CO129-525-3 Estimates 1931 and other financial papers 16-1-1930 - 1-9-1932 — Page 339

405

10

The average monthly rates for sterling and Shanghai taels

were as follows:

January

February March

April

May June

1/6.8376

78.8333

1/6.1698

78.6413

1/5.7762

78.2115

1/6.0534

78.4782

1/5.4123

78.5833

1/3.1552

81.3586

July

1/3.1511

82.7307

August

1/3.5718

83.6354

September

1/3.6850

80.4400

October

1/3.5174

80.2870

November

1/3.2955

80.1354

December

1/1.6924

77.7282

GENERAL

The fall in the sterling value of the dollar was the principal factor in business during 1930. The export trade which is supposed to thrive on a depreciated currency did not flourish to any extent. In this connection it must be noted that Hong Kong is a transit port and depends on the outside world for its well-being. China imposed a higher tariff on imports and that country is still far from settled. Remittances from abroad continued to flow in at an increasing rate to the end of the year. Bankers' fixed deposit rates for 12 months opened in January at 41%. At the end of the year Banks were only accepting new money for deposits at call bearing no interest, while for renewals 2% only was obtainable for 12 months. The Banks' strong rooms are full to overflowing in silver bullion and dollars and it is difficult to lend money on good security. In these circumstances it is not surprising that the purchase of land and building construction should have been turned to as an outlet for money. This resulted in higher prices for land and a small building boom. An additional impetus was given to building by reason of the fact that the price of labour had not increased. The low valued dollar was able to command as much of the lowest quality of rice, the staple food of the masses, as formerly. This was due to the fall in the world value of this and other commodities. Hong Kong, therefore, has not been affected by the world depression to the extent that other countries have. The revenue has shewn no signs of falling away, on the contrary from the returns a substantial increase is recorded and there is no reason to doubt that having passed through a most difficult year owing to the low price of silver and to the general world depression in trade Hong Kong will be in a strong position to take advantage of any revival when this begins.

THE TREASURY,

Hong Kong, 14th May, 1931.

EDWIN TAYLOR,

Treasurer.