893.515/1107: Telegram
The Consul General at Canton (Spiker) to the Secretary of State
Canton, June 8, 1936—4
p.m.
[Received June 8—11:10 a.m.]
[Received June 8—11:10 a.m.]
Referring to Department’s telegram June 5, 6 [7] p.m., requesting new developments in matter reported in first two sentences of paragraph 3 of my telegram of June 1, 10 a.m.38 Subsequent fluctuations in local exchange have been reported in my telegrams of June 3, 6 p.m., June 4, 4 p.m., June 5, 5 p.m.,39 and June 6, noon.40
- 2.
- All reports received from reliable sources to date indicate that negotiations between Nanking and local authorities for adoption locally of national currency have thus far been productive of no results since the matter is rather hopelessly controlled by politics rather than by the crying needs of the present situation.
- 3.
- As evidence of present confused situation, the national Department [Page 488] of Finance has sought to control situation by fiat, yesterday announcing that speculation in Hong Kong dollars should be curtailed from today and that outstanding accounts should be settled at a rate not exceeding $1.72 to the Hong Kong dollar while future transactions between merchants shall be at rates determined by usual exchange factors. Banks find it increasingly difficult to continue business and are frankly seeking to avoid exchange transactions. Exchange shops today quoted rate 1.80 on Hong Kong dollars. Business is dead. Prominent local banker today informed this office he considers wholesale bankruptcies inevitable unless drastic measures taken within next 3 weeks to relieve situation.
Repeated to Embassy and Shanghai.
Spiker