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New American Policy in China

By MARC T. GREENE [Foreign Correspondent of The Sun]

HONGKONG, Feb. 1 (By Air Mail). Definite and possible radical changes in America's policy in and toward China may be looked for in the near future. 
There is no probability of the reorientation of American policy in China affecting our continued and undiminished support in the war against Japan. That is an attitude to which we are obviously definitely and irrevocably committed, as the world, and especially Japan, now understands.
What we intend to concern ourselves more closely with henceforth is said to be China's internal economy and particularly her finance. That intention is easily read into the mission of Mr. Laughlin Currie to Chungking.

Financial Control Sought

For it is clear that if we intend to provide China's financial support and to stabilize and control her currency in order that the long-threatened large-scale inflation may be averted, we must not only possess the most intimate knowledge of the Chinese economic position and of Chinese financial operations, but we must have an influential voice in them. It is possible that we are about to demand that as a price for continued and unqualified support until Japan is defeated.

It is no secret here that China's economic position is hardly less shaky than Japan's. The issuance of more than 4,000,000,000 yen of national currency has already had a serious inflationary effect, so serious that in many parts of the country-including the capital-the cost of living essentials has increased more than 500 per cent. in a single year, and in the case of some localities and commodities even to 1,000. Clearly such a tendency must be checked if the aid we have so far given China is not to turn out to have been money wasted.

Concern In Washington

Moreover, it can hardly be said to be a secret to anyone any longer that Washington is a good way from being satisfied with Chinese financial operations generally. People thoroughly acquainted with China and Chinese ways will understand why. To others it may be hinted that Chinese financial policy is not following lines wholly pleasing to those who are concerned with providing millions for its support.

Informed circles in Washington have known this, of course, for a long time. But lately certain unusually disquieting things have happened, such for example as the numerous arrests of officials in the Chinese Ministry of Economics for "improper conduct of the affairs entrusted to them" and for 


Cruiser Arrives

Saigon, French Indo-China, Feb. 15 [[{AP}]]-The Japanese cruiser Nagara arrived at Saigon today and tied up at the dock as one hundred Japanese marines ran alongside and shouted a welcome.
The cruiser replaced the cruiser Abukuma, scheduled to depart tomorrow, from which was landed considerable equipment and supplies for Japanese troops and airmen who arrived a few days ago without French permission.


proven association with the food hoarders and profiteers to whom is directly attributable much of the the terrible suffering among Chinese peasantry and city coolies this winter.

This and other disclosures of the sort have been hushed up as much as possible by the China king government lest not only the public morale be weakened, but a bad impression be created abroad-especially in America.

The long-drawn-out war is laying a greater strain upon the economic condition and the morale of the people in both countries than the world realizes. Prince Konoye, admitting to the Japanese nation that the war has so far cost his country more than 17,500,000,000 yen, also admits-and for the first time- that "no end to it is in sight." This dreary information, according to reports from Tokyo, "brought tears to the eyes of the peers."

U. S. To Crack Down

If it had that effect on the peers, what about the masses? But their condition is, as a matter of fact, that they have no more tears to shed. They have wept to their capacity long since. So, indeed, have the equally sorebeset Chinese. But in a way they have even more to cry about because, while the war effort is united and undivided and sacrifice general in Japan, it is a long way from being that in China. 

There is no longer any use in mincing matters. Not for nothing is the saying common on the China coast, especially among the British, that "China will fight to the last American dollar." Not without reason do missionaries come out of the interior and, literally in tears, bewail their inability to obtain anything like the full amount of the supplies-or of the money-they know have been sent to them from America.

It is felt, and such a course has been urged for a long time by people closely acquainted with the position, that a closer supervision should be exercised, both over the aid given China officially and that privately contributed for general relief purposes. Much would have been saved, both in money and in suffering by the common people, if this had been done from the first.

Some recent revelations not possible to divulge have apparently brought Washington at long last to that way of thinking, and Mr. Currie's mission is the first move to do something about it. The next may not improbably be so firm a stand by America in the matter of finance and economy as to constitute a radical change in her attitude toward the Chinese Government.

No question of Mr. Nelson Johnson's diplomatic capacity is understood to be involved in his impending removal as United States Ambassador in Chungking. The feeling rather is that he has been overlong on the China scene, that he has watched-with reasonable and proper sympathy-China's struggle, and so come to feel so close a personal interest in it and concern with it as perhaps to be unable to gain the clear perspective in respect of certain tendencies of Chinese economic and financial policy that would be possible to a newcomer. 

Moreover, it is considered that some plain talking is necessary at Chungking, and certain diplomats are better qualified temperamentally in this regard than others.

Civil War Threatens

Also the rift with the Communist elements is a serious menace. Contrary to the Chungking-manufactured news dispatches, it was the Government troops who actually attacked the Communist Fourth Army after a part of it had failed to recross the Yangtze, as ordered by the generalissimo.

The Communist losses were heavy, for they were greatly outnumbered, and the affair has so stirred up other Communist armies that it is now feared a general state of civil war may result. That would wreck everything, and here again America is much concerned.

So that it is likely another move in our altered policy will be to point out to the Chinese high command-otherwise the generalissimo-the folly of its autocratic attitude toward the Communists, who have taken so large and important a part in repelling the Japanese invasion.

This attitude has become markedly more apparent as continued support from America has assured the Chinese-as they believe-of ultimate victory. It indicates clearly what is likely to be the post-war policy. Such a policy can have but one effect, general civil war, probably with Russia backing the Communists. Possibly only intervention by America now can avert that dire outcome.

Transcription Notes:
top and right side has been cut off, opt'd not to transcribe it