The only conservancy work carried out during the year was that undertaken by private interests in the immediate vicinity of their own wharves in the Shanghai Harbour. About the end of the year an agreement was reached under which conservancy work would be resumed. Certain equipment has been returned and is being reconditioned but at the time this report was prepared no commencement in operations had actually been made. and although some relaxation was made in Tsingtao the general situation continues to be regarded by Third Powers as unsatisfactory. Practically all southern ports are closed, to the detriment of general trade.
The financial position remained unduly complicated owing to the variety of currencies in force in different parts of the country. In Shanghai, in addition to the local dollar, Hua Hsing notes sponsored by the "Reformed" Government at Nanking are used in certain cases, and in January, 1940, Japanese yen were being accepted by the Chinese Postal and Telegraph Offices, whilst in territory under the control of the Chinese National Government the Chinese National dollar remained the only legal currency, the value of the dollar being quoted at 1s.2%4d, although it was impossible to purchase foreign currency except at the "Black"
ket rate which in Shanghai ried from 4d to 514d, and latterly appeared to have stabilized for the time being between those limits. The '24% system of allotments of foreign exchange made available in Shanghai by the Central Bank of China was discontinued during the year. In addition to the above, Japanese military notes continued to be issued by the Japanese military forces in large numbers in the territory occupied by them and the same, together with ordinary Yen notes, are now in use very largely in the area under Japanese control North of Soochow Creek.
Text read from the printed page and cleaned; old type leaves the occasional error.