Tt has become a truism that foreign trade is two-sided. It is clear that measures tending to curtail exports from China and remittances from abroad must in the Jong run tend to reduce its imports. But the con sequences most serious to China are not so much in its foreign trade as in the deflation which has been sipping the country's economic life.
In my report for the 2ist and 22nd fiscal years, an account was given of the developments culminating in the adoption, on October 14, 1934, of the export duty and equalization' charge fon silver. "Although imposition of the abetition of over 1,600 more Teprosenting revenue of over $20 items, export duty and equal drove a wet ion charge drove a wedge between the value of million, silver in China and abroad, the value With regard to the preparation of in China has continued to increase. local budgets, 1,089 districts This is duc to various circumstances. (hsiens), oF ST per cent. of the total Changes in the foreign value of silver number of districts in the country,|have so long exercised fluence on the budgets for the current fiscal year have either been duly approved, oF are in the process of examination lup to the middle of September. Tu all these budgets, curtailment of expenditure so predominant feature. Obviously, some time must be required for the readjustment necessary to a complete change of procedure and for the cultivation habits in line with modern methods of public finance. the value in China that this connection Ie not readily broken. Silver is silver, and rising value abroad may expected to tend to increase its value in China even though exportation is prohibited, particular! smuggling cannot be wholly prevented. Furthermore, heavy exports of silver have seriously contracted currency and credit in China, which makes for higher exchange and lower prices.
In order to insure the strict observance of local budgetary provision: measures have been recently submitted by the Ministry of Finance and approved by the Executive Yuan which provide that the widest pub-|' Hielty shall be given to the district and. municipal budgets, after they have been duly sanctioned, that henceforth the receipts and disbursoments of the local governments shall be kept strictly within the budget; estimates, that any local authorities who impose or collect taxes not provided for in the approved budget id shall be lable to punishment accord ing to law, and that local budgets, may not be altered after their promulgation except under special circumstances.
Text read from the printed page and cleaned; old type leaves the occasional error.