CHINESE EXCHANGE

Greymouth Evening Star, 8 May 1936, Page 2

CHINESE EXCHANGE

OLD BUSINESS ABOLISHED. Step by step, as modern commerce forces China to modernize and unify her currency, twilight is settling over

the time-honoured exchange snop (writes the Pekin correspondent ot the “Christian Science Monitor”). One of the most important links in the old Chinese economic system, the exchange dealer has for hundreds of years dominated the commercial life of China. He now leaves the scene at long last only because his media of exchange—the highly diverse coinages and currencies of China are being called in by the Nanking Government and replaced with unitoim legal tender. Three vears ago China abolished the tael—a silver unit determined by weight and fineness— replacing it with the minted silver dollar. Last autumn a more drastic decision of the Nanking Government withdrew all silver dollars from circulation and declared the notes o state banks to be the only legal tender. This left only the business in exchanging the dozens of varieties of “small money” comprised mostly ot copper coins, notes therefor, and the old-fashioned square-holed “cash. > Now the Government is taxing specific steps to call in all denominations under a dollar and is planning to replace them with nickel coms. Even the ancient coppers and strings of perforated “cash” are to he melt-, ed down and reissued as uniform pen-1 nies. 4 . . While much opposition to this program has been encountered throughout the country, particularly in the interior, present indications are that the Government is fully determined to carry out the currency unification plan. This means the virtual disappearance of the exchange dealer, who has always played a prominent part in the economic life of the nation. In many cases it would have been virtually impossible to maintain an even flow of trade if he had not been present with his scales and abacus to reconcile strange currencies and thus oil the machinery of commerce. The average changer is an expert in determining the weight and fineness of any metal currency—generally copper or silver, as gold has been little used in poverty-stricken China.

By far the largest volume of business done by changers has been with the subsidiary coins, or the copper pence and perforated “cash.” Exchange shops in the interior, drawing upon the accumulated experience of centuries, carefully inspect each string of “cash” that comes to their counters, identifying each kind and testing for weight and fineness. ISOLATE STRANGE COINS.

Strange coins are immediately isolated and their value determined. In case the guild does not recognise a new type of coin or note, it automatically becomes practically worthless in

this district. No one will accept the outcast issue, knowing that shops will not exchange it for local tender. Exchange shops range all the tvay from the highly specialised shops of the crowded districts of Shanghai, many of which deal only in exchangeas such, to the “general store” type found in the interior. The latter handle all kinds of currency and often conduct a thriving trade in grain and local produce. Dealers in the interior of China who thus control the grain trade,! often holding liens on entire crops j

through their banking and credit activities, naturally wield a powerful influence over the economic life of their entire community. Even in semi-modernised Peiping, ordinary exchange shops deal extensively in cigarettes. Many of them also carry toothbrushes, towels, soap, shoestrings, flashlights, matches, thread, candles, kerosene, and other minor articles. Many of the larger native banks have grown out of this same hole-in-the-wall type of ex-

change shop which is so common in Peiping and where one can buy anything from a paper of pins to a Japanese patent medicine. Like all other trades in China, ex-

change dealers are closely organised into guilds which hold members with strictness to prevailing business standards. They tend, however, to place less and less restriction upon the extra exchange activities of their members. Hence the diverse types of business in which the shops are indulging to-day as popular demand for the exchange function dwindles to nothing.