FO371-24687 — Page 166

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5656 176 110 4

DEPARTMENTAL NO.2.

Telegram (en clair) from Mr. Broadmead.

pp.

96

24/12.

?

Copy o Ivel

(Shanghai). alla!

23rd December, 1940.

D.

3.10 p.m.

27th December, 1940.

M

R.

12.10 a.m.

28th December, 1940.

No. 1119A.

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My telegram No.1115. Fsbsbl

F5656/176/10

1.

A statement by Minister of Finance Nanking was published on 20th December to effect that in accordance with decision of Central Political Council in March 1937, the new Bank which will be officially

inaugurated at Nanking on 6th January, will be called Central reserve Bank.

2. Mandates have also been issued announcing personnel regulations governing the Committee for control of Foreign Exchange Reserve Fund (whose decisions require approval of and enforcement by the Minister of Finance by whom members are appointed) and provisional measures for readjustment of currency notes published by Ministry of Finance on 19th December.

3. These measures give Bank powers of redemption and exchange. In order to effect gradual standardisation of currency, notes are made legal tender of Republic of China. Issue of various denominations and cash reserve are governed by articles 16 to 23 of Central Reserve Bank law. The kinds of legal tender provisionally permitted to circulate at par with new notes are those provided for in currency orders issued 3rd November 1935. Redemption of old legal tender may be, at par, but provision is made for special regulations if necessary. Hua Hsing Bank's authority to issue notes is revoked and special measures will be formulated for recall of existing issue. Taxes etc. may provisionally be paid in old legal tender but payments by the Government will be made in new notes. Certain areas may be specified as not subject to these measures, which are stated provisionally not to apply to North China where status quo is maintained. Separate measures are to be formulated for readjustment of various kinds of currency notes.

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