Grand Forks daily herald., 1916-06-23
BANK ACTION
STIRS CHINESE
Suspension of Specie Pay
ment on Bank of China
Causes Trouble.

Pektng. June 6.-(Correspondence
Of the Associated sa)-China has
been much stirred by the action Of the
government on May 12 in suspending
specie payment on the notes Of the
Bank Of China and the Bank of Com
munications, the two government in
stitutions having branches through
out the principal cities Of China
Recently there was a great rush to
withdraw funds from these banks be-
Of the government that the late Yuan
Shi-kal administration was utilizing
the banks funds to maintain itself.
Furthermore the recent high price of
silver has caused much speculation
in the white metal. and resulted in
its transfer and expectation.
Tten.tsin has been a great center
the present government. and it was
there that the rush to withdraw funds
from the Bank Of Communications
first began on a large scale. It soon
became apparent that the limited re-
serves would not stand the drain, ard
Premier Tuan Chi-jui and his cabinet
declared limited moratorium. The
divtduals, but merely to the financial
affairs Of the government. It pro-
vides that the government banks shall
not redeem their notes In hard money,
and shall not permit the depositors
to withdraw their funds from the
banks.
with the suspension Of specie pay
business in Peking came to a sudden
halt.
The cabinet mandate provided that
oil persons must accept tho notes Of
the two banks at their face value or
undergo severe punishment. Soldiers
and policemen have been stationed in
the various parts of the city to en-
force this order in shops
Nevertheless. merchants have found
means Of evading the order. Nearly
all prices in the city have been raised.
and when merchants feel that pay
ment will be made in Chinese bank
notes. they frequently advance their
prices to q point that ID prohibitive in
order to avoid sales.
Peking is, in fact, threatened with
famine as a result Of the partial NOR
atorium, for farmers and produce
dealers will not bring their products
to PeIsinS, - they do not desire to 30
paid in the deprecated paper bank
notes Of the two government financial
institutions.
Grains and all sorts Of vegetables
nIo 8OSI4IIB V0Ey OC8<C0s ana In0 CHS.
nese chamber Of commerce and local
grain merchants have petitioned the
government urging It to devise means
| to relieve the situation. There 10 q
plan on foot to establish oflcisj
grAnaf1eS and dspots in which all sorts
Of food studS WIN be handled By the
governnaeut for sale at normal prdoee
All sorts of food gtuhIs have sdvanced
In price from 80 to 100 per cent.
| One Of the wort features Of thu
limited moratorium 10 tho criticiEr
directed at foreigners by the vsrnacu.
lar press. Many Of the Chinese news.
papers are declaring that foreigner
have bought up all the silver and eold
IN Chdna, ana are responsible for thu
depreciation Of the notes Of the Banl
OF CHINA ana the Bank Of Communi.
cations: Posters making this A..
many Of tho dead walls In Psking. and
Chinese papers are encouraging thu
populace in this belief. Foroisner
are already beginning to feel the un.
friendly attitude Of the masses. whit
have accepted the statements OF un,
n rehable papers and are quite Willina
to believe that Eufopeans, rathe,
thAn Chinese omcials. are responsible
fof the present financial conditions II
Coolies. huekstsrs ana SMALL msr.
chants. whose business has been al.
most entirely ruined by the mora.
IN thsir treatment Of. foreigners. Ths
newspapers are DISCUSSING the organi.
xation Of = clearing house In Pekinl
Tor forel6n and Chinese merchants Il
rslisve the money strinsency.