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་་ སཎྛཱ་J

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94

DEPARTMENTAL NO. 2.

Decypher. Mr. Broadmead, (Shanghai).

20th December, 1940.

D. 10.50 a.m. R. 1.55 a.m.

21st December. 1940.

22nd December, 1940.

No. 1115.

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Tokyo telegram No. 2489 to Foreign Office.

French Consul-General has just shown me in confidence report from French Consul at Nanking of statement made to him by Minister of Finance. Following is summary.

2. Financial situation is good and Government has at its disposal 50 million Chinese dollars. However, military expenditure might increase to unknown proportions "if military operations involved Nanking area.

New bank will be inaugurated about January 10th.

4. Total issue of notes will be 500 million dollars. These are already printed. *They will be* issued slowly and progressively, the first issue being guaranteed by 50 million mentioned in 2nd paragraph which have already been exchanged into United States dollars.

5. Policy is to decrease the notes at the same rate as Fapi which will remain concurrent in circulation.

6. Huahsing notes will be withdrawn from circulation when new notes are issued.

7. There are at present about 70 million military yen in circulation in central China. Government propose to buy these back gradually with new Central Bank notes and then use them for acquiring Japanese goods. During his recent visit to Japan, Minister of Finance negotiated arrangement whereby Japanese should not issue new military yen notes and that they should not send back to China the notes used for the purchase of Japanese goods. While Japanese Government agree to this, military authorities in China are making difficulties.

Repeated to Tokyo telegram No. 397, Chungking telegram No. 954, Hong Kong for Rogers telegram No. 399, Nănking Saving telegram No. 76.

DEC

28

F.Q

1940

ELISTRIA

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