HORNYCROFT
JOHN 1. THORNYCsoft & Co., LixiraD,
SHIFBUILDERA - AND, EnginKÉRI, **
LONDON, SOUTHAMPTON and Basingstoky..
Shangbai Office: 65, Szechuen Road.
MARINE MOLORS AND MOTOR BOATS.
MO1OR LIGHTING AND PUMPING “SETS»
SHALLOW DRAFT STEAMERS. *
THORNYCROFT CIL "FUEL "SISTEM.
THE HONGKONG DAILY PRESS, ~THURJDAY, APRIL 29TH, 1920.
Commercial, High-speed and Pleasure Craft.
THORNYCROFT WATER-TUBE BOILERS. THORNYCROFT MOTOR VEHICLES.
"Our Motor Engineer and our Naval Architect. bath Thornycroft "experts, now resident in Shanghai, will gi.e sttention to all inquiries, ✨
Early deliveries can be made of 15-bh.p., 30bhp, erbhp, and 10-1.bp. Kercrepe Marine Engines.
"R_R_ROXBURGH,"
Manager for China.
LA FAVORITE
A bag
LATEST PARISIAN CREATIONS. EVENING DRESSES, AFTERNOON GOWNS,
SMART COSTUMES AND SPORTING APPAREL.
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Telephone No. 8812.
B, Beaconsfield Arcade
IMPORTANT NOTICE.
IN Manufactures the most Important Point is Improvement, and in Dietetion
Cleanliness. Science always insiste on those Maximu
Groundnut or Peanut Oil can be used as a substitute for Olive Oil, Batter"or Lard, but when Blightly Dirty Is injurious to health.
In China, by the Ordinary Methods of Extraction, Dirt and Dust are not guarded against: Our Method shows a great advance. By the use of New Machinery and New Methods Scrupulous Cleanliness is Assured.
Our Machinery during the Process Filters the Oil while our Factory is Free from Dust One Oil is Clear, Sweet-and Fragrant; and Compares most favourably with other Oils used for Culinary purposes: there is no residue.
Prices are moderate so as to induce new businom. » » “Analysis is always given before Shipment to Foreign Cementalem. Foreign Correspondence wanted. Capacity per day 30 tons.
NAM CHAU On
FACTORY,
Office :--No. 127, Queen's Boad Central, HONGKONG, Tel. 1301 Factory-No. 28, Kwet-Léo Street, SAMEHUIPOVINE
The Bole Proprietorship of this concerns belongs entirely to a Chaise Citizen.
Stationary Crude
011 Engines
sult all purposes
from 5-500 B.H.P.
For prices and particulars apply to—
UNION ENGINEERING CO. LTD..
York Building Chater Bond,
FOREIGN EXCHANGES, worth of shells, which it proceeds to blow INFLATION AND THE EXCHANGES.intor the air. But the munition workers who received the wages want to buy food, clothing, or boots, and there are no more. of these commodities than before for them to spend their money on. The result is competition, and a rise of prices; and when, na has happened during the war, this increased purchasing power coincides with a marked reduction in the supply of civilian goods, as, for example, owing to the reduction of the world's cotton crops during the war, the rise of prices is the natural result of the shortage of the supply, as well"a the abnormal increase of demand.
Professor John A. Todd in the course of a further article in the Daily Tela- graph says:-That, while the main cause of the Huctuation of the exchanges is the so-called balance of" trade" there is another class of causes to be found in the monetary conditions of the various coun trics 2013 is the most difficult and the most controversial part of the whole sub ject
14T
THE RISE OF PRICES.
This is the real cause of the rise of prices, and much ink has been spent in discussiong whether this means inflation, or is due to excessive issues of currency
of a kind, but it is a kind which was more or less inevitable. The Government had to have the shells, and it could not get them without withdrawing from the pro- duction of civilian goods a large number of producers, whose wages nevertheless must be spent on these civilian goods, and not on the goods they produce namely, shells. The question of whether the Gov ernment's methods of borrowing were the best is of secondary importance. The real root of the trouble is that they had to divert the borrowed money to producing commoditie for destruction, instead of goods fit for consumption.
The elements of "the controversy are comparatively,ample.” The rate of ex- change between, say, London and raris means the price of a foreign bil drawn in London on Paris, ie, the amount of French currency which will pe received in Paris in payment of a bill drawn in Lon-notes. It is, of course, obviously inflation don for, say, £100. The theoretical or mint par value of such a bill is based on the relative gold content of the standard cons of the two countries, namely, the sovereign and the Napoleon, and accord ing to this the English sovereign is worth 25,2915 franes. It is obvious, however, that it, owing to a inenetary change in France, gold coinage is no longer cosain- able and debts are payable in some other currenty, say legal tender paper, which is depreciated relatively to the gold standard, then anyone in England who pays 100 sovereigns for a bill drawn on Paris would expect to get not merely 2,529 franes in the depreciated paper, but such an amount as will be the real equiva lent, at the then depreciated value of the paper money, of 2,522 france gold When, therefore, we and that the rate of exchange in London on Paris is 45 francs to the as it was in the middle of December, £, there is a certain presumption, other things being equal, that the actual lega! tender in Paris is deprecisfed to that extent in comparison to gold. But, na o often happens in economics, the trouble
is |that other things are not equal
rency:
"
|
As has been shown in the previous article, a serious disturbance of the balance of trade may produce a yariation, of the rate of exchange, quite apart from any depreciation of the legal currency When, therefore, we find the sterling exchange on Berlin rising from 20.43 marks for £1 to 500 marks, there is nothing on the face of it to show whether this is due to the entirely abnormal balance of trade against Germany, or to an appalling depreciation of German cur, It is probably due to both, with a strong presumption in favour of the lat ter as the major cause; but one of the things we have learned from the war is that, in the absence of the gold control over the exchanges, it is impossible to tell how far the rise in the exchange is due to the canse and how far to the other, The fact, therefore, that the sterling ex- change in New York has fallen recently to $3.87 does not mean that the actual currency of England today, namely, Treasury notes, is depreciated to that or tent. Even the fact that the market price of gold has risen to £5 111 3d. per ounce fine instead of £3 176. 96" per qunce standard (or approximately 24 68 per oance fine), is again no proof that the currency notes are depreciated to that extent. I only means that if gold can be exported to America it will fetch that price, because it is equivalent to a bill of exchange payable at par in New York and the actual position due to the abnor mal balance of trade is measured roughly either by this apparent price of gold, or by the quotation of the exchange at 83.67 to the . These are only two ways of expressing the same fact. Neither of them enables definitely to answer the ques tion whether our present currency is de... preciated, and how much. All that we
can say is that if our currency is depre ciated, then that must be partly the cause of the rise in the rate of exchange: and
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1920.
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4
All this is leading up to the question of the currency notes. The first effect of the threat of war was to produce almost a currency famine, which had to be met by the immediate issue of a relatively small quantity of currency notes. But as the Government's demands for munition work increased, an increased supply of currency became absolutely essential. It is besids the question to argue that if the currency notes had never been issued the inflation and the rise of prices could not have taken plade. "That is, of course, obviously true. If the supply of currency bad not been increased, the employers could not have paid the wages of the munition workers, the manufacture of munitions would have ceased, and the war would have come to an end-a very bad end for us. Currency in largely increased quantities we bad to bave, and as metallic coinage could not be produced in sufficient quantities, paper currency was the only possible alternative. And here comes in the vicious circle of currency. The high wages caused high prices, high prices required more cur rency, but high wages led to higher cost of production and necessitated bigher prices again, which again required more currency to pay them. It is therefore, obvious that the increased issue of cur rency notes is a logical necessity of the situation, of which high prices in the outstanding effect; but that is a very different thing from saying that the issue of currency notes is the cause of the bigbanged, with the Initial no weil in the Surnames, in strictly Aphabetical Order, prices.
> that say naˆ can be found instantly.
The Book is printed from New Type specially reserved for the purpose, sad uniformity in every arrangement greatly facilitatos reference,
Besides teisal Alphabetical List of Firms the Directory gives the CLASSIFIED LISTS of TRADES and PROFESSIONS at the larger, Commercial Centres,*
The
ALPHABETICAL LIST of RESIDENTS in the Far East contains the names of over
20,000 FOREIGNERS,
THE MPS AND PLANS
It might just as easily be put the other way, that the large issue of currency notes is the result of high prices. The fact of the matter is that the currency notes were merely the means of inflation and not the
a the principal ports in the Far East bare cause, and to pay, as some people hava bi 7 engraved by one of the most eminent been doing, that the immediate withdrawal F in Great Britain and are annually of the currency. notes is the one thing to corrected and brought up to date. stop the rise of prices is foolish. It is quite true that the withdrawal of currency notes, before they can be replaced by any other form of currency, would stop the rise of prices, because it would stop basi ness altogether. There would simply be no money at the next week-end to pay. wages, and no wages to buy anything with
COMPANY PROMOTION.
DANGERE OF INFLATION, to settle the primary question of the ex-in the House of Commons to charges of The Chancellor, in the course of a reply tent of the depreciation of our currency, if any, we are driven back to an examina tion of first causes.
CURRENCY AND INFLATION.
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The CHRONICLE and DIRECTORY
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The Directories and Descriptions are of :----
CHINA
Soochow
Chingiang. LOEDPOL. Nanking. Kowloon.
Wuhu.
Lappa
Korkiang Shamwai,
Haskow, AUDITOON Yochow.
"AKARING
Trade Ctres. Shansi. W GROWTH,
Hangohow. Hother. Chungking. Pakhoi
Niego, Wenchow. Mengrie. Bante. Hokow
Lungehow.
extravagance brought against the Govern ment uttered a serious warning to finan- cial circles and to investors in regard to The prime cause of depreciation of a newly-formed companies. currency is over-issue or, as it is gen" I cannot view without some concern,” erally called, inflation; but it has been Mr. Chamberlain said, "the extraordinary too often assumed that the mere fact that extension in the promotion of companies, Peking our legal tender currency has increased If I were sure that the expenditure of this Tientsin. very suketantially during the war is itself money really resulted in increased produe Paitaiko, proof of over-issue and inflation. Again, tion I should find some consolation, but I Chinwangtao. the serious rise of prices which has taken am convinced the time has come when a Taks, place in England, as everywhere else, dur- part of it only creates increased competi| Antung. ing the war, is generally regarded as in tion for the limited supplies of labour Manchurian itself proof of inflation, but even this fails and material which are ordinarily avail, as as a quantitative test under the abnorable. I must say that I think those who Newchwangchang, mal conditions of war. The mach abused are capitalising and recapitalising old Dairen. Quantity Theory of Money is a simple businesses on the basis of the present in-Port Arthur. statement of proportion which is really fated profits are entering upon a most Cheloo an axiom. If the amount of money increases more than the amount of money's ability, and are laying up for themselves, Txinanfu
dangerous task, are taking a great respon Weihaiwai, work to be done, then price will rise; if they continue to hold any interest in Mukden. but there are so many factors in the equa these concerns, and certainly, for those Shanghai, tion which are not measurable that de whom they induce to come into them, as Harbin finito quantitative applications of the theory are liable to produce the most mig well as for the country, very perilous Swatow leading results. It depends, for example, future problems, I woud utter that Lungshingchun on what is included in money word of warning and invite fascial What has happened during the war may circles in the broadest sense to realise that be gummed up in this way. The Govern the deflation which they have called for Takyo, menty owing to its stupendous military cannot be carried out by the sole action of requirements, has had to buy enormous the Chancellor of the Exchequer or of the yoga. quantities of goods and services of all Government. The prevention of the evil Kobe. kinds, including munitions. It has paid needs their co-operation, and that criti-Shimonosed. for these goods in money derived from ciam of the demands for credit that azo several sources, cig: (1) ite normal, re brought to theur which I am supposed to venues, (2) additional revenue derived ex-icise over the demands for credit that from war taxation, (3) money borrowed are brought to me. (Cheers,)*: in many different forms from the public, and (4) money borrowed from the banka through the creation of additional credit.
The distinction between the third, and THE POLICE OF THE SEAS fourth item requires further explanation,
Yokohama.
Frochow Szamao Amy Tengyush Kirni. Lungkow.
Changchun Hansban.
Jáván Land. Formonal
Ok Keelu
Mo Tainanta. “Nagasak). Takow.
Hakodata. Auping. Tämeni,
Baszoen · BrneZZÁ,
Vladivostock.
Beoul.
Nicolaforik,
CHOREN. Wohann. Mokpo Shamulpo. Husan Chinhampo Kuma... Pingyang. Songobin,
HomeKong and 171 DariausŅCTER, MACIGE FOR INDO-CHINA,
If I have £1,000 in the bank, and lend THE NECESSITY FOR BRITISH it to the Government, the result is simply that the Government, now has the £1,000
NAVAL SQUADRONS.“den
Hanoi. Haiphong Tonkin
in the bank and I have none but there is
Provinum
To the statement of the First Lord of the Admiralty explanatory of the Navy Estimates, 1920-1
appended
P
no more "money" in the world that-there, was before, But if the Government bor tows a million from the Bank of England long document entitled, "Notes on Naval then the Government is in a position to Policy," in the course of which the First spend an additional £1,000,000 without my Lord says: "As regards the squadrons bank account or anyone else's (and there
Sarawak.
Annam. Tourama. Hue.
Saigo Quinbon.
PHILIPFOIRE.
**BORNEO. Brunet.
Cambodge,
fore, our spending power), being reduced on the China, African, North and South British North Boruso..
BANGKOK. to corresponding extent, This American and East Indies Stations, the
MALAY SZÁTKE. £7,000,000 the Government pays out to need for them, which has always been Perak
Belangor. Pahang Army contractors; they use it to pay recognised in the past, has never been more
ages to munition Workers, who then pro urgent than it is to-day, in view of the Negri Sembilan Joboto, Kedan coed to spend it in the shops, and it ends necessity for re-establishing the internal
Kelantan Trengganu. Perlis. its way back to the banks as deposits at trade of the Empire, and promoting that
Singap
Penang, Malacca, Pror. Wel the credit of the grocer, butcher, baker, with foreign countries The Navy con etc. The result is the Government has stitutes the police of the seas, and "all created a million of!! money," and in experience teaches that an efficient Navy exchange for this has received £1,000,000 is the aurent guarantee for peace.
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CHINA, JAPAN. STRAITS - HETTLE MENTS, INDO-CHINA, PHILIPSPINE. Itc
for 1920
50TH ANNUAL EDITION
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