HONG KONG DAILY PRESS
MANAGED CURRENCY
TALK TO ROTARIANS
Instructive Address By Prof. Robertson
A very interesting talk entitled "Managed Currency" was given by Prof. W. Robertson, of The University, at the weekly mesting of the Rotary Club yesterday when Prof. W. I. Gerrard presided over a large gathering, including the following visiting Rotarians: Messrs. R. J. Holmes (Nanking), J. T. Kwo (Shanghai), J. Marsh (Shanghal). A. Schaefer (Shanghai) and William Yinson Lee (Shangbal).
At the conclusion of his speech, Prof. Robertson was thanked by Rotarian P. 8. Cassidy, who said he felt sure that those who had listened to the very instructive address appreciated the finer points of it though he would, himself have to cut the report from the news- papers and slowly let one or two paragraphs sink la!
| JAPAN'S
INVASION
OF CHINA
Communism" Excuse
(To the Editor of the Manch- ester Guardian)
Sir. One of the most. frequent and spectacular excuses given by the Japanese in defence of Japan's Invasion of China is that Japan is conducting a "holy war in order "to save China from Com- muniam." In order to prevent this facile slogan from doing endless mischief in creating bellef by repetition, we need only recall that as early as 1937 the Chinese Government had sternly denounced Communism and that General Chiang Kai-shek has personally directed the campaign against the in London and able to be with-Communists until finally the rem- drawn at call or short notice, was
nants of the so-called Red forces absorbed into the monetary sys- were driven to a small corner of tem. Its withdrawal on.
a large scale, should its owners decide that it would be safer elsewhere. in volved sudden and rapid drains from the gold stocks of the coun- and indeed this was one of the main factors in the 1931 monetary and financial crisis.
The chairman announced that, la which it takes temporary refuge. he was sorry to inform members When Britain was on gold, such that Rotarian Roberts was seri- refugee money, funds, namely be- ously ill and said he would like to longing to foreigners but deposited have the Club's permission to write him and wish him a speedy re-
covery.
יי
MANAGED CURRENCY Addressing the gathering Prof;
Robertson sald:--
I should perhaps make it clear at
the outset that I shall not cell- berately state a case elther for or against managed money.
The meaning of managed money
ON
GENERAL
HSUCHOW'S IMPORTANCE
IN CHINA'S DEFENCE
Must Thwart Third Phase
Of Japanese Aggression
After passing through Chengchow, a semi-deserted city släce the ruthless and indiscriminate bombings a "month ago, which resulted in a civilian casualty list of 420 killed and wounded, and eastern Ho- nan, where there are over 1,000,000 wandering victims of last year's' flood, visitors to Hsuehow invariably find this city encouragingly buoyant, writes a correspondent from Hsuchow.
From Chengchowto Bauchow, and two smashed two sections of
side-tracks.
the special express train service
has been brought back to an al- most normal schedule.
་་
Repair gangs were rushed to the scene, and within two hours the damaged rails, and sleepers were replaced.
The Lunghai Green Express has by far the best coaches in China. Built in Belgium and operated Besides being the junction of two since last spring, these de lure trunk railways, Hsuchow is a dis- cars are more spacious than the tributing centre for the Hwai River Blue Express coaches on the Tain- salt belt. If the salt supply from pu line.
the Hwat Valley is out off by the Coming back to the situation in Japanese, as they have done with Hsuchow, I was cautioned by some the Changlu salt in the north, the North-west. where they Hankow residents before I started then Central, North and Northwest mained quiet and revised their the expedition that I would have China will have to depend upon attitude. Even the Japanese them to hurry back and forth, otherwise, Szechuan and Kwangtung for this selves must know that few
I might be cut off by the Japanese vital supporter of life. countries have waged Wa
invaders.
IMPORTANCE OF HSUCHOW Communism so persistently during
However, I have not yet encoun- The protection of Central China wered such an experience. Chan-lagalnst - the Japanese aggresser ces are that I will not have to hinges on the defence of Hsuchow. scurry hither and yonder.
Should the Chinese lose Hauchow, the Japanese would have easy con- One is not aware of a war going trol of the whole of the Tsiapu 100,000 population-except for the third step of their imperialistic ad- on in this railway junction city of Line, thus paving the way for the frequent air ruld sirens. The pre- venture in China-the occupation sence of Gen. Li Tsung-jen, Com-u the southern section of the mander-in-Chief of the Tsinpu Pinghan Railway, with Wuhan as Front, helps to bolster the morale their anal objective.
recent years as China.
Simultaneously with the cam- paign against the Communists China has been rehabilitating the
is perhaps most clearly indicated with other examples of managed ["country" materially and spiritually ¡ AERIAL REMINDERS OF WAR
by a phrase in the Barik: speech of Mr. McKenna, namely "a free monetary system." There is a story that Mr. Baldwin (as he then was). round about 10 years ago was seen poring over a dictionary. When asked why, he said he was looking
- for a word which meant Protection
without saying so. (Laughter).
To those for whom the words "managed money" convey 2 sense of original sin, the phrase "free money" may be confidently offered. (Laughter). If managed money is. "free" money. the ques-
tion arises, free of what? The answer is "free of any rigid at tachment to gold" for allver, as the case may be). Free. that is.
from the danger that its value may be so distorted by extraneous influences as to render it an im- pediment rather than a help to the industry, trade and finance of the community.
NO EMBARRASSMENTS
DE-STERILISATION ·་ Tume does not allow me to deal
exchanges and currencies. Ameri- es, after devaluation, found gold owing to her in large quantities For a time after 1934 this gold was allowed to enter the American monetary system and cash and credit basis. In 1936 this swell the
policy was reversed. requirements of the banks were successively increased, and sterili sation of incoming gold on lines similar to those of the British plac above described was adopted.
the reserve
The New Life Movement and the People's Economic Reconstruction Movement have carried the good work into every province.
Thousands of schools have been opened, numerous public health
services organised, rural centres for the Improvement of agricul- türal methods established, and farmers' co-peratives opened and financed in many parts of the country.
Hand in hand with this went
of the local populace.
.. The Japanese 'started their Before be came up here to northward push from Nanking assume military command and the early last February. But their ad- eivil governorship of Anhwei, Gen-vance was thwarted on February eral . had distinguished himself when they were driven.south as a champion of the masses in of the Hwal River. Kwangs!, his native province. Then about the middle of March, Early this year, partial de-on the sterilisation was inaugurated, and
Regarding air raids, the local the Japanese launched south- railways, telephone and telegraph Lunghai and Tsinpu stations have ward thrust along the Tsinpu line finally a week or so ago the Ad-communications and the develop experience upward of 200 bomb-trom Shantung. On March 22, ministration announced plans for complete de-sterilisation, reduction helped to link up every corner of
ment of civil aviation, all of whichings since the hostilities broke out, the "Japanese spearhead, penetrat- The other day I witnessed theed into Talechwang on the edge requirements, and in the
Japanese raiders. Four were kill-from Hsuchow. raining of shrapnel bombs from of Shantung, only about 35 miles
of reserve
short, an inflationary (or if you like a reflationary) programme.
Holland and Switzerland, which are places of refuge for foreign balances also, have through stabil sation devices sought to maintain even exchanges and prevent un- effects upon their cur- rency. The latter country - even
The essential characteristic. healthy
then, of managed money is that it enables monetary policies to
De makes a charge for taking short devised and operated without the term funds in, although this does embarrassments which the old
not seem to make much diference
fixed parities entalled. This free-to her attractiveness as a refuge. dom w pot readily be given up.
POSITION IN FRANCE
10
French money.
construction of roads.
vast corntry. Peace and prosperity have reigned over the country during recent years.. Thised and seven wounded on that day Events in the ensuing 15 days as shown by the steady increase has given a great impetus to trade
in a congested residential district proved that Japan has again fall- or the maritime Customs returna
around the Sun Yat-sen Memorial ed in the Talerchwang sector aa Hall here... during these yearA.
they did on the southern Tsinpu Almost simultaneously, four gaint front. Furthermore, the Tater- demolition bombs were dropped on chwang 'battle has proved to the the local Lunghal station. One world that China, after the signal made a crater about 30 feet across victory there, is beginning to win and 18 feet deep outside the the war despite her inferiority in statton compound, one was a dud, military equipment.
in
It is largely the achievement of the Chinese Government rehabilitating the country and Jo improving the lot of the people that has led the Communists to cbange their attitude towards Nanking. Since Japan's invasion of North China inside the Great Wall In 1934 the leaders have made repeated pro
Communist
posals to General Chiang Kai-shek to fight the common foe.
But he was cautious and would not have anything to do with
Attachment to a narrow and France would need a talk all to inelastic gold value used to hamper herself, Bince her depreciation in the Central Banke or other mone-1935, she has, unlike the tary authorities in the measures great monetary centres mentioned. other appropriate to the situation at any been on balance a great loser of moment. They had to do their gold. The internal and external best for the business of the com- politieal difficulties which have them until they were ready to give munity by trying to furnish it with produced continuous uncertainty up their Communistic. preaching the volume of money and credit and lack of confidence among which it needed from one week to holders
and join the national forces on
the next.
are his own terms. This they did "at familiar to us. She has, therefore. the outbreak of the present large- But at the same time they had been less able than Britain and scale hostilities and accepted the to keep an eye on the state of their America to pursue the co-operative Generalissimo's leadership uncon- gold reserves, which rose or fell
policy of positive monetary re-aitionally. according to the balance of pay-construction which was one of the ments with countries abroad. In aims of the Tripartite agreement.
The truth is that by tempera- ment and tradition the Chinese taking measures appropriate to the
Her stabilisation funds latter, they might be falling in the tended constantly to be depleted of munism.
have people are not prone to Com. former duty.
Even in North Manch- gold and foreign exchange. A few uria, which is so close to Russian "FREEDOM TO MANAGE" weeks ago there was even sugges- influence. there had been no trace The essential feature, therefore, tion of exchange control for of Communistic tendencies among of managed money does not lie so France, which would have cut her the Chinese people up to the time much" in "management," for Cen-on from any possibility in sharing of the Japanese invasion of 1931, trai Bank control or "manage- in international monetary policy. ment" had characterised the old some countries have used the Ex-North Manchuria I often observed During my five years' stay in system too, but in "freedom to change Control system to rid them- manage." Of course, this Central selves of outside embarrassment would simply laugh at the idea that the average Chinese folk Bank control is fully possible only while pursuing an internal po ley when
In countries where there is a high ly developed centralised banking and credit system, and a money market of an advanced type.
WORKING METHODS
of recovery. Germany affords the chief example of this device
MONETARY STABILITY
The essential question is, how far have we gone towards a new We may now take a glance at and relatively stable equilibrium? some of the methods of working The British, Scandinavian managed
currencies. The
Arst
other countries of the
and
Communism was talked
about. Similar observations have been made by many impartial observers. On the other hand, it must be observed that the Chinese. have never shown any antagonism
against Communism or any other kind of "ism" cherished by China's the Chinese would consider it sterling neighbours, because by tradition
fere or bother about the idealogi- cal "doctrines of other peoples.
The Increase of Commanfatic activities and the growth
thing to have, and it is a thing group have shown in recent years which was present in the older a great measure of monetary system as well. is sufficient control stability. It is true that British by the Central Bank or other in-policy has on occasion "been cri ancial authorities over the volumeticised by one or other of these of money and credit.
Notes are the chief type of cash countries, as for example a year or
STABILISATION
none of China's business to: inter-
of
50 ago when that policy was "dangerous thoughts" in Manch- these days: and the note issue is directed towards a very deanite uria, as reported lately by the stili governed, as it used to be,, by the amount of gold held by the
rising price trend,"
Japanese, are a direct result of various Central Banks, or by the travel before complete certainty in
There is still a long road to Japan's military occupation. It is amount of foreign exchange (say monetary affairs can be achieved: Japanese military forces are with- safe to say that as soon as the dollars or sterling) which they But it is certain that the aims of drawn Communism in Manchuria hold, or by the two combined. I international policy must be to en- and other parts of China will England and. America, gold still sure by means of joint action as quickly disappear." controls the note issue. But, as we small a degree as possible of hand, even the Japanese must On the other ahall see there may be a certain nuctuation in the purchasing realise that the continuation of elasticity even here.
power of gold; the establishment Japan's wanton invasion will not of exchange parities which will re- only drive the Chinese Into the In addition to these familiar present the real long term inter Communists' arma bat will also "methods of control; recent practice national position of each country help Communism to bore its way has evolved the device of the and at the same time to maintain within Japan itself Yours, &c. stabilisation or exchange equalisa-such a degree of elasticity as will tion fund. This device was a Lon, allow currencies to move when
C. C. Wang, former Director General of the Chinese don invention, and may best ho need be, not violently" and ex-
Eastern Rallway, Illustrated from British practice. cessively, but smoothly and without One of the thief embarrassments disruption of the system itself, to of the "post war period has been move; that is, in accordance with the uncertain and variable move-economic facts and not with econo- ments of short term funds from mid fears,
one centre to another. This "hot" This will not be an easy task, money constitutes a danger to the but the experience in management, currency systems of the countries and especially in co-operative
(21, Tothill Street, Westminster.
London, 8:W. 1. April 7.
management, of recent years will assuredly be brought to bear upon these future problems.
TEL. $8.906
WEDNESDAY,
"APRIL 27, 1938.-PAGE 11
No sleep last night? TRY
"BLACK
WHITE"
THOSE WHO KNOW, SAY IT'S THE SCOTCH.
WINTER CLOTHES
Women's, Men's & Children's
WANTED URGENTLY
COATS & UNDER-CLOTHING
HONGKONG BENEVOLENT SOCIETY Monday & Thursday
ICE HOUSE, STREET
10 to 12 Nood,
A Japanese prisoner has penned in his diary the following poem, which may be freely rendered as
tollows:
**Tientsin fell in only four hours. Six hours needed for Tatman; Who would think it difiéult "To pocket tiny Talerchwang!”
EXCHANGE BUILDING
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HONG KONG,
H. M. S. PARTHIAN.
THE GLOUCESTER
7 HUMPHREYS BUILDINGS, CORNWALL AVENUE,
KOWLOON,
HONGKONG & SHANGHAI BANK BUILDING
QUEEN'S ROAD CENTRAL HONG KONG
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HÀNG XONG
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