New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-13
In China the Contents of
Pay Envelope Are Deceptive
O 70 Wide Fluctuations in the Price Of Silver the Purchasing
Power of Fixed Incomes Constantly Vares-EmPloyes
Hard Hit by Recent Rise

TN THOSE portions Of the Far
East where silver is the COM
n mon basis Of currency and
forms the principal medium Of ex-
change the spectacular rise in the
value Of the metal in the worlds
markets since the war began has de-
veloped many interesting aspects. In
China, where silver is bought and
sold like so much wheat or coal or
meat, the steady upward climb in
silver prices has vitality affected the
economic and financial situation.
The money of China and the Brit
ish colony of Hong Kong is based, at
least for all the larger transactions,
upon silver, the price Of which IN
terms of gold determines the interna-
tional value from day to day of the
country or colony's entire monetary
circulation. To-day, for example,
China's silver circulation might be
worth in terms Of gold, say, for the
sake of comparison, s200,0O0,OO0. A
month from to-day, by reason of a
rise in silver prices throughout the
world, it might be worth S225,0OO,-
900, and then again it might decline
to S175,000,000 because of falling
silver prices. In this constantly
shifting ratio between silver and
gold is found one of the chief reasons
for the complexity Of China's cur
rency to the layman.
Since the war began and silver
started on the upward movement
that eliminated a few months ago
when the New York quotation
touched 70 cents an ounce, COM
pared with a pre-war level of around
As cents, numerous vexatious prob
lens have developed in China, owing
to the constantly shifting value Of
that country's currency basis. The
rise in silver prices finally reached
a point where the thrifty Chinese
began to take silver out Of circula-
ton and sell it abroad. In 1916
they are reputed to have sold up
ward of 5O,000,0O0 ounces of the
metal to India. This withdrawal OF
silver from circulation caused seri
Gus financial difficulties in different
parts of China, and banks in a num-
Der of cities were compelled to close
their doors temporarily. The situa-
ton finally became so acute that 1t
was necessary for the governmental
authorities to stop the export Of sill
yer from China without special per-
nit.
One of the most interesting feat
ures of the Chinese currency system,
and which has a direct bearing on
the subject under discussion, is the
fact that all money in China is not
O coined representative of value sup
ported by government authority, but
is merely a commodity, and that all
trade is barter-the exchange of so
much merchandise for so much
money of such-and-such a kind. In
silver currency, which is the chief
currency, the market value of the
silver is the first consideration, and
? silver coin is merely a convenient
amount of silver.
Chinese Exchange
Rates Deranged
Now. the rise of silver has had
farreaching effects upon the interna-
tional exchanges between China and
the gold-basis countries. Taking the
average price of silver in London
for 1913, 6O.45S cents per ounce,
British standard, as the basis, the
average 1918 values Of the Hong
Kong dollar and the Shanghai tael
were AIS and 65.49 cents, respec-
lively. Assuming these to represent
par, or 100 per cent, the accompany