Referring to the cblect of the Association as being that of main-{taining British interests In the Far East the President emphasized the scope of this pur nan. This he said, way a8 broad as: that of the Government which viewed" British prosperity not only in British terms, but In terms equally applicable to China and Japan and the Far Bast asa. whole.
To this characterization he would ike to. add two observations, one being that it was Just because of the Targeness of the British outlook that the friendship and goodwill of the British Empire were so" well worth having: the other being that merging her conception of her own welfare in that of the general welfare, Britain had no intention of Aisavowing or renouncing her own, Interests.
That a contrary impression had been created by British policy In Fecent years might well be, indeed was, ho thought, the ease." Always after every Great War there had a period during which an apparently renunciatory spirit had apeared to prevail. But that was not the note of British polley to-day, and thought it should be. plainly said that no country could afford to make the mistake which Germany made before 1014 in its reading, of British temperament. purpose and capacity.
After referring amusingly and ap~ predatively to other distinguished Ruests, the President paid a. warm tribute to the work which ud been done by. Sir Frederick Leith-Ross. He said that Sir Frederick had once more made it clear that the veally Rood British expert was the finest expert in the world. The essential sanity and reliability of Sir Fredevick's outlook upon Chinese altairs were characteristic of the best Brl-{ish minds, the elements which they displayed being. he thought, the best guarantee that in a world of fluctua on, change and danger Great Bri-fin' provided the most reliable and stabilizing element, attempt to review the whole field on fan occasion like this. When I. toft China last June a statement summarizing my general impressions was published in the press both over there and in this" country. Twill take it either that you read that statement when Issued, or if you did not read it then, that you equally do want me to talk about it. now. In my remarks to-night Twill take that statement as' the starting point and try and summarize. the various developments" which have "taken place since then In tw ilelds, vis: Government "Mnances and British 'Though China looks very different, she has very much the same troubles as we have. 'When T first went out to China, there was an acute menetary and financial crisis. Owing the' rapid rise In the price of silver 1934, China was faced with the same deflationary pressure as we were faced with before 1931, but in a much more severe degree.' Prices fell sharply, credit had to be restrict ed, debts became difteult to collect, the banks became illiquid, Govern= ment finances were more and more Involved, the adverse balance trade Increased, and monetary reserves were being constantly exported.
These problems are all connected but one must begin somewhere and the central problem is that of the currency. In regard to the currency, China adopted the same remedy we were foreed to do. In November fof last year she decided to abandon the metallic basis of her currency and to adopt a managed paper currency based on foreign exchange at a value of about 1/2%4d, to the dollar. It was a beld step and many of the foreign officials and bankers with whom T discussed the decision were sceptical of its success. They thought that the Chinese people were so tccustomed 10 the use of silver as currency that they would accept nothing' else.
The First Banknotes The Chinese ministers however were confident that the public would accept the change without dimeulty. 1 was disposed to.take their view, because it is natural to assume thal the Chinese Government understands the psychology of their people better than any foreigner can. But T was fortified in this view by reading memorandum on Chinese currency' loft by a. distinguished Tlatian expert who visited China some time before me=t refer to Marco Polo.
Marco Polo gives an account of the currency system in China under! Kubla Khan and explains how. the rear Khan "possessed the secret of the "alchemists" as he caused. notes fo be made out of pulped mulberry bark. "Apparently "their colour "was black, like that of many of the notes circulating to-day, fete ig authenileated wit match fetuaily ¢¢ pure wold, or form land ceremony "us each hole Das number "of oficiais Specially sppainted not only. suse {hele naoves" but "ati Weir seats The paper, ctrreney: ly eireuinied "in pare Re ans the "Great ete reticle. Tay Pirrchased. Witen any" person Tapper ibe possessed of paper money" fom tone use Nar ha come, Gamazes, they carry It te the Mint where, Payment "of only ea. ner "cent" ther Fecelve' fresh notes "in, Sexchanse Sir Frederick Leith-Ross's Address Sir Frodevick Leith-Ross began by describing the origin of his mission. Hig. Majesty's Government had preposed un expert investigation of the situation of China, with a. view to drawing up some international plan for assisting her. He had been nominated as the British expert and the United States, Japan and France had been invited to nominate experts collaborate with him, Unfortunately for one reason or another, none of these countries were willing to do so and eventually he went out alone. But his objective remained as before, not_merely 10 Promote British interests but to seo What could be done {o promote the stability and prosperity. of China, in the interests "of all the countries wading with China,
Text read from the printed page and cleaned; old type leaves the occasional error.