To the Editor of the "Nowrit-Cutwa Dairy News"
Smit {s stated. in the article! Jappearing in your to-day's issue that [Chinese Government currency in the north has been "bought up by the Danks with the Reserve Bank notes, and transhipped to Shanghai to buy foreign currencies, principally sterting?
This. probably is the true reason for the restrictions imposed on the sale of: foreign currency by the Chinese National Government.
Last week the new Federal Reserve Bank in Peiping and the Japanese, were being named the scapegoats, As a matter of fact, it 4s the Chinese banks which are to be blamed. Quite characteristically, they are "taking. advantage of the situation: to enrich themselves by the purchase of foreign feurrencles at the expense of their own Government.
Tt seems curious the National Government has not adopted the: most obvious remedy, which is to decree that Chinese National Govern~ ment notes bearing the imprint of} Peiping, Tientsin and Tsinan will not be accepted for foreign currency purchases.
This would cause hardship to no one, The big firms up north with appreciable bank balances _have already had these transferred to Shanghai or Hongkong, leaving only what was required for current needs, and small traders and individuals handling Uquid funds would not be fected at all.
'A continuation of the restriction on foreign currency purchases, as now imposed, can only have the most detrimental effect on' Chinese credit Jabroad. One cannot help putting the query, are. certain parties being favoured at the expense of others?
Shanghai, Mar. 30.
Text read from the printed page and cleaned; old type leaves the occasional error.