Chungking, July 25.
On hearing a week ago that the Japanese intended to convert large amounts of North China bank notes into foreign exchange, the Shanghai note-issuing banks on their own responsibility refused to accept such notes any further. Thereupon the Chungking Government instructed these banks yesterday to accept such notes in Shanghai against payment of ihe counter-value in Chungking or other places under the control of the Chungking Government. In this way the Chungking Government aims at blocking banknotes in the hands of the Japanese.
This measure is connected with the announcement that the second half of the $600,000,000 reconstruction loan will be issued on August 1 which, is maintained, shows the determination of the Chungking Government to continue the fight—Trans-Ocean.
Tokyo, July 25.
The Nomonhan incident, the slump of the Chinese dollar and the situation in China were discussed at this morning's Cabinet meeting.
The War Minister, Lieut.-General Seishiro Itagaki, reported on a fresh clash between Manchoukuo and Outer Mongol forces on the border.
Mr. Sotaro Ishiwata, the Finance Minister, after describing the causes for the slump of the Chinese national Currency, said that the major cause for the devaluation of the Chinese dollar was due to a withdrawal of support on the part of the Exchange stabilization Fund. He predicted a further fall in the Chinese dollar "if." the present situation continues," and urged the necessity of formulating an independent currency policy by Japan to deal with the slump.
__A free and frank exchange of views is said then to have followed among the Cabinet Ministers regarding the "China Incident," although Lieut-General Itagaki is reported to have "refrained from voicing his own opinion."
Text read from the printed page and cleaned; old type leaves the occasional error.