Office of the Historian

893.515/1082: Telegram

The Ambassador in China (Johnson) to the Secretary of State

Peiping, May 24, 1936—6 p.m.
[Received May 24—10:50 a.m.]

255. Department’s 125, May 23, 3 p.m.

1.
There have been no comments in the Chinese or foreign press in Peiping on the monetary reforms or the two statements of May 18.
2.
A Chinese banker with whom this was discussed by a member of my staff on May 23 stated that Kung’s statement was confusing because it was impossible to tell from the statement just how Kung proposed to carry out these reforms. He said that the statement was unnecessarily disturbing since the stabilized currency program of the National Government was regarded satisfactorily and that the statement had raised doubt in the minds of some people (who do not understand reserves to back currency are maintained) as to the stability [Page 486] of the currency which they are now using and which they have accepted as sound. This background of uncertainty in the minds of some people he considered unfortunate. Local manager of the National City Bank with whom same member of staff discussed question same day expressed similar views. Bankers themselves do not appear perturbed.

It is my own personal belief that above represents not so much opinion as lack thereof due to present almost complete financial separation of this area from Central China.

Johnson