In view of this precedent, it would be inconsistent indeed, both economically and legally, for British banks to refuse dealing in the new currency. Should they continue to refuse to deal in the new notes, in the face of this fact, the British banks will be unable to avoid being accused of doing so from political or sentimental motives to assist the Chiang Kai-shek regime in its resistance to Japan.
There are several problems which should receive expert attention with regard to the technica) phases of the circulation and development of the new currency. For instance, the clearing of bills between the new bank and foreign banks is one of those problems. This, however, should not be difficult of solution if considered. calmly, for a practical method should be worked out, even though the new bank is located in Hongkew.
As to the question of the acceptability of the new notes I do not believe in ihe light of precedents involving Chinese banks that the decision should be made by the Foreign 'Bankers' association but that the matter should be decided by each individual bank.
As to the development of the new currency, I am not in a position to state whether or not the Reformed Government intends to adopt a policy for the control of foreign exchange, but, in an international market like Shanghai, it is most desirable that control. should be shunned and that methods for the healthy development of the new currency in keeping with the natural laws of economics, be followed.
In addition I consider most desirable that foreigners who seek the development of trade and industry in Shanghai and in Central China, should abandon political considerations and ce-operate with the new bank in view of the object and the character of the new institution. The life of a bank and of its currency rests upon popular confidence. Once this confidence is generally obtained the development of such a bank and its note issue is easy. The development of commerce and industry should run parallel to the development of the bank and of its currency. They should be coadjuvant. The revival of commerce along the Yangtze, once the present military restrictions are removed, should grow rapidly in ect relation to the development of the new currency. In hoping for the development of commerce and industry in Central China, I am confident that the Reformed Government as well as the Japanese authorities, who have no intention of closing the Open Door or of monopolizing trade, will adopt logical and appropriate measures for the promotion of trade and industry which is essential for the healthy: development of the new currency. I-hope that the foreigners will ce-operate in this direction without unfounded suspicions or doubts.
Text read from the printed page and cleaned; old type leaves the occasional error.