Feb, 28.
The announcement by the Municipal Council that it will be necessary to secure the consent of the ratepayers at the next inuual meeting to an increase in the veneral rate, special rate and the land tax of 50 per cent, has been received with mixed feelings. That was inevitable, and those addicted to criticism of the Shanghai Muni~ cipal Council whether justifiable or not, will to place responsibility for the need of increase at the Councit's door. That is not wholly fair, for the fact of the matter fg that had it not been for the fall in exchange last year's budget would have balanced, and there is every reason to believe given the same state of affairs that this year's budget would also have done so. 'That' substantial increases would have to be made in the rates has been realized ever since 1931, and it was only the profit on the vale of the electricity department which per= mitted of their being maintained at levels which are still very Jow as compared with those levied in other cities of similar size and importance in other parts of the world. It will be recalled that when it was first proposed to use the profits of that sale for the purpose first of reducing the rates tem~ porarily, and afterwards for maintaining them a low level until the last year or so, the proposal was criticized, but the ratepayers took no action. Their failure to do so leaves the responsibility with them, and not with the present municipal council nor any of its predecessors. When the council of 1932 decided to make the arrangements it did, they wore justified in believing that Shanghai would continue Its normal rate of progress, which humanly speaking it had every right to expect. They were justified by the growth of progress and prosperity which improved yearly until the catastrophe of 1937 fell upon the city, for it will be remembered that up 10 the time of the outbreak of hostilities round Shanghai this city was experiencing what would otherwise have proved to be record year for trade, The advent of those hostilities threw a Jarye additional burden upon the revenues of the settlement, but even then there was not the slightest reason to doubt that as long fs exchange remained where it was the nnecds of the community could be met and the budget properly balanced. From a dollar at 1s. 2d, there has been 'a constant fall until the rate is only about 30 per cent. of that sum, and the present tragic state of affairs is directly attributable to that reduetion. It is an interesting fact, one which it ly important to remember that, even if the rate had remained at 8d. last year's budget could have been balanced. Unfortunately it did not, and the time has come when it is imperatively necessary to put the Interna~ tional Settlement's financial house in order.
That can only be done now by the raising of a Jon, and in this connection it has to be remembered that the lenders of money are not likely (o be attracted: to invest in a municipality which does not, or cannot bal= aanee its budget, for in the very fact of bal-oncing lies the investor's safest security. Added to that there is the further requirement that the municipality shall follow the policy of effecting every practicable economy. It is a pleasing feature of recent years that the Council has shown a greater readiness to investigate suggested economies than was apparent only a few years ayo, and it is joved that a continuance of that policy will serve to maintain that confidence which is so necessary if investors are to be attracted towards giving that assistance which is now so necessary. During the next three weeks communiqués will be issued by the Council showing how as a result of vigorous pruni ductions this year in the inevitable in due to the fall in exchange will amount to approximately $1,800,000 suMeient evidence in itself that the Council has been exercising a prudent caution with regard (0 the future financial administration of the city. From these statements ratepayers will be able to form a fair idea of what is being done, and realize the utmost necessity of doing their share towards the maintenance of the city's the heavy charges which result frore irely outside the control of the inal council, or the ratepayers they While this increase of 50 per cent. p the rates does in fact seem to be a formidable one, it is necessary to bear in mind that even with this rise Shanghai rates are very Tow indeed compared with most cities of the same size and importance. Quite from those towns in Britain, wher policies of the parties controlling th ministrations have Ted to very large increases, a survey of those run by no means Vextravagantly shows that a rate of 10/- in the pound is a very moderate one. Shanghai with the present suxxested increase hardly ins to half that ratio, so that even now international Settlement can be regarded with justice as a cheaply run municipal It is unfortunate that so has to be swallowed in one gul much {0 be said for the contention that a series of gradual increases would have been preferable, but it has already been pointed out that until the ea was no reason near to Sippene teak affairs would take the turn they have.
Is consequently no more than an exh of ex post facto wisdom now to argue what the Council could, or should tave done in anticipation of the disasters which befallen the port and affords no wei contribution towards the solving of the very serious problems with which it is now con~ fronted, The fact of the necessity of this crease should be no ground for pessimism. The manner In which Shanghai has stood under the heavy blows of the present decade, the recovery which it made after the 1932 troubles and the manner in which it has carried on during the past two-and: halt years ore amply demonstrative of the resiliency of the place. There is no reason whatever to suppose that the proposed increase will in any way diminish Shanghai's recuperative powers, but every possi ground for believing that once this storm has been weathered Shanghai will again be able to grow, prosper and expand in stich a manner that it will be worthy of that enorm= ous credit which it has enjoyed in the past and which it should enjoy again in the future. In the circumstances the dicision of the Council {0 ask for this increase is a wise and prudent one, for, obviously, if matters were allowed to worsen the task of recovery would become all the more dificult.
Text read from the printed page and cleaned; old type leaves the occasional error.