Silver Protest

Chinese bankers have stolidly watched the Roosevelt Administration's oft-repeated promise to "do something about silver," increase the price of the metal, upon which Chinese currency is based, from about 16-c- to about 50-c- an ounce. One of the loudest cries of silver Senators in the U. S. was that raising the price of silver would also raise the purchasing power of the Far East.

But, like every other government, China has no desire to increase her imports at the expense of her export trade. Rising silver has drastically reduced her markets.

There was little China could do last week, but that little she did. Finance Minister H. H. Rung sent a protest against the U. S. silver policy to the state department in Washington. Timed to accompany the protest went several unofficial threats. Unless the U. S. stopped deflating China's currency, she might be forced to switch from silver to gold. She could do this because the Central Bank of China has shipped no gold since August, has built up heavy reserve stocks, could increase these stocks by declaring an embargo on silver and selling silver through the Government to buy gold. Bankers familiar with the East were sure that such a plan would not work. Any drastic change in China's financial structure would probably provoke a revolution. The Nationalist Government is not strong enough to prevent the smuggling of silver.

The protest remained just a protest, but President Roosevelt regarded it seriously enough to call a special conference with Secretary of State Hull and Secretary of the Treasury Morgenthau to see what might be done.

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