893.50/5–349: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received May 3—6:34 a. m.]
918. Summary economic developments Nanking:
Since Communist takeover April 24 city has had isolated economy especially in sense that it thus far impossible reestablish modern transportation connections of any economic importance with outside areas except across Yangtze. Markets generally slack owing to buyer reluctance and currency exchange problem since introduction Communist notes. Many shops opening but larger firms still closed; daily official announcement PBN rates for GY beginning 29th expected encourage greater retail activity. Communist armies introduced three kinds currency Nanking, namely Jen Min (PBN) notes, Pei-hai (North Sea) notes, and Hua Chung (Central China) notes. Pei-hai notes already banned by local authorities. Problem substitution PBN locally as legal tender has been subject early action Military Control Commission. Currency regulations already issued (Embtel 907, April 30 to [Page 767] Department,66 repeated Canton 337. Shanghai 484) call for repudiation GY earliest possible by local populace and in any case no later than May 8.
Monetary and Trade Department Nanking Military Control Commission issued statement May 1, essential points include: GY should be promptly eliminated from Nanking by people; merchants should take positive steps to convey GY into Nationalist areas and bring back commodities (with exception narcotic drugs and contraband); Hua Chung notes are to circulate as subsidiary currency simultaneously with PBN, but other Communist notes such as Pei-hai, Chung Chow (Honan), and Chi-nan (South Hopei) are banned in Nanking. Kate Hua Chung to PBN: 100 to 1.
Nanking branch People’s Bank formally opened May 2 in former Central Bank premises. Shun Keng-tao is Manager.
From May 2, GY convertible into PBN at 17 places including People’s Bank, Postal Savings Remittances Bank, Bank Communications, Bank China and many private commercial banks. Only 5, 10, and 50 thousand denomination GY notes permitted conversion, however, in accordance with rate announced daily by People’s Bank. Amount convertible by any individual limited to 200 PBN daily. Chosen representatives of factory workers, teachers, students (middle school or higher) and staffs of units taken over by Military Control Commission may act at People’s Bank for them after proper certification. Rate conversion April 29 PBN 1 to GY 2500; April 30, 1 to 2800; May 1, 1 to 3500; May 2, 1 to 4000; May 3, 1 to 5000. At today’s rate, therefore, GY 1 million per individual convertible.
While GY price US dollar and silver coins around 1,000,000 and 1,300,000 respectively April 23 when Communists entered city, sharp decrease these quotations developed over week until by Thursday April 28 above rates reduced approximately half. Over past weekend, however, dollars and coins have regained earlier position vis-à-vis GY. Rates now about 2,000,000 and 2,200,000 respectively. Note silver strongly above par US dollars. At official rates PBN announced today, US dollars equal 396 PBN.
Municipal shuttle train has resumed operation; some public buses running; pedi cabs sufficient meet modest demand.
Nanking–Changchow section Anking–Shanghai railroad resumed operation April 27. Repairs to 1–kilometer length Pukow–Tungko section Tientsin–Pukow railroad completed May 1.
Sent Department, repeated Shanghai 487, OffEmb Canton 340.
- Not printed.↩