The major. cause for this is the present conflict, but the policy adopted by the Chiang Kai-shek regime of restricting currency circulation, in disregard of the welfare of the people, is another, Such an uneven concentration of currency will hamper the economic rehabilitation of the farming areas. Therefore, in order to restore financing facilities in small towns, as well as in farming areas, it is necessary to alleviate the present dearth of currency. To achieve this new organ Such as the new bank of the Reformed Government should become the moving force in distributing in adequate amounts the surplus currency found in the cities to the countryside. In this sense, the distribution of new currency to the countryside by a new bank, basing its note issue upon fapi, is one of the most necessary measures. Particularly urgent are such measures in Japanese-occupied areas.
There is one reason that we fear that British banks, purposely or because of a misapprehension, may refuse to deal with the new currency, The King's Regulations issued in 1935 at the time of the Chinese currency reform, banned the use of silver as currency and designated as legal tender in China the currency approved by the Chiang Kai-shek regime. The former prohibition, inasmuch as it dealt with only silver, has no relation to the note issue of the new bank. The second may be invoked as a basis for the refusal to deal with the new notes but cannot constitute an absolute reason for such action, If British banks feel that there is no danger in accepting the new currency and that on the contrary, it would assist trade, it would be wise for them to do so. After accepting the currency, if they find themselves unable to use it in payment of obligations all they have to do is to take it to the new bank where it will be exchanged for fapi without limit. Therefore, there should be no hesitancy in their acceptance of the new currency" In addition, it is relevant to recall, in this connection, that British banks and Britons freely accepted Hongkong Dollars in Canton even after the Chinese currency reform. The Hongkong currency which was not legal tender of the Chiang Kai-shek regime but it was, nevertheless, openly in transactions,
Text read from the printed page and cleaned; old type leaves the occasional error.