893.5151/579: Telegram
The Counselor of Embassy in China (Lockhart) to the Secretary of State
[Received March 11—7:30 a.m.]
126. Peiping’s 122, March 8, 4 p.m.
- 1.
- President of Federal Reserve Bank announced yesterday, anniversary of founding of bank, that reserve for foreign exchange purposes totaled 30 million yuan for America and Europe and 100 million for Japan (and presumably Manchukuo). This latter is believed to represent the Japanese credit mentioned in Peiping’s 119, March 7, 4 p.m.17 and will be used in financial trade with Japan and Manchukuo.
- 2.
- Local press announced that from today North China is divided into two areas, (a) Federal Reserve Bank currency area where possession of old legal tender is punishable (the least punishment being confiscation) and (b) “bandit area” where Japanese military will control the exchange of old legal tender for Federal Reserve Bank currency and where a further period of 2 months is to be allowed for such exchange.
- 3.
- Foreign Exchange Bureau of the Federal Reserve Bank was inaugurated today at Peiping with branches in main ports. According to the press, branch exchange bureaus are to be or have been established at Peiping, Tientsin, Tsingtao, Weihaiwei and Chefoo.
- 4.
- The Chinese dollar continued firm with the following nominal rates quoted by an American bank, six point twenty buying and six point fifty selling.
Manager National City Bank has informed me that the French, British and Belgian banks have agreed to adopt noncooperative attitude toward the new exchange and export measures and that his bank would for the time being, pending clarification and development of new factors, adopt the same position. I know from a wholly reliable source that strong pressure was exerted by the British bank to adopt this attitude but I believe that the exigencies of the situation might conceivably bring about a change in this policy.
[Page 380]Repeated to Chungking and Shanghai. Code text by mail to Tientsin and Tokyo.
- Not printed.↩