893.01/661: Telegram
The Ambassador in China (Johnson) to the Secretary of State
[Received March 2—8:15 a.m.]
106. Embassy’s 105, March 1, 3 p.m., from Chungking. Under date of February 29 the Minister of Finance wrote me as follows:
“Dear Mr. Ambassador: The Japanese Minister of Finance recently announced that the proposed new ‘Central Government’ would set up a new central bank of issue. Undoubtedly such an institution would be designed to control foreign trade and foreign exchange in the interest of Japan in areas where it might be able to operate, and to displace the lawful Chinese currency which affords a free market in which legitimate foreign trade may be conducted by Chinese and nationals of friendly powers. Creation of such an institution and issuance of still another kind of currency in areas subject to Japanese interference would further complicate conditions and cause serious detriment to [Page 643] the rights and interests of nationals of friendly powers resident in and/or trading with China. The Chinese Government therefore earnestly hopes that the friendly foreign governments will oppose this scheme in whatever way they may deem most effective.
Similar representations are being made to the American, British and French Governments.”
Repeated to Peiping, Shanghai; Peiping mail reading to Tokyo.