Laurel outlook., 1945-10-31
Initiation Stiff
China Problem
Situation Most Critical of
Postwar Questions, Says
Finance Minister.
By PAULINE
(WNU Staff Correspondent

towel, or S4,UUU Tor a louSe!
These are some of the prices the
Chinese are paying today, in
Chinese dollars of purse I know,
because l have walked through the
streets of this Chinese capital and
priced some of the wares in the
shops along the way. And Chung
king, situated on steep hills along
the Yangtse and Chialing rivers, is
rebuilt and doing business even
though the Japs bombed it many
times.
Initiation is one of the many criti-
cal problems China has to deal with
as a result of the war. When l en-
tered the country, the black mar
ket rate of exchange in which every
one deals, was 1900 Chinese dollars
to one American dollar. Two weeks
later, it was 5000 to l. l talked
with Finance Minister o. K. Yui,
and former mayor of Shanghai,
about the matter. He told me
Imitation has reached the point
where it demands action, but almost
anything we do now will be tenn
porary. There can be no-permanent
cure for the situation until the rich
areas and ports the japanese hold
are opened and more goods a be
brought in to relieve the shortages.
Even after the ports are open it
will be five or six months more be-
fore we will get much consumer
goods, for the military will probably
need all the supplies up until that
time"
Improvement Essential.
"When the goods do come in"
Minister Yui went on, ''transpor-
tation and communication will have
to be improved in order to get them
properly distributed"
But more than goods are needed
to steady China's webbing cur
rency.
"We can't increase taxes now"
the finance minister explained, "be-
cause of low incomes. But we are
renovating old taxes and trying to
open up new sources of income. An
other obstacle in raising revenue is
the difficulty of floating bonds be-
aus of the high profit in specula-
ton. An investor asks why he should
take 6 per cent from the govern
ment when in two weeks in specu-
lation he can double his income"
"Would a new loan from the
United States help?" I asked Mr..
Yui.
"a new loan from the United
States would be helpful" he re-
piled, ''but we need more than dol
lars. We need assets to which we
can link u currency so as to give
it stability"
Iasked the finance minister wheth-
er price control and r~ationing would
not help to counterfeit the initiation.
But he said that because of China's
de~centralized economy, each farm
er growing and transporting and
marketing his own goods, it would
be impossible to enforce such a pro-
gram.
Exchange Rate 20 to 1.
The official government rate of ex-
change has been fixed at 20 Chinese
dollars to l American dollar, but
this is expected to be increased. The
government rate applies to all Off
cial transactions, and for individ-
uals who. want to go to the United
States and desire to change their
money into dollars. The black mar
ket exchange rate is not recognized
by the government. In fact, there is
a penalty for dealing in it, but the
market fourishes since the penalty
is not enforced.
A Chinese general draws a salary
of 100000 (Chinese) a month, or $40
gold, roughly speaking. In addition,
he receives $1,000 worth of free
rice. Cloth and oil are provided
for him at the official rate. All other
military and civil employees are
paid on the same basis. A junior
government official receives 81 800
(Chinese) a month.
Although China's economic and
financial condition is Minister Yui'S
primary oncern these days, there
is another subject very close to his
heart. AS l said he was the former
mayor of Shanghai he still o n
siders himself the mayor, for he
held that position in 1887 when the
Japs came in. He then went to Hong
kong and five minutes before the at
tack on Pearl Harbor, he was sum-
moned to Chungking to be vice min
of finance. Last year he sue
ceeded DR.. H. H. Kung as minister.
Mr.. Yui is going back to Shanghai
one of these days, so 1 asked him
what he would do first in that event.
81 will direct the rebuilding of
Shanghai and help it to regain its
position" he said. "This will need