1932-03-18 — Page 2

THE

CHINA

MAIL.

担

HEAD OFFICE: LONDON.

Surplus

4,000,000 2,687,000

Paid-up Capital

.£3,000,000

Reserve Fund

Reserve Liability of Pro-

£4,000,000

Branches, Agencies and Correspon- dents in the principal cities of the world.

prietors

£3,000,000

Ageories and Branchen:

ALOR STAR

AMRITUAR

KUCHING

BANGIDE

NAOBAN

J. A. Plummer, Log.

Every description of Banking and Exchange business transacted,

TAN ENG HOOL,

BANKS

HONG KONG AND SHANGHAI BANKING CORPORATION.

Aborted Capital 50,000,400 Trust and Pully Paid-op 10,000,00 Beberre Fante

Bring #ver

# $.400.000 EG.000.00

Mecers Liability of Proprietors... 333,900,100

wwwww.....cam.com

HEAD OFFICE, HONG KONG.

BOARD OF DIRECTORS-

Hoa. Ms. J. J. Paterson, Chaircond,

T, E. Patron, Leq. Deputy Charmsu.

▲.. Cerapion. Esq. I. i. R. Bhaw, `kog.

Ban. Mr. O, Q. 8. Mackis 1. P. Warren, Eng

. Miskin, Esq.

AMUT

BANG BOL

BATAVIA

BOMBAY

CALOUPTA

V.

Or, Eng.

Ohio! Mangur.

BRANCHEA

THE CHARTERED BANK OF INDIA, AUSTRALIA & CHINA.

Incorporated by Royal Charter, 1853.

THE HO HONG BANK, LTD.

(Batablished 1917.)

HEAD OFFICE:~~SINGAPORE. Hong Kong Branch: 18, Queen's Rd. C.

Authorized Capital Stealta $20,000,000 Isaned Capital....

8,000,000 Paid-up Capital ... Reserve Liabilities

of Shareholders.

" 4,000,000

W. K. Bell, Esq.

CANTOX

CHEPOO

COLOMBO

BAIBEN

POOCHOW

KAIFIIONG

KAMBURO HANKOW

НАВЛЕК

KOHOKEW

ILOILO

ΠΡΟΣ

JOHORE

IODI

IOWLOON

KUALA LUMPON

BATAVIA

NEDAN

NANILA

NEW YORK

PEPINO (Pina)

PENANG

BOMBAY DALOUTTA CANTON

CAWNPORE CEAU

COLOMBO DAIREN

SAIGON

DELHI

HAIPHONG

HARDIN

RANGOON

SEMARAKO SEREMBAN BITANGHAI

TONDON

KANDURO

HINGPORE

ISONN

HANKOW

SITIAWAN

MALACCA

SOBRADAYA

TIONG SONG

TAIPINO

MANILA

120110

TIENTSIN

MUAR (Jekori

[rel

MCKDEN

КАПАСНІ

TONGKAH (Back@1)

TSINGTAO

NEW YORK

YOKOHAMA

PEIPINO

ZAMBOANGA

PENANO

BANGOON

SALOON

SAN FRANCISCO

SHANGHAI

SINGAPORE

ROUBABYA

SUNGEI PATANI

TENTAIN

τόκτο

TNG130 TOKOHAMA

Durres Lecointe opened in Los! Queroner and Fixed Depolis exceived fo: on your un shorter periods in Local Currency and Berling en erme which will be quoted on application

Hong Kong, 17th February, 1932.

HONG KONG SAVINGS BANK.

Ts Businner of the abara Bank la conducted

by the ITONG KONG AND ALAWOHAS BANK- INO CORPORATION, o may be obtained

napplication.

FOR THE HONGKONG AND SHANGHAT BANKING CORPORATION.

V. OBAYBURN.

Chief Kenager,

Hong Kong, 7th February, 1933.

THE BANK OF CANTON, LTD.

Established 1912.

Head Office:-Hong Kong.

Anshorised Capital (EI.R. Currenny) ...@11,000,000 Paid-Up Capital .......

Lesarre Find .........

BRANGUES-

6,668,000 1,100,00

Canton, Bhaagksi, Irakow. Smakow. Bangkok, New York and Ben Pranjeno,

LONDON BARKENG:-

The Lloyd's Bank, Litolisd. CORRESPONDENTA

In ali principal reins of the World.

Foreign Exchange and broktog bones of

stry description Triad

Hala Depill Bases (turae vixen al a juurig

reated of trace Bỉ to $40.

LOOK POONG SHAN,

Chief Manager.

KLANG

KODE

EUALA KANGSAR

KUALA LUMPUR

TORTO

Foreign Exchange and

Manager

THE NATIONAL CITY BANK OF NEW YORK.

HEAD OFFICE: 55, Wall Street. NEW YORK.

Capital, Surplus and

Undivided Profits U.S.$225,347,466.11

Branches in:-

ARGENTINE

BELGIUM

BRAZIL

CHILE

LONDON

MEXICO

PHILIPPINE ISLANDS

PANAMA

PERU

General N

CHINA COLOMBIA

CUBA

DOMINICAN REPUBLIC INDIA ITALY

JAPAN

Hanking business transacted.

Current Accounts opened and Fix-

ed Deposits received for one year or shorter periods at rates which will be quoted on application.

J. STUART,

Manager,

Hong Kong. August 17, 1831.

NEDERLANDSCHE HANDEL- MAATSCHAPPIJ, N.V.

(NETHERLANDS TRADING SUCIETY)

BANKERA

Betablished 1894,

Hong Kong Offer:-11, Queen's Road Content.

Authorised Capital ............. Quilders 150,000,000. Pud-Up Capitul.... ....... Gulideri 30,050,000. Reserva Fund ............... Quilders 19,215,000

Hand Offen:-AMSTERDAM". Eurora Band Obce: ~BATAVIA.

Branches:Bandartsen. Bandong" Babay

Calcutio Charihon Djembes, Djok jakarta", The Hagus", "Něžek, Kobe, Makassar, Medan, Palembang, Puka longan. Parang, Bangoon, Rotterdeur”, Sommarang, Shanghal, Blayayora, Boera bala, Sourakarta (Bolos, Tugil, Tilatjap and Wellevreden..

• Thesy officer bare Bafe Deposit Boxes to Lat.

LONDON BANKERS:-

NATIONAL PROVINCIAL BANK LTD.

Correspondents all over the world. Banking Busi- zess of very description transacted.

A. STOKKINE,

Bong Kong, lai Documber, tat.

THE

AMERICAN EXPRESS COMPANY.

Manager.

Hong Kong, March 1, 1932.

(TAIWAN GINKO.)

Incorporated by Special Imperial

Charter, 1899.

Commerce and Finance.

FAILURE OF THE GOLD STANDARD

EFFECTS OF ABANDONMENT.

How A Managed Currency Could Maintain An Internal Price Level.

II.

In yesterday's issue of the China;tionary; Mail, we published n portion of the than

FRIDAY, MARCH 18, 1932.

CAN WE ESCAPE THIS MONEY MAZE?

PLANNING A NEW CURRENCY.

As Mr. Reginald McKenna re- possesses super-abundant produc cently told the City. England needs ing capacity. more than anything else a monet- In order to protect in each coun- Jary system which will give it per- try the owners of fixed monetary manent stability of its exchanges as incomes against the loss of pur well as reasonable stability of its chase power, which they would internal price-level.

otherwise suffer through the de- The one is essential for its bank-preciation of the national currency ing and foreign trade, the other for in consequence of the all-round the development of the national monetary expansion, each member industries and for the maintenance State of the proposed monetary of equitable relations between ere-union would declare the current ditors and debtors, employers and money-for example the Bank wage-earners.

of England pound note-legal ten-

The perfect monetary system der only to the extent of its actual it is still slightly lower must be able to maintain the stabl purchase power on the day of pay-

and near-ity of the exchanges and of the ment

|

復

Rt. Hon. R. McKenna's remarks only, 20

year ago, per cent.

dress:--

below the price-level through a period of This purchase power would be

Our monetary expansion, large enough measured by the cost-of-living in

the Press might

more earners.

the subject of the failure of the figure for January, 1930. gold standard. We now publish cost of living index, if we allow to allow of a rapid reabsorption of dex, that is, the average price of a the concluding portion of his ad- for seasonal changes, has scarcely the existing enormous volume of un-"basket" full of commodities, includ-

moved; it is below the figure for employment.

ing rented house room and local The fundamental fact, that at transport facilities, on the day of Public and Gold Standard. January, 1931, and more than 10 If I were to summarise what a per cent. lower than a year earlier, present in all countries more men payment. PORTO RICO

great many people in the indus- You will observe that there has are unemployed than were mobilia- STRAITS

Wages And Prices. SETTLEMENTS trial and commercial community been no inflation, and the supposed ed on all fronts during the war,

Under such a law not only would URUGUAY think to-day. I should say that niiracle of maintaining a currency must be faced courageously. In each wage-earner have index wages VENEZUELA they take un

entirely detached stable in purchasing power without order to convert them into fully or salaries, but each creditor would view of the Gold Standard. For any metallic standard has been ac- paid workers, public expenditure is have monetary claims varying in Commercial and Travellers' Letters them it is a matter of practical complished.

necessary on a scale comparable to direct proportion to the prevailing of Credits, Travellers' Cheques, Bills of Exchange and Cable Transfers convenience, subject to the general There is, then no reason to re. the sums spent on mobilising the retail price index, writes Dr. Robert bought and sold. Current accounts aim of ensuring the highest pos- gard the management of monetary armies at the beginning of the war. Elster, in the Daily Telegraph. and Savings Bank accounts opened sible degree of justice between conditions as an altogether novel'

Helping Buying. and Fixed Deposits in local and for debtor and creditor on existing departure, nor to see in it the grave

Having deposited £ current money Public buying and building arean ordinary bank-note--with a eign currencies taken at rates that

obligations. Let the Gold Stand-dangers which might arise from necessary to create additional con- bank, a creditor owns in return £ may be ascertained on application to the Bank.

ard be made to work satisfactori-lack of experience. It is equally suming capacity by distributing new of bank or contract money, which We are also able to offer our Cusly, that is, let it give a stable true. I think, that public anxiety wages, because private enterprise we will call £ banco, and which is toniers the services of the Branches value to money. and they will be about exchange fluctuations is un- cannot expand at its own risk as not by any means of the International Banking Cor- quite ready to go back to it. On necessarily exaggerated.

A second cur- poration in Spain and also of The the other hand, if it continues to pound retains a

If the long as existing stocks are unsafe-rency, but a purely Ideal, legal National City Bank of New York

constant value able,

money of account, the new stable (France), S.A.. in Paris and Nice. work as in recent years, with a measured in commodities, a rise or Under the actual monetary sys-standard of value.

constantly depressing effect B. M. MCLAY,

onfall in foreign, gold exchanges, tem, England could not afford to At the initial index of 100 a £ prices, they will be driven inevit-temporary fluctuationa apart, will create such an amount of new cre-current money is equal to a £ banco. ably to call for some other method only mark the degree in which gold dit, without robbing through the If, however, owing to millions being of controlling the value of money. has appreciated or depreciated, in ensuing inflation all persons with paid out to newly employed workers Is it possible, then, with or other words the degree in which the fixed monetary income of about and to their hasty purchases of all THE BANK OF TAIWAN, LTD. without the Gold Standard, to Gold Standard has failed of

its the same amount of purchase power kinds of goods, the cost of living maintain the pound at a constant proper purpose in securing a stable as would be given to the unemploy-Index go up in the first week, say value measured in internal pur-value of money. In such circum- ed by converting them into wage to 133-a violent and unusual but HEAD OFFICE:-Talpeh, Formosa. ¡chasing power? If we are not stances

frightened by the term "managed logically remind us that the pound

not an impossible rise each owner Is it possible to devise a monetary of a shilling banco-be it a claim currency," and can harden our is always worth 208, and reckon the system which can be freely expand-for wages or a claim for money de- selves to some degree of indiffer-dollar and the franc as worth vary. ed without depreciating either the posited in a bank or lent to a pri ence to exchange fluctuations.

Ing numbers of cents and centimes. foreign or the national purchase (vate debtor-could draw Bank-Mutes issued Average amount ... Yem. 45,000,000! there seems no reason to doubt the

power of the monetary unit? DHANCHES AND AGENCIES:

I do not know why

each shilling of contract or bank JAPAN:Toyko, Yohchama, Kobe, O.

think it can't be done on these lines: money, Is. 4d. actual current money. FORMOSA ;-Oliena, Kazi, Karapka. Keelung we should be alarmed by the idea I conclude, then, that it is pos- International-or falling a truly

Hakong Nesta. Ehlochiku, Taichu Tainan, of a managed currency. The sible for long-term stability in the international agreement, Inter-Im would create perninhent equity he Such а simple monetary law CHINA-Shanghai, Hankow, amoy. Facebo, phrase is perhaps misleading, for price level to be achieved by the perial stabilisation of the ex-tween debtor and creditor in terms Sorah Currency in subsidiary to credit-exercise of monetary policy. But changes by means of mutual credit of a monetary unit, which would we ought perhaps more accurate this does not necessarily mean that between England and all its Domin- always be equivalent to a certain ly to speak of a "managed stand-the Gold Standard should be per ions and Colonies, including auch quantity of all the necessities of life ard"-but it only means that the manently abandoned, for if a foreign countries as are actually at retail prices. central bank will control credit in country off that standard can suffering from currency deprecia- The Book a Correspondente in all the princin such a way as to secure a parti- achieve stability of the price level. tion, and would, therefore, be will-

icular object.

so also can countries on it, provid- ing to join the proposed monetary tract money in terms of wholesale So as to stabilise the new con- The essential difference between ed they act in concert. It is a mis- union, a Gold Standard and a managed take to

suppose that the Gold,

goods-cspecially raw materials and standard is a difference of objec-Standard and a managed - standard

means of production, that is to say tive. The instruments are precise are mutually exclusive opposites, could not in the long run maintain facturer and merchant-the nation- Such mutual stabilisation credits in the torms essential for the manu- ly the same, the Bank rate and The widespread impression that the exchanges between two coun- al banks of nations participating in "open market operations," the the Gold Standard operates au- second being a technical term for tomatically is a complete delusion, tries at par, if their trade balances such a scheme would undertake to buying and selling bills or secur- for in fact it must always be in were not equilibrated.

keep the wholesale price level stable ities in the open market with the some degree managed

Actually, ย precarious equili-in terms of bank money by means object of increasing or diminishing bank credit plays a leading part in brium of exchanges is maintained of the recognised methods of central the quantity of money. These in the business life

through a parallel competitive rea- banking policy. of a community.' struments have long been employ- The trouble is that hitherto

triction of public and private con- Nothing, but the solution of the ed by the Bank of England, whose mere fact that the Gold Standard is sumption. But the same result could old, purely technical problem of an ¡main objective hitherto, with a

be obtained in a happler way by expansible circulation of monetary established has induced among Gold Standard in operation, has monetary authorities a false sense parallel and proportional all-round units of stable purchase power can necessarily been the maintenance of security, leading them to limit expansion of public, and, conse- enable our present world of constant (of exchange stability, whereas with

the irreducible quently, also of private spending technical progress to sell constant- management to a managed standard the objective!

It is because the Gold without any corresponding increase ly what it can produce in almost un- minimum. would be stability of the internal Standard has been left too free to

of taxation.

limited quantities. price level.

take its own course that the world;

Monetary reconstruction, Empire has suffered the ill effects we are new monetary union would estab-wide and, if possible, world-wide, lish, besides its ordinary, actually monetary stabilisation is the crying now experiencing.

Contral Bank in Formosa,

Takao, Tamoul, Torn. Heito. Talin.

Swalow, Caton,

UTHENE-Hong Kong. Singapore.

Setuarang, Balaria, Slowbay Loudon,

York, Dairou.

LONDON BANKERS:

Barclays Bank, Ltd., nyde Bach, Ba

Midland Bank, Gad, Westminster Bank, Lid.

Commercial Centros throughout the world.

K. NADURA.

INC.

THE BANK OF CHINA. 行銀國中

Head Office:-45, Broadway, New York.

HONG KONG RBANCH:

5. Das Van Road Cantra). Hong Kang. December 5, 1981,

Reorganised October 20, 1028, under

Capital

special charter of The National Gov-

Surplus

.U.S.$6,000,000 U.S.$1,579;464

crament as an

INTERNATIONAL EXCHANGE

BANK.

.$25,000,000.00

..$28,710,200.00

Pald-Up Capital

Reserve Funds

Subscribed Capital

.$ 8,820,308.82

HEAD OFFICE: SHANGHAI.

HONG KONG BRANCH:

4 Queen's Road Central,

Dwing to our numerous branches in China and large connections in the Important commercial centres of the world, we are able to extend to our clients spacial facilities for domestic and foreign banking and exchanges.

We also handle the Issue of Bonde and other Public Funds of the Chin:

eae Government both at home and abroad.

Reserves

Ganon 07 Havson

.U.S.$1,908,209

BRANCHES:-

Amatardare Autwerp Athay Besle

Ilamburs

Nice Naplet

Pari

Fizeous

Berita

-Dharette

Bombay

Brune

Chiro

Katro

Jorunlars 10 Leadco Liverpont Lazerzo Calotta Lugana Canes

LULO Colombo

S Constantinople. Monte Carlo Ocpantagen Kanila Ediaberab

Munich Plorence

Manteaux Genara

Penang

Podar

Pription

Rotterdam Hom

Buenos Aires

Hambou Shanghai Houthampton Anspare BL. Morita Floatsio

Vienna

Venice Yokohama Zurich

Branches of American Express Com- pany in Principal cities of United States of America and Canada.

SHOU J. CHEN,

All classes of Commercial Banking Manager. Transactions undertaken.

Hong Kong, 5th March, 1921.

THE YOKOHAMA SPECIE BANK, LIMITED.

Established 1889.

· Capital (fully paid-up) Yen 100,000,000 Reserve Fund ........Yen 117,300,000

Head Office:-YOKOHAMA.

Branches and Agencies at: Alexandria

Batavia

Berlin

Bombay

Calcutta

Canton

Changchun

Dairen (Dalay)

Hankow

Hamburg

Negamki Nagoya

Newchwang

New York

Osaka

Farla

Peiping Rangoon Bongtien (Mukden) Rio de Janeiro

Harbin

Hong Kong Hozolalu Kal-Yuen

Karachi

Lobe

London

Los Angeles

Mania

Personal handled.

investment

accounta

The Company offers to intending Travellars the use of its "Travellers Cheques" and Letters of Credit and, In addition, the world-wide services of its thoroughly equipped Travel Department.

E. W. DUGGAN,

Manager.

FOR SALE,

Stanley Gibbon's

Magar.

Postage Stamps Catalogues

for 1932

Whole World

$12.00 British Empire

.$ 5.25 Foreign Countries ...$ 8.00

GRACA & CO Dealers in Postage Stamps, Garden Seeds, Picture Booka, Toys, etc., etc.

No. 10, WYNDHAM STREET, P.O. Box No. 820. HONG KONG

possibility.

The Control of Credit,

It is well recognised that the Bank of England, through the two, instruments I have mentioned, has

The Inescapable Choice.

80 soon

the

Equilibrium.

Ench country taking part in the

A Sterling Union.

out for

I believe we should all welcome unbalanced budget, an extraordin-weed of the hour. If England were

a well-managed Gold Standard ifry budget, large enough to cancel to convene at the earliest possible Ja high degree of control over the we could get it. It is not manage-out existing budget deficits and to date a monetary conference open to volume of credit and the rates cur-ment but the lack of it which has cave, moreover goodly margin all Governments willing to partici- rently charged for its use. In-

caused the failure of the Gold Stan- for additional publle buying and pate on equal terms in a sterling deed, its control over the quantity of credit, and consequently of

At present, however, and building, either for productive or currency union, few nations would. probably for some time to come, the merely sumptuary purposes, accord-dare to leave this invitation un- money, is as nearly absolute As

practical alternative is between ing to whether or not the country' heeded. anything can be in economic life,

Gold Standard badly managed and while the power of the Bank rate

dard.

#

QUALITY PRINTING has been demonstrated on in-a pure managed currency without

With Quick Service

THE NEWSPAPER ENTERPRISE LTD. MENINA MAIL ELM. · BA WYNIKAN 87.

THE BANK OF EAST ASIA, LTD.

Established 1918.

HRAD OFFICE:

10, Des Voeux Road, Central.

HONG KONG

San Francisco Seattle

Shimonovel

Capital and Surplus j Total Resources

Singapore

Sourabaya Sydney Tientaln

Tokyo

Telagtan

Interest allowed on: Current Ach

donată.

Deposita received for axed periods

at rates to be obtained on; application.

H. MORT,

Manager.

Hong Kong 11th March, 1982,

-over H.$ 8,000,000,00 aver H.$30,000,000.00

Every description of Banking and Exchange business transacted

Current and Fixed Depoal Accounts in local and for- sign currencies opened for ellenta.

Savings Account and Bafe Deposit Boxes, Branches and

and Agencies all over the world.

KAN TONG PO,

Chief Mansgor.

since

numerable occasions ever

gold. Experience in the last few credit became an important ele-months has taught us what our ment in our commercial system.

cholce should be. Events have With the aid of these controls shown conclusively that we cannot

it should not be an impossible task afford the Gold Standard of post-

CHARTERED BANK.

Final Dividend.

The Chartered Bank of India,

to maintain stability of the price war times; it has become impossible Australia and Chins inform us level. It is true that in the Unit for HO because of unfavourable

tions.

ed States, again for psychological technical and psychological condi- that they have received a telegram reasons, the central banks proved If these are incapable of from their Head Office stating that at the forthcoming Annual Meet- anable to regulate the value of control the Gold Standard will not

Ing of Shareholders their Directors money in consequence of its ex-work. cessive use in speculation. But

On the other hand, there are ad-will recommend the payment of a there is no reason to fear a simi-vantages of practical convenience, [final dividend at the rate of 14 lar danger in this country, whereby no means inconsiderable, in a per cent. per annum, subject to in- the Bank of England, through the Gold Standard well managed; and some tax, and to carry forward the centralisation of our banking sys-such a standard would be preferable sum of £149,384 128.-1d. - tem, is in a far more favourable to a pure managed currency unlesa, position to peal with the use ele-na is hardly conceivable to-day, the ment, of monetary policy.

management were conducted on an will have to be relied upon more and

COASTWISE

“ ALGIE”: BENNETI.

An interesting book. of Cartoons depicting "Happenings on the Chine Coast

*

PRICE $1.00.

ITEAWAY. LAIDŁAW

It seems therefore, that the international basta. The immediate more to obviate such catastrophes Now on sala at achievement of a high degree of choice before this country Is In- in economic life as we are witness-REWERS atability our domestle prica escapable; either we must have a ing today. We must not delude level should present no insuperable soundly managed Gold Standard, ourselves once again into thinking difficulty. What in fact bas hap which can only be secured by well that if we return to gold all will be EXCELSIOR BOOF STORE. pened in the last four months? ordered international action, or we well; renewed Indulgence, in that at the Publishers- Following almost Immediately upon must definitely abandon gold and confortable-idea would be fatal. De-

China Mail Building,

our going of the Gold Standard, rely on a managed standard with liberate, skilled, and resolute The Newspaper Enterprise, the British wholesale price level out any metallic basin at all. In monetary management, with por rose about 1 per cent, and aluse either event one thing is certain without gold, is the sine qua non of then has remained practically sta- the art of monetary inanagement steady economic progress.