July 22.
With the continued fall of the Chinese National Dollar there must be the gravest pos-, sible concern as to future developments, and people are naturally asking whether steps could not be taken ju Shanghai for the purpose of protecting the economic life of the community. It is clear that should something not be done, and the exchange value fof the Chinese dollar be even more reduced alle business in Shanghai will be brought to 'a standstill, What obviously is needed is to provide some form of currency, of a stable value which will permit of the buslness of the port being carried on, as well as the continuance of municipal' undertakings, for itis clear that with a currency which can command only a very low exchange value the munfeipality itself will find itself in dif culties, There is not only that aspect of the case, but consideration has to be had for those various public utilities and other concerns whose capital as well as working liabilities are expressed in currency other than that of Chinese, and if from their revenues they are unable to secure sufficient to meet their exchange obligations, whether it be for the purchase of essential materials, or the service of obligations the economic state of Shanghai may very soon become chaotic. The rapidity with which the origin £10,000,000 which was provided for stabilizing the Chinese dollar was swallowed up suggests that the amount was not large enough to withstand the onslaughts which were made upon it, and while there are sug-questions that further British support may be available if necessary, there is nothing to suggest that this form of assistance can be carried on indefinitely, and the question naturally arises as to whether local steps can the taken in Shanghai to afford that protection which at the rhoment is woefully lacking. The idea has been mooted in many circles that it is time the Municipal Council in~ vestigated means of establishing its own currency, and while in ordinary cireumstunees there might be political reasons why this should not be done,.the existence of a state of grave emergency, and also of something in the nature of a' precedent indicates that this Is an occasion when some such action is necessary and justified.
One of the most interesting suggestions which has been made is that the Municipal Council should issue its own currency pegged on either the pound sterling or the gold dollars, or both. The general scheme is somewhat analogous with the systems in vogue in Hongkong and Singapore, where the currency has been pegged to sterling in a manner which by reason of the small amount of "spread" permitted. gives the completest control, and proponents of such a system for Shanghai sce no real reason why such a scheme could not be worked here. At what evel this municipal currency should be pegged is a matter for discussion, but if it could be established at a higher level than any of those pertaining recently, provided with @ very small margin of "spread" a general improvement of existing conditions would result, One suggestion is that the municipal dollar should be fixed with a high at tad and a low of 84. It would be necessary for the Municipal Council to set
Text read from the printed page and cleaned; old type leaves the occasional error.