893.50/11–2948
The Ambassador in China (Stuart) to the Secretary of State
[Received December 14.]
The Ambassador has the honor to enclose a copy of an English translation18 of the text of “Supplementary Economic and Financial Measures Adopted by the Executive Yuan” as announced by the Government Information Office, October 31, 1948.
These Supplementary Measures comprise: (1) adjustment of economic control by allowing free marketing of foodstuffs and prohibiting unauthorized interference of local governments with the flow of food and other commodities, and continuing basic food rationing programs in six principal cities including Nanking and Shanghai; by readjusting prices of important commodities and rates of public utility and communications enterprises in consideration of cost of production; and by stamping out speculation, hoarding, and furtive transactions; (2) assistance to important productive enterprises to replace equipment and raw materials, and to obtain productive loans from government and commercial banks; (3) readjustment of the treatment of government employees, school teachers and workers with reference to their needs; and (4) increase of national revenue by readjustment of rates of the commodity tax and other ad valorem taxes by taking commodity prices into consideration.
These Measures were intended to cope with the economic predicament arising from the purchasing spree which occurred early in October, as costs outstripped controlled prices, resulting in later October in ultimate business stagnation, suspension of factories and widening of the gap between demand and supply. These Measures have not, however, succeeded in remedying shortcomings of the August 19 Economic Measures, nor did they contribute much towards the improvement of the grave supply situation obtaining in October. They in fact seem to mean little except that they are regarded by people [Page 438] generally as official recognition of the unfreezing of the August 19 ceilings, which were in fact superseded in many places before the promulgation of these Measures.
- Not printed.↩