893.515/1077: Telegram

The Ambassador in China (Johnson) to the Secretary of State

254. Department’s 121, May 20, 1 p.m.

(a).
There has been no reaction in Peiping to the monetary reforms [Page 485] recently announced. Exchange rates and Government bonds have remained constant.
(b).
Opinion in Chinese banking circles is that Kung’s statement of May 18 is confusing and unnecessarily disturbing, especially since Chinese had already adjusted themselves to the new stabilized currency. Doubt was expressed that new token coins would be acceptable to the people. Actually there has been no reaction to Kung’s announcement, but the psychological effect has been bad. There has been no reaction in Peiping to the Treasury Department’s announcement.
Johnson