MENGTSZ AND YUNNANFU
A473
domestic importations of cigarettes followed an upward trend during the last few years, the same was not maintained during the current year, the price of cigarettes so increasing that the poorer classes have fallen back on locally manufactured rolled tobacco made from Szechwan tobacco leaf. Cotton yarn imports increased by 16,541 quintals, an indication of the steady growth of the weaving industry of the province. The Yunnan Spinning and Weaving Company, under the auspices of the Yunnan Economic Council, started functioning in August 1937 with a capital of St. $1,200,000. The factory is now equipped with 5,200 spindles and 60 looms. Its output of yarn, shirtings, and jeans, however, being as yet on a moderate scale, no noticeable decline was seen in domestic imports; but, with the concurrent extension of cotton-growing farms in this province, it is the intention of the Yunnan Economic Council to increase the capacity of the factory to such an extent as to effect a considerable reduction in the annual figure of more than $10 million expended on the purchase of imported cotton yarn and piece goods. A general increase was seen in staple exports to foreign countries: tin slabs, wolfram ore, medicinal sub- stances, bristles, wood oil, hides, skins, and leather. For the tin industry, which is the mainstay of the export trade of Yunnan province, the year opened encouragingly, but closed on a less prosperous note. During the first half of the year the price of the remained at a high level. This factor, coupled with sufficient rainfall, stimu- lated output in the Kochiu mining district, where all tin-fields are located; but there was a sharp decline in prices in the late autumn, the London quotation falling as low as £18 per ton as compared with £262 in September. Throughout December the price showed little sign of recovery. Nevertheless, the total quantity exported abroad aggregated 94,662 quintals, a record figure since 1920, although domestic exports declined from 13,143 quintals in 1936 to 4,315 quintals. The Kochiu tin industry has attracted the attention of both the Central and the Provincial Gov- ernments, the Yunnan Mining Corporation being financed by the provincial authori- ties with the main object of developing the tin industry; the National Resources Commission is also engaged in investigating the conditions of the tin mines. Exports of wolfram ore to Hongkong for sale to England and Germany amounted to 6,787 quintals, representing an increase of nearly three time the total export for 1936. The year witnessed the re-estabishment by the Provincial Government of the foundry at Tchetsouen for smelting antimony ore, which is extracted in the districts of Kaiyuan, Wenshan, and Kwangnan in South Yunnan, Since the opening of the foundry a total of some 80 tons of antimony regulus has been turned out, of which 30 tons were exported abroad during the year. Increases in exports of bristles, medicinal substances, and wood oil were accounted for, among other factors, by the blockade of the Yangtze and the improved highway communications, which resulted in the division of Szechwan products to Yunnan on their way to foreign markets.
On the 15th May the Provincial Government announced the suspension of silver as a circulating medium and that notes of the four Government banks of one dollar denomination or under were to be accepted for monetary transactions at the rate of St. $1 Yunnan Paper $10. Legal tender notes of higher denominations remained, however, subject to a discount, and the notes of the New Futien Bank still comprised the Major portion of the local currency. In December a branch office of the Central Bank of China was opened at Yunnanfu whose main objects are to be the introduction of legal tender notes into this province and the control and remittance of Central Government revenue. The year experienced heavy fluctuations in the local exchange market. Owing to the lack of demand for remittances on Shanghai, a sharp decline in the value of the Standard dollar in terms of Yunnan Paper dollars began to make itself felt in October. The rate dropped as low as Y. P. $910t. $100 in November as compared with Y. P. $998 == St. $100 in the best time of the year. In the first three quarters of the year the average rate of quotations on Hongkong was about 1,022; following the depreciation of the Standard dollar, the rate for the Hongkong currency reached the lowest level of 950 in November. The Indo-China piastre followed the fate of the French franc, and quotations which opened at Y, P. $1,578 for I. C. $100 at the beginning of the year dropped to Y. P. $1,460 in June, the lowest point being reached in November when the quotation was 1,055. The Eurasia Aviation Corporation, whose head office has been transferred to Yunnanfu from Sian, secured permission in December from the French Government to operate a weekly service from Yunnanfu to Hanoi, connecting with Air France. Motor-bus through traffic between Yunnan, Kweichow, Szechwan, and Hunan was inaugurated officially in November, thus bringing Kweiyang,