HONG KONG. DAILY PRESS
35
JUNE 7. 1930.
Latest news from Nanking states that the Chinese Government is con- sidering the adoption of measures to deal with the silver question. Nothing definite is known as to the Government's plans, but rumours include the adoption of an "ima- ginary gold standard, and the purchase of all imports of bar silver, so that the Government may regulate the amount of metal on the market. As these measures are not definitely decided upon, but are merely reports based upon in- telligent anticipation, it is not worth while commenting upon them more than to say it is most satis- factory to learn that the Chinese Government is taking serious notice of the situation, and realises the gravity of it. Control of the silver market might help to check specula- tion in exchange-a practice which is bitterly complained of as having a disturbing and harmful effect upon the market. Undoubtedly there are many who do gamble in exchange, and make a very comfort- able living at it, but to stop the practice entirely is utterly impos- sible. These gentry would speculate in Hong Kong's fixed-value dollars if such a currency should come into circulation; in fact, a definite two- shilling dollar would give them yet another pawn to play with. There is no way of preventing persons gambling in exchange if they have the financial means for indulging in the practice, any more than speculation in commercial deals can be prevented. Reports of an unexpected scarcity of sugar cement, for example, will cause merchants who do not usually handle such lines to get hold of all available supplies-not because they want the goods to execute orders on their books, but because they believe it will be profitable to have sugar or cement in godown a month hence, by which time the market will have risen considerably. Cornering commodities when market is reported to be short- stocked and holding them for the big rise expected is just as much speculation as the operations of the gambler who buys currency months ahead, not because he needs it to settle accounts, but because he be- lieves he can make a profit on the deal. Such speculative activities do no good to legitimate trade, but are impossible to suppress.
or
a
That the slump in silver means very considerable hardship for many is not questioned. Everyone who sends part of his earnings out of the Colony suffers heavy loss; all who use imported goods in any form have to pay much more for them. These things are self-evident; what is not so obvious is how such con- sequences can be avoided, or even minimised. Possibly the report of the Currency Commission will en- lighten us
on these and other matters. We must wait and see, but we should not be expected to wait very long-and two months is much too long. The currency of this Colony could be stabilised; if necessary, the British Government could give the local Government its backing, in which case the Hong Kong dollar would have the British Empire behind it, but in what way that would assist local trade we cannot imagine. If the buyers and sellers in China whose foreign trade is the life-blood of this Colony are not in a position to do business, then no business is done, whether the Hong Kong dollar is fixed or fluctuating. If the Chinese wish to buy and sell, and Hong Kong can render services in connection with those transac- tions at a competitive figure, then the Colony's trade will prosper- but not if its standard of currency and of costs is to be fixed at a point far above those prevailing around it.