The Ambassador in China (Stuart) to the Secretary of State
[Received February 15—3:41 a. m.]
391. Inflation continues spiral with US dollar ranging over 1500 to 1 in Nanking-Shanghai. Preoccupation Government with peace efforts and dispersal Ministries directly concerned have resulted in total absence any coherent effort to ameliorate problem. With Acting President10 in Nanking, President Executive Yuan11 in Canton, Minister of Finance and Staff aboard ship anchored in river off Shanghai, only Governor S. Y. Liu and Central Bank staff remain doing business at original Shanghai stand.
We can foresee no likely change coming weeks in this situation whereby effective concentrated attention by Government will be devoted to Chinese fiscal and economic problems. Accordingly prospect is for continued rise in prices, diminution foreign trade, stagnation local production and decline in value GY in terms of gold, silver and hard currencies.
Sent Department, repeated Shanghai 182.