Directory_and_Chronicle_1932 — Page 427

CHINA.

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a refusal at the last moment. Attempts to raise loans in other quarters also failed. Confusion became worse confounded when, in May, 1916, the Govern ment issued an order forbidding the Bank of China and the Bank of Communi- cations to make specie payment against their own notes. Such an injunction for a day or two paralysed the trade and commerce of the entire country, but, for- tunately, the branches of these banks in the big cities decided to ignore the order and resumed payment. China thus presented the unique spectacle of provincial branches of

of the two national banks carrying on business in definance Jf the Government. Truly a Gilbertian situation. It was explained that the chief concern of the authorities was to re- tain а silver reserve with which to pay the troops and so prevent mutinies and looting, but whatever the motive which prompted the so-called moratorium, there can be no question as to its harmful effect upon the national credit. The Government, however, managed to carry on the administration, and, in October, 1916, sanctioned the payment of silver by the Bank of China, with the result that the value of the Bank of Communications notes rose in one day from 79 to 91, but declined again to 87 in consequence of the run on the Bank of China for silver payments. To finance the futile war against the South the Government borrowed money from Japanese sources with a recklessness that scandalised all people interested in this country, especially as the proceeds were dissipated among the selfish Tuchuns and their followers. National assets were pledged with the prodigality of those who give what is not their's. During 1918 alone over 150,000,000 yen was borrowed.

China's foreign debts are in various currencies and, owing to fluctuation of exchange and the paucity of statistical information considerable difficulty is experienced in arriving at an accurate figure of China's national indebted- ness. Budget Statements in China have yet to become the precise documents that they are in other countries. The most complete statement of China's financial position of recent years is contained in the report by Dr. Lo Wen- kan prepared at the end of 1922. According to that report, which accompanied the Twelfth year Budget, the domestic loans as they stood in September, 1922, were $208,400,000 with security, and $249,000,000 without security; while the foreign loans amounted to $1,029,000,000 sccured and $240,000,000 unsecured, making a total of $1,726,400,000.

CUSTOMS REVENUE.

The step taken in 1929 by the Chinese Government of introducing a Na- tional Import Tariff based on the principle of tariff autonomy was followed in 1930 by another and more momentous step, namely, the transference of import duties from a silver to a gold basis. This change of procedure was decided upon in view of the sharp decline in the silver exchange which set in towards the end of 1929, causing apprehension that the revenue during the ensuing year might be insufficient to meet the country's foreign loan and indemnity obligations. The Government therefore announced that, as from the 1st February 1930-the first anniversary of the National Import Tariff,- the Haikwan tael should be abolished as the unit of calculation for import duties and a Customs gold unit adopted in its stead. This gold unit was officially fixed at 60.1866 centigrammes of pure gold, equal in terms of foreign currency to Gold $0.40, Pence 19.7265, or Gold Yen 0.8025. It was further ordered that from the 1st February to the 15th March inclusive the Haikwan tael rates appearing in the 1929 Tariff were to be raised to gold units at the rate of Hk. Tls. 1-1.5 Customs gold units (representing the average rate of exchange for the last three months of 1929, i.e., Shanghai Tls. 1-2s. 24d.) and from the 16th March onwards at the rate of Hk. Tls. 11.75 Customs gold units. (representing the average rate of exchange for the month of January 1929, i.e., Shanghai Tls. 1-2s. 7d.). For reasons of expediency, however, it was decided that silver dollars and taels and other silver coinage in common use were to continue to be accepted as legal tender in payment of import duties, for which