The Chargé in China (Peck) to the Secretary of State
[Received 12:28 p.m.]
107. Reference Embassy’s 78, February 6, 3 p.m.,94 the following is the Embassy’s translation of a note dated February 9 from the Ministry of Foreign Affairs:
“The Ministry of Foreign Affairs presents its compliments to the American Embassy and has the honor to state that it has received a communication from the authorities concerned to the following effect:
According to reports recently the Japanese widely proclaimed in Tientsin that a fixed date has been set for the devaluation and invalidation of the banknotes of the Bank of China and the Bank of [Page 362]Communications. Of all the foreign banks, the National City Bank of New York alone notified its depositors promptly to withdraw their deposits, stating additionally that when deemed necessary it will probably return deposited funds.
The foreign banks had earlier refused to use the notes of the Central Bank of China with a view to placating the Japanese and the bogus organization, accepting only the notes of the Bank of China and the Bank of Communications; in consequence, use of the notes of the Central Bank of China was suspended. From the foregoing the indication may be drawn that in the future it will be difficult to guarantee that pressure will not be brought to suspend use of the notes of the Bank of China and the Bank of Communications.
It is observed that since the introduction of legal tender notes they have been uniformly used by Chinese and foreign merchants and have enjoyed great confidence. The Ministry of Finance has announced that it will in the future assume absolutely no responsibility for adjustment of the banknotes arbitrarily issued in North China by the Japanese and the bogus oganization, and has also issued a circular to Chinese and foreign merchants and civilians not to accept and use such notes, as is common usage.
The Japanese and the bogus organization are, on the one hand, freely issuing large amounts of bank notes and, on the other, are not devaluating the legal tender notes of the Bank of China and the Bank of Communications in an attempt to destroy the whole of China’s monetary system, to monopolize the trade of various departments in China and to realize the ambition of independently occupying east. All foreign nationals and merchants in China should jointly cope with the situation.
The Ministry, apart from causing the Chinese Embassy in the United States to request the American Government to rectify the activity of the National City Bank of New York, has the honor to request that the American Embassy in China pay attention to the matter and instruct all American citizens and merchants in China uniformly to use legal tender notes as in the past and to refuse the bogus currency. A reply is also requested.”
The Embassy is replying to the note under reference today, stating that the matter is being referred to the American Government.
Repeated to Shanghai, Tientsin, Peiping.