CHINA CONVERTS CURRENCY

Press, Volume LXXXIV, Issue 25581, 24 August 1948, Page 5

CHINA CONVERTS CURRENCY

Gold Yuan Replaces Inflated Dollar EXCHANGE RATES ANNOUNCED (N^.PA.—Reuter—Copyright) (Rec. 8 p.m.) SHANGHAI, August 23. Memories of better days were recalled when citizens of Shanghai woke this morning to find their newspapers costing only 25 cents instead of 800,000 dollars, and one foreign store advertising a 10 cents sale. Shanghai from to-day will attempt to adapt itself to the new gold yuan (earlier called “Sun”) currency, after handling millions of dollars daily with reckless abandon. Local banks reopen to-day after being closed since Thursday for the conversion of accounts into gold yuan and are expected to do heavy business, taking in bales of the old national dollars and doling out fistfuls of the new currency. A rush is also expected for subsidiary coins, which are making their first appearance for a decade. A man will now be able to tuck his salary in a wallet at the end of the month instead of lugging it home in a suitcase. The Central Bank of China has advised the banks that it is prepared to provide foreign exchange at the following rates: One United States dollar for four gold yuan.. £1 (sterling) for 12 gold yuan. One Hong Kong dollar for 75 gold yuan cents. One rupee for 90 gold yuan cents. Exchange positions must be squared at the close of each business day. Currencies other than the United States dollar and sterling shall be converted into these two currencies and squared separately. For the sake of uniformity the conversion rates will be as follows: one Hong Kong dollar into Is 3d; one rupee into Is 6d; one Straits dollar into 2s 4d. Chinese Government currency and economic reform measures included Presidential decrees ordering registration by Chinese nationals of all holdings and property abroad worth more than 3000 United States dollars, and prohibiting the circulation, possession, or sale of all foreign currencies in China, along with gold and silver bullion and silver coins. Economists say that the real test of China's new currency regulations will be the Government’s effort to freeze price levels. If the price of daily necessaries iS kept within the reach of the salaried man’s pocket, they say, the battle will be won and inflation arrested.

The Foreign Minister (Mr Wang Yun-yu) said that the Government hoped to secure a monetary loan from the United States, either for the direct purpose of backing the new gold yuan currency or otherwise stabilising Hhe economic situation.