A check with the Chinese banking circles yesterday revealed that Chungking was paying close attention to the foreign exchange market here, but that no orders that would improve the situation had come. The Bank of China and Bank of Communications which have refused to exchange large numbers of their notes issued for circulation in Tientsin since Monday were still waiting for instructions from their head offices as they did so of their own accord. Tientsin notes in big sums were still refused yesterday by the two institutions.
Informed Chinese circles believed that the banks refused to exchange the notes bearing the character of Tientsin because of late there had been an unusually large number of such notes circulated in Shanghai which fact led them to suspect that they were smuggled here in order. to buy foreign exchange. The Chinese press reported that the Tientsin notes which recently arrived here amounted to between $30,000,000 and $40,000,000.
Strongly commenting on the situation, the "Shun Pao" yesterday urged that something must be done to check the unofficial foreign exchange market here after pointing out the Bat, effects of Tuesday's changes. The danger is that the Federal notes issued by the provisional regime in Peiping might benefit by the change. It was pointed out that the price of the Federal notes jumped to $101 for $100 in Chinese national currency whereas formerly the former were only worth 60 or 70 per cent of the latter.
The price of the 10-ounce gold bar fluctuated around $3,100 which showed an increase of more than $430 when compared with the quotation used two days ago. Never before has the price of gold here been quoted so high. The price of ornamental gold was increased by more than $40. Prices of cotton, piece goods, sugar, oil coal) medicine, chemicals and metals have all jumped up in many shops.
Text read from the printed page and cleaned; old type leaves the occasional error.