This is not the occasion to refer in detail to Shanghat's Municipal and other problems, but I feel that you will wish me fo say how much we sympathize with that great city in its Jembarrassments and with the Chairman and Secretary General of the [Shanghai Municipal Council who have both narrowly escaped the hands of assassins during the past year. Re-Jstrietions on the movement from the interior of rice, that very important tem in the Chinese diet, and of other Inative produce, which' were potent factors in causing exchange to fall, Ihave driven up the cost of living over 1250 points' since January 1940; the price of rice increased 120 per cent. in the year and over 600 per cent. since the Sino-Japanese conflict commenced in 1997, This has naturally fied to higher costs all round and particularly to demands for increases Jor pay and so brought financial em-[barrassment to the Municipal Council, The latter's powers of taxation being restricted by the Shanghai Land Regulations, they have been forced to desk authority from ratepayers for a Jeonsiderable Increase in rates rather than to adopt other forms of taxa-
proper solution of the Shanghai prob-Tem in all its aspects can only come when the political problems of the Far East are solved. In the meantime let us hope that there will be a realization of the vital importance Jon humanitarian and common sense grounds of reasonable compromise for {the maintenance of peace, order and the livelihood of the large population fof that cosmopolitan city, Important Problems:
There are many important prob-ems facing the National Government Jat Chungking but it would take too long to deal with them here, There is the undivulged financial and budge-{ary position of the Chinese Govern-Jment; the serious economic problem It'is facing—especially in regard to {food prices and distribution (rice is bout ten times the pre-war price in Chungking); there are the difficulties Jet communications, concerning which the slate of the Burma Road is of urgent importance; the complicated relations with the communist armies, Jwhich give rise to periodical friction fas at the present time; there are the interesting industrial and mining developments in West China; the arter agreements with foreign coun-{tries and the problems affecting the whi occupied areas, All of these matters Jare of great importance and in one way or another they must affect directly or indirectly the future of [China and our concern in that future. Some of them are real danger spots—ike time bombs which need the most careful handling by men of outstand-Ing skilt and pravery—but I am conident that, with the foreign assist Jance which is now being made avail-fable, these internal affairs will be Jiackied in a manner which will avoid any serious set-back to China's powers of resistance, On the other hand, China's external problems are, believe, dependent on the outcome Jot the war in Europe,
Text read from the printed page and cleaned; old type leaves the occasional error.