893.5017/132: Telegram
The Chargé in China (Atcheson) to the Secretary of State
[Received July 25—11:15 a.m.]
1294. As an example of the uncertainties and sometimes suddenly disruptive aspects of the present inflationary process, it is reliably reported that the prices of staple foods at Chengtu are now increasing at the approximate rate of 10 percent per week. On July 6 the price of rice was double that of June 1, of flour almost double, of vegetable oil over one and one half times, of pork over one third as much. The cost of living index (1937 equals 1) in July 1942 was 34.7, in January 1934 was 44.1, on June 7, 1943 was 96.3, on July 5, 150.6 and on July 12 was 164.7. (See first paragraph of Adler’s message to Treasury in our 1263, July 2348).
While the causes of the recent sudden extraordinary increases are varied and complex, an important circumstance is that the application of repressive measures to control prices in Chungking where the Generalissimo takes personal interest in endeavoring to enforce them has driven many speculators in commodities from the provisional capital to Chengtu and other interior places.
One possibly serious political aspect of the situation at Chengtu is that it is not at all unlikely that there may result a recrudescence of disturbances in revolt against Central Government authority there.
- Not printed.↩