893.515/1571
The Second Secretary of Embassy in China (Rice) to the Ambassador in China (Gauss)88
Sir: I have the honor to refer to my despatch no. 8, February 23, 194489 in regard to a press account of the alleged production of and [Page 370] trade in opium in Communist-controlled territory. There is now enclosed, in the thought that the item may not have been published in Chungking, an article90 from today’s Kansu Min Kuo Daily News in which reference is again made to alleged dealing in opium by the Communists and in which details are given in regard to regulations stated to have been adopted in the Communist-controlled area, in an effort to bolster up the position of the Communists’ own legal tender, making it illegal to possess Chinese National Currency. The regulations, it is stated, went into effect December 1, 1943 and prescribe punishments ranging from a three-day sentence to capital punishment, depending upon the amount of such currency found in the offender’s possession.
It is interesting to note that the report likens the alleged currency policy of the Communists to that of the Japanese-controlled Nanking regime. As a matter of fact, Chinese authorities in the northwest give every evidence of feeling much more bitter hatred for the Communists than for the Japanese themselves and one seldom hears expression of enmity for the Chinese puppet authorities at Nanking and Peiping. In general, Chinese here do not dare to mention the Communists by name and persons reaching Lanchow from the Peiping or other Japanese-controlled areas find little difficulty in obtaining official employment provided they have influential connections, whereas persons coming to this city after visiting Communist-controlled territory frequently find their position here quite impossible.
Respectfully yours,