The undeclared Sino-Japanese War, which had its origin on July 7, 1937, in the neighbourhood of Wanpinghsien, some few miles south of Peiping, and eventually spread over the greater part of northern China and considerable areas in the northern Yangtze Valley, has brought chaos, disorder and misery to the cities and provinces effected, Although the foreign administered areas of Shanghai south of the Soochow Creek suffered comparatively minor damage except on two or three occasions during the early part of hostilities, the rounding districts were to a very large extent almost completely demolished in the course of hostilities and in the successive holocausts that followed. The toll of deaths and in-been paid it was impossible to assess duty in the absence of proper inspection and in cases where duty had been paid, cargo was delivered to consignees other than that described in the bills of lading: shortages also were frequent. This matter was taken up by the chamber with the Japanese authorities through the senior consul who has informed the chamber that he is in communication with the Japanese authorities on the nity also arose at the Japanese-owned wharves in connection with waste metals, The wharf companies agreed to deliver to consignees 90 per cent. only of their cargo, giving the reason the fact that in many s the marks had been obliterated from the cargo in question and until such time as it was possible to ascertain whether shortages existed the 10 per cent. would be retained and delivered to consignes either in full or in part, according to shortages discovered at a later date. This matter was taken up by the chamber with the Japanese Chamber of Commerce pointing out that the detention of the cargo in this manner was illegal. A reply is now awaited Navigation by deep draft vessels of the approaches to Shanghai, including the Whangpoo River, has been seriously hampered by the complete suspension of dredging operations. and it would seem that unless dredge ing is resumed in the near future irreparable damage to the Port of Shanghai may result. I hope the authorities will give this matter their early attention.
Another matter which has recently been taken up by your committee is the question of resumption of telegraphic communication between important cities no longer within the zone of hostilities. Representations on this matter have been submitted to the senior consul.
The deviation of Shang other ports resulted in many difficulties which occupied a good deal of your committee's attention. difficulties were concerned prima with freight rates fixed for on-carriage of deviated cargo from ports of refuge and the rates of premium charged under marine and war risk insurance policies for such deviation. Negotiations regarding these matters are still pending. juries amongst foreigners was comparatively light, but damage to foreign-owned property was extensive. It is too early. yet to foresee what the outcome will be as far as Shanghai is concerned, but this great city has risen from other calamities, although probably never so serious, with greater strength and I feel sure that although Shanghai's greatness for the moment appears to have n ceived a setback, as soon as conditions become normal again, the development of Shanghai will forge ahead and its future be assured. It Revision of Customs Another disturbing factor has been the recent revision of the customs tariff in North China, where reductions of 50 per cent or more irom the tariff rates previously in force in the north and still effective in other parts of China have been introduced, The reductions which have been introduced appear, without doubt, to favour imports from Japan exclusively, the importers of other nations, as far as I know, neve: having been consulted at all as to their views. may have been retarded, but Shanghai will remain the sole important port of entrance and exit to one of the most extensive trading regions in China, and, for that matter, in the world. The immediate future cannot be regarded without some pessimism, but Shanghai's future in the long run is assured, geographically, commercially and financially.
As a direct outcome of the new situation which has arisen in Shanghai many delicate points have arisen both in connection with the local foreign administrations and certain Chinese Government departments, particularly the Customs
Text read from the printed page and cleaned; old type leaves the occasional error.