On the whole, adoption of the export restrictions has been beneficial, first, by checking the further drain of silver, and, second, by preventing exchange from rising pari pass with the rising value of silver abroad. Without this measure, the silver reserves. essential to supporting a sound monetary system would soon have been drained away and China's leurrency forced off its metallic basis.
The continued rise of the silver price, however, has created a considerable spread between the value in China and abroad of the silver content of the Chinese dollar and hes accordingly placed a premium on the export of silver from China, It is obvious that there ig a strong temptation to smuggle as long as there is a net premium on evading the e<port restrictions, and it is dim cult to combat smuggling, particularly in view of China's extensive borders.
Accompanying the drain of silver and contraction of the currency, money has become extremely tight fand financing difficult. The unusually thigh rate of interest charged by banks has made it practically impossible to borrow at any rate regardless of security. The tightness of money has checked reconstruction activities and interfered with normal financing of {the Government's needs.
Deterioration is further reflected the decline of stocks and bonds. Moreover, the shrinkage in real estate value has caused the failure of both Chinese and foreign concerns and seriously impairs the strength of others. Business failures and un~ employment are acute and widespread.
The situation has been most ezitical during the past nine or ten months. Wholesale Snancial collapse has been prevented only by action of the Gov-jemment in organizing support through ce-operation of banks, especially the Central Bank, the Bank of China and {the Bank of Communications.
Text read from the printed page and cleaned; old type leaves the occasional error.