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*ALIENDED COPY
E 4707/176/10
51
DEPARTMENTAL No. 2.
Decypher.
Sir A. Clark-Kerr (Shanghai).
8th October, 1940.
D.
By Wireless, 13th October, 1940.
R.
8.45 p.m., 13th October, 1940.
No. 880.
33353
Tokyo telegram No. 849 to Foreign Office.
Minister of Finance* at Nanking informed His Majesty's Consul on October 1st that his Government had decided to establish a new central bank, the preparations for which had already been completed. He expected it would start operations in November. He said it would" "of course" issue its own notes which would link to Fapi but he was vague as to the method of linking. His Majesty's Consul presumes that beginning of operations will synchronise with the recognition of the Government.
2. Reports in August from usually well-informed sources indicate that it was Wang Ching Wei and his friends who were anxious to see the new bank established and that Japanese were opposed to the scheme.
3. In recent modifications of military permit system control of imports and exports seems designed to extend the use and enhance the value of military yen, a process which would hinder the introduction of a [?group omitted] currency.
Repeated to Tokyo telegram No. 272, Chungking No. 407 Hong Kong for Rogers No. 304, Nanking telegram No. 67.
[Copies sent to Mr. Waley, Treasury].
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