893.515/5–1749: Telegram

The Consul General at Peiping (Clubb) to the Secretary of Stale

855. Reference Embtel 964, May 8 and Contel 835, May 13. Since April 6 this office has met currency requirements by sale official drafts to Bank of China and Hong Kong–Shanghai Bank. Although sale began after negotiations undertaken, believe purchases resulted basically [Page 779] from adoption policy by Communists announced in Foreign Exchange Regulations published April 7. Sale drafts now routine and automatically processed at rate for day. Official rate raised at irregular intervals, boosts allegedly based on price [necessities?], although col in terms US much higher than before adoption official rate.

Following is summary present practice and policy under exchange regulations reported Contel 600, April 11:88 Although regulations state travellers’ checks must be exchanged, Bank China informed member Consulate staff they accepted for safekeeping only, in view non-negotiability, and returnable upon departure holder from country. Personal checks must be negotiated, but bank guarantee required. Manager Hong Kong-Shanghai Bank here guarantees personal checks official personnel.

In oral reply to group written questions submitted by Consulate employees, Bank China stated private persons holding foreign exchange for living expenses not subject 40 days’ limitation Article 8 regulations and their holdings considered “overseas remittances”. Position on travellers’ checks and exchange for living expenses represent withdrawal authorities from original position almost all foreign exchange must be turned in subject 40-day limit. Protests foreign community against unreasonable character this particular portion regulations appear increasingly effective. Reference Consulate’s reftel in refusing accept deposit US funds in name Consulate, Bank Manager stated deposit those funds in name private person would not be subject 40–day limit as accommodation this particular case.

Reference Article 15 exchange regulations, this office asked Bank China whether definition various types “immigrants” yet defined, and if time limit for deposits under Article 15 existed. Bank replied authorities at port entry would determine status individual’s demand that no deposit time limit existed.

All these interpretations oral and informal, bank refusing “official” contacts. Reinterpretations therefore possible.

Sent Department, repeated Nanking 547, OffEmb Canton 122, Shanghai 57; Department pass Tientsin.

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