Principal Effects on Exchange Estimated: Silver Export Gauged: China's Difficulties By 4 Srocut, With the imposition of a variable Jexport duty on silver intended to estrlet the free flow of silver from China in adjustment of the balance Jof international payments, this country may be considered to have abandoned the silver standard and is now compnitied to a degree of official management in monclary affairs the extent and effect of which can only, judged over a period of time. "The more important. consequences at the moment of the National Gove Heeision appear to be:
1, Phot the effect the United Staies Government's silk ying Dolley om the current broad will no longer be fully felt in the exchange quotations for the Chinese silver: dollar. existing circumstances there Is unlikely to be any appre cable Chinese demand for silver bread apart, perhaps, from seme Speculative activity quite ther exports of silver from this. country, the influence of Chinese Sales of the molal on the price of Silver abroad. will be Temoved. Accordingly, China wil present circumstances, have litle for no influence in determining the World price of silver. This situa of course, be entirely Ushment in due course of some form fof gold standard for China rather than a return to a silver standard addition to a very large supply of quid funds, an Intimate and exact Knowledge of what is happening in the exchange market affecting the domestic currency, and also a shrewd appreciation of ihe various international factors bowring upon the It is, of course, of the first import ance that the "currency managers" shall be ina position to determine, without any possibility of error whether the rate of exchange is weak because of temporary influences, such as speculation, whicl it may be quite hustiflable to resist, or because of a definite trend in exchange brought about by some change in the fundamental condition of the trade and finance of the country in question, for any attempt to neutralize reverse stich a trond must necessarily result, in the long run, in the ex-of the exchange equalization An other words, the use of the 's resources in such a case would be equivalent to pouring them down the drain, The considerable movements in exchange rales in the local market during the past three days, and the feeling of uncertainty as to developments in the near future, may possibly have the effect of creating in some minds a desire for exchange control intended to restore confidence the market, but it may be antly cipated that the Government will decline to be hurried into yet another experiment at the present tim was not to be expected that drastic a measure as the abandonment by China of the long-established silver standard would be carried through without considerable disturbance to market rates, and if, as Is asserted by several authorities, the local dollar was, as a result of the USA, silver-buying polley, substantially" overvalued at the moment when the Government chose to cut the Gordian knot, a decline in exchange at the present ime can only be regarded as the natural sequence of the Government's action, The sooner a level of exchange rates ig reached more in consonance wilh the present condition of China's Dalanee of international payments, the sooner will exchange stability be allained. In the process business activities connected with import and export trade may be seriously me convenienced, and serious exchange losses may be realized by some, But it would in all probability be' imas sible for the Government, no mater how large an exchange fund it might be able to raise, to offset this rend, and, with the knowledge and experience at its command, it would be very unwise to try,
Text read from the printed page and cleaned; old type leaves the occasional error.