With reference to the situation in the piece goods trade caused by the fall in exchange a circular issued by the piece goods dealers is of importance. It is stated that the circular makes various demands, not requests, a fact which has not created too favourable an impression in many quarters.
It appears that the principal demand in the circular is that all contracts entered into since October should be cancelled. It should be pointed out that between November and January prices in Manchester rose something like 40 per cent. for several lines, and while from the local point of view this was overcome by the ascending rate of exchange, present rates cause the ise to be felt to the full. Another report states that the demand is for cancellation of all goods that have not yet been shipped.
Another important clause is that all drafts for goods now on th way should be extended for six months, but no suggestion is made as to who should finance the drafts during this time. The whole tenour of the circular appears to be that although large profits have been made in the past, present losses should be annulled.
In pleasing contrast to this circular is a letter which is understood to have been sent out asking the Chambers of Commerce to meet the Piece Goods Guild in order to discuss the situation which the fall in exchange has created. Neither demands nor suggestions are contained in this letter, but merely a request that these different bodies, having a mutual interest. in the position, might try to arrive at the hest possible arrangement.
In the meantime well-informed Chinese circles report that four failures occurred over the week-end among Chinese dealers. They are all men of small capital—in' one case, it is said, of only Tls. 30,000—but no statement is made as to the extent of their losses, these depending upon the extent of the credit they. have hitherto enjoyed from the banks. The immediate cause of these failures is given as the contraction of credit allowed them by the Chinese banks. Owing to the fall in exchange this has been considerably reduced, and consequently these men have found themselves in difficulties.
Text read from the printed page and cleaned; old type leaves the occasional error.