893.5151/9–2049: Telegram
The Consul General at Peiping (Clubb) to the Secretary of State
[Received 2:27 p. m.]
1577. Gold 150,000, BH [British pounds?] 1500, US 3700. In view 55 percent increase official rate exchange since September 1, appearance large denomination notes, and overall worsening food picture, present stability prices surprising. Communist practice staggering official payrolls throughout month, heavy taxation (merchants now preparing for payment business income tax for first half 1949 and for autumn period house and other taxes), and apparent dumping grains at prices below those prevailing in country prevent sharp rises prices. This however achieved only at cost general business stagnation and increasing impoverishment city. These counteract effects currency inflation and price stability reflects depressed economy not economic strength and prosperity.
Sent Department 1577. Department pass Shanghai 989.