CHINESE CURRENCY

Greymouth Evening Star, 10 March 1939, Page 7

CHINESE CURRENCY

STABILISATION FUND. [BRITISH OFFICIAL WIRELESS.] RUGBY, March 8. Announcing in the House of Commons that the Government had agreed to give a £5,000,000 guarantee which would enable the Hong Kong and Shanghai Banking' Corporation and the Chartered Bank of India, Australia and China to participate in the Stabilisation Fund for the support of Chinese currency, the Chancellor .of the Exchequer. Sir John Simon, said: “The stability of the Chinese dollar is a matter of great importance to Britain, in view of our financial and economic relations with China. China achieved considerable success in her efforts to maintain the convertibility of Chinese currency for trade transactions, to limit its depreciation in exchange against sterling, and to keep the rate reasonably stable for many months. “China informed Britain it intended to continue its existing monetary policy and that as part of that policy it desires to establish a Stabilisation Fund of £10,000,000 in addition to its other reserves. China invited two Chinese Government banks to subscribe a total of £5,000,000 to the fund and the two British banks, namely the Hong Kong and Shanghai Bank and the Chartered Bank, to subscribe a further £5,000.000 between them.

“The British banks agreed to subscribe these amounts subject to receiving an undertaking from the Tieasury to reimburse them; for any loss that might be incurred when the fund was wound up. The arrangement would be that the fund would operate for 12 months but it could be continued for further periods of six months by agreement. If the necessity arose, however, the fund, could be wound up at any earlier time. “Britain would welcome the establishment of this Stabilisation Fund, the successful working of which would be of material assistance to British trade enterprise in China, and the Treasury has agreed; subject to legislative approval, to give to these banks the guarantee against loss for which they ask. A bill is being prepared and I hope to present it early next week.”

SEPARATE AREAS. (Recd. March 10, 2.45 pan.). LONDON, March 9. “The Times’s” Pekin correspondent says that, as a result of its failure to secure the wide circulation of the Federal Reserve currency, the Provisional Government has divided the country into two currency areas. The first consists of eleven towns in the Hopei. Shangtung. Shansi. and Honan Provinces, wherein the old currency will he illegal after March 8. The county elsewhere is regarded as a bandit zone, to which the new currency will be extended, “following the expansion of the Japanese military operations.” The old notes are still at par.