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Financial Mission to China.
Recommendations.
The primary object of my mission to China was
to seek a solution of the acute currency crisis caused
by the American silver-purchasing policy. This object
was achieved as the result of the abandonment by China of
the pure silver standard and the adoption of a managed
currency last November. The currency reform then
introduced has up to the present proved unexpectedly
successful and no serious difficulty has been
experienced in maintaining the exchange at the level
fixed. The Chinese Government have still to complete
the prograinme of reform by re-organising the Central Bank as an independent reserve Bank and by balancing the Budget; but the main danger to the currency is the constant menace of Japanese intervention and if a better
understanding could be reached between Japan and China, there would be every reason for feeling confidence in the Chinese currency and for anticipating a definite
Mr. Rogers, of the revival in Chinese trade generally.
Bank of England, who accompanied me to China, is returning there, on the invitation of the Chinese Government, to advise the Central Bank, in which capacity he will be able to render valuable assistance
in the completion of the banking re-organisation contemplated. I have circulated to the Departments
interested more detailed notes setting out my impressions of the situation in China generally and the present memorandum is directed to formulating such
suggestions as I have in regard to British policy and British trade. It should be borne in mind that,
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