893.515/345: Telegram
The Consul General at Shanghai (Cunningham) to the Secretary of
State
Shanghai, October 24, 1934—4
p.m.
[Received 9:25 p.m.]
512. The following are the regulations governing the newly established
Foreign Exchange Stabilization Committee as published October 23rd by
Kuomin News Agency:
- “(1) This Committee shall be organized jointly by the
Central Bank of China, the Bank of China, and the Bank of
Communications, in accordance with the instructions of the
Ministry of Finance.
- (2) This Committee shall have three members, one each
designated from the Central Bank of China, the Bank of
China, and the Bank of Communications. A chairman shall be
elected by and from the members and said election shall be
duly reported to the Ministry of Finance for record.
- (3) The daily equalization charge shall be fixed by this
Committee.
- (4) This Committee, in order to meet the requirements of
the market may request Central Bank of China to buy and/or
sell foreign exchange and gold or silver bullion with a view
to stabilizing the foreign exchange market.
- (5) This Committee may, in time of necessity, request the
Central Bank of China to import or export gold or silver
bullion.
- (6) The proceeds of the equalization charge on the export
of silver shall be handed over to the Committee as a
stabilization fund. Upon instructions of the Ministry of
Finance to the Inspector General of Customs this fund shall
be deposited in a special account with the Central Bank of
China.
- (7) The Committee may make use of the stabilization fund
to meet any loss suffered as a result of its operations.
Should the fund be insufficient to meet such loss, the
Ministry of Finance shall be responsible for the
deficit.
- (8) The Committee shall submit a confidential report of
its accounts monthly to the Ministry of Finance for
record.
- (9) In case of necessity, the Committee shall transfer the
required number of staff members from the three banks to
assist in its operations.
- (10) These regulations shall be effective upon approval by
the Ministry of Finance.”
2. Rule (5) would seem to justify the apprehension expressed by the
National City Bank that the Central Bank of China intends to export
[Page 454]
silver probably without
payment of export duty, referred to in my telegram to the Legation of
October 17, 4 p.m.33 Repeated to Legation.
