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    "localId": "205716342",
    "label": "Report to the President: China - Korea, Submitted by Lieutenant General Alfred C. Wedemeyer",
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    "id": "205716342",
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    "contentType": "document",
    "title": "Report to the President: China - Korea, Submitted by Lieutenant General Alfred C. Wedemeyer",
    "citationUrl": "https://catalog.archives.gov/id/205716342",
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        "President's Secretary's Files (Truman Administration)",
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    "productionDates": [
        {
            "logicalDate": "1947-09-01",
            "month": 9,
            "year": 1947
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{
    "seq": 57,
    "pageIndex": 0,
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    "ocrText": "TOP SECKET\nization through the issuance of a new currency, either paper or silver, will be premature,\nunless the Government has already taken steps to live within its income. The ultimate\nobjective should be a limit or ceiling on the currency circulation and on borrowing from\nthe Central Bank. Full publicity should be given to the activities of the Central Bank in\ncontrolling the issuance of the Chinese National Currency. These measures might help\nto slow down the rate of price increases, protect the position of the CN dollar as a national\ncurrency, and forestall any attempts by provincial authorities to issue separate local\ncurrencies.\nThe economy would be strengthened by disposing of Government-owned industrial\nconcerns and monopolies to private Chinese enterprise, both on the mainland and in Tai-\nwan, through open and honest sales-preferably for foreign exchange or gold-to the\nhighest bidder. This step would increase production by giving an incentive which is at\npresent lacking. The disposal of industrial plants would eliminate expenditures from\nthe national budget to finance Government enterprise, reduce the number of function-\naries who are in a position to make private profit at the public expense, bring in large\namounts of revenue for the national budget, and assist in retarding the rise in prices.\nA prohibition against public officials as directors in private corporations would also\nstrengthen the morale of the Government service.\nProgress towards a balanced budget should become possible through the foregoing\nmeasures, and through increased revenue from taxation and public borrowing. Even un-\nder the present tax laws, revenue could probably be increased by strict and punctual\nenforcement. A tax on profits secured from speculation in commodities would be a useful\naddition. If there is any prospect of success in stabilizing prices and limiting currency\nissuance, the public would be encouraged to buy Government bonds and repatriate funds\nwhich have been sent abroad, thus materially helping the Government to balance the\nbudget. Improved efficiency in the collection of the land tax in kind would increase the\nyield and reduce the burden of its incidence. Stability of the Government in the country-\nside could be rapidly undermined if the incidence of conscription and the land tax in kind\nbecomes too severe. The recrudescence of likin-local transit taxes-and military requisi-\ntioning at nominal prices should be severely discouraged.\nThe administrative inefficiency and corruption, which are paralyzing the economy and\ncrippling China as a military power, should be eliminated as rapidly as possible, and the\nadministrative inertia overcome by a delegation of executive power and authority.\nConsiderations on United States Economic Assistance\nBudgetary Deficits-Inflation is China's central economic problem, and the most ur-\ngently required assistance is that which can first check the depreciation of the Chinese\ncurrency and later permit of its stabilization. The main inflationary pressure comes from\nbudgetary deficits, financed by issuance of paper currency, to cover the increasing burden\nof military expenditures. Reduction of such deficits requires drastic action by the Chinese\ngovernment in two principal ways, (1) in reducing military expenditures by setting\nChina's military objectives within the capacities of its economy (with such assistance as\n56\nTOP SECRET\nC.S. country\nREQUICE\""
}