Thirteen Billion Blessings

As the reporters gathered in the bare room on Chungking hill, they chatted about the news, which they had already heard. Finally China's official spokesman, onetime Ambassador to Russia Dr. T. F. Chiang* (no kin), came in. Man-of-the-world, he showed no particular excitement as he said in faultless English:

"It is gratifying news to learn that President Roosevelt has sent a message to Congress asking for a $500,000,000 loan to China and that the British Government has made known it is ready to lend China -L-50,000,000."

The Illness. For four weary years China had dreamed about beating the Japanese by means of some whopping generosity from the democracies. Here, at last, was aid on the scale about which China had dreamed. At current rates of exchange the two loans would add up to almost 13 billion Chinese dollars.

The reporters listening to Dr. Chiang knew that each of those dollars would be a blessing to China, because China is in the throes of a terrible and long-standing inflation.

Inflation is a meaningless term to people who have not lived through one. To reporters on Chungking hill it was anything but meaningless. They knew that the Government had perforce solved most of its fiscal worries in the war years by printing money. They knew that fiscal reform, the main point of which had been Government assumption of the land tax, had not worked too well. They knew that mistrust of the Government's money had driven many Chinese, rich & poor, to selfish hoarding, particularly of rice.

More personally, they knew that Chungking prices had risen 2,000% since the beginning of the war. (In U.S. terms, a package of cigarets would cost $3, a man's shirt $50, a pair of medium-priced woman's shoes $160. One might, with luck, buy a bottle of Scotch for $60, but a quart of champagne would cost over $200.)

The Harassed Doctor. The man whose job it has been to try to stem China's inflation, and whose Ministry has often been accused of aggravating it, is Minister of Finance Dr. H. H. ("Daddy") Rung. Seldom has even a horse-&-buggy doctor operated under such harassments as the coolie-&-ricksha society of bomb-torn Chungking has imposed on aristocratic Dr. Kung, 75th descendant of Confucius. An active ingredient of the inflation has been lack of confidence in the finances of the Chiang Kai-shek Government. Some of his henchmen have been accused of worse things than incompetency. And so a large measure of the responsibility in turning the U.S. and British loans to good uses will rest on the shoulders of the Generalissimo's loyal Dr. Kung.

The Treatment. With 13 billion Chinese dollars' worth of U.S. and British credit to play with, Daddy Kung ought now to be able to operate more successfully on the gangrene of inflation. Dr. Chiang suggested some ways this might be accomplished:

>Increase of confidence. "We are sure our Allies will continue to give us aid."

>Issue of domestic bonds based on these loans. These bonds would be presented as long-range savings and it would be hoped that they would 1) absorb some of the recklessly printed banknotes; 2) deter some of the hoarding, which is a form of short-range savings.

> The backing of enterprises in China. Small manufactures, based on simple machinery which China can produce herself, would, by increasing the flow of goods, help ease the inflation. Big undertakings, such as the building of railroads with rails torn up from Japanese-occupied territory, could help the war effort.

The loans would not be used for purchasing goods in the U.S. and Britain. These were already available under Lend-Lease, and the big problem for China was not financing their purchases but getting them in.

The Long Night Watch. And so the aid had come at last. Dr. Chiang, and the Chiang for whom he spoke, might be pardoned for a tiny grain of bitterness, for remarking, politely, that certain countries "sandwich a great deal of talk between actions."

And yet the Chinese, as always, took their bitterness manfully. Dr. Chiang, closing the conference on Chungking hill, looked back on China's years of war: "Night fell early upon China's independence," he said. "But we held on, hoping against hope. Then at midnight, at the darkest hour, we suddenly found at our side stout and loyal companions in arms.

Now we are surer than ever, although we may still have a few hours of darkness ahead, there will be dawn and victory."

*Who sometimes spells his name Tsiang to avoid being accused of nepotism.

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