Si
CHANGES URGED IN BRITISH BANKING.
CLOSER TOUCH WITH INDUSTRY.
POINTS FROM THE MACMILLAN REPORT.
London, July 14. Important changes in British banking methods, including those of the. Bank of England, are recommended in the report of the Committee on Finance and Industry, over which Lord Macmillan presided.
"The Committee's proposals on thelle heads form part of a larger programme designed to remove, the causes of the present acuto world depression. They include:--
Restoration
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HONG KONG DAILY PRESS, THURSDAY, AUGUST 6, 1931.
A policy of maintaining cheap credit in domostio money markets sufficient to satisfy the demands for liquid resources and also to support any now, productive en- terprises coming forward,
British Currency." The Committeo's recommendations on domestic monetary policy are of a permanent rather than emergency
ST. ANDREW'S BOY
"SCOUTS.
A FOREIGNER'S PLIGHT.
SUFFERINGS.
July was a most successful month for St. Andrew's Troop of Boy HELD IN GAOL BY CHINESE Scouts. A most interesting day
IN TSINAN, was spent early in the month when
DREADFUL" STORY OF Scoutmaster R. Dormer" with "A number of the troop gathered at Camphor, Woods, for the purpose of The fiduciary issue, in their examining chadidates for the second opinion, is not satisfactory in that class cooking tests. Of the con it locks up so high a proportion.testants seven passed the test with
honours. the debtor countries and, then of of the gold stock-in such a way themselves, be prepared to lend as not to be available for export at Kowloon and St. Andrew's troop Scouting is taken very seriously back thoir surplus instead of taking if the Central Bank should as it in gold.”
between debts to and claims on the rest of the world on income accharacter, count; while creditor countries must, unless they are ready to up set the economic conditions, first of
:
the Colony.
desire." The arrangement of the is one of the most enthusiastic in Of the upsetting of equilibrium Act of 1998 as a normal means of
Keen rivalry is the between debtor and creditor | providing elasticity is open to sub-keynote of the troop, rivalry foster. nations, the Committee say, "Here stantial criticism. Certain prin- ed by the scoutemasters and scoute
alike. of world pricu 18, perhaps, the major part of the ciples are laid down for the re-
immediate explanation of the chl-gulation of gold reserves in prosent. During July the following scouts Their international stabilisa-lapse of international prices."day circumstances. It is recomwere successful is qualifying for tion.
levels.
A managed (not automatic) 'cur- rency for this country, with the Bank of England as the manag. ing authority...
The first step to stabilisation, the Committee any, must be a greater willingness on the part of creditor countries to buy and to lend.
A concerted policy to that".
end between the banks of Great Britain, Fance and the United States is advised.
די
Recommendations for the guid- ance of domestic monetary policy iáclude:- EN
The Committee review the reacht working of the gold standard. They indicate a divergence of opinion on the question of the re- turn to gold in 1928, and add :-
"The accomplished fact of the restoration of our currency to the. prewar gold parity and its main tenance there for a period of six years crentes an entirely new situation. It by no means follows, even if the view be held, as it is by. some of us, that a mistake was make in 1923, that the consequences can be repaired by a reverual of policy in 1931."
Issue by the Bank of England After reviewing the statistics of of notes up to £400,000,000, the | foreign balances held in this coun- normal circulation figure, with try the Committee come to the im- provision for temporary expan-pressive conclusion that Яion.
1
The underlying financial facts are more favourable than bas bean sup-"' posed, and that Great Britain's
Statutory £73,000,000 "minimum sqld reserve (bat increased normal gold holding or foreign exchange ¦ position as a creditor country re equivalent).
Increased consultation between the Bank of England and the clearing banks.
Closer co-operation of finance and industry.
The suggestion to revise the gold parity of sterling the committee re- ject without hesitation.
mains immensely strong.
Bestoring Prices,
In setting out what in their view should be the broad aims of world monetary policy, the Committee (say :-
"Even if a further fall of whole- salo prices be avoided, their
An unexpected note is struck instabilisation at approximately the
mended that:-
The Bank of England should be empowered to put into circulation notes to an amount exceeding by a moderate figure what has been found by experience to be the normal note circulation, with provision for, additional tempor- ary elasticity. This figure, it 18 auggested, might be set £400,000,000,
The North-China Daily News is in receipt of news from its cor- respondent at Teipan that in the Puble Safety Bureau' there a for eigner has been detained by the Chinese authorities for a lengthy. condition, physically and mentally. period and is now in a pitiable Investigations made by the cor- respondent have resulted in an namission by the Chinese that the man whom they describe 'as been and is in their custody as a Russian, about 47 years of age, has. Buspected Red.
Formerly in Sannghai,
#
His name is given in Chinese various badges-Victor Bond R. script as " Poponiaff.” He is said Branch, G. Arnold, R. Gascogine to have admitted that before visit- and L. Gibson, Special congratulatice in Shangbai. It appears that
ng Tsinan he was in medical prac tions are due to John Miller for ho speaks very little English and having gained the Handyman and his, gaolers speak only Chinese; he is denied communication with the Artist badges,
outside world, although he does not kyow this to be the case, the Chi- nese having admitted that lotters and telegrams sent by him havo. been held up by them until their investigations in Shanghai are com- ploted
DISMISSAL OF ́S.M.R. EMPLOYEES.
WHOLESALE PROTESTS
EXPECTED.
The Bank of England should by law fot be permitted to allow it gold reserve to fall below (say) £75,000,000, except temporarily by permission of the Treasury necessity of affecting wholesale Dairen, July 29.-Because of the While this would be a statutory" minimum, the committee do not economies approximately 1,000 em contemplate that the Bank would ployees of the Japanese owned actually allow its gold to fall so South Manchuria, Railway are. te low in any ordinary circum.bo discharged within the next few stances, and, in fact, they put days, the management announced to-day. It is expected that many forward recommendations in the of the employees will vociferously report for an increase in the protest the less of their jobs. Bank's normal gold holding or its equivalent in foreign exchange.
WINDOW DRESSING,
-SYSTEM THAT IS NOT CREDITABLE,
the committen's reference to hire present level would be a serious reference to the note issue are purchase and deferred payment
transactions. The view is express
ed that not so much use is made of available facilities as is possible and desirable.
BRITAIN AND GOLD
STANDARD.
IMMENSELY STRONG
POSITION,
12
If the Committee's proposals with
adopted the separation of the Bank. The avoidancing and Issue Departments of the Bank of England would necessarily come to an end,
disaster for all countries of the world alike,
of such an event should be a prime object of international statesman- ship."
to
When the point comes nt which international prices are restored to level appropriate to the then existing levels of salaries and wages, and the burden of monetary indebtedness, monetary policy, the Committee state, should have as its objective the stability of the international price level.
The acceptance of stich an gh. jective, they observe, will represent in itself a
great and notable change. For before the war scarce- ly anyone considered that the price
The report is signed by all, save one of the members of the Com mitter:
Lord MacMillan, Sir Thomas Allen, Mr. Ernest Bevin, the Hon. E. R. Brand, Prof. T. E. Gregory, Mr. J. M. Keynes, Mr. Lennox E.level could or ought to be the care Lee, Mr. Cecil Lubbock, Mr. Re and preoccupation, far less a main ginald McKenna, Mr. J. T. Walton objective of policy, on the part of Newbold, Sir Walter Raine, Mr. J. the Bank of England or any other Frater Taylor, and Mr. A. A. G. central bank.
Tulloch.
Creditor. Nations Must Land. The exception is Lord Bradbury, who submits a reasoned memoran- Discussing international propos dum of dissent. There are fourals to meet the present emergency, addenda and reservations signed by the Committee refer to difficulties. five members.
which arise if the creditor nations
The first part of the report on- as a whole are unwilling to lend to sists of an exhaustive examination the debtor nations as a whole the of the history of the economic crisis. Į surplus after they have taken áll
In regard to unemployment, the Committee conclude :---
that they are disposed to take from creditors in the shape of goods."
Further proposals of the Com Imittee in the domestic sphero are:
The joint stock banks should reduce their holding of notes and pay up to say, £40,000,000, into the Bank of England, increasing their balances with the Bank pro tantu.
#
The Chinese also give AB a reason, for his arrest and indefinite detention the complaint of a Rus sian at Cheloo that he, bad Com- munist affiliations.
No Rights.
From what the correspondent tan gather from independent but thoroughly reliable outside sources, "Poponoff" left Shanghai about two months ago for Chefoo, having in his possession the necessary travelling permit and other papers which were given to him by Mr. Grosse, who attends to such mat.
ters here..
The permit and papers have been sent to Shanghai, apparently, for the information of the local authori. ties, the Tainan Bureau disbeliev being the man's emphatic denial of
association with the Reds. claim to be a White Russian who fought against the Bolsheviki has been eynically discounted..
oble to our, banking system; and we recommend that they should given up at once,"
The Committee feel that there is a need for closer co-operation of finance and industry. They co- trast the methods of issuing for- eign securities in this country, with those of issuing cinc industrial securitie
They suggest the setting up of institutions (of which the Bankers Industrial Development Company might be the nucleus) to act as financial advisers to industrial companies, to carry out all types of financing busines
His
He is in a terrible condition physically, and worse mentally. Ravaged by malaria and dysentery and entirely at the mercy of gaolers who have little knowledge. of, sanitation or cleanliness, he en not last very long under present sultry conditions.
"Here." says the North Chinna Daily News correspondent," "is a rights. He is too poor to send to ense of a man evidently without Shanghai, even if he were allowed to do so, for an efficient interpreter, or even for legal help and advice, and is at the mercy of Chinese law.
Lord Bradbury Dissents.. In a reasoned memorandum of Chefeo Authorities' Action, dissent Lord Bradbury disagrees "He is accused without evidence. with most of the Committee's.con- || of propagating Communist teach
ings. The Chefeo authoritios, it be tried by the high provincial appears, recognising that he should court have sent him up here (Tainan), and the police here the excuse that if his innocence (Tainan) are delaying his case on can be proved in Shanghai his care need not come before the high court at all.
Balances with the Bank of dusions. International Settlements' to Leaving out of account for the reckon (at the discretion of the moment the effects of the recent Bank of England) as the equi-heavy fall of world prices," he valent of gold..
writes, "I think the main causes of the economic troubles of Great Britain since the war have beep
The burden of inproductive debt;
Increase of Bank of England's liquid assets at first opportunity and maintenance at 1. high figure.
Increase in capital of the Bank of England. Cessation by Joint Stock Bauks of "window dressing "
for monthly returns and at end of year.
London Clearing Banks should' 'keep cash in notes and balansla with the Bank of England of not less than 10 per cent. of their deposits.
Over-lavish expenditure by the State and local authorities;
.Excessive cost of transport nhi distribution and of the products of sheltered and protected in dustries; and'
"Meanwhile, the poor victim drage out a miserable existence in the prison through these dog-days."
BRISTOL CHANNEL
WATERSPOUT.
"LIKE A BOILING POT
Weather vagaries at Home on July 6 included a waterspout in Bristol Channel, as a prelude to a thunderstorm.
·
The attempt by all classes to maintain a standard of living higher than is justified by the facts of the economic situation," "It is no doubt true," olmerves On the subject of window. Lord Bradbury, "that the pay dressing, the Committee observe, ment of the interest on internal "the monthly figures published by debt and allowances to unemployed eular area
The waterspout, covering a cir "The first measure towards the the clearing banks are not true workmen are merely a transfer of diameter, suddenly shot up from
of over Sevea per cont, arose out of the
100 yards
war;
restoration of the price level inust daily averages." A certain part of incomes within the, country, but the marine bathing Inke at Clove- Increases of tarifs abroad play-be taken on the initiative of the the published reserves of the clear (except in so far as they are met don, Somerset. It is stated to have
brond play be ed an important part, particular- creditor countries, and consisting banks in the shape of, deposits ly in textiles;
partly in a greater willingness to with the Bank of England is like the taxation of rentier or the attained a height of nearly 40ft. * A unemployed workman himself) it is few minutes afterwards a thunder- That our technical efficiency buy and partly in a greater will. a stage army, the same liquid ro
in transfer from the producer to the storm, broke over the town. was much inferior appeara un ingness to lend." In the main a sources doing duty four times over
non-producer."
Mr. C. J. Gibson, the piermaster, likely.
concerted. policy is necessary be. in the course of each week. At the The major explanation of the tween the Central Banke and end of each half-year the same
said:" adverse changa in our relative costs issuing institutions of Great practice, euphemistically known as to produce and in the end ceass abroad, but never iny in the process of raising the Britain, France, and the United' window-dressing,' is followed ou a gold value of sterling unaccomStates. The principles of action grander scale. panied by corresponding reduction | suggested are:-
of those oats in terms of sterling.
Major Cause of Collapse. The Committed go on to defend the Bank of England against critico of its restrictive policy, and to examine the responsibilities of creditor countries and debtor.coun- tries in relation to foreign lend- ing and borrowing, and its bearing upon movements of golden
44
Debtor countries they declare which wish fo be able to maintain their surp his gold holdings must not depart too far from a balance,
No Useful Purpose.
leave the producer with no motive "If it goes far enough it will
perforce because there will be noth-waters. ing, to transfer.**
General acceptance of the desir ability of foreign lonus being made by the lending creditor countries on a greater scale than in the past two years.
The removal of hindrances in her 31-the only figures with which the way of opening financial war-
moat of them supply their share Lord Bradbury recommends efforts kets to foreign. Joana and the holders and their customers-ap to secure a better working of the maintenance of a volume of pear to be about £75,000,000 in gold standard by international domestic eredit which will cu excess of the figure normally held. agreement; better machinery for courage the market to take fur advantage of attractive foreign
"I have seen such a phenonerzon in English
"The waterspout rose from the The malady, says Lord Bradbury, lake and came over
sen wall. In the case of the end-yeur appears too deep-seated to be re Then, very slowly those
gradually window-dressing the aggregate de moved by any manipulation of currising higher, it crossed the pier posits with the Bank of England reney or credit. The real remedies from south-east to north-west, going offered by the banks of the country for our economic troubles lie in the up channel. Its area never excecd- as a temporary display on Deveni main in a field outside the turma ed that of the lake from which it
of reference of the Committee. had risen.
issues.
The water all round was por. fectly cair, but the actual water- spout was like a boiling pot and throw. "masses of spray high into War are not aware that these providing domestie ludastry with the air passed the pier about practices, serve any useful purpose, long-rate credit and permanènt a quarter of a mile off and took We think that they are, not credit-onpital, and strict coonomy in about twenty minutes to cover three,
(L'ontir ued in mezi Column.) public expenditure.
quarters of a mile."
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