The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1936-06-11

WaShiigtOn.-A great many persons
we're mystified few weeks ago by the
treasury announce
SItUer ment that it had en-
Policy tered into an agree
ment to buy Chinese
silver. On the surface, it appeared to
be an action by the American govern
ment that was wholly a part of its do
nestle silver policy-a policy that thus
far has resulted in no economic bene-
fits at all but has cost American tax
payers rather dearly. Beneath the sur
face, however, the Chinese silver pur-
chase agreement is one of the most
significant moves yet to be made in our
foreign policies. 1 believe it has po-
tential consequences as great or great
er than any foreign relations pro-
nOuncement to come from the Wash
ingtOn government since World war
controversies were liQuidated.
To understand the Importance of the
silver purchase agreement with China,
one must examine international rela-
tiOnShipS over a wide scope. They in
volye, first and most important Of all,
the steady inrOad made by the Jap
aneSe into the Chinese political and
economic structure. They embrace, as
well, relations of Soviet Russia with
China and Japan, and the whole Far
Eastern situation for that matter, and
the continued efforts of the British to
obtain for their nationals additional or
restored spheres of influence in China.
Lastly, these international relation
ships involve, indeed, directly affect,
the open door policy respecting Chinese
trade. The United States has cOnsis-
tently maintained that China must be
open to world trade and in this atti-
tude our nation has had support of the
British and some other white nations.
On the other hand, the japanese, while
adhering to the open door policy on
the surface, have consistently attempt
ed to undermine it directly or by use
of the military.
Before the World war it used to be
said in China that the international
competition there took the form of di-
plomacy operated through banks and
railways. Now, we see the additions
of currencies and tariffs to the meth
DDS used by the diplomats. The United
States is using the currency method
a method attempted by the British
without success two years ago-and
through this influence, this nation is
seeking to expand it's trade with China.
The Japanese are employing the tariffs
TO protect their own interests in China
and to keep the British and the Amer
leans on the outside.
So, for the first time since 1898, the
battle among the nations for the rich
lure of China trade is on an economic
basis of competition and, it must be
said, Japan is in the lead. The Jap
anese are ahead in this economic war
fare chiefly because of their proximity
to the territory which is so rich in po-
tential trade.
A year or more ago, the British sent
Sir Frederick Leith-Ross of the Brit
ish treasury to
Japan Will Shanghai to aid the
ODpoSe Chinese ministry of
finance in the estab-
Iishment of a currency system. 1t was
not announced, of course, but the real
purpose of Sir Frederick's visit was to
stabilize Chinese money and link it to
the British pound sterling. Diplomats
watched the maneuver with great in
terest because it was expected that
Japan's control in the North China
provinces would be loosened through
British currency influence But it failed
TO work that way. The North China
provinces simply were separated fur
Their from China proper and the Jap
anese frightened their grip.
Now, the Americans have tried some
thing of the same scheme. They worked
1t out on the basis of silver purchase
from China but they prescribed that
as the American treasury buys Chinese
silver, the dollars paid therefor will be
deposited in branch of the Bank of
China which will be established in New
York. 1t will result in easy transfers
of money where American exporters
ship to China.
No one can tell what the conse-
quences will be. In the first instance
Japan can be expected to exert every
power her nationals have to thwart the
effect of the program. In the next in
stance, the British are not going to be
enthusiastic about the arrangements
because the competition between Brit
ash and American traders has been in
creasingly sharper since the World war.
There is still the further circum-
stance of Japan's smuggling into China.
Having had control
WHY of the Chinese tar
JuDonese ifs, the willy Japa-
nese proceeded to
enforce tariff duties rigidly against ev-
eryone except themselves. Stories COM
ing out of North China through diplo-
matte channels as we'll as from COM
mercial interests tell of vast smuggling
operations by the japanese. In other
words, the Japanese have proceeded to
find scores of landing places on Chi
nese soil where they neglected to place
customs houses. The net result is, of