893.515/424: Telegram

The Consul General at Shanghai (Cunningham) to the Secretary of State

70. 1. Inaugurating on February 15th at Shanghai the Monetary Advisory Committee formally appointed on February 2nd, Minister of Finance Kung stated inter alia: “The formation of this Committee is a recognition of the need to pool our knowledge and work together in developing the country’s economic strength and in handling the present admittedly difficult situation” and “while the measures we adopt must be determined chiefly by our domestic needs, we cannot ignore the fact that decisions and actions in the field of international trade and finance inevitably produce reactions in our own country” stating that Government leaders had publicly stated they placed no reliance on cheap remedies and that “we have no wish to adopt extreme measures.” Kung mentioned necessity for improvement of note issue system and financing internal trade and discounting trade bills and adoption of means for rectifying large adverse foreign trade balance.

2. The Monetary Advisory Committee is composed of 20 prominent bankers and Kung as Chairman. The terms of reference are: “To consider and make recommendations to the National Government for the, (1) improvement of the present currency situation, (2) stabilization of the exchange market, (3) improvement of China’s balance of international payments, (4) improvements in the conditions and machinery for the finance and trade and industry in the interior, (5) any other matters submitted to the Committee by the Ministry of Finance.”

3. The Committee approved a recommendation to the Ministry of Finance that future imports of silver into China be exempted from present export duty and equalization charge on reexport from China.