The San Francisco call., 1908-12-26
SILVER SLUMP SETS
CHINA'STRADEAWRY
Fluctuations of Currency Stand
ard Cause Heavy Losses
to Importers
COnSuIs Report Dragon Empire
Is Suffering Heavily as
Result of System

WASHINGTON. Dec. 25.-That bust
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
material. have caused this commercial
difficulty is shown by a large number
OF special consular reports received by
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 a 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 renorts were
called for by the statement at the re-
quest OF Senator Lodge. Consular
officers were requested to report what
had been the tendency of prices since
1896, measured by silver currency;
whether firms importing from the
United States. Great Britain and Ger
many had found the depreciation OF
silver matter Of serious embarrass-
ment to their business during the last
year, and whether the depreciation of
silver had stimulated considerably the
export trade.
SILVER LOAN BOOMS IMPORTS
Charles DENLY, consul general at
Shanghai, China, says that when sill
YER is high imports are increased and
profits are made on goods stocked
at lower rates. Similarly. when sill
yer droops trade becomes unprofitabIe
Importing firms, he says, have found
their legitimate trade seriously en-
oarrassed during the last II months
by the depreciation OF silver This
loss usually does not fall on the forei gn
wholesale importer, as he does not
carry large stocks, but orders goods
on commission for Chinese buyers. The
recent large 6uctuation in the value
of local currency, in comparison with
gold he adds. has ruined hundreds of
Chinese merchants who have dealings
with foreigners Normally, he declares,
this depreciation would have consider
ably increased the export trade, but the
other markets were so affected by
other considerations that il was diff
cult TO trace this influence. The
foreign trade In general, he says, has
been disturbed since 1890 by huctua-
dons 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 IL
months has seriously affected their
business.
Thomas Keenan, consul at New
chwang, China, states there is no doubt
that the depreciation of silver stimu-
lates the exports Of silver using coun-
tries. but it Is difficult to show this in
any given article
PRICES MOVING UPWARD
That since 1908 the tendency of prices
has been upward, that the deprecia-
ton OF prices has affected The local
importers to a serious extent, on ac-
count OF their being unable to obtain
higher prices from the Chinese con-
sumer, and that this depreciation has
not stimulated the export trade to the
extent expected, is the view of Albert
w Pontius, vice consul general at
Hanghow, China In the natural course
Of events. he says, the low exchange
promotes imports and precludes ex-
ports; and vice versa.
TT is believed by some Of our mer-
chants" says Samuel l. Gracy, consul
at Fuchau, China, that the deprecia-
ton of silver has practically been the
salvation of the importing firms, as the
Chinese have been unable TO buy as
cheaply from foreign countries as they
can from those with stocks IN the east,
they having been sought when the
exchange was high"
That the prices at Canton, China,
have generally speaking consider
ably advanced since 1896; that the de-
preciation of silver, during the last
year, has offered no serious embarrass-
ment TO importing firms and that any
depreciation in silver does not increase
the import trades. the fall generally
being compensated by rise in the
local cost, which means that the home
buyer pays the same price in gold is
the opinion Of Willard p. Hull, vice
consul general at Canton
GALE OFF OREGON COAST