The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1927-07-08
CLAIM EMBARGO
ON SILVER HURT
Chinese TRADE
Bankers Consider Policy Of
Nationalist Regime
Mistake.
BY RANDALL GOULD
United Press staff Correspondent

- United Press staff Correspondent
HANKOW, July 8.-One sight OF
silver makes Hankow hens begin to
lay.
But since the silver embargo was
laid down here by the Nationalist
Government on April Is, neither
hens nor tradesfolk have had many
glin1pses of this inspiring metal.
Through the placing of this en-
barge described by leading foreign
banker as "the greatest single mis-
take of the Nationalist government
in Hankow"> and by a government
official as ian unfortunate but Who'll
ly necessary emergency measure"
Hankow has been taking a pratical
course on money and banking OF
such intensive nature that all con-
cerned are frankly anxious to gradu-
ate.
Egg Story Explained
= The reaction of the Hankow hen
to this situation was described to
the United Press by a foreigner who
operates wholesale supply business
which is ordinarily flourishing but
now decidedly in the doldrunls. Said
he:
"An experience of mine this morn
ing gives the whole situation in an
egg-shell, so to speak. I went around
to Chinese poultry merchant to lay
in some household supplies. Pull
ing out one of the legal tender
banknotes, L asked for eggs.
"Now you must understand that
the Chinese merchants are forbid
den by government mandate to re-
fuse these notes, or to discount them.
So the Chinese merchant very POI
litelv informed me that he was very
sorry but his hens were not laying
and he had no eggs on hand. Then
I rang silver dollar down on the
counter. The hens must have heard
or seen that dollar, for eggs were
Forthcoming moment later.
Business is Rotten
Business is bad in Hahkow today
under the Nationalist regime. Every
BODY ADMITS It, including the Ma
tionalists. Differences of opinion
crop up at once of course, when the
detailed discussion starts. HankoW
notes of the three legal tender"
banks, notably of the Bank Of China
and Central Bank, are in circulation
among the Chinese, but foreign
banks and business houses refuse
them and demand either foreign
bank notes or silver. Opinions dill
fer as to whether circulation of such
notes among the Chinese is due
primarily to compulsion or to
measure of confidence in the sta
bility of the Nationalist Govern
ment, and foreign merchants cite
such episodes as the incident OF
the eggs in proof of their contention
that fear of decapitation is the only
thing which keeps the Chinese US
ing such money at all.
The cause of the embargo lies in
difficulties of the government, prlm-
arily the detection of Gen. Kali
shek and his establishment of the
Marking Government, which caused
lack of onfidence and threatened an
exodus of all free silver from Han
kow. Everyone seems agreed that
there was such a danger, and that
once an embargo has been laid
down; the raising of it is real
problem.
Chen's Defense
Foreigners insist that the embargo
is sitting trade and that free cir
culation of silver once more is the
only thing which can restore trade.
Eugene Chen, Foreign Minister, told
the United Press that rsilNer is only
token and we must win success
in our military operations which will
reopen lines of trade communication
up the Yangtze and into Honan
province SO that goods can move in
once more.
And, with the situation as it is at
present, this seems to sum up the
matter. Everyone is now muddling
along as best he can and waiting
to see how the governments several
military campaigns come out. For
eign traders are bitter and de-