To, the Editor of the "Nonra-Ciina Datty News."
Sit—Of the many interesting articles you publish, the report. by Professor Gregory under above {in your issue of August 9, 1929, may bbe called the key for the solution of China's economic' probleme, The quarrel shout she Chinese Eastern Railway or the abolition of extraterritoriality ave tzifies compared with the importance of a stable currency.
As has been pointed oat in the reports of your exchange expert: the existence of large stocks of! silver in Shanghai tends to lower the exchange rate. Why then stick to the use of it for currency purposes. when, as Professor Gregory explains: a' Central Bank, control-Ting the country's currency system, can be perfectly respectable without olding'a large reserve of gold of which no use is made and which, from an economic point of view—being idle—is. wasted?
After all, a currency system, let it be called money for the purpose of easier understanding, is but 8 medium for measuring values not] otherwise comparable, Tt would be practically impossible to compare the value of a pair of shoes of a piece of land with a corresponding amount of meat, rice anything else. Most people for-oF rather shoald have no intrinsic value and ought to be a standard measure not subject to fluctuations in a similar way as we measure length by a yard or metre, weight by pound or kilo, lume by gallon or litre, all well fined unchangeable units, "It seems a pity that those responsible for conditions in China—that is the Government—play at polities a rear deal more than necessary but give little attention to economic pro-
Does the Government realize compared with about & year ago, China pays at present about 10 per cent. more for everything that. imported and also gets less for what is exported? This means a loss of at Toast 200 million dollars in one year due to China sticking to the tse of an obsolete and complicated way of valuation, based on the value of silver which has no standard value. Even if there was a budget it could not be correct when there is no way of telling beforehand what things will cost in a few months time!
When Mexico fixed the value of her dollar at 50 cents U.S.A. gold there followed a tremendous improvement of economic conditions and the same is bound to take place in China as soon as a currency is introduced which is in conformity with the currency of most other countries, The fact that silver is a com: for a currency system in a modern state. There will be less speculation in exchange but that is rather an advantage. More losses in business in China are due to specula ation la exchange than to other causes. If China would introduce a stable currency she could buy and pay the Chinese Eastern Railway in less than 10 years and repay all her foreign debts in addition. Tt can be done and not even require the importation of financial experts who usually only see and talk about difficulties when action is all that The Chinese Government ought to be thankful to the "North-China Daily News" for publishing Professor Gregory's explanation and show it by really lifting the prohibition of using the molle for its cirealation, act, which to say the least, unworthy of a Government representing a civilized country and Tesponsible for the actions of its employees.
Tam, ete, Shanghai, Aug. 12, 3929.
Text read from the printed page and cleaned; old type leaves the occasional error.