The important communication from the chairmen of the British Chamber of Commerce, the China Association and the British Residents' Association on the subject of the forthcoming municipal election deserves the closest attention of every ratepayer. It is a well-balanced statement of fact, which should not be ignored at such a juncture as the present, for, if it is, it can be readily expected that wrong decisions may be made which will have a profoundly unfortunate effect upon the history of this port. It is as well to remember that when the Council sought to effect economies in 1936, which actually came into force in 1937 there was very considerable criticism by the public, and in all justice it needs to be remembered that, if now the Council is criticised for its alleged extravagance, it has also in the past been reproached for its parsimony. The Council has stood to be, and has been hit at from both points of view, and it can with justice be said that whatever may be the rights and wrongs of the matter the ratepayers themselves cannot hope wholly to escape from blame. The real fact of the matter is that the rates should have been increased years ago." Such a step was only avoided by the sale of the electricity undertaking and the use of the surplus of some $40,000,000 for the purpose of balancing budgets, which in the absence of adequate revenue from the rates could not in fact be balanced. The sale was put through on the understanding that the surplus after the repayment of the then outstanding debentures would be used for the purpose of keeping down the municipal rates. The method of financing the administration then adopted was open to criticism, but it was what the ratepayers wanted, and they cannot now hope to escape from their share of the responsibility. The necessity for raising the rates was clearly realized in 1936, when the Chairman of the Council told the members of the British Residents' Association that an increase from 16 to 20 per cent. was necessary that year, and that the more this was delayed the greater the increase would have to be. That has in fact occurred, and the International Council is now faced with the imposing task of setting its house in order.
That, despite opinion to the contrary, there has been no prodigality on the part of the Council may be deduced from the fact that, had it not been for the collapse of the dollar, the municipal budgets for this and last year would have been balanced, and the Settlement would have been able to carry on. The figures which have been issued by the Finance Department of the Municipal Council clearly show that the drop in exchange is wholly responsible for the position in which the International Settlement finds itself now. And while there is some criticism concerning the amount of revenue which because of the depreciated dollar has to be devoted to the satisfaction of pension agreements, it has to be remembered that no criticism was forthcoming when the factor of falling exchange did not operate against the interests of the ratepayers. It must be by now the common experience of all ratepayers that the fall in exchange has added very considerably to their own expenses. How can it possibly be conceived that the municipal administration should be the only thing left untouched by that fal? It must be obvious that the cost of administering so important a city as this can only be reduced to a certain limit without actual damage to the place. It is plain to those who walk the streets of Shanghai that, in this respect the limit has been reached. Road surfaces clearly show it and that is not the only indication of how expenditure has been kept down almost to the irreducible minimum. If there are instances where further economy is possible, it can be said at once that those economies, if effected, would have no material bearing upon the Settlement's financial position. Suggestions that the Volunteers should be reduced and that the Russian Regiment should be disbanded are nothing short of ridiculous when all that the International Settlement has gone through during these last eight years is remembered. Were the latter disbanded there would have to be a very material increase in the Police Force, but the fact nevertheless remains that the services which the Russian Regiment has performed since its creation, and those which it may be called upon to perform in the future, are the completest justification necessary for its continued existence.
Some criticism has been advanced of the comparison of the rates paid in Shanghai with those in occidental countries, but the communication under review makes a point, and an important one at that, when it avers that even with the increase of the rates to 27 per cent., ratepayers will still be taxed far less than in other cities in China, Japan, and other parts of the world. That brings the comparison very close home, and presents an argument which should not be overlooked. What then is the real issue with which the ratepayers are faced this year? The letter referred to puts it quite plainly Are we to maintain an adequately paid and efficient staff capable of maintaining the rule of law in this Settlement as it has been maintained in the past, or not? Can there be any doubt as to our attitude? We may disagree with some of the Council's recommendations, but this is surely a ime when we should sink our differences and unite in supporting the Council.
This journal has not hesitated to criticise the Council when occasion justified it, and will not, it may be taken for granted, hesitate to do the same thing in the future should it be considered necessary, and on its record ventures to believe it is correct in urging ratepayers to give the utmost heed to the document which has been issued by the British organizations referred to above. The future of this Settlement requires that its problems shall be faced with a far-sighted policy in mind. Any solution of present difficulties which merely eases things without due regard for the years to come might do the prospects of this city irreparable harm. Failure to relieve this perfectly solvent International Settlement of its present embarrassments, and the accumulation of more through reluctance to look hard facts in the face, can only have but one result, and that those, who have an affection for the place, shudder to contemplate.
In his very lengthy reply to criticisms which have appeared in the columns of this journal, Mr. Ranald McDonald alleges that he was unfairly treated when the editor refused to publish three of his letters. The point has already been dealt with. Those letters constituted an attempt to force the British Election Committee o divulge information, which it was rightly considered should not, in the interests of the British community, be made public. Mr. Mc-Donald had one letter published, and in fairness Mr, A Pullen also had one letter printed. There can in the circumstances be no question of any—to quote Mr. McDonald's own words;—"act of unfairness to myself and of deception of the public." For the rest of his lengthy communication Mr, McDonald depends upon a purely legalistic attitude of approaching the whole question, apparently averring that as no specific document of agreement was preferred him for signature whereby he would agree to abide by the result of the straw vote, he can suffer no reproach for doing what he has done. Mr. McDonald may be satisfied with his statement of the case, but there will be many to disagree with him. It will be remembered that some years ago as a result of a split vote, which for a year cost the American community one seat on the Municipal Council, the system of straw vote was instituted, later to be followed by the British community. In order that split votes should not occur again it was necessary that unsuccessful candidates in the straw votes, or for that matter any others of the same nationality, should retral from offering themselves for election at the municipal elections. If they did so, it is obvious that the whole purpose of the straw vote would be destroyed. It is a matter of record that candidates entering for the British straw vote at all times understood the position and abided by it, and it is only this year, one of the most important years in the history of the International Settlement that Mr. McDonald has departed from a well recognized practice. It is important in this connection to recall what happened last year. Ten candidates were presented in connection with the British straw vote. Five of them including a municipal councillor seeking reelection failed. Not one of those five appealed over the heads of the British community in the manner which Mr. McDonald is now doing. This year two candidates failed to obtain sufficient British suffrages. One of them accepted the verdict of his fellow national. Mr. McDonald has not. It is difficult to believe that Mr. McDonald knew nothing of the implications attendant upon his presentation of himself as a candidate in the straw vote, and in all fairness it should be pointed out that Mr. McDonald has failed to make out a convincing case for himself.
Text read from the printed page and cleaned; old type leaves the occasional error.