To the Editor of the "NoRr-CHiNA Dany News"
Sm—It is generally known that local Banks receive certain exchange allotments from the Central Bank of China, witch they distribute amongst their clients at the official rate of l/2/&. Every week, before Wednesday, clients apply to the bank through which their nearest payment in foreign currency is to be effected, for the necessary exchange. The sum of all such applications plus requirements of the bank is being applied for by the respective bank. On Fridays the allotment is.received by the bank in full or in part and is to be distributed by the bank among the clients in proportion to the amount received. The latest practice is that the equivalent in local currency at the rate of 1/2/3; is to be deposited with the bank, when the application is handed in. Thus every client is entitled on Friday to receive a certoin percentage of the amount applied i; the beginning of the week. The balance needed he is free to purchase wherever he likes and on terms and rate he s most convenient Now ye have before us a circular letter of H. & S. Banking Corporation eated the April 22. ti. last Friday. in which the Pank informs their clients that the Bank has received an allotment of £25,000——. for the special purpose of retiring acceptances outstanding in their books, which they will distribute among their clients on the following terms:—
(1) Applications to Peera d by cash.
Applicants could be prepared io accept to th cash deposited ull extent of the ith application an orage rate of exchange, whatever V be, based as follow
allotment at 1/2% (b) Balance at 1/1% (official rate of April 22.)
Questions of great importance arise to "beneficiaries" of the new regulations of the H.'& S. Bank and I should be much obliged to those who would be ín a position and also willing to answer them:—
(1) Is it legitimate shat tne H. S. Bank should distribute the allot-inert or the April 22, received against plications of their clients handed during the previous week among c who applied after April 22.
Is it legitimate that the H.
Bahk compels the applicant for exchange at the rate of 1/2, to buy meeded by him from the lik at the rate imposed by 12) Would it not be fair to let the applicant have such a proportion of the amount applied for as has been allotted by the Central Bank of China. leaving to him the option to get the balance wherever he prefers Or let him next week apply for the next allotment?
(4) How is to be called in legal terms the act of compelling applicant to purchase for the full amount of deposited with application, thus g him to buy even the amount ted by the Central Bank. of China ata higher rate?
For amounts payable through the H. & S. Bank one cannot apely through any other bank. What is the legal term for taking advantage or ie helplessness of the client in such a case?
I hope some learned lawyer or financial expert will take trouble to clarify above questions,
Text read from the printed page and cleaned; old type leaves the occasional error.