Dr. LIH, Kung has informed the public thatthe Government's efforts {o uphold public confidence in domcatie. bonds are well-known. the light of the uneasiness of the market, og shown "by the sharp decline' during the latter part of the week, this Is hardly a satisfactory way of meeting the specie repens Which' attribute tothe Government measures intended to reduce the inforest rates on. the bonds. Dr. Kung will no doubt be reminded that In 1992, "the Government's reorganization of the structure of the domestic loans after Mr. T, V. Scone's resumption of office " in January of that year, was expressly declared to be exceptional and not Tiable to repetition. On that assurance the Government's reduction of the interest tates to.a uniform six per cent Per annum and extension of the life of issues to about double the original erin, were reluctantly accepted as, in view of the situation then prevail-Ing, it was felt that ea-operation between the bondholders and the Government was desirable. Mr. T. V. Soong categorically asserted that the decision was "the last to be reached between the Government" and. the people regarding the maintenance of bond credit" and that. it should not bbe vin any "way altered", This Journal, after pointing, out that the reorganization "was open to. the charge of violating important Brineipjes on which the credit of the country" rested, expressed the the Government should "he most stringent safe-ards" for the reassurance of bond-folders. "Te ts plain that a. device Which might be reluctantly accepted nce in an acute national crisis when hostilities were aelually proceeding and the Government had just been reconstituted after a temporary bul complete collapse, could not, without incurring certain recognized risks, be Invoked for a second time, when com-Paratively"stabler postical conditions Sxl, anxious though the "situation may be. Tt would be expected there: ere that "Dr. Kung woud sacrites everything to the need. of making the Government's intentions speci ficoly known. He must be aware that when confronted with reports such as. those which were current laet week, the only effective course Isto be" precise and ealegorieal, for otherwise the market is api to. draw ig own conclusions. "Tt not suflicent to. make a general attack "on "speculators™ at this Juncture."" Indeed the time for "killing" speculators "with the mouth has passed, If they are alli exereis-{ng an "unhealthy" influence, action should' be taken to deal with them, matter who they are, always Femembering that some of them at least help the Government by coming fo. the support of the market buyers when prices are unduly depressed. "Dr. Kung, in a position. of cimeutty and men' responsibility, has Feceived many proofs of generous readiness {0 ce-operate with him and his department in the launching his "new "currency" scheme. The Success of that scheme depends on the reality of "the Government's credit and the confidence imposed in! its intentions. Too little evidence has been forthcoming of an unfaltering resolution in instituting reforms which are essential to secure. the Foundations of the new currency' system. Pronouneements purporting to attain that end have shown an apparent desire to leave loopholes for hesitancy. It is hoped that this interpretation' will be refuted some definite measures in fulfilment of the policy prescribed, Meanwhile Dr. Kung will do well to review. the whole situation and, with such promptitude as is permissible, "make far more precise effort to reassure bondholders; otherwise China's finan-cell difficulties are likely to increase with consequently unsatisfactory reaction on her currency. tran; nents. Recognition of Dr. Kung's exceptional perplexities impels prescription of firmness and decision. If it be held necessary to take definite measures, action, after investigation' through the proper channels, should be instituted with the minimum Amount of public discussion #0 that embarrassing uncertainties "may be avoided. If no action affecting bond. holders" rights be contemplated, the need for swift and unmistakable re~ putation of rumours is equally" im= portant and essential to the preservation of confidence.
Text read from the printed page and cleaned; old type leaves the occasional error.