THE SILVER CLAUSE IN CHINA.

Since 1933 silver clauses, defining the Chinese dollar and providing for optional re-payment in bar silver or in equivalent value in legal tender currency, have appeared in debentures issued by foreign and by sonic Chinese borrowers in Shanghai. After China went off the silver standard in November, 1935, debenture-holders of at least two companies agreed to accept legal tender bank notes for December 31 interest. The subsequent fall in the price of silver reduced the margin between silver and notes and made the question less important. No case apparently has been taken to court as yet; the legal questions are complicated by the extraterritorial status of many of the borrowers. Whether any cases are brought to court probably will depend upon whether the margin between silver and notes becomes so large as to cause serious inequity to the debenture-holders. [ABSTRACT FROM AUTHOR]