Feb. 5.
The letter appearing in the correspondence columns to-day relating to the Gold Bar Exchange can only be accepted as a partisan expression of opinion: To say that "the Exchange hi no right to exist and is nothing short of a gambling house" is inaccurate, and if the writer of the letter had taken the trouble to secure the opinions of exchange brokers actively engaged in fixing rates of exchange for importing and exporting firms, he would have found that times the speculation proceeding there has been the medium of securing certain more favour-fable rates for merchants than in these difficult. times of trade would otherwise have been lable. That gambling in \ddition to what may be deseribed as legitimate speculation occurs is undoubted, and the! regulations recently "issued by the Nanking Government have been devised with a view to suppressing it. To blame the Gold Bar Exchange, however, for all the evils in local business is hardly correct. The crimes of Kiukiang Road are not as all-embracing as the correspondent appears to believe.
It will be noted that the writer of the letter mentions the case of a cotton mill having closed its doors "owing to the evils of the speculative mania of the owners.
One of the best informed firms on the local cotton and yarn situation, Messrs. J. Spunt & Ca,, dealt with this matter in their report published in the "North-China Daily News" last Saturday, when they said:—
steady during the earl The yarn market has been quite the week, as one of the Chinese mils, due to financial difficulties, went into voluntary. liquidation, The proprietor of which mill was one of the largest operators in Yarn and cotton (bear sde) on tides to suable bears end' parts ularly the mill in question to cover its shorts by not exciting.
the market, the Exchange put into effect an order to demand a Special margin of Tls. 10 cash per bale on any new purchases, and hence the buying" forces "were restricted.
It has to be emphasized that the! Cotton Goods Exchange is entirely separate from the Gold Exchange, and it is certainly of interest to note that the authorities there at once took action on their own initiative to prevent a further dislocation of normal business conditions.
Where the writer of the letter is in a sense correct is. that operations on the Cotton Goods Exchange are influenced by those on the Gold Bar Exchange. For instance yesterday when observers of the market expected to see the price of cotton yarn lower, they found it higher because' there is a belief in Kiukiang Road that the price of gold bars is going to advance to still further heights. In cther economic systems, however, 01 finds practically a similar condition of affairs existing, commodities being under the influence of money rates and the prices of other commodities Of course there is no doubt that at times Shanghai—as probably only natural when growing up to its still aspired condition of maturity—went mad over the prospect of making' untold wealth by the establishment of exchanges for every purpose in the world, no commodity being so insignificant! that people could not be found to establish an exchange for! it, but that fever quickly and da) value at G.$7,200,000. That] radically cured itself. What re this not under an embargo bring the present exchanges into line with the soundest foreign Dractice, making them an aid to commerce as they should be,.with. regulations which sane Chinese business men know perfectly] well how to devise to meet their own special conditions, eliminate as far as humanly possible violent disruptions of the normal channels of trade,
Text read from the printed page and cleaned; old type leaves the occasional error.