893.5151/657: Telegram
The Ambassador in China (Johnson) to the Secretary of State
[Received August 15—7 a.m.]
499. Reference our 441, July 15, 10 a.m.,2 and previous on currency situation. Following is Embassy’s translation of note from the Ministry of Foreign Affairs dated August 14:
“The Ministry of Foreign Affairs presents its compliments to the American Embassy and has the honor to refer to its previous communications requesting that the Embassy assist in the maintenance of the credit of legal tender notes and in the stabilization of the foreign exchange market.
[Page 448]A communication has now been received from the Ministry of Finance stating:
‘According to a report, the bogus Federal Reserve Bank in North China has, in view of the fall in value of the bogus currency which it has circulated, recently devalued the bogus currency and accorded facuities to exporters permitting them to sell their drafts to the Yokohama Specie Bank at the rate of 8 pence. On the other hand, the foreign exchange thus obtained may be sold to importers also at the rate of 8 pence.
It is observed that the enemy and the puppets have organized an illegal bank which issues fiat bank notes. Chinese and foreign merchants and civilians should uniformly refuse to use such bogus notes and should have absolutely no connection therewith. It is urgently necessary to effect adjustments and to take precautions against the present attempt of the bogus bank to purchase foreign exchange from exporters and sell it to importers at the rate of 8 pence.
Please take note and request the Embassies in China of the nations concerned to issue instructions to act accordingly in the matter.’
Apart from addressing separate communications to those concerned the Ministry has the honor to indite third person note for the Embassy’s information and to request that the Embassy cause instructions to be issued to the concerned foreign banks and merchants in North China uniformly to refuse the bogus currency and absolutely not to cooperate with the bank in order to protect the legitimate interests of Chinese and foreign merchants. The courtesy of a reply is also requested.”
In acknowledging the foregoing note the Embassy is stating that the matter has been referred to the Department.
Repeated to Peiping, Peiping please mail to Tientsin and Tokyo.
- Not printed.↩