AT LOW EBB

Otago Daily Times, Issue 26980, 15 January 1949, Page 7

AT LOW EBB

CHINA’S FINANCES FRANTIC SEARCH FOR FUNDS COLLAPSE OF GOVERNMENT POSSIBLE NZPA—Copyright NANKING, Jan. 13. China’s National Government is approaching both military and financial bankruptcy at a speed - which may cause collapse without a direct Communist attack on the capital, says the Associated Press correspondent. The situation was accurately forecast three years ago by General George Marshall, when he told. National leaders during his efforts to bring peace: “ You must quit fighting and disband your armies or face bankruptcy.” Lack of ready funds is affecting not only attempts to remove officials and property to places of greater safety, but is preventing the continuance of normal processes of Government, adds the correspondent. Actual Government functions are rapidly being shifted from Nanking to provincial and country leaders whose ability to 'collect taxes and control territories is growing as Generalissimo Chiang Kai-shek’s strength ebbs. It is learned from reliable sources that not even a personal order from Chiang is certain to produce money from the Central Bank, because, in their words, “ there just is not any money.” The Ministries in most cases have exhausted the money given to them for expenses because of the rapid drop in the value of the recentlyestablished gold yuan. They are now seeking frantically funds with which to continue operations on even a skeleton basis. A Reuter correspondent says that a shoot-to-kill order against law-break-ers who used violence in the capital was issued to-day by General Chiang Yao Ming, Nanking garrison commander. Anyone who destroyed vehicles or disturbed the peace in Nanking's shipping centre would be shot immediately, said the general. Extra police are patrolling the streets. Communist Forces Active : A Nationalist military spokesman announced that the Communist forces thrust again into the Hwai River area north-west of Pengpu, on Nanking's outer defence screen, about 100 miles north of the capital. Unconfirmed reports said that General Chen Yi was now moving 15 Communist columns towards the river for the expected battle for Nanking before the end of January. Breaking a long lull, the Communists besieging Peiping to-day opened up with artillery against the defences in the immediate outskirts of the city, according to private reports filtering through the strict North China censorship. This is said to be the first time the Communists have used big guns against the ancient capital since surrounding the city. Peace Efforts Continued Reuter reports that members of the Control Yuan, the highest supervisory organ of the Kuomintang, decided to confer with China’s three most prominent peace advocates and interview the Big Four Ambassadors in another attempt to reach peace with the Communists. They met Generals Chang Chih Chung and Chang Chun, Ministers of the inner Cabinet, and Shao Li-Tse. former envoy to Moscow, and will meet the Ambassadors later to emphasise the people’s desire for peace.