1930-06-09

HONGAY SMOKELESS EGGS COAL

FOR

HOUSEHOLD USE.

KEEP THE HOUSE CLEAN AND NEAT I

NOTE CHEAP PRICES :-

In lots of not less than half-ton; delivered to:-

Peak District (above Bowen Road) Bowen Road and Lower Levels Pokfulum Road

Kowloon ...

PER TON.

$28.00

$21.00

$23.00

$19.00

Orders should be sant in writing, not by Telephone, at least. 24 hours before the coal is required, and orders must be accom. panied by cash, cheque, or compradore order payable to SZE WAI & co..

Please apply for prices of other descriptions of coal for bunker, factory, and other purposes,

TELEPHONE No. 25009,

SZE WAI & CO.

42. BONHAM STRAND WEST, HONG KONG. (CANTON BRANCH ---SZE WAI & 00., Lox YU SUM HOLD, CANTON 'Prosz No. 13650.)

THE PRIMITIVES CACHED FOR SAFETY

X X X

The primitives were crafty men. They always maintained a reserve food supply cached away in case of need. We may as well take a hint from them-saving, not food, but ENERGY. KEEP A RESERVE OF ENERGY BY DRINKING

STILCO

MILK STOUT

Sole Agents:

RUTTONJEE & SON,

16, QUEEN'S ROAD CENTRAL

P. & O. S. N. CO.,

SUMMER HOLIDAYS

TOURS TO JAPAN AND BACK VIA SHANGHAI

JUNE TO SEPTEMBER

· SPECIAL REDUCED_RETURN_TICKETS

AVAILABLE

FOR THREE MONTHS

|TO KOBE+ £21. TO YOKOHAMA: £23, 10s. Od

FORTNIGHTLY SAILINGS

}}

RETURN PASSAGE MAT BE MADE IF DESIRED BY

BLS.N. Co. OR E. & A. 8,8. Co's STEAMERS.

FOR FURTHER PARTICULARS AND SAILINGS, APPLY:

MACKINNON, MACKENZIE & CO.,

AGENTS,

Interested In Wireless?

[9507

Then look for some

interesting news in the Daily Press next Thursday.

HONG KONG DAILY PRESS, MONDAY, JUNE 9, 1930.

FIXING THE DOLLAR'S VALUE.

"SAVE BRITAIN'S 'FACE'!"

VIEWS FOR AND AGAINST A STABILISATION POLICY.

ORE than one business-mau in Hong Kong has conceived the idea that the dollar, should, be stabilised, and that during the period of transition from the pre- sent to the future currency policy Shanghai methods of accountancy be adapted. Some ten days ago scheme of this character was sub- mitted to the Daily Press, since when we have obtained some com- ments upon the plan, which are res produced" below, together with a brief summary of our correspon- dent's proposals,

"F.V." Dollars.

Banks and business-bouses in Shanghai keep accounts in dollars and taels-the latter a "currency" which does not, in fact, exist. It is suggested, then, that in Hong Kong we should also have two accounts- one in the present fluctuating cur- rency issued by the banks, and the other in fixed-value notes issued by the Government, worth two shillings or one-tenth of a pound sterling, neither more nor less.

Importers would convert their sterling, fraze, mark, yen, and other prices into Hong Kong "F.V." dollars, and it would be for their Chinese clients to calculate what

these quotations represented in Fuctuating silver currencies. Chinese merchants selling to local exporters would similarly quote in F.V." dollars, enabling business inquiries from abroad to be definitely answer. ed. Meanwhile, the Government's fixed-value paper dollar and sub- sidiary coins for 50, 20, 10 and 5 cents would become the only legal tender to settle al fransse tions-payment of taxes, rents, salaries, compradore's bills, 'bus. and ferry fares. "Your ten-cent 'bus ride would still cost you ten cents, and no more; your tin of cigarettes would cost you just what you pay now; your $1.35 tiffin would cost you precisely $1.30. The only difference is that you would pay all these prices in F.V. dollars, but as you will have already received your salary in F.V. dollars, you will not mind doing that."

"Save Britain's ' Face '''

Britain's Credit Pledged.

So far as the backing of the is suggested by our correspondent Government dollar is concerned, it that promise to pay two Eng ish shillings for every dollar, or a sovereign against $10. note,

anteed the issue.

time. from time to

Is not this another form of speculation 1 How is this going to help business?

G. has lived in Hong Kong all

What if Silver Eises?

his life, and has therefore been, within three months of demand

accustomed to look at the 2s, dollar (as a safeguard against a run)

(except during 1929-30) as absurdly below normal. Would not the fix- would be quite sufficient. No huge reserves either of gold or silvering of the dollar at 28. deprive him of all further prospects of enjoying would be necessary if it was known the that the British Government guar- former years by the higher dollar? amenities afforded during

Moreover, it is possible that silver. may go up, and a silver dollar be worth 3 Where would the fixed dollar be then? Would not Canton and other Chinese ports buy direct from abroad? Would not a fa, dol- lar then put Hong Kong shaolutely An article costing £10 in England out of business For example:-

in Hong Kong would cost $100; in Canton it would cost (at 3/-) 8ca6e. Both are paying for it a silver dollars!

A certain amount of bullion must be kept in the Colony to meet any reasonable demand for coin which might be made The within three months clause is merely a precaution against being or panic. Bullion could be brought caught short in the event of a scare

aut to the Colony from Londen well within three months if necessity arose, but our correspondent be lieves that the mere fact that Great Britain's credit was pledged to sup port the Hong Kong dollar would be quite sufficient to satisfy the most nervous.

How About Insurance?

H. bas a life-ngsurance policy for $10,000, Hong Kong currency, Will his widow get ten thousand shillings or ten thousand florias? If he has a houseful of furniture insured for.

SOME CRITICAL COMMENTS.

The foregoing is a summary of the plan for stabilisation as put to us more than a week ago by reader who believes relief.could be obtained by some such scheme as that roughly outlined. Our corre spondent is and a fanter, nor does he pretend to be, but he be lieves the idea might be elaborated THE CRUX OF THE QUESTIÓN. by those better acquainted with financial affairs into a workable Ia presenting our correspondent's plas. Below we give some coni-plan and the comments "made upon iments which show how stabilisation it, we would remind readers that is regarded from different angles. our own views on the subject were

"It should be explained that, in

set out in an editorial article last order to facilitate calculation. it Saturday. Stabilisation of the dol has been assumed (unless otherwise lar is possible, of that there is no stated) that the Hong Kong dollar doubt, but that it would be bene- stands at one shiling, while the Government note is hxed at two shillings,

$5,000, and gets burned out, what does he get-fixed or fluctuating dollars? With furniture now being. Bold F.V." prices, a claim met in old dollars would not help him mach

The Investors' Point of View.

A has money invested in local public companies which gives him $6,000 a year or $500 a month. He has always kept within this 8500 Recognised throughout China as spending, say, 80 per cent of his being worth two shillings at any

income. On July 1 he draws his time or place, the "FV" dollar usual $500. His investments being would Bave Britain's face." de in the old dollars the money be clares our correspondent. How is draws will be in those dollars. His this to be done, if it should be de-monthly expenditure of 8400, Low- cided it should be done! There are many who fear that the establish- ment of a gold-basis dollar would seriously react upon the trade of the Colony. The "double accountancy" method, says its advocate, meets this objection. On a given date as early as possible-Government paper dollars of fixed value would be issued, and become legal cur-

ever, becomes, doubled, since all servants, shopkeepers, rent, and other expenses have to be paid in the new "F.V." dollar. He hads the change costs, him 8300 more that he draws, whereas before he could save $100 per month.

B. has investments not in shares but in landed property. He col-

rency. In effect, exchange would let rent from his houses of $500 a. jump from 1/3 or thereabouts to south, and speads. $400 on house: 2. overnight. The existing bankkeeping From July 1 he is paid notes and silver dollars would be in the "F.V." dollar and be pays out the new dollar. His position ia converted into "F.V." notes at the current rate of the day. Those whoot affected by the change! The preferred to keep their cash hold balance of 8100 a month continues, ings in hopes of a rise in the silver but whereas before he saved $100 market could do so. Those who of the cheaper money, he can now wished to run two bauking accounts pat aside 8100 of the better money. Who is paying the difference and how!

-one for the "F.V." dollar and one for the fluctuating dollar-could do. so for a period to be fixed-say, five to ten years. At any time during that limit old dollars could be con verted into F.V." dollars; if the silver market improves, and a per- son feels the time has arrived when he should convert his fluctuating dollars into the Government's 28. currency, he would instruct his banker accordingly, but once con- verted there can be no re-conver- sion. When the time-limit expires in 1035 or 1940 the fuctuating dollars must be converted; it is for the holder of them to decide whe- ther conversion should take place before the compulsory date. After

that, only the doller would remain, and by that time the world

would know that a Hong Kong

dollar was worth two shillings to-day, to-morrow, - ar this day twelve months.

C. has a family in Hong Kong, but business takes him elsewhere. He has left a deposit with the bank, out of which his wife draws

regular allowance. That family's spending power is cut down by half from July 1 if the "F.V." dollar is introduced.

D. is a widow drawing an allow ance from an estate. What is the Government going to do for her if her allowance (which was just suf- fcient to meet bare necessities before the change-over) is cut down by 30 per cent, or conversely, if her expenditure is increased by 100 per cent. 1

Gambling In Exchange.

cini to the Colony-economic coL- "ditions being what they are-is questionable. In our opinion, the stabilising of the Hong Kong dollar would be equivalent to stabilising too big a task for this Colony to the currenty of China, and that is attempt. In conclusion, we need only urge once more that the report of the Currency Commission abould he published at an early date.

E. has two banking accounts of $1,000 old money, and $1,000 new, He converts his old dollars into new when exchange is standing at Everybody Batisfied. 1/2d. A few weeks later he finds the old dollar touches 17 and de- This arrangement, declares its cides to change his new dollars advocate, meets the objection of back. He can take his F.V:"* those who fear the harmful effect of currency to a neighbouring port suddenly establishing a gold dollar and buy silver dollars. Speculation in Hong Kong It also meets the in silver dollare will thus continue. wishes of those who want to see

and the buying power of a silver, an. end of the exasperating fluctus standard country-China-is not tions of the silver dollar. That the thereby improved. Moreover, it is two currencies would actually re-possible that the new 28. dollar main in existence for five or ten might stand at a big premium in years is doubtful. The greater Clanton and Macao, which again convenience of the Government's

gives gamblers (and financiefs) an FV dollar would be so quickly opportunity to speculate-in-the-so- appreciated that the public would called "fixed"? dollars, There soon show its preference for the seems to be nothing to prevent this fixed-value note. Employers and sort of thing. If that is so, then employees would both find the Gov- the fixed value is merely a farce ernment dollar more satisfactory, to so far as it concerns places outside. give and to receive. Shop-keepers would find it more convenient to mark their goods in Government dollar prices, and customers would

currency Importers and.

would not find Chinese, merchants objecting either to pay or receive Government dollars, since those in- clined to speculate on exchange could still do so, by converting their contract payments from and to any other currency they pleased.

the Colony, Will this sort of thing improve the Colony's business. It not, what in there to prevent it?

F. is a dabbler in exchange. He

he. secures £100., With this sterling he buys old money at 1/- which gives him $2,000. He waits for in slight rise in the exchange, when he goes back into sterling and back again to the axed-value dollar. probably making, $100 new money in the process, which he can repeat

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