893.5151/828
The Consul General at Shanghai ( Lockhart ) to the Secretary of State
[Received April 3.]
Sir: I have the honor to refer to this office’s special financial radiogram No. 249 of March 3, 1941,13 in which was mentioned the announcement of the Chungking financial authorities to the effect that exchange facilities at Chungking were to be increased and that the Central Bank of China had been instructed to resume foreign exchange operations to meet all requirements for legitimate purposes, and to elaborate in greater detail the reactions to this announcement in Shanghai financial circles.
Summary: Chungking’s vague announcement was interpreted at first to indicate that exchange would no longer be supported at Shanghai, though later reassuring statements to the effect that the measure is precautionary were accepted. Chinese bankers have outlined the various technical problems involved in establishing a new exchange market in Chungking without adverse effects upon the markets at Shanghai and Hong Kong. The Chinese bankers at Shanghai naturally associate the new move with Dr. Lauchlin Currie’s visit to Chungking.
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Local financial circles have naturally assumed that Dr. Lauchlin Currie’s visit to Chungking had for its purpose the determining of a method by which the American currency stabilization credit of US $50,000,000 might be used to the greatest effectiveness in strengthening China’s currency during the national emergency. Hence the announcements from Chungking above enumerated, made immediately after Dr. Currie’s departure from Chungking, were naturally interpreted here as constituting part of the stabilization scheme possibly now mutually agreed upon by the Chinese and American financial authorities.
Respectfully yours,
- Not printed.↩