A Review of Fluctuations in 1925 with Some Explanatory Notes:
The Continued Evil of Uncertain Values it By BOLDO STROMWALL
HE small money, under which denomination the subsidiary coins are popularly known in Shanghai, and with which I principally understand silver and copper cons of modern times, have all since their) introduction into China in the earlylinineties undergone a steady depreciation in value. The limit for the downWard trend is the intrinsic value. In earlier years the difference between this Value and the market value, or circulating rate, of the coins left a fair margin of profit to the mints, because demand exceeded supply. The demand being practically a fixed quantity in our case, an increased supply naturally tended to reduce this margin of profit. In other words, the coins were depre-clating being left uncontrolled at the mercy of the law of demand and supply, When this margin of profit had reached a point where it became unprofitable for the mint to continue marketing their products, they faced the situation either to close down for the time being or to reduce the intrinsic value of the coins thereby forcing up the thargin of profit at the expense of the public, The directors of the mints, knowing that their tenure of office is generally of a short duration, are, practically without exception, out for immediate gain. They, therefore, decide upon''the latter alternative, with the result that the natural lowest limit of depreciation is reduced for the furtherance of private interests. In the earlier years the depreciation was due to overproduction alone; now-a-days the depreciation is accelerated through the combined influence of over-production and ¥eduction of the intrinsic value, The 20-cent coins have been faring particularly badly during 1925 in this respect, and we narrowly avoided seeing a disastrous reduction in their exchange value.
Text read from the printed page and cleaned; old type leaves the occasional error.