41
MONEY
HONG KONG DAILY PRESS, THURSDAY, APRIL 20, 1933′
AND MARKETS
INFLATION---ITS "PRO"-S
AND "CON"-S
SET OUT BY ASIA LANDS, LIMITED
Inflation of curreney may be brought about by one or more of several methods:
l
A WIFE'S SHARE TRANSACTIONS
Suit in Shanghai Supreme Court
were
Mr. Newman; opening the cast, said that the plaintiff, who had lived here for over 17 years, had bees employed for some time as manager of the Office Appliance Co. Ever since their marriage, the plaintiff had allowed his wife, the defendant in the action, an allowance which ranged from Tls
Shanghai. April 14-The defon. 20 cents to 30 cents per bushal, at
ce offering no evidence on thei: be- the same time the prices of every half, judgment went to the plain- thing the farmer buys would in
tiff by canseut in H. M. Supreme' creage proportionately. On I. Issue of irredeemable paper, other hand, it is argued that. E. S. Joseph.
the Court in the action H. B. Joseph
Counsel money. Any nation on the gold halving the amount of gold in the Mr. K. E. Newman for the plain standard promises to redeem euch dollar would raise the dollar price tiff and Mr. F. G. Livingstone for unit of paper currency by an of all the country's raw materials the defendant. amount of gold fixed by law. In Wages do not fluctuate as does the order to do this, the Treasury, or value of commodities, therefore the the banks of inste, are compelled cost of manufactured products to retain fixed amounts of gold in would not be raised. Rent, in- reserve. If currency is printed terest and taxes paid by the mana- which is aut redeemable, it is or facturer would not have to be in dinarily called inflated currency. I creased until he bought new raw 2. Debasement of Standard of material. Thus, inflation would be Currency,
a sure method of reducing real (a) By reducing the gold content. wages paid to government en (b) by introducing bimetallis-ployers, and therefore taxes, process which involves monetization least, would not be increased. of silver, as well as gold.
In foreign trade a change in the gold dollar might help. Foreign goods would cost more in dollars, He then called Mr. Joseph who so import to the US.A. would in answer to questions put by decline, and American goods would counsel, said that some time before cost foreigners less in gold dollars, his wife had won $30,000 in a so exports would increase. This sweepstake. In June, 1931 he would be the case until, and it, bought 150 C. P. R. shares for her foreign nations increased tariffs at her request. She handed him a or further restrictexi import quotäs" cheque for Th. 5,300 for these to neutralize American compeition shares, which he in turn handed over to Messrs. Swan, Culbertson with their own products.
and Erits, the brokers. This sum was for the margin.
a. Going off the gold standard by suspending gold payments, which produces a situation similar to 1. c., the issue of irredeemable pa-
per money.
4. An expansion of paper money, The second and fourth of the Foregoing methods are being strepu. ously pressed by the protagonista of inflation in the United States at the present timë.
As far as stocks are concerned, it
were
is a self-evident fact that if the It might be enlightening to con. sider what these methods are up-gold content of the dollar posed to accomplish; how they can accomplish it and what dangers they involve.
200 to Tls. 350 a month. He then briefly went over the facts of the case with his lordship, Judge P.
Grant Jones.
Calls for More Margin,
In August the same year, the market sagged, and another mar
reduced, prices of stocks in the new dollars would be higher than prices of stocks in the old dollare. This is axiomatic as, naturally, twice as many half-dollars as dolgin was called for, She handel lars are required to purchase given article
1
The tendency of the new dollut would be to rise, but pot at all in proportion to the out in its gold weight nor is its rise a certainty, Since England abandoned the gold standard in 1931, the gold value of the pound has been decreased by about 31 per cent, and prices of commodities in England are at the levels of 1831. The process of ad justment of the price level to the new gold content would be a slow one. For a long time, people would receive the old incomes and ove the same debts.
him a tal cheque for Tis. 1,500, which he in turn banded over to the brokers. This happened again in the early part of September, when she handed him another che que for Tls. 1,325. She left soon after for Teingtoo, and another margin for G. $450 was called for. He paid this in her absence, and informed her of this on her re turn. She said she had no ready money at the time, and as he had no need for money then, he did not worry about it. He had never intended it as a gift.
NEW YORK STOCK EXCHANGE
ASIA LANDS, LTD., QUOTATIONS
(INCORPORATED IN HONG KONG.)
Tel. 28280-Gloucester Building, Room 300.
(REUTER'S AMERICAN SERVICE.]
Change
Now York: April 18. -
Dow Jones Averages: High-1932
Low: Apr. 17
Apr. 18
30 Industrials
88.78
41.22 61.59
62.65
1.08 down
20 Rails
41.30
13.23 25.70
26.12
+42 down
36.11* 83.26
16.53 20.75
20,09
.24 down
65.78 74.41 74.10
25 down
20 Utilities 40 Bonds
Asia Lands, Limited, has received the following report from their New York correspondents, E. A. Pierce & Co. The controlling market is influenced still by inflation talk, which is likely to continue to be tho principal factor at present, Rails and utilities are disappointing, particularly rails. The wheat and silver markets have felt the influence of aggressive buying, apparently induce by continued inflation rumours, aided also by the strength of foreign currencies. Cotton: An active markot, with minor profit-taking in evidence at the close. Businesa Done: 1,430,000 shares,
1932
DIV, 9 HIGH Low PEE. SI.
6.00 Allied Chemical & Dye
́ ́EUROPË-VIA SUEZ
AMERICA MASUEZ!
STRAITS AMEINDIA
The President
13
TO CALIFORNIA TO NEW YORK LAPAKINA
TO SEATTLE: VICTORIA
INTERPORT Liners INTERPORT
Weekly Sailings Transpacific
REDUCED ROUND TRIP FARES
On Sale from JUNE 1st
to
JULY 31st
With Return Limit to
September 30th
Hong Kong to
Honolulu and Return
Apply for farther particulars........
DOLLAR STEAMSHIP LINES AMERICAN MAIL LINE
PEDDER BUILDING – HONGKONG, CANTON BRANCH-4, Shaxx Road.
LAST SALE Apr. 17 Apr 18
84)
30%
3.0 Air Reduction
50
954
80%
42
801
891
73%
20
4.00 American Can......
011
632
རྙ་
27
American Smelting....
10
208
137#
70
9.00 American Tel.
Tel:
893
44
5.00 American Tobacco B
First Class Special Class
19
3
Anaconda Copper Mining
G$ 360
G$196
1514
281*
2.00 Auburn
36
Victoria and Return
G$ 432-
G$ 240
43
182
1.60 Borden Company
Vancouver and Return
208
7
Canadian Pacific
કર
G$ 432
G$ 240
65
103
J. I. Cast
***
Seattle and Return ...
......
473
G$ 432
G$ 240.
214
5
1.00 Chrysler Motors
081
314
4.00 Consolidated Gas of N.Y,
112 44
124
San Francisco and Return ...
G$ 4,50
4A
Los
57
23
3.00 Drugs, Inc.
s Angeles and Return
G$ 240
KAM
G$ 450
333
G8 246
363
694
22
2.00 Du Pont de Nemours
36)
324
877
351
3.00 Eastman Kodak
32
63
48
&
-6s. Electric Bond & Share
12t
127
201
8h
0.40 General Electric
141
401
198
2.00 General Foods
93)
248
78
1.00 General Motors
131
14
109
1. Gillette Safety
12
121
34
102
0.60 International Harvester .....
231
108
681
7.00
(Preferred)
921*
·013
187
29
International Tel, & Tel.
871
341
4.00 Liggett & Myers
61
67
87%
371
0
1.00 Loew's Inc.
19
166
34
Montgomery Ward
122.
14
15
404
201
2.80 National Biscuit
37
163
2.00 Racific Gas & Electric
38A
.391
233
0.30 Pennsylvania Railway
21
13
Radia Corpn.
161
102
37: 37
Sears Roebuck
42
197
1.00 Standard Oil Co. of New
182
Jersey
12}
of
0.40 Socony-Vacuum Corpn.
15
1.20 Union Carbide & Carbon ...
25
941
27,
6.00 Union Pacific
€3
528
158
United States Steel Westinghouse E. & M.
32%
33%
મુ 231
* Bid.
43
Vand
THE EXCHANGE MARKET
MESSRS. ROZA BROS..
The Purpose of Inflation, What is the Purpose of Infla tion: The object of inflation is to put more money in circulation and raise pricer. It is obvious that at present, people have not enough purchasing power to buy the goods that can be made. Thus, it is any to conclude that, if the government should create and put into circula- tion, a substantial amount of now money, the people would have more to spend and prices would obvious ly begin to mount. It is also ob vious that business and trade would benefit if prices started to rise. Prominent among the first uses to
gin of G.8250 was called for, and Shortly afterwards another ar which new money would be put is the refinancing of existing farm
she paid by a tael cheque, as she did in October when another mar mortgages at their fans value, and
Silver Inflation, making possible loans on farm pro-
gin, this time of G.8500, was call Silver- Indation. As pointed out ed for. On May 27 of the follow. perties, representing a high per by the experts who prepared the ing year, there was a final demand centage of their appraised value.
agenda for the coming World for Tls. 1,000, which she paid. How Could Inflated Currency be Economic Conference, the bimetallic Shortly before this demand, he put into Circulation:
Any new standard, which presupposes a fixed had bought for her another 50 kind of legal currency would have relationship between the value of shares of the same company. There to be issued and spent by the gov- gold and that of silver, could he was no margin to be paid, on these
Messrs. Roza Bros. bave forward- ernment itself in order to get into safely introduced only if the most shares, as there was
the following exchange 115 Bufficient ed circulation. Whether or not by important nations of the world margin overpaid on the other 150 market report for yesterday :-- printing some billions of treasury agreed to such an incrense. As the shares. These shares were later noney a proportionate lift in pr gold standard is the only interna sold at a profit, and a balance of ces would occur is another question. tional monetary standard which is Tis..000 was paid to defendant.
Silver prices dropped 1/16 yes- In 1931 about a billion dollars were
at present, likely to command uni- The shares were then transferred terday for both deliveries, the paid to veterana in bonus money varsal acceptanos, the idea el in to her name. He went to the quotations being 17.15/16 for Ready without causing any real increase troducing bimetallism must be re brokers and bought 100 shares for und 18 for Forward. Silver ad- in business or any advance in pri-garded as impracticable. These, himself, offering as margin the Vices reported America as having experts rule out the use of silver, shares of Mr. Joseph, which they bought. China sold. The tone at There is now in circulation about even in moderate amounts, as part were at the moment holding. Mrs. the close was firm. The American #15 of currency per capita of the of the reserves in central banks, Joseph. went round to the brokers price was quoted at 30 for Spot. population of the U.S.A. Ench saying that silver is unsuitable for scon after and withdrew herThe market was strong! additional billion dollars of new such use, because there is no fixed shares, so Messrs. Swan, Culbert currency brought into existence price at which it would be received son & Fritz asked him to provide The London/New York cross-rate would amount to eight dollars of by other central banks in the settle-a margin on his shares. He then was higher at 3.471. new money per. persOT. But the ment of balances on international told his wife that she must either
ces.
increases needed to raise the gen- eral levels of prices are far greater than those made possible by print is to continue to be redeemable by ing new paper money, if the money
gold.
accounts.
a
REPORT
take her shares back or else let
New York/London was quoted at Credit Inflation: Expansion of him have the G.8450 back, as she 3.51 Firm. credit occurs when business or in knew he was at the end of his re-
The Sterling market was steady increased amounts. The more they They had been staying in their firm. Towards the close rates for dividuals or governments borrow in sources. She refused to do so. but the Gold Dollar market was borrow, the more they spend. Ex-on's flat, but he had been forced both currencies declined slightly of governmental pansion of credit is therefore one to leave it due to the attitude of following Shanghai.
his wife.
Wife's Decision.
Mr. Livingston, after formally
Sterling.
The market opened with sellers
The danger spending of inflated currency, re-way to put purchasing power in gardless of the amount of gold on circulation and increase prices. which it is based, is that there is Those who believe in credit" infa- no theoretical end to the process tion point out that most business until prices reach astronomical in America is done by credit and submitting that there was no case heights and money becomes actual pot by currency. The price col- to answer, and that the sum of at 1/3, buyers bidding, 1/3.15/16 worth nothing. This danger lapse has been accompanied by a G.8450 had been a gift, went on leading to business at 1/3.15/16 for could be theoretically avoided by great shrinkage in the volume of to cross-examine Mr. Joseph, who, placing a limit on the amount of bank credit and not by reduction in reply, said that his monthly May relivery followed later by a new currency or by the spending in the amount of currency. The salary in August of last year emall transaction at the same rate. program itself. But in practice it loss in bank deposite, which form averaged 8800 a month, including for April. The market closed with is difficult to adhere to such a limit the basis for bank credit, has am commission on the company's busi sellers at 1/3 April, 3/3.29/32 May when the time comes. The govern-ounted to about 15 milliona dollara ness. In May he had made over and 1/3.16/16 June, buyers at 1/3. ment, for instance, finds it difficult since 1929, or to some 68 per cent, Tls. 18,000 on the exchange, part 15/18 April/May and 1/3.31/32 to collect enough in taxes to meet while the volume of money in eir- of which had been invested in other June. its obligations when prices rise too culation has actually increased. shores, part of which he had lost rapidly. It is therefore tempted to Thus it might be argued that what in other transactions. His wile print more money and thus a vici- is needed in order to lift prices ous circls comes into existence. is an expansion of bank credit..
-" Debasement,”--
Gold Dollars,
8 ⠀ * € - ⠀ ⠀ * * * * IF÷IZZIESCH£Ã£75 (~1:88
957
HONG KONG STOCK MARKET
YESTERDAY'S OFFICIAL
QUOTATIONS
Generally, prices remain steady to firm, but the volume of trading still continues to be from "hand-to- mouth.
In the mining section, however, both Benguet Consolidateds and Benguet Explorations were a strong market, and marked higher.
Bales.
Union Insurances, $0. Hotels, $6.05/7.
Hong Kong Tands, 874 Ewo Cottons, Shanghai, 816. Hong Kong Trams, 21, China Lights (Old), $12. Electrics, $793/721. Telephones, $27.15. Dairy Famne, 827.
Buyers.
Hong Kong Banks, $1,740. Canton Insurances, 81,260. Douglases, 832).
Benguet Consolidated, $201. Benguet Explorations, 33 cents. Wharves, 13.
Providen's (Old), $3.00, Providen. (New), $1,30, Hong Kong Lande, $74 FI.K. Realties, $7. Chinese Estates, 895. Macao Electries, $24. Lane, Crawforda, 24.35. Constructions (New), 90 cents. Govt. Loans, 0% Prem.
THE MERCHANTS' MARINE INSURANCE CO., LTD.
RECORD OF A DIFFICULT YEAR.
The report of the Directors of
PACIFIC ORIENTAL
MONTHLY CABGO AND PASSENGER SERVICE
M.S."JUTLANDIA" Sailing on 26th APR.
CARGO AND PASSENGERS ACCEPTED FOR SHANGHAI, SAN FRANCISCO, VANCOUVER, SEATTLE, LOS ANGELES, ETC. THROUGH BILLS OF LADING ISSUED TO OVERLAND POINTS. Excellent Passenger Accommodation
Passenger fire Hongkong/San Francisco
(1st class only)
08120.
For Freight and Passage, etc. please Apply to: THE EAST ASIATIC CO., LTD. THE CHINESE AMERJOAN
SHIPPING COMPANY
Agenta:
JOHNMANNERS & CO. LTD.
Agent: HONG SLING
Office: MERCANTILE BANK BUILDING (TOP PLOUK), 7; QUEEN'S RD., CENTRAL,
TELEPHONE : 24071..,
LLOYD TRIESTINO
FLOTTE RIUNITE LLOYD TRIESTINO-MARITIMA ITALI«NA-SITMAR
FAR EAST INDIA ITALY
Express Passenger Service
S.E, "CONTE VERDE" for Shanghai S.S. "CONTE VERDE" for Italy (London)
Freight Service
S.S. “CARIGNANO " for Italy vis perts S.S. MARIN SANUDO" for Sha
had given him money twice, as far The market opened with sellers ins he could remember, a gift of Banking Policy and the Conclusion. sweepstake, and the Christmas box at 233 for June followed by transac- the above Company, held in Lon Tis. 2,000 after she had won the at 23 for cash leading to business Another method of inflation that We see, however, that over since of Tie 100, which she later got Later 234 who also done for Maydon on the 21st March states that
tions at 231 Juse and 23 May. is much discussed is that which the early part of 1939, the Federal back in another form: would reduce the amount of gold Reserve Banks have adopted a A dramatic turn was given the delivery. The market closed with after a series of unremunerative in the dollar in the expectation policy calculated to stimulate ex- that prices would rise in propor- pansion of credit. But this policyed in the afternoon. Mr. Living and 23.5/18 June, buyers at 231 glad to report that the operations market value on the dist. Der
case when the bearing was resum-sellers at 23} April, 23.3/16 May years of working, the Directors are
| value on the 31st December, 1028, | tion as the gold content was re- has resulted in almost no expansion stone said that he had had an op- April/May and 238 June.
of the Company at the 31st Decem- duced. One of the difficulties in in loans by the banks. The reason portunity of discussing the matter
ber, 1939, resulted in an underwrit-comber, 1932, being £193,730 08, d. carrying out such a project lies for this is the preference of banks with his client in the interval,
ing profit from
The sum of £15,000 has been trans- Yen. in the existence of the gold clause, for keeping a high degree of liquid- and she had decided not to give
In the 1939 account the net forred from the profit and loss C- i.c., the US.A. federal bonds, mostity and the fact that business has any evidenco. Mr, Newman then
count to investments reserve fund no sound prospects on which of the estate and municipal bonds,
Merchants were quoted at 100 premiums amounted to £225,328 28. asked for judgment and costs as for near delivery."
4d, and the claims paid to £44,080 which now stands at £18,294 108. and most of the corporate bonds borrow safely. At any rate, this arranged between him and his for
188. 10d. 19,6 per cent, as cont are promises to pay in dollars shows that lack of purchasing power
learned friend). equal to gold dollars of the pre credit, resources, but rather from ship, who in addition said:
does not arise, from any lack of
pared with 17.8 per cent. in 1031. This was granted by His Lord
Shanghai Dollars,
Fire and General Account. The increased during the year by ro The reserve for income tax was seat weight and fineness, The
"I Supreme Court has rendered dect the absence of confidence.
think, Mr. Livingstone, that your
Sellers around 100 for near de premiums for the rear, after deduc funds of taxation, and after trans sious declaring such gold payment Conclusion: The cousinsion.ot-
client. has taken a yess right and livery.
tion of reinsurancos, mounted to ferring £2.50 to profit and lose 90 contracta valid, irrespective of whethe whole matter seams to be that
«Skanghai- proper course,
-£51;243–178. - 28. The losses paid count, now stands at £3,845 136. ther the money is on the gold stan-efforts to revive domestic and for
and outstanding to the 31st Decem-d dard or off it
Business was done early in theber amounted to £21,648 38. 7d. morning at 1/2.8/16 for near de- After providing for unexpired risks,
to
eign trade by ourrency or banking
11
od.
It is questionable whether debase. alone is based on a misunderstand lief, what really counts is the relivery. Later the market eased off the profit of £1,176 136, od, has been by insolvent reinsurers is approach ment could solve the farm problem. ing of the manner in which econo gulation of production, the distr and towards the close business was transferred to profit and loss ac- ing completion. The Directors are The liquidation of the debte auc Even if it is assumed that through mie processes work. Though pump bution of purchasing power, the reducing the gold content of the ing more money into the economic regulation of the specific uses of reported at 1/2.7/16 April. There count. dollar by one-third, the price of system may provide temporary re- credit and the establishment of in-were probable seller's at 1/2.7/10.1
of opinion that the reserve set up corn, for instance, would rise from (Continued at jost of next Voluma) ternational goodwill.
The investments are shown in in the past will prove sufficient to buyers at 1/21 May.
the balance sheet at their market meet losses in this connection.
6th May
14th May
9th May
ghai & Japan 18th May
"DODWELL & Co., Ltd.
AGENTS.
AMERICAN ORIENTAL FINANCE CORPORATION through its Agent
A
Asia Lands Limited:
Gloucester Building
COMPLETEGUT BROKERATIN SERVICE
NEW YORK ST
oght and sold for
Phone 28880