893.515/1412: Telegram
The Counselor of Embassy in China (Lockhart) to the Secretary of State
[Received August 5—8:05 a.m.]
386. Paralleling steps taken in Manchukuo, the Provisional Government has promulgated a decree forbidding the taking out from territory under its jurisdiction or from bringing into the area foreign currency above 500 yuan in value (approximating United States dollars 40 at the present rate). Special permission must be obtained in the transport of foreign currency exceeding this amount. It is not stated whether the decree applies only [sic] to travelers’ commercial remittances as well. The text of the decree has not been obtained but as soon as it becomes available a further report will be made.
This action, which may be the initial step towards an effective control over the export of capital and the earnings of foreign companies, is believed to be the logical development of the economic policy of [Page 442] Japan, which envisages complete domination of North China. It is also believed that this action, taken in conjunction with the recent extension of control to all exports, is aimed to strengthen the Federal Reserve Bank currency.
The recent recrudescence of rumors pertaining to tariff requests in favor of Japan, together with the above mentioned action, indicate the economic exclusiveness of Japanese policy and the dark future for foreign interests in this area unless those interests cooperate with the Japanese on Japanese terms.
Repeated to Chungking, Tokyo, Shanghai, Tientsin. By mail to Chefoo, Tsingtao. Tsinanfu informed.