Directory_and_Chronicle_1931 — Page 588

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CHINA

unstinted eulogistic phrases. As has been pointed out before, successful efforts are being made to develop production in all parts of the world, especially in the United States, South America, and Africa, where the fluctuations of exchange, the heavy burden of inland taxation, and poor transport facilities which at present handicap China are little if at all felt. It has been noted more than once in the course of this report how trade was hampered by the disruption of communications and insecurity due to piracy and brigandage, with the result that in many cases produce could not reach the seaboard for shipment abroad and that, when it did arrive, the price was exorbitant and out of all proportion to production costs and China was unable to take advantage of the favourable markets offering for her produce. It is a world-wide maxim that markets once lost are not so easily regained, and, if China is to meet her competitors on equal terms, it is incumbent on everyone loyally to support the Government in assisting it to introduce those reforms in inland taxation which the Minister of Finance has demonstrated are necessary for sound and successful trading conditions and which the Government is anxious to see enforced, while systems of transport must be developed and freed from the chains of militarism. Much has already been done, and still more is being attempted, but it cannot be too strongly emphasised that, while these essentials are lacking, the vast agricultural and mineral resources of the country, which constitute the foundation of its future strength and independence, will lie to a great extent wasted or untouched. Traders and merchants will also do well to organise effective measures to check adulteration, of which frequent complaint is heard on all sides, and at the same time to encourage farmers to improve their methods of cultivation. Finally, even at the risk of plagiarism, it would appear a fitting moment to repeat the advice previously offered on more than one occasion--but which to day is probably truer and more pertinent than ever-and once again to quote from the words of Dr. H. B. Morse, whose sympathetic under- standing of China's peculiar difficulties aud whose interest in her welfare are of international fame. "Trade can adjust itself to a low exchange or to a high exchange, or even to a sliifting exchange, if the movement can be foreseen, but a state of affairs which introduces the element of gambling into the business of every day, which makes it impossible for a merchant to estimate the amount in one currency which will give him a profit in another, all this increases the cost of trading by enforcing the wisdom of large margins and by so much acts as a restraint on trade. In the course of every year there is also much fluctuation in the exchange between silver and copper but by no means always synchronous or commensurate with the changing relations of gold and silver. Every parcel of foreign products in its course from the place of production to the ultimate consumer, and every lot of Chinese produce from the producer to the foreign market, is subject to a bewildering series of exchange conversions in which each person who handles the goods is forced to allow a margin to cover all possible fluctuations. No trade can stand such a strain under conditions in which even the wise foresight which settles exchange in advance may involve the operator in a heavy loss, and it is high time that all interested in the prosperity of the trade of China--governments, banks, importing and exporting merchants, guilds, jobbers, and retailers--used such influence as they possess to further any method of reform which will ensure stability of exchange.

Although any reference to events during the year 1930 should not, in accordance with procedent, be made in a survey of trade dealing with the year 1929, the intro- duction of the new Gold Unit as the unit of calculation of duties on imports from abroad is of such world-wide interest that apologies should be unnecessary for placing the bare facts on record in this report. In view of the heavy fall in the gold price of silver, apprehension was felt that the revenue for the year 1930 might not be sufficient to meet foreign loan obligations, and, in order to protect its revenue, the Government decided that from the 1st February, 1930, the Haikwan tael as the unit of calculation for import duties should be abolished and all import duties collected uniformly on the basis of a Customs Gold Unit, which unit was fixed by the Govern- ment at 60.1866 centigrammes of pure gold, equal to Gold $0.40, Pence Sterling 19.7265, and Gold Yen 0.8025. It is perhaps fitting as a matter of historic interest to place on record the fact that the step taken by the Government of collecting its import duties on a gold basis was first suggested in 1901 by Sir Robert Hart, when the Government was faced with the difficulty of securing sufficient funds to cover both the foreign obligations existing as a charge on revenue and the then newly imposed Boxer Indemnity."

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