During the whole period of the hostilities up to 10th March 1938, the stability of the currency had been maintained satisfactorily without any restriction on operations in Foreign Exchange, for which there was a free market, When, however, Federal Reserve Bank was established in the North on 10th March by the "Provisional Government of the Republic of China" and immediately issued notes. which were not convertible into foreign exchange but which were to be exchanged at pa opened 1 o improvement can be expected in the present wading position. Importers are now well supplied with'eargo which cannot be shipped to consuming centres, while Exporters are unable to obtain the produce from the interior, The necessity for freedom of zeees to the Northern and Eastern areas has already been emphasized as a pre-requite for the re-establishment of industry. Freedom of communication with the hinterland and river ports is of no less importance to Shanghai.
Military exigency is claimed in respect of the closure of the Yangtze and other outlets for trade and it is ce when such a claim not be made, bui Shanghai cane on itself and though the Chinese trader is a past master in the art of overcoming difficulties, it is dificult to see how even he can overcome the difficulties due to this closure of outlets, to say nothing of the devastation of the country and the destruction of his normal market:
China is very largely dependent on its agricultural products and inasmuch as in the area between Shanghai and Wuhu and south to Hangchow the country has to a large extent been devastated it is dificult to see how anything or even adequate food supplies can be expected from these areas unless the Chinese farmers are encouraged to return and are con vinced that they can do so in safety
Text read from the printed page and cleaned; old type leaves the occasional error.