811.42700 (R)/7–349: Telegram
The Minister-Counselor of Embassy in China (Clark) to the Secretary of State
Canton, July 3,
1949.
[Received July 3—7:26 a. m.]
[Received July 3—7:26 a. m.]
Cantel 683. For VOANY.17 Central Government promulgated currency reform July 2. Summary of new measures follows:
- 1.
- Subsidiary silver coins denominations 1, 5, 10, 20 and 50 cents.
- 2.
- Central Bank also issues silver exchange certificates denominations 1, 5, 10, 50, 100 dollars. Subsidiary exchange certificates denominations 5, 10, 20, 50 cents.
- 3.
- Exchange certificates backed by 100 percent reserve of which at least 60 percent must consist gold or foreign exchange and no more than 40 percent goods, warehouse receipts, other valuable securities.
- 4.
- Foreign exchange to be purchased accordance with foreign exchange control regulations.
- 5.
- All public [and] private transactions on silver dollar basis. All Government organs, public utilities must accept exchange certificates.
- 6.
- Monthly reports on currency issued to be made by Central Bank to Finance Minister. Monthly investigation currency issued and reserve conditions to be made by Central Bank Supervisory Board and Control Yuan representative.
- 7.
- Provincial banks may with approval Finance Minister issue exchange certificates in denomination one dollar and subsidiary exchange notes. Monthly reports to Finance Minister on amount issued and reserve conditions and investigation by Finance Minister whenever necessary.
- 8.
- New currency measures effective July 2. In addition lengthy telegraphic instructions from Yen Hsi-shan18 state still permissible hold [Page 794] foreign currency but circulation same forbidden. Chien Kuo Jih Pao reports three special planes carried 900 cases containing 4000 silver dollars each Formosa to Canton yesterday. Paper estimates 10 million silver dollars now stored Canton Central Bank.
Sent Department Cantel 683, repeated Nanking 458, Shanghai 395.
Clark