The Sun Comes Out

Even after war's end, Shanghai, greatest trading city in China, was cut off from foreign trade by a financial barrier as insurmountable as the Great Wall. Last week, TIME & LIFE Correspondent John Walker reported that this wall has finally been breached.

After a series of overcast days, the sun burst out over Shanghai's busy river front this morning. There was a sparkle of excitement and hope in the air.

It was more than just a change in weather. Today Shanghai's great foreign banks opened their doors again, the first step toward restoring trade to this city of traders. The banks had been closed almost four years to the day.

On Nanking and Kiukiang Roads, happy bankers were holding open house amid the excited bustle of guests, buffet lunch eons, congratulations and piles of flow ers sent by the city's many Chinese banks.

Busiest and happiest of all was the Na tional City Bank of New York, which took the lead in pressing for reopening now.

As a measure to revive trade, today's opening was actually more symbolic than real. With currency still unstabilized, banks will be unable to handle foreign-exchange transactions. On Shanghai's native money market the hot dope was that the rate of exchange might be set this month at one thousand Chinese dollars to one American dollar (prewar rate: $3 to $1).

There were other heartening signs of reviving trade. Many cotton mills have resumed production, thanks to the first shipments of cotton from Anderson, Clayton & Co. In the best free enterprising tradition, Anderson, Clayton had shipped the cotton without knowing who would buy it or how it would be paid for.

Traders feared that the Chinese Government would handle the cotton, thus set a pattern for state trading. But the Government, significantly, let the cotton be sold through private channels. Paying Anderson, Clayton was more complicated. Buyers paid Chinese dollars to Chinese merchants with dollar balances in the U.S. The latter then paid Anderson, Clayton.

There was some feeling between Britons and Americans over the opening of the banks. Slightly oversimplified, the situation is like this: leading British institutions such as the lordly Hong Kong & Shanghai Banking Corp., Chartered Bank of India, Australia & China favored reorganizing the old Foreign Exchange Bankers Association and dickering with the Chinese as a united front.

The Americans, especially the up-&-coming National City, took the view that that sort of thing went out with extraterritoriality. It may be that this attitude has given Americans an inside track on dealing with Chinese--time will tell. Anyhow, when I visited several banks this morning I noticed that they had been given silver plaques by the Ministry of Finance to commemorate the great day. At the Hong Kong & Shanghai Bank they told me that the Chinese characters on their plaque meant something like congratulations on reopening.

Maybe the National City had a more diligent translator on the job, or maybe it is that subtle Chinese sense of humor. The National City Bank told me that their plaque said: "Gets into first place by whipping fast."

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