Chapter 38 Monetary Policy in the Frontier Region

(August 17, 1938) Nie Peng[1] also sued Zhu Peng[2]: The monetary policy of the border area shall be based on the following principles: (1) The border area should have a relatively stable currency to prepare for a protracted struggle against the Japanese invaders. (2) The number of banknotes in the Border Region should not exceed the quantity required in the Border Region market.Here we should take into account the possibility of expansion and contraction of the border area. (3) Banknotes in the border areas should have reserves: first, goods, especially industrial products; second, counterfeit currency; third, legal currency.

(4) The Japanese invaders occupy the cities and railway lines, and I occupy the countryside.The source of industrial products in the border areas is the Japanese-occupied areas, and the agricultural products of the border areas are sold in the Japanese-occupied areas.Therefore, the border region should have an appropriate foreign trade policy to back up the monetary policy. (5) The military expenditure in the border area is huge, and the fiscal and monetary policy should focus on the source of future military expenditure. (6) Before the final victory of the Anti-Japanese War, the value of legal currency will continue to fall, and the legal currency may gradually disappear in North China.Miscellaneous coins will fall even more, and counterfeit coins will also fall to a certain extent.If there are too many banknotes in the border area, they will also fall.The core of the problem is that the exchange rate of banknotes in the border area should not be lower than that of counterfeit currency.

We propose the following specific approaches: A. Issue a certain amount of banknotes in the border area (this amount is up to you to decide by telegram), buy legal currency, keep part of the legal currency, buy most of the industrial products, and exchange part of the legal currency for counterfeit currency. B. For miscellaneous coins, various methods should be established to make them flow outside the border area. C. Is it possible to send some miscellaneous coins to the headquarters and the 120th Division, and bring some legal currency to Yan'an, please consider calling back. D. Expand the printing of banknotes in the border areas, because it will be more difficult to print in the future than it is now.

Please consider researching the above.Wait for Peng Zhen to come and discuss the decision in detail. Mao, Luo, Wang, Hu[3] August 17 Printed from transcripts kept at the Central Archives. -------------------------------------------------- ------------------------------ note [1] Nie, referring to Nie Rongzhen, who was the commander and political commissar of the Shanxi-Chahar-Hebei Military Region of the Eighth Route Army at that time.Peng, referring to Peng Zhen, was born in 1902 and was born in Quwo, Shanxi Province. At that time, he was the head of the Organization Department of the Northern Bureau of the CPC Central Committee. Pingjin party work.

[2] Zhu, refers to Zhu De.Peng, referring to Peng Dehuai, was the deputy commander-in-chief of the Eighth Route Army at the time. [3] Luo, refers to Luo Fu, that is, Zhang Wentian, who was the secretary of the Secretariat of the Central Committee of the Communist Party of China at that time.Wang, refers to Wang Jiaxiang (1906-1974), a native of Jingxian County, Anhui Province, who was then the vice chairman of the Central Military Commission of the Communist Party of China and the director of the General Political Department.Hu, referring to Hu Fu, that is, Liu Shaoqi.