Aug. 1 On February 5 last the Bank years succeeding the war—and at one time during the Labour regime it had again lost a very great deal of ground—this is a distinct triumph on the part jof the British financiers and bankers. The arrangement with America to lend gold should at any time it prove neces. sary has not had to be put into force, and on the surface at Toast those responsible for the return to the gold standard have made out good case. The question which may be asked is whether it has been worth the cost.
In this wise has the reckoning be made. We mentioned above that part of the policy of the return to a gold standard was the decision to curtail all lendings abroad, and in this we see a reversal of the time-honoured function of London, We have a conerete case only a few weeks old, when out of an Australian loan of £5,000, }000, ten per cent, only was float-jed in London, and the remaining ninety per cent. in New York, jand it is said to be the first occasion on which Australia has gone outside the British Empire for her borrowings. It is surely arguable that if instead of using her money to support a gold there consistently en May be said that the Chinese on which date it maintained, even before the days of the Post Office, an. admirable system of Government expresses, and the. extent to which carrier pigeons were used to influence the exchange markets of China is a factor in commercial life telegraphic system commenced. jin February, 188, " Chinkiang was linked with Nanking, and in Canton soon afterwards a Private company, under the special sanction of the Viceroy. was formed with the object of Rate in London was raised to five per cent., and while several factors tended towards the adoption of this measure, the return of Britain to a gold standard was undoubtedly a very strong influence in' the situation.
The theory of the working of a Bank Rate is very, that holds much romance, "The Kong. The line was opened as|enetatey perfectly. connecting Canton with Hong-simple, and in normal times it Should none att, Chinese ight 8 Kowloon, but it was not money become renee in Peed Funpire/" wrote Michie, "would until nearly two years later thatis higher Nork fter introduced, render telegraphic communica j-ithe Chinese company obtained thus drawing capital from other tion. more than ordinarily acceptable, and, in the present ago of the world, even necessary,' His forecast has proved accurate Permission to utilize the Eastern Extension Company's cable across Hongkong harbour. It is not necessary further to trace jeentres so that it may participate in the increased rate of. interest, and in the same way, when money jstandard—receiving no return on in the meantime—Britain continued her policy of being the world's lending nation and getting interest on her investments, it would be more to her advantage. Again no nation in the world has the same experience lof the handling of foreign exchanges as Britain has, yet by virtually stabilizing the exchange between London and New York she sacrifices what profit: that experience would have given her in taking advantage of its fluctuations. Above all, it has to be asked whether the return to a gold standard has in every particular, The tele-the laying down of the lines. ud have practically recovered, the normal course of things, what jabour the smaller ports? Under what conditions are they struging to exist? Without resources of their own to fight the strike, is anything being done to fight it for them by their better ipped neighbours? ithe Micawber policy of "waiting for something to turn up," to which most of our official re-Presentatives and Governments appear to have resigned themselves, what of the enormous Joss and daily discomfort that the smaller ports are' enduring? Is it not a case with them of "out of sight, out of mind?
Take the case of Shameen where the state of siege has now lasted for seven long weeks and may, for all appearances to the contrary, last for seventy. Of all places Shameen st des Served most consideration. Its cli unate is peculiarly trying at this time of yea its. position alongside the Red is full of peril; and it is so small that its inhabitants literally lead the if fe of men in a beleaguered fortress, Doubtless everything possible has been done with ndbags, trenches and Lewisxuns to put them in a good Posture of self-defence, But that was no more than ought to have been done, In other res-pee ets they have many grievances, Towards the end of July they were left without supplies for a week, because something nay opened to the transport from Hongkong and no alternative ar rangements had been made, And certainly at one time, when they wished to go to Hongkong for a week-end's much needed rest, they were charged, we are told, three times the ordinary fa re by the Hongkong Government, That is no way to treat men who are practically soldiers on furlough, from a desperate battle for British interests, These things may have been righted by now. But we do not th ink Shameen ly much inclined to throw up its hat for Hong-kor ug's success, Or take the case of Swatow, On July 1 the mob sackes and ra ined all hotels and restaur-graph "has spread all over the Jand—even before railways. The difficulty with respect to the. transmission of Chinese characters was overcome as all our readers may know, by using figure codes, of which there are several forms, one of them. adopted officially and the others corresponding to the codes usual in commercial communication la the west. As far back: as 1865, the Russians opened the eyes of the Chinese to the possibility of. the telegraph system. The: Russian Government in that year sent a telegraph engineer to Peking by way of Mongolia, and. he demonstrated with a remarkable miniature apparatus before the high officials. But Chinese prejudice towards this newfangled idea was strong enough to allow neither the adoption of: system for China nor the laying of a line between Kiakhta and Peking, the only concession: obtained from the Chinese being the promise that if at any time in the future China allowed foreigners to construct telegraph lines within her borders Russia should have the preference. That was why the Russian line had to be brought to Vladivostok to reach Japan and China through submarine cables.
It was in 1871 that the submarine cable between Shanghai and. Hongkong was declared open for public messages, and in order to make it possible for the Chinese to use" the cable a special code was compiled and printed which each Chinese. character may be remarked, however, that probably in no other country in the world did the engineers experience such difficulty in their work. Not only was there con. siderable official opposition, but the attitude of the populace made it appear that the telegraph could never become general in the country, As soon as prepara. tions were made for the build. ing of a line, the people would steal the copper wire to make {poles and other materiel tee nails, or they would steal' the ease is on record how, in far Yunnan, the edict went forth that a line was to be built. and the Taotai of the particular city duly collected the taxes to pay for the poles, explaining that by the time the poles were erected another tax would be levied for the purchase of the wire and other materials. The poles were leotlected, but by the time the erected, the second tax was wite arrived the engineers found that most poles had been chopped down for firewood. Another set of poles were consequently secured and put up, but by this time the wire had all been-stolen, perhaps lacks employment the ra ite falls.
In connexion with ithe resumption of a gold stand-jard certain well-known economists have expressed doubts to whether this theory still holds good, and in view of the depreciation of the credit of so many countries in Europe have contended that the Bank Rate has lost its former power. How they will shape their arguments to-day in view of the experience of the Bank Rate in London will be very interesting to learn, and the financial papers arriving here a few weeks hence should provide much instructive reading.
The fact of the matte ris that since the Bank Rate was raised last February eight and a half millions. sterling have been added to the Bank of England gold reserve, and the position is now so strong that it has been found possible to reduce the Rate to four and a half per cent.
The great fear in connexion ith a return to the gold standard was that the European countries with depreciated cur-rendes would proceed to drain aig, went on for ed oft holdings, and that to maintain Great Britain dry of her gold being presented with two men presented ante teeth ithe standard there Cosi who were caught in the act of stealing, ordered they should be deprived of their ears land that they be marched along! ithe roads throughout his: official district as a warning to others.
ageing on elsewhere, even under.
In spite of all the development official encouragement, Peking, to be continuous and expensive borrowings from the United States. Certain Precautions were taken against this happening, and in particular the Mint laws were amended, and this together with the higher bank rate has been successful in eva-iding the "cos sequences which had been threatened. Perhaps helped the trade of the country, and this is the real criterion of its value. There are few if any signs of a trade revival, and British manufactures are being undercut by those of countries with depreciated currencies This is the oth side of the and it cannot ignored.
Text read from the printed page and cleaned; old type leaves the occasional error.