Directory_and_Chronicle_1932 — Page 619

SHANGHAI

559

into Hunan, who occupied Changsha and Yochow, the peace of the Yangtze Valley was menaced and military operations assumed serious proportions on all fronts. This menace to the Government position in Hunan, however, was relieved by the pressure of large detachments of Nationalist troops from Kwangtung province, but the engagement of so many troops in military opera- tions left the field open to the activities of Communists and bandits, who were not slow to take advantage of the situation. Practically the whole province of Kiangsi, except for a small strip along the south bank of the Yangtze, was overrun by these independent brigand armies, while conditions were almost as bad in many parts of Kiangsu, Chekiang, Fukien, Honan, Hupeh, Hunan, and Kwangsi. Not only did residents in the affected districts suffer untold hardships, but merchants in Shanghai were seriously embarrassed, and im- porters handling staple commodities for distribution in the interior found themselves with large stocks on their hands. Towards the end of June the seizure of the Tientsin Customs resulted in the National Government's demand for the liquidation at Shanghai of all financial obligations on cargoes shipped to the former port. This further emphasised the feeling of uncertainty and lack of confidence, consignments to North China thus becoming liable, in many cases, to the payment of double duty, and goods were reported to have been diverted to Japan for transhipment to Tientsin. As the civil war dragged on, the need of funds for replenishing war-chests resulted in the imposition of further taxes on trade and industry, especially in North China. Railways were exclusively devoted to military purposes, and the commandeering of motor cars and trucks was of daily occurrence. In Central and South China the populace suffered no less from the commandeering of ships and the im- position of special taxes of various kinds. During the month of September the improved military situation somewhat encouraged the placing of orders to a limited extent, and with the collapse of the Shansi faction in October, prospects of improved trade became brighter. This was further encouraged by reports of excellent rice crops in all parts of the Yangtze provinces-said to be better than the country had enjoyed for many years. With better harvest prospects the tension which the fear of a shortage of supplies had engendered was rapidly relieved, and hopes were entertained that these agricultural areas might be looked on to some extent as potential buyers, even if their purchas- ing power had been so seriously impaired that bulk buying could not be anticipated. Throughout the year, however, the unchecked downward trend of exchange rates and the value of local currency in terms of gold from week to week, if not from day to day, continually placed merchants in a position of considerable difficulty, and with a further slump at the beginning of December the renewed confidence which the more stable political situation had engendered rapidly disappeared. The total value of goods imported from foreign countries during the year amounted to some 680 million Haikwan taels, as against 625, millions during 1929, representing an increase of 9 per cent. This result should not, however, be taken as a sign of prosperity inas- much as the advance is entirely due to the abnormal depreciation in the value of silver. Exports abroad declined by 51 million taels, or 14 per cent., which can be attributed in part to the interruption of internal communications, and also to the world-wide economic depression. A pleasing feature of the period under review is to be noted, however, in the enormous increase in the export of Chinese produce to Chinese ports in spite of the general depression of trade, which owes its success entirely to the increasing demand for home-made com- modities. The various staple articles are dealt with under their respective headings, but the following is a brief summary of the import trade. Although local firms in many cases closed their accounts one month earlier than usual, the piece goods market did not respond till after the Spring Festival, when inquiries were satisfactory. Towards the end of February, however, the tone completely changed, the general situation in the political outlook and ominous rumours from all over China causing merchants to adopt a waiting attitude. When March set in, the vagaries of silver and the daily wild fluctuations in