ECONOMIC INFORMATION: NON-OFFICIAL EXPLANATIONS OF THE CURRENT ACCELERATED INFLATION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R000400260003-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 3
• Document Creation Date: December 15, 2016
• Document Release Date: April 29, 2003
• Sequence Number: 3
• Publication Date: March 12, 1947
• Content Type: IR

 Y ' '" Approved For Release 2003/08/05: CIA-RDP82-00457R0g2P0003-0
C.,,JTRAL fl?(` JLLI~ZENC1 U1tUUP
of successor; b) If KUNG replaced SOOT, , he would then be the.
ojr-ct of attacks by cOONG similar to those he himself formerly launched;
c) :.; ore Is no other ran in the -.7uominuang who can be as successful a dic-
tator of economic atiairs and serve the moneyed interests ' of the govern-
25X1 ::cc-at setter than SOLING.
25X1
25X1
25X1
0
14. PEI is at pre ent waging a battle with LIU :,urg-3en, Director of the Central
Trust. ITndar PEI's direction and with the backing of SOOIJG,. amenrirwants and
regulations designed to gain control of the imports and lessen LIU's pyror
are being out into effect. ote: Comment
0
cr trze difficulties of these two -:on: (1) The Central Trust, as a government
purchasing agency-, is outside the Central Dank's exchange control. Toe
Central Trust has spent millions of dollars of China's foreign exchange on
behalf of government agencies and govern:aent personnel for imports that the
oard for the Temporary Regulations of Imports (under PEI) would have pro-
hibited and has prohibited for everyone else. To this extent the Central
Trust has sabotaged the exchange control. (2) PEI has tried, unsuccessfully
so far, to get the Central Trust to assume responsibility for passing; on
certain types of importers' applications for import licenses, simply in order
to reduce the burden on the greatly overerorked departments of the Board for
Ternoorary Regulations of Imports. LIU, however, has consistently refused to
have arrthing to do with the Board, since he wants to maintain the indeponderit
character of the central Trust.)
25X1
25X1
25X1
25X1
0
25X1
25X1
25X1
0
5.1 1 SuON will be sent to America to negotiate
for the loan as soon as the reorganization of the governnc t is announced,
thus leaving vacant the presidency of the Executive Yuan.'
6. On 13 February Dr. KUi.G gave to the press a release which stated that he had
had no connection with the buying of gold or the manipulations In the gold
market and that he therefore demanded a thorough investigation by the Central
Bank and a resulting publication of a list of persons and firms who had recently
bought gold. His claims are considered false for the most part. :!any of the
"underlings" who have bought gold in their own naries are KUNG, men and :aembers
of the Shansi Clique. T' ie remaining buyers are primarily hirelings of the
25X1 Kwangtung financial clique who are not loyal followers of dOONG.
I
25X1
25X1
7. HUO Pao-hsu (P.H. JHO), head of CII1RA and a loyal SOONG man? has beea personally
dealing in the gold market I __j David K LIG (son of H.H. KUNG ),
head of the Yangtze Tradi compo7j, ling; in the gold market for his
mother and father as well as in wrsonal speculation with import commodities.
25X1 4 Note : T.V. SOONG resigned on 2S February and on 1 "arch the
Supreme National Defense Council named the Generalissimo as President of the
Executive Yuan. PEI Tsu yi was replaced as Governor of the Central ',ank
on I :arch by CHLNG Kia-ngau f
cc) ri Sl4L
Approved For Release 2003/08/05 : CIA-RDP82-00457R000400260003-0
 25X1
25X1
25X1
0
25X1
25X1
0
S. The paymasters (also called disbursing officers and finance officers) of each
Nationalist army in China must go to Nanking to get the raonay for the payrollr.
After receiving this money in currency, the paymaster either buys gold in
Shanghai and holds it until he has riA e a considerable profit, or he tales
the gold back to his on area and sells it there at a profit. This profit
is split between the paymaster and his con::-anding general.
Approved For Release 2003/08/05 : CIA-RDP82-00457R00040026("X-
CE? Ti-AL I:T LLIUE;IJCE , nOUP
Financi l Activities of A Officers, Speculators. and k rchants
9. Tho activities of the merchants, shop owners, and other speculators not con-
nected with the large financial cliques are another cause of the present
trouble. These persons have increased their buying and selling activities.
In order to avoid the losses w'.'ch follow devaluation of CNC, the ordinary
merchants are converting their currency into gold bars, US notes, and coa.-
randities. Vost of the silver and ornament shops are buying gold and making
It into ornaments and jewelry.
10. The use Communists have decided to exert great effort to cause the
25X1
25X1
25X1
0
the financial market without art re ?ard for the misery of the people and
the 41ticiAra of he Kuomiratan; itself.
economic and financial situation in China to become worse. T ey have prob-
ably*ecided to promote the future of their party by encouraging the dis-
satisfactio* of the Chinese masses with the Kuomintang and its., financial
policy, ratker than to work for the general good by trying to improve the
f1na ial situation. :.:en like SOO1 i and KT.AG continue to make fortunes"
ortunes in
11. Come. uni sts busy commodities with their ovrn bank notes and then sell the
rcc ns i t i AR Lot wain vith "rh-t^16 + h
b
ey
ars I I
25
I !ent : This opinion has been voiced by all Kuomintang-owned or supervisod
newspapers in the Shanghai area.)
25X1
25X1
0
25X1
12. :.;tinny of the third-rate money exchan ;e shops in Shanghai are run or controlled
by the Chinese Communists. They have done a great deal of speculating in the
past week.
C ONFIDL . AL
Thin btu: umaLt contains information affecting
the natiorall, 49ftn a oi' tha meted States
witbiaa the aea n 4: tlia .ate Act, 50
U.S.O. 31 and 32, as sassed. Its tr onleal u
or the revelation of its contents in avW samer
to an uaauthorised person is prohibited b r Iwo
Approved For Release 2003/08/05 : CIA-RDP82-00457R000400260003-0