893.5151/6–1349: Telegram
The Ambassador in China (Stuart) to the Secretary of State
[Received June 13—11:54 a. m.]
1279. ReEmbtel 1239, repeated Shanghai 666, June 8. Nanking Military Control Commission has announced that regulations for control [Page 788] gold and silver for East China area now effective Nanking. People may hold gold, silver but only legal disposition of these is surrender to PBC or Bank China. No transactions in terms these permitted. Consequently earlier licensed silver dollar dealers now illegal and only legal channel for disposition gold, silver, as well as foreign currencies today is PBC. Bank China opening this a. m. but only accepting silver for exchange to PN.
While rates paid Bank China Shanghai reached 1700 and 1800 PN per US dollar last week, a development reflected in Nanking currency black market, PBC official rate used by Embassy personnel remained 770 throughout week. PBC today announced official rate PN 1200. Markets yesterday down from highs of over 2000 to about 1400. Most important, however, is that prices moved to upper levels indicated by highest financial quotations past week and have not come down to equivalent degree. Hence cost living exorbitant, picul of rice today costs US $13 at new official rate, normally has been around US $6.
New rate somewhat more realistic for present and affords moderate relief from personal hardships experienced by staff past 2 weeks. Nanking is in economic financial backwash and developments official financial-economic policy seem tardily almost reluctantly follow Shanghai’s lead. No announcement as yet of invocation foreign exchange surrender measures locally.
Please inform FA.3
Repeated Shanghai 692.
- Division of Foreign Service Administration.↩