J'
[January 17, 1930
Jai
17, 1930]
GAINS AND LOSSES ON THE DOLLAR.
FORTUNATE GAMBLERS IN EXCHANGE.
HOW THE LOW DOLLAR WILL AFFECT THE HOUSEWIFE.
GAMBLING IN EXCHANGE. disappeared into a
ENORMOUS PROFITS.
While we hear many loud lamenta- tions over the falling value of the dollar,
and while exasperated victims have been busy trying to find remedies for real or imaginary weaknesses in the currency of Hong Kong and China there is a small section of the Chinese community who are enjoying a quiet laugh at the wails and moans to be heard on all sides. These people practically live on the doorsteps of the local banks, and not a day passes without exchange into they enter contract or other, either directly with the banks, or through repre- sentatives of those institutions, for the banks cannot recognise all and
fallow These men
the sundry. slightest change in quotations with the greatest interest, for they are gamblers all-in the business inter- pretation of the term.
some
Li
marked Manager," while a Daily Press man went up to the merchant.
room
}
"Are you worrying about the ex- change also!" was the query put to him.
"I should say I am. I am just waiting for the bank manager to Terrible state of give me a rate.
Who will send anything things! to Hong Kong at our prices? the reply.
was
An Unquoted Rise. Passing on to another bank our representative met a Chinese well versed in exchange matters, and not a little interested in the fluctua- tion of the Hong Kong dollar.
C
44
*1
Have you heard? he asked, on sighting the Daily Press man,
Exchange has gone up half a farthing, but the banks are quoting it?"
not
"No, I haven't heard," the writer
replied, "but why do you think the banks are not quoting it?"
"A further drop is anticipated, my friend, that is why!" was the cryptic answer he gave as he passed on.
to 108
THE HONG KONG WEEKLY PRESS &
Highest. Lowest.
1887 1888
474
431
44.9-16 418
1889
442
1890
548
41.15.16 438
1891
483
43
1892
432
37%
1893
38.13-16 30}
1894
31%
27
1895
31.5-16 27.3-16
1896
31.9-16
292
1897
29.13-16 23@
1898
98%
25
1899
99
265
1900
301
27
1901
29.9-16
25
1902
26
21.11-16
1903
28
1904
28.9-16
1905
30.5-10
21.11-16 24.7-16 25.7-16
1906
331
1907
32.7-16
1908
1909
243
1910
261
1911
261
1912
29.11-16
1913
293
29 24.3-16 27.1-16 22
23.1-16 23.3-16 23.11-10 25! 25.15-16
1914
271
221
1915
271
22.5-16
1916
37
261
1917
55
35.11-16
1918
493
42!
1919
79%
47.7-16
1920
89,
381
1921
433
303
1922
37
30
1923
33.11-16 303
1924
1925
1926
1927
1928
1884
36.1-16 313 33.7-16 31.1-16 31.13-16 24
243 287 26.1-10 1929
26.7-10 21.5-16 EXCHANGE IN HONG KONG (WIRE). Highest. Lowest. 3/93
28
3/6
1885
8/7
3/33
1886
3/43
2/11
1887
3/41
3/01
1888
3/1
2/113
1889
3/23
2/114
1890
3/102
3/01
1891
3/5
3/08
1892
3/0
2/82
1893
2/87
2/2/
1894
2/3
1/11/
1895
2/23
1/11
1896
2/23
2/1
1897
2/12
1/92
1898
1/113
1/93
1899
1/11
1/10
1900
2/1
1/11
1901
2/1
1902
1903
1904
1/94 1/108 1/61 1/10.11-16 1/64 1/11.9-16 1/8
1905
2/11
1906
1907
1908
1/8
1909
1/92
1/81
1910
1/10
1911
1/10
1912
2/1.1-16
1913
2/0.15-16 1/11
1914
1/11
1/81
1915
1/11
1/9
1916
2/41
1917
3/20
2/3
1918
3/8
2/11/
1919
5/2
3/02
1920
6/2
2/11
1921
3/12
2/2
1922
2/7$
2/23
1923
2/4/
2/21
1924
2/51
2/23
1925
2/51
2/27
1926
2/43
1/98
1927
2/03
1/113
1928
2/1
1/113
1929
2/01
1/7!
1/9.13-16
2/3.11-16 2/0 2/3.5-16 1/93 1/11
1/8.9-16 1/9.1-16 1/10.5-16
1/11.1-16
A Very Happy New Year. A good many of these people are looking forward to a very happy either Chinese New
for, Year through a stroke of fortune or through their close association with the banks and intensive study of daily quotations, they figured on a drop in the Hong Kong dollar, and entered into commitments with this end in view.
a
Whether they foresaw the present abnormally low rate is open to ques- tion, but it was learned on good
that authority yesterday
profit amounting to three, five and seven lakhs has been made by different number of speculators, while others have "small" profits of from $50,000 to $100,000 to show. There were a few speculators who did not believe in the continued fall in the Hong Kong dollar, and these have been caught, but not too badly, as the bulk of the profits, so it is re- ported, have been made out of the
banks.
When the dollar on Thursday touched the lowest record to date, a pitiful scene was witnessed out- One side one of the local banks.
MR. AND MRS. MAN-IN-THE- STREET.
LOOK AT THE FALLEN DOLLAR.
COST OF LIVING AND FAMILY
RESPONSIBILITIES.
While bank managers and pro- fessional, or amateur financiers, are discussing the silver basis, China's currency and the bank rate, Mr. and Mrs. Man-in-the-Street are ask- ing themselves what the fall in the value of the dollar is going to mean to them. And they generally dis- cuss the problem with long faces. The cost of living will quite inevit- ably go up, though probably not to any appreciable extent until March. Six weeks from now, if the dollar still stands at 1/6, the cost of living will have increased by from 25 to 30 per cent.
of
"The evil-minded grocer Chesterton's poem will not be to man, who was probably among the blame. He will have to pay for his minority who were caught, was ask- goods in sterling, and pay more ing those who had gathered closely dollars for his sterling than he did round him to let him off. To the tinue in business he must increase six months ago. If he is to con- man's repeated request there was at his prices. The same applies to first no response, but later one man
Evan flaunted a piece of paper in the every form of retail trade. supplicant's face, the while explain-vegetables and fruit bought from the ing that he was not actually pocket-interior, or Oriental goods of any ing any of the man's losses himself. description, will cost the retailer more because he will get fewer There followed a label of voices,
Canton dollars for his Hong Kong and whether the unfortunate man was eventually "let off" or not have treated their clients well in currency. Hong Kong retailers remains unknown, for the witness this crisis. With a very few excep- to the curious scene had passed on.
tions no prices have been raised on goods which were bought with the 2/- dollar, but it is unreason- able to expect them not to charge
Round the Banks,
At one of the banks an Indian merchant was seen in long confer-
ence with one of the officials. When proportionately more on those pur- the unversation ended the official | Clused with a 1/6 dollar.
Bome
こ
year's were
CHINA OVERLAND TRADE REPORT
It
Ook Not So Gloomy.
An Optimistic Note. A dis sion of the situation with
It seems likely that Mr. and Mrs. the leading retail ner-
Man-in-the-Street will not really chants the Colony revealed some
suffer as much as they expect to do facts. Their general from the low exchange rate provid- interest outlook not nearly so black as
ed they have no responsibilities at Home Living will be more expen- that of the man in the street and lis wife. While realising that their sive, but almost automatically our trade will be to an extent curtailed,
standards will be adjusted to meet they appear to feel a certain con- our incomes. There will be less in- idence that things will adjust them-dulgence in luxury certainly for a s-lves after a few months. The month or two, possible for longer, Sumps of 1920 and the following but probably little actual want,
"At first is on the parents of children at recalled. people stopped buying anything but school at Home that the burden necessities, but after a time they will fall most heavily, for their accepted the new prices as normal,"
school fees and upkeep will have to be paid in sterling, which will mean representative was told. The retailers anticipate doing on
a bigger outlay of dollars than the whole a smaller volume of trade formerly. during the coming year, but they do not seem to anticipate suffer- ing very heavy consequences. Some are considering the policy of buying only enough stock to meet the re- gular demands of an assured circle of patrons, and giving up any idea of enlarging their business or at- until the custom tracting new dollar rises or its lower value has accepted. and been stabilised Others are considering buying a cheaper class of goods in order to avoid raising their prices, but they are in the minority.
01
HOW THE COLONY WILL GAIN.
AN OPTIMIST'S VIEW.
Amid general depression about the dollar, especially among those of us who live on "fixed" salaries it is, perhaps, good to have a little optimism, such as that conveyed by a well-known authority to a Daily Press representative yesterday.
was
In answer to the interviewer our authority agreed that with the de- preciation of the dollar it naturally prophesied by several lead- ing business magnates and news- papers that 1930 in Hong Kong would be a gloomy year.
destructive find "We always
he con- critics the world over,'
"but when constructive tinued, ones are wanted, they are rarely found. Coming down to hard facts
Influence of "Jack Frost." But there are compensatory fac- s for the retailer. The cold spell In one of the most im. for one. portant European shops dealing in Oriental curios and objets d'art, our representative was told that while there had been less than the usual demand for jewellery and ex- pensive wall pictures, there had been unusually good sales of Pekin and Tientsin carpets. Other mer- chants are experiencing good sales of woollen garments, coats, scarves-why blame bankers, financiers, and travelling rugs. Then there is what might be termed to borrow a war-time phrase the food-hoard- ing instinct. It is obvious to every one that prices must go up when new stocks arrive, and many con- sumers are tempted to buy largely now for the future, of the goods already in stock at more or less normal prices. Not only food but clothes and every sort of necessity, even in soine cases luxuries are being bought before the family exchequers feel the real pinch of the lower dollar.
The January sales should prove even more popular than usual this year.
No Increase In Prices! Mr. H. Overy, of Messrs. Wm.
of Powell, the well-known firm men's tailors and outfitters, viewed the situation with confidence and even optimism.
"We shall not put "We buy our prices up," he said. only twice a year, in September and March. Our September goods were bought at the rate of 1/11d.. and our customers will have full benefit. If the dollar does not rise-which I think it will-of course our March buyings must be affected. We have no intention of buying goods in any bu our usual British market and tl price of small haberdashery ar icles will in any case remain wlt it is at present. There is no di ction in which the fall of the It is all the other dar helps us.
W However,
5
rade is good just now-people want things for the cold weather,”
10977
would only realise that a slow but sure policy is always worth while, things might be different.
Trade Prospects.
"As I have already mentioned, men must live, therefore there will always be a demand for goods. The sudden drop of the dollar naturally sets the heads of business-houses thinking and waiting until matters improved before taking further orders. Thus temporarily their business is at a standstill and, what is more a man is apt to cry out louder when in pain than from pleasure and so it is here. Now if the intrinsic value of the dollar is low, foreign investors and financiers will invest in the Colony, because they will get more dollars as the equivalent of their own currency. One can always get 8 or 10 per cent. even more on investments locally,- shares, property mortgages, etc.
"With the money market easy naturally the prices of the various investments will increase by leaps and bounds. Therefore, I can see a very bright silver lining to the clouds in the near future. A colony with a stable and well-established government like ours, where every- one has a pretty fair deal-a shelter for political refugees from neigh- bouring places, a harbour of world- renowned fame, where millions come and go, of all colours, races, and religions a Mecca of trade with hundreds of princely merchantmen constantly coming and going—such a Colony can never languish. The sun never sets on the British Em- pire; where the British flag flies one rarely find her sons with cold feet- so let there be none among us!
CORRESPONDENCE.
ct
and brokers for the present low Does one rate of the dollar? realise that control of the silver market is in London, and that the THE FALL OF THE DOLLAR. two biggest silver consuming coun- tries in the world are China and India? If these two countries have ample stocks in hand-so much so that they are willing to sell them- selves-how can one expect the market to come up?
In
"Hong Kong is on a silver basis, and it is only natural the dollar must depreciate accordingly. fact, at the present time, the sterl- ing basis of the dollar is still d. to 1d. over the parity rate.
"Now let us take a shopkeeper's point of view on the matter. He has to buy stocks from foreign coun- tries, and has now to pay from 25 per cent. to 30 per cent. more for his goods than he did say six months ago. Naturally the selling price must increase accordingly. But if the increase is as gradual as the drop of the dollar, the buyer will not feel the pinch so much, whereas in many instances the increase has jumped from 50 to 100 per cent. all of a sudden the tea-dance prices for instance. That, of course, is a luxury and not a necessity, but in case of necessities one has no must alternative, because a live.
man
[TO THE EDITOR
HONG KONG DAILY PRESS."]
SIR,-I should not have thought it possible that so many editorial and interviews with comments
could authorities " anonymous have exhibited such a complete lack of comprehension of fundamental facts as has come to light on this subject.
One authority, who granted a long interview, implied that if the Hong Kong dollar had been fixed at about 2-, we should, by our geographical position, have had a sentimental effect on Shanghai and prevented the drop in silver! It is hardly necessary to dwell upon the absurdity of such a view. Most of obsessed the commentators with the idea that if it were not for some imaginary conspiracy, we in Hong Kong would really be basking in prosperity, with a 2/- dollar, and surveying with aloofness the fate of One of China's silver currency. their complaints is that "the banks should never have put us back on a silver basis."
seem
Their arguments and comments "Furthermore, it is in the nature
overlook the fact that this Colony of man to grab while the grabbing is good, thus one finds profiteering all has always been on a silver basis. over the Colony, even in cases of Our Hong Kong dollar is a silver goods produced in China. If people | dollar and our bank-notes promise