893.515/8–1948: Telegram

The Consul General at Shanghai (Cabot) to the Secretary of State

1852. Chinese radio announced tonight and press will carry tomorrow morning Government announcement reconversion to gold yuan currency based on managed gold standard. Calls for surrender all gold and silver bullion and all foreign currencies at rates apparently as stipulated below for circulation, i.e., gold yuan 4 to US dollar; 3 to 1 ounce silver; 2 to silver dollar; 1 to 3 million present CN dollars. Backing new currency not specified except in terms 100 percent reserves.50 New currency to be in units 1, 5, 10, 50, and 100.

Two-day bank holiday declared, tomorrow Friday and Saturday and all prominent bankers being called tonight to Nanking for conferences. Auxiliary measures include provisions that foreign assets be registered, that cost of living indexes be discontinued, that strikes be prohibited, and that northeast currency be withdrawn before November 20 at rate 300,000 to 1 gold yuan. Also planned that import quotas be reduced drastically and that budget be calculated so that revenues cover ⅞ of expenditures.

Sent Department 1852, repeated Nanking 1465.

  1. In telegram No, 1876, August 24, 4 p.m., the Consulate General at Shanghai reported an official Nanking announcement that the new currency was backed by 2,767,173.587 ounces of gold bullion, 41,370,000 ounces of silver, and U. S. $74,189,924.46 worth of foreign exchange, with a total value of $200,000,000, as well as Government-owned enterprises and alien property valued at $300,000,000 (893.5151/8–2448).