6¢\7HEN I return home I shall watch with closest sympathy the development of the situation here," said Sir Frederick Leith-Ross, Chief Economic Advisor to the British Government, in an interview on Monday evening at the Cathay Hotel to nearly sixty members of the foreign, Japanese, and Chinese press.
Sir Frederick sailed for England on Tuesday on board the s. Rawalpindi, and in the interview on Monday he first issued a statement outlining his impressions of his mission to China, and then answered a large number of questions concerning the statement and some of the results of his nine months' stay in the Far Bast.
He arrived in Shanghai on September 21, 1085, accompanied by Lady Leith-Ross, and was joined by Mr. E. Wall Patch, of the Treasury, Mr. Rogers, of the Bank of England, and Miss N. Cracknell, his secretary. Mr. Hall-Patch will not. be returning to England, Sir Frederick revealed that day, but is to be attached to the British Embassy as its financial adviser, In his statement on Monday, "Sir roderick said "His Majesty's Government in the United Kingdom sent me out to examine the financial and economic: aimeulties of China and the possibilities of our assisting her, in conjunction with the other Powers. interested, to overcome these difficulles, T have spent nearly nine months here and have done my best to investigate conditions as I found them, without prejudice or preconceptior A Jarge part of my time has neces sarily been spent in Shanghai, but have visited Nanking, Tientsin, Pei ping, Hankow, "Chungking, Amoy, and 'Canton, and have met represen tatives of the Government. author! ties and coal banking and trading' hi ment that the US.A, Japan and France would appoint experts to col-elaborate with me, but this did not prove possible. However, an import= ut Economic Mission ' from. the United States recently visited China and I have found their report of arear interest. I have maintained contact with Japanese Government representatives and bankers here and have paid two visits to Tokyo so as obtain first hand information of the views of the Japanese Government.
"The considered report on my mission will have to be presented in duc curse to, kmy Government, but it may be useful, before T leave China, to give some outline of my impres-10
The Currency Position The first question to which my attention was directed was naturally the position of the currency. Silver has "for many centuries been the: currency of China, and the sudden and sharp rise In the value of silver during 1984 caused a similar rise in the exchange value of Chinese euro rency, Chinese produce became lear in relation to world prices, exports fell off and silver had to be exported to meet. the adverse lance of trade. Thi caused fall, debts could not be met yanks became more and more frozen, particularly in Shanghal_ where the' collapse of the real estate boom created a special problem. By October, 1934, the situation had become so serious that the Chinese Government imposed a variable export tax on the export of silver, thereby divorcing' the Shanghai dollar from the free) silver standard. But this measure, while it mitigated the extreme effeels of the rise in silver, did nothing to remedy the difculties which that. rise had already caused: and when I reached Shanghai last, September was evident that further positive ures had to be evolved. China lad _abandoned silver, without adopting any alternative currency basis.
did not bring any cut and dried scheme out with me to put over the Chinese Government. There were several possible alternatives, and the decision between them, depending as it did largely on Chinese psychology, could only. be taken by the Chinese Government. 1 was examining the situation with a view to the prepers tion of a detailed programme with adequate safeguards and if possi with international support. But Tore any such scheme could be devised, the exchange market became dangerously weak and the Chinese Government decided to adopt an inconvertible managed currency on the basis of their own resources.
"I had no responsibility for this bold step but I have of course closely followed the situation and I have no hesitation in saying that the action taken has been fully justified by the success which it has achieved. Tt was accepted throughout China without any serious diiculty. The notes fof the Government banks have been steadily replacing the silver dollars in circulation, Their exchange value has been firmly maintained and the resources at the disposal of the Gov ernment banks for this purpose have.
Text read from the printed page and cleaned; old type leaves the occasional error.