Los Angeles herald., 1908-12-26
ORIENTAL TRADE
MUCH DEPRESSED
SILVER FLUCTUATIONS CAUSE
SERIOUS SETBACK
CONSULAR REPORTS EXPLAIN
COMMERCIAL INERTIA
Consul General at Shanghai Says
When White Metal is High
imports and Profits
Increase

WASHINGTON, Dec. 25-That busi-
ness conditions in the orient have been
seriously embarrassed by fluctuations
| in the price of silver, and that the
fluctuations rather than the mere de-
probation in the value of the white
metal have caused this commercial
difficulty is shown by a large number
of special consular reports received py
the national monetary commission
These reports indicate that in Japan,
where the gold standard is the basis
/ of exchange. there has been no un-
settled condition from that cause, but
| in China, with the silver standard,
dealings with gold standard countries
have been injuriously affected by
changes In the price of silver, which
make the profit of transaction largely
dependent on the trend of exchange.
The prevailing statement of the re-
ports is that prices are largely regu-
/ lated by rates of exchange.
These several consular reports were
| called for by the statement at the re-
| quest of Senator Lodge. Consular Of
ficers were requested to report what
| had been the tendency of prices since
1896, measured by silver currency;
| whether firms importing from the
1
many had found the depreciation of
silver a matter of serious embarrass-
ment to their business during the last
year, and whether the depreciation of
silver had stimulated considerably the
export trade.
Trade Embarrassed
Charles Denby, consul general at
| Shanghai, China, says when silver is
| high imports are increased, and prof1ts
are made on goods stocked at lower
rates. Similarly when silver becomes
improbable importing firms, he says,
have found their legitimate trade seri-
| ously embarrassed during the last
twelve months by the depreciation of
silver
| This loss does not usually fall on the
| foreign wholesale importer, as he does
not carry large stocks, but orders goods
on commission for Chinese buyers.
The recent large fluctuatlon in the
value of local currency in comparison
with gold, he adds, has ruined hun
dreds of Chinese merchants who have
dealings with foreigners. Normally,
he declared, this depreciation would
have considerably increased the export
trade, but the other markets were so
affected by other considerations that
1t was difficult to trace this influence.
The foreign trade in general, he says,
has been disturbed since 1890 by fiuc-
| tuations In the gold value of silver
Julian H. Arnold, consul at Annoy.
China, says that the foreign importing
firms at Annoy all assert that the de-
probation of silver during the past
twelve months has seriously affected
their business.
Thomas keenan,, consul at New
Chang, China, states there is no doubt
that the depreciation of silver stimu-
lates the exports of silver-using coun-
tries, but 1t is difficult to show this in
any given article
That since 1905 the tendency Of
prices has been upward, that the de-
| probation of prices has affected the
local importers to a serious extent. on
account Of being unable to obtain high
er prices than the Chinese consumer
and that this depreciation has not
stimulated the export trade to the ex-
tent expected, is the view of Albert w.
Pontius, vice consul general at Hang
Kow, China.
How Conditions Change
In the natural course of events, he
says, the low exchange promotes i'm
ports and precludes exports, and vice
versa.
'Tt is believed by some of our mer-
| chants" says Samuel L. Gracy, consul
at Foo Choo, China, that the depre-
citation of silver has been practically
the salvation of the importing firms,
as the Chinaman has been unable to
buy as cheaply from foreign countries
as he can from those with stocks in
the east, they having been bought
when the exchange was high"
Stuart ]. Fuller, vice consul general
at Hong Kong, says he learns from i'm
/ porters of cotton goods that the fall
in silver in the last twelve months has
not substantially diminished the de-
mand for cotton goods. With regard
to exports, he adds that while the gen
eral tendency of a low exchange was
to stimulate exports, this was more
than counteracted during the year by
the general financial depression in Eu-
rope and America.
That the prices at Canton, China,
/ have, generally speaking, considerably
i advanced since 1895, that the depreca-
tion of silver during the last year has
offered no serious embarrassment to
importing firms and that any depreca-
4 tion in silver does not increase the inn
port trades, as the fall is generally
compensated by rise in the local cost,
which means that the home buyer
pays the same price In gold is the
opinion of Willard b. Hull, vice consul
general at Canton.
Results in Korea
i Speaking of Korea, Consul Thomas
Sammons also says trade conditions
there are not much affected by the rate
of exchange of silver the country hav-
ing practically been a gold standard
through it's use of Japanese currency
"Of the principal countries having
business relation with Kobe, Japan,
says Vice Consul Walter Ganzett, "the
United States, Great Britain, British
India, Germany and China, only one OF
.these--China-has been affected by the
result in the rate of exchange, China
living a silver currency, while Japan
is on a gold basis.'
I Consul Henry b. Miller says Japan
not being a silver country, the decline
in the rate of exchange has practically
no effect on trade conditions there.
Il Carl Deitchman, consul at Mansu
Formosa, says that importing firms
have felt no serious embarrassment to
their business from the depreciation OF
/ silver during the past twelve months
: as their buying and selling prices are
both in gold.
Referring to conditions in Manchuria
Consul General Roger s. Greene, al
4 Dalny, states that the Japanese mer-
chants there have not failed to attrib-