Directory_and_Chronicle_1935 — Page 392

A 10

CHINA

via Sinkiang province and Russia to a terminus at Berlin. In the meantime, however, the planes go no farther on the European route than Tihwafu (Urumtsi), and, during the recent disturbances in Sinkiang, actually no farther than Lanchow, in Kansu; but they also serve the northern provinces eastward from Kansu to Hupeh: these planes. covered a distance of 347, 608 kilometres during the year ending June 1933.

During the past five years radio circuits have been established with Hongkong, Macao, Philippines, Netherlands India, the United States of America (two circuits), French Indo-China, France, Germany, Switzerland, and Soviet Russia, while beam stations have been erected for direct radio communication between Shanghai and London. This was inaugurated on February 3, 1934.

TREASURE AND EXCHANGE

Silver: Abolition of the Tael and Introduction of the Standard Dollar:- Effective from March 10, 1933, the use of the tael as a monetary unit was abolished by the Ministry of Finance and replaced by a new Standard Dollar. In recent years, the tael, nominally a Chinese ounce of silver, had become largely a money of account, and its value throughout the country according to the exact weight and fineness of the silver content originally adopted for it (based on the quality of the silver ingots normally in local use) in the various provinces districts or towns. Thus in Tientsin, for instance, there were at least five recognised taels in use, varying in weight- from 35.86 to 36.12 garmmes, and with a silver content varying again from 35.57 grammes to 35.83 grammes of 992 degrees of fineness; while the Hankow tael weighed. 35.94 grammes and had a silver content of 34.76 grammes of 967 degrees of fineness. The new standard dollar according to data supplied by the Ministry of Finance, las a weight of 26.6971 grammes, of which content 88 per cent. is pure silver and 12 per cent. copper. The new coin contains, therefore, 23.493448 grammes of pure silver, and, as the Shanghai tael equals 33.599 grammes of pure silver, it follows that in pure silver content the standard dollar is equal to 0.6992305 of a Shanghai tael. A minting charge of 2.25 per cent. of this latter figure, that is to say 0.0157327, has to be added in order to establish the officially fixed rate of conversion between the Shanghai tael and the new standard dollar, this fixed rate being Sh. Tls. 0.715-Standard $1. The change over from varied taels to an invariable dollar of strictly maintained weight and fineness was a great step forward in the standardisation of the country's currency, and was carried out smoothly and without any apparent inconvenience to official institutions, banks, or the general public. The new dollars are coined at the National Government's Mint at Shanghai.

The production of new silver during the year was estimated at 163 million ounces, as against 160 million ounces in 1932, 194 million ounces in 1931 and 247 million ounces in 1930: mine output, therefore, would appear to have been kept at about the same low level as in the previous year. Ready-silver prices in London opened at 16 9/16d., the highest official quotation for the year being 201d. on May 1; while in New York the opening price was U.S. $0.25 1/8 and the closing price U.S. $0.44 3/8. The depreciation of the United States dollar accounts for the difference in the range of prices quoted in London and New York respectively.

Foreign Exchange :-There was little or no alleviation of the difficult exchange situation in evidence during the year 1933: for the United States of America was added to the list of countries which have deserted the gold standard; the effect of America's action was disturbing to monetary transactions throughout the world, besides creating panic for a time in the free-gold Continental countries; the Silver Agreement concluded at the World Monetary and Economic Conference in London had a speculative influence on the price of that metal; cross-rates were more unstable, and the numerous exchange restrictions besetting the world were almost as stringent- ly enforced as in the previous year. The Silver Agreement, and the subsequent clamour for some sort of reinstatement of silver in the monetary system, probably was responsible for raising the exchang value of that metal in relation to the currencies of the countries which have abandoned the gold standard, but, judging from the exchange rates ruling for Customs gold units and French francs during the past two years, the average value of the Chinese silver dollar has actually depreciated by over 5 per cent. in terms of gold during 1933. The Shanghai rate on London opened Is. 2d. for the new Chinese standard dollar and closed at 18. 3 d., the highest rate for the year. Exchange on New York opened at U.S. $0.19 and closed at U.S. $0.331, the highest rate for the year being U.S. $0.34. On Paris, the rate opened at Francs 4.99