CHINESE FINANCE

Southland Times, Issue 22730, 5 November 1935, Page 7

CHINESE FINANCE

NEW SYSTEM ADOPTED GOVERNMENT NOTES AS LEGAL TENDER SILVER CALLED IN (United Press Assn. —Telegraph Copyright.) (Rec. 9.50 London, November 4. A message from Shanghai says that in order to conserve the currency reserves the Government established Government banknotes as legal tender. They will gradually supersede all ■others. The bank reserves will be under unified control. All holders of silver must exchange it for legal tender notes.

The Chinese dollar is being stabilized at the present level. The Central Bank will be reorganized as a Central Reserve Bank owned by the banks and the public. It will not undertake general commercial business. China’s decision to call in silver and the other measures adopted are described by the Financial Times as an achievement of the first magnitude. The world is given a memorable reminder that China, with all her internal difficulties, is still capable of evolving great constructive plans. That she has lately received advice from a British expert does not alter the significance of the adoption of a new financial system which will conform broadly to that which is serving this country so well. A reduction of dependence upon silver for internal circulation will provide means of breaking free from internal price upsets and other evils which flowed from artificial interference with the world value of the white metal by the United States. The Chinese Government undertakes to balance the Budget within eighteen months and pledges itself against inflation. CHINESE BONDS PROTECTION OF HOLDERS’ INTERESTS. (British Official Wireless.) (Rec. 5.5 p.m.) Rugby, November 2. The Bank of England has taken steps to provide an organization representative of British bondholders in Chinese Government, railway and other loans which will be in a position to negotiate with a view to 'the protection of their interests. The initiative has been taken as a precautionary measure in view of the unsettlement of the Chinese exchange due to the rise in the price of silver.