Besieged by a barrage of questions from foreign correspondents, a Commercial Counsellor attending Yesterday's Japanese press conference, admitted that the only reason for which the Hua Hsing Bank had been formed (full details on page 8) was to give the "Reformed (Nanking) Government," its own financial institution and the Chinese National currency would be valid in Central China along with the new banknote issue contemplated by the new bank. He denied that, for the present at least, any trade restrictions would come into force ud that export bills will have to pass through the new institution at the present time.
When the spokesman admitted that the new note-issue was being backed by Chinese National currency and that unlimited amounts of foreign exchange would be available from the new bank, he was asked whether this did not mean that the new bank was actually ce-operating with the Chungking Government, economícally in view of the fact that the new currency would be at par with the Chungking issue, He answered in the affirmative and pointed out that the new issue was being backed with the present holdings of National Chinese currency held by the "Reformed Government" and the six Japanese banks who are financing the new institution. Asked whether the backing thus obtained, consisted of species Or banknotes, the spokesman said that only the management of the bank would be able to answer this question, Foreign Banks to Ca-operate The spokesman also said that a number of foreign banks had already agreed to recognize the new legal tender, but being further questioned, he said that arrangements have not as yet been completed and that therefore the names of the foreign banks concerned, could not be made public for the time being, but that the foreign bankers had accepted inasmuch as that the basis for the I new notes, it was also síated ow currency was very sound.
the spokesman, will be convertible into Federal Reserve Bank notes but the rate of exchange had not yet been decided upon. Pressed further by a correspondent who stated that, consequently Federal Reserve Bank notes could thus be used for the purchase of foreign currency, the spokesman said that this was true, to a certain extent only however.
"In view of the fact that the new currency will have the Chinese National currency as its foundation will it fluctuate with Chungking lega: tender?" a correspondent asked, whereupon the spokesman said that this question would have to be studied by the management.
No Confidence in Chungking Asked whether the Japanese agreed with the Nanking "Reformed Government's" statement that the Chungking currency was not sound, the spokesman said that no confidence can be placed in the Chungking, Government and that therefore its currency could not be called sound.
A correspondent then pointed out that he understood that foreign banks here will only recognize the legal tender of the Chungking Government with which their respective countries uphold diplomatic relations. The spokesman said that he did not think that this would in any way hemper the new currency.
Asked whether the new Government bank had credit facilities in New York and London, the spokesman refused to answer the question.
"Consequently" a correspondent stated, "there can be only one reason for the establishment of this new bank, namely to permit the 'Reformed Government' to place a monopoly on exports." "There is no intention of this sort for the tine on
Text read from the printed page and cleaned; old type leaves the occasional error.