Jan.
The isto from Nanking formal injunction to government departments on retrenchment is a familiar item of official intelligence, Taken, however, in conjunction with the revelations made in the columns of this journal on Tuesday in. re-'
gard to the attitude of the Chinese Bankers toward the idea of a moratorium and with the notable statement by Mr.
Kiu-ngan, general manage the Bank of China, published Emphasis. Examination of the esterday, it deserves special
speeches and pronouncements, made in Shanghai, Nankingand elsewhere, facilitates an ap preciation of the political crisis in less particular form than has been possible when personal vagaries veered to be.dominant. The fall of the Chiang Kai-shek administration has been due, fundamentally, to the financial position in which it found The late Finance Mini three and a half years ayo, declared that all attempts at financial rehabilitation China's disordered finances. would be futile unless the system were unified and a budget on national lines adopted. He pointed out—and the warning had to be repeated by him in successive budget speeches—how the drain of uncontrolled military expenditure stultified all efforts to put the finances of the Government on a sound basis. In spite of these admirable ex: pressions of opinion, Mr. Soong. had the mortification of seeing Wis Government indulge in expenditure in excess of revenue.
he discrepancy was made good y the issue periodically of domestic bonds, a form of financing which eéuld only. be a permanent feature of the administration if successful efforts were made to stop the Jeakage of uncontrolled _expenditure. Otherwise,.as each successive issue of domestic Donds was made, the credit of the Government pari possi deteriorated, the cust of the bonds increased and their value decreased. The bankers, on whose complaisance this repair of the gap between revenue and expenditure ultimately depended, could not as business men be pected-to endure that str resources indefinitely, sense of public duty i clined them to give support, so far og they safely could, tothe stabilisation of the Government, jot possessed of a Fortunatus purse, they were bound at some stage to cry a halt. The market itself would bring inexorable arguments (o, impress this point upon them. The general economic condition of the world played its part in the process.
Mr. Chang Kia-ngan's. statement' showed that, from 1927 onwards, the bankers have made unavailing efforts to induce the Government to cut down their military commitments. The Manchurian trouble of Septem-last_produced the definite result of compelling the bankers to advise ayainst the further Sgsue of domestic bonds. The Government endeavoured, means of the National Fi Commission, on which the banketp were represented, to exercise supervision over expenditure. This commission met only once before the Government fell. It has not functioned since. With a treasury so sorely depleted that payment of the arrears military and civil salaries, made the late Government up to December 31, before they went out of office, had in fact to be incomplete and, to a large extent, made up of bills maturing at a future date, the late Government found themselves in an impossible position. For their
Text read from the printed page and cleaned; old type leaves the occasional error.