SHANGHAI DOLLAR.

Auckland Star, Volume LXXI, Issue 81, 5 April 1940, Page 5

SHANGHAI DOLLAR.

A TRAGIC COLLAPSE. THOUSANDS BANKRUPT. GAY LIGHTS AND DEPRESSION. (Special to "Star."—By Air Mail.) HONGKONG, March 17. While American marines, gold-dollar salaried stenographers and sterling-paid office workers are finding it practically impossible to spend their'monthly wages, thousands of other Europeans in Shanghai are faced with cost of living expenses which p.re making them virtually bankrupt. It is all due to the collapse of the Shanghai dollar, fhe results of which find their parallel only in the tragic collapse of Germany's currency in 1923.

Relative wealth and poverty rub shoulders in Shanghai to-day as they iiave never done before in the history of the great city. While American girl stenographers are enjoying an exchange rate which nets them up to 2000 Shanghai dollars a month, editors of Euro-pean-owned newspapers and heads of commercial firms are -wondering how they can make their monthly pay cheques of 1000 Shanghai dollars cover normal living expenses, of twelve and thirteen hundred dollars. A few official figures give you the picture. Based upon a survey conducted among the city workers, it has been found that while commodity prices have increased to 325 per cent above those of 1936, the purchasing power of the Chinese dollar has declined by slightlv more t'uau 30 cents. There has been a flat increase in prices during February averaging from 10 per cent to more than 100 per cent. ' Of all the commodities, vegetables have shown the greatest increase in price. Green vegetables have been raised by as much as 103 per cent, spinach by 64 per cent and spronted broad beans and turnips by over 45 per cent, all in the course of en* moatfc.

Price Fixation Attempts. Meat, fish and poultry have also revealed significant rises, varying from about 7 per cent in the case of fresh pork to 26 per cent in the case of fresh fish. Kentah during recent months have increased by 50 per cent, and fuel and light by over 200 per cent. Meter charges alone have risen by 100 per cent. So urgent is the problem that the French Municipal Council, which controls the French Concession (but not the International Settlement), has undertaken to fix maximum prices for rommodities in daily use. It has also been decided not to raise rates in the French Concession "in order not to give impetus to any possible further rise in prices." Business men, however, are eceptical about the outcome of the echeiorl and quote the fact that, although the price* of rice had been fixed and limited under the joint authority of both th« French Municipal Council and the Shanghai (International Settlement) Municipal Council, rice merchants are getting more for their rice than they are permitted Ito receive.

It is behevea extremely unlikely that the French authorities can single-handed fix and control commodity prices. Little co-operation can be expected from the merchants in the settlement, who are not under the jurisdiction of the Frenchtown authorities, and there does not seem much chance of the International Settlement authorities coming into the scheme, as the French have so far acted independently. Japs Capturing Trade. However, the Shanghai Municipal Council have gone so far as to make hoarders, speculators and profiteers in commodities liable to prosecution by law, although this obviously hae had no effect upon the rise in prices. The| poorer classes are suffering untold distress and thousands of Chinese daily' line up outside of the 2S shops which 1 are entitled to sell <-hrap flour for the] poor. But for those paid on a gold-dollar or sterling basis, the increased cost of living has but small effect. The difference in the exchange is sufficient to offeet higher Bring costs. Eren Chinese members of the etafte of American and certain English fcaeiarae booses are to-|

day comparatively wealthy owing to the exchange. Chinese chauffeurs are drawing as much as 200 Shanghai dollars a month, which is at least five times ae much as their less fortunate colleagues, whose salaries are paid in Shanghai currency. But despite ite glittering lighte and gay night life, which continues despite all vicissitudes, Shanghai as a whole ie depressed. Trade figures are good, but it ie a trade which has been diverted from the American and European firms to the Japanese, and the immediate outlook from a commercial, economic and financial point of view is anything but encouraging.