Aprit 29.
Mexico has taken drastic action meet the emergency created by! the latest developments of the silver-purchase programme of the [United States of America. It seems to be assumed in Washington that }the visit of the Mexican Treasury, representative will not affect Mr. /Morgenthau's judgment on the Ineeds of the situation. In short, {the policy of purchase will be continued to bring the price up to the figure required by the exigencies Jof Washington's solicitude for the comfort of the "Silver Senators." China, facing an emergency which has steadily acquired momentum during the last few months, is fortunately able to count on the coordinated action of the banks and their ce-operation with the Govern-Jment here. For reasons which appear cogent to him, President Roosevelt has decided' to cut the fine between silver and commodity-prices. Silver, for the time. being, moves in a price-world of its own. [Unfortunately silver happens to be the basic metal of China's currency. Whether, by the maintenance of measures hitherto taken, it is posible to keep China's currency in its own little backwater, while the called "doing something." In the light of the known conditions of! [China's monetary machinery and)banking organization there is much to be said for this view. Those incalculable powers of resistance and resilience which China has long, Jshown ability to command may thereby be given beneficial scope. Nevertheless it would be foolish to ignore the dangerous incentive to [sin gling now given in renewed force by this enhanced disparity between the world-price of silver and the ruling rate for the Chinese dollar.
Turning to the London Agreement which China ratified last year it will be recalled somewhat grimly [that that document was expressly [designed to secure the stability and not the enhancement of the price fof the silver:
'Whereas it is to the advantage China that sales from monetary' stocks of silver be offset. by purchases as herein with view to its effective stabilization Thus ran the Agreement to which India, China and Spain, "as holders! of large stocks or users of silver" and Australia, Canada, the United States, Mexico and Peru, "as pri cipal producers of silver," were signatories. The obligation laid on the silver holding countries was jenforeed by limiting their action in selling. For India was prescribed fan annual maximum of 35 million ounces and for Spain 7 million. The silver-purchasing programme of the United States involves the total acquisition of at least 1,400 mil-Von ounces, equivalent to about six oF seven years' world production. In the light of these figures the restric tions placed upon the silver holders, including China, receive an ironical note of exclamation. Indeed, it would not be unfair to argue that the spirit of the London Agreement had been amazingly ignored. Probably Mexico is under this impression, but is prepared, at present, to take action without' labouring the point. "India, apparently, fancies that, in some' way, the Agreement may still operate' to protect her Interests. China might do well to consider some such eventuality.
At the time when ratification of the document was being discussed at Nanking in the early part of 1934, it was suggested that the Government should reconsider the position in view of the possibilities of the American purchase-programme which was then beginning to find definite sponsorship in Washington. It was, however. hoped that the protests which Chinese merchants and bankers had addressed to President Roosevelt would sufficiently dispose of the contention that the artificial enhancement of the price of silver would benefit Sino-American trade relations. The protests were sym~ pathetically heard. An emissary was specially sent from Washington to investigate China's monetary conditions for President Roosevelt's Personal guidance. But, as the nonofficial but highly influential Econo-mie Mission now touring here from the United States, will instantly gree, nothing has been done to mitigate China's embarrassment. No doubt the American Government felt bound to follow the prevailing fashion of economic nationalism and consider its own interests, first and last. No reasonable critic, can throw stones at Washington plate-glass on that account, without im-Perilling his own or other people's bhat-houses. So a highly delicate situation has arisen. China has a perfect right to consider whether, within the framework of the London Agreement, something can one to bring America's purchasing! of silver more effectively in line with the obligations jointly accepted by the various signatories to charter of silver stabilization may be pertinent to quote recent observations of the new Deputy-Governor of the Central Bank of China, when addressing the share~ holders of his former Bank a month thought of value in devising a substitute for the arid process of filing sympathetically-received but unheeded protests.
Text read from the printed page and cleaned; old type leaves the occasional error.