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*** Related Readings ***:
The Amerasia Case & Cover-up By the U.S. Government
The Legend of Mark Gayn
The Reality of Red Subversion: The Recent Confirmation of Soviet Espionage in America
Notes on Owen Lattimore
Lauchlin Currie / Biography
Nathan Silvermaster Group of 28 American communists in 6 Federal agencies
Solomon Adler the Russian mole "Sachs" & Chi-com's henchman; Frank Coe; Ales
Mme Chiang Kai-shek's Role in the War (Video)
Japanese Ichigo Campaign & Stilwell Incident
Lend-Lease; Yalta Betrayal: At China's Expense
Acheson 2 Billion Crap; Cover-up Of Birch Murder
Marshall's Dupe Mission To China, & Arms Embargo
Chiang Kai-shek's Money Trail
The Wuhan Gang, including Joseph Stilwell, Agnes Smedley, Evans Carlson, Frank Dorn, Jack Belden, S.T. Steele, John Davies, David Barrett and more, were the core of the Americans who were to influence the American decision-making on behalf of the Chinese communists. 
It was not something that could be easily explained by Hurley's accusation in late 1945 that American government had been hijacked by 
i) the imperialists (i.e., the British colonialists whom Roosevelt always suspected to have hijacked the U.S. State Department)  
and ii) the communists.  At play was not a single-thread Russian or Comintern conspiracy against the Republic of China but an additional channel 
that was delicately knit by the sophisticated Chinese communist saboteurs to employ the above-mentioned Americans for their cause The Wuhan Gang & The Chungking Gang, i.e., the offsprings of the American missionaries, diplomats, military officers, 'revolutionaries' & Red Saboteurs and "Old China Hands" of 1920s and the herald-runners of the Dixie Mission of 1940s.
Wang Bingnan's German wife, Anneliese Martens, physically won over the hearts of  Americans by providing the wartime 'bachelors' with special one-on-one service per Zeng Xubai's writings.  Though, Anna Wang [Anneliese Martens], in her memoirs, expressed jealousy over Gong Peng by stating that the Anglo-American reporters had flattered the Chinese communists and the communist movement as a result of being entranced with the goldfish-eye'ed personal assistant of Zhou Enlai
Stephen R. Mackinnon & John Fairbank invariably failed to separate fondness for the Chinese communist revolution from fondness for Gong Peng, the Asian fetish who worked together with Anneliese Martens to infatuate American wartime reporters. (More, refer to Communist Platonic Club at wartime capital Chungking and American Involvement in China: Soviet Operation Snow, IPR Conspiracy, Dixie Mission, Stilwell Incident, OSS Scheme, Coalition Government Crap, the Amerasia Case, & the China White Paper.)
 
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Chiang Kai-shek's Money Trail


Armed Uprisings Against Manchu Qing Dynasty
Song Jiaoren's Death & Second Revolution
The Republic Restoration Wars
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Civil Wars Among Northern Warlords
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China In Crises Of Internal Turmoil & Foreign Invasions
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Campaign Of Nankou & Campaign of Xinkou
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Rape Of Nanking & The Great Rescue Of 1937
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2nd Changsha Battle, & Pacific Wars
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[ revolution.htm & tragedy.htm]
Communist Armed Rebellions
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Campaigns Against Communist Strongholds
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Xi'an Incident - Turning Point of Modern History
Demise Of Red Army Western Expedition
[ campaign.htm & terror.htm ] [ default page: war.htm ]

 
Continuing from Tragedy of Chinese Revolution, Campaigns & Civil Wars, & White Terror vs Red Terror:
 

 
 
After reading through memoirs by Chiang Kai-shek's attaché and secretaries, I could not explain the riddles about the fast fall of Chiang Kai-shek regime. Blaming it on corruption by Kung-Soong families, on incompetency of Whampoa lineage generals, on the communist espionage, and on the communist propaganda did not explain the whole issue. Before I discovered the writing by Freda Utley, I, having read Seagrave's "The Soong Dynasty", thought that Chiang Kai-shek's loss of China to the communists had something to do with the corruption by Kung-Soong families and the incompetency of Whampoa lineage generals. After researching into the battles and campaigns one by one, as well as thoroughly researching into China's wartime finance, I was able to discard the corruption and incompetency themes, and go beyond the communist espionage and communist propaganda to understand what Hurley meant by accusations that "the US Government had been hijacked by colonialists and communists" and why Wedemeyer constantly stated that the United States owed China for the loss to the communists. (What the Chinese side did not and does not understand about the Yalta Betrayal & Marshall Dupe Mission is that two factions of Anglo-American interest groups, i.e., the ranks of innate cousins of British colonialists and the ranks of American doctrinists with advocacy for "China containment", had joined hands with Russian/Comintern agents in subverting China.)

 
The list of slanders against Chiang Kai-shek and the Republic of China were endless: the US media accused Mme Kong Xiangxi of possessing the most deposits in US banks in 1939; in 1941, Comintern agents launched a concerted smear campaign in the HK and US media to blast at the corruption of the Kong-Song families; Li Ao cited Seagrave's "The Soong Dynasty" and U.S. archives [originally authored by Comintern agents and released by the US through the Free Information Act] in stating that Song Ziwen, with a personal fortune of US$1.5 billion, had embezzled the US "Lend-Lease" funds by means of a claim that 60 purchased tanks had capsized with ship at the sea. (See http://www.iun.edu/~hisdcl/g385_2001/seagrave3.htm - "T.V. Soong played a suspicious role in overseeing Lend-Lease goods to China, probably pocketing the money meant to buy the goods by himself"); Seagrave claimed a total of 0.9B USD equivalent and 6M ounces of gold which were all "from American taxpayers" [????? Chinese coolies' work for free, and Chinese war deaths in vain???]. Seagrave accused TV Soong of halving Chiang's 0.9 billion reserves aforementioned within two years of the 1945-1947 civil war; Li Ao pointed out the Chiang cronies milked 0.75 billion out of 3.8 billion wartime US military aid in goods and cash - which did not base on the facts that the lend-lease amounts were merely US$26 million (1941, mostly squandered in Burma in the aftermath of the Japanese invasion), US$100 million (1942), US$49 million (1943), and US$53 million (1944); In Nov 1947, the U.S. media accused Soong of having 0.1 billion deposits in US and Switzerland, and Kong Xiangxi and his sons were accused of implication in supporting Tom Dewey's presidential candidacy against Truman; the American media ridiculed the Kongs as tycoons with 0.5 billion US dollars against Truman; In May 1950, the US media accused Kong-Song families of having 0.5 billion US dollars in US banks. In March 1951, the US media accused the two families of having as much as 0.85 billion US dollars. Outageous claims included the reference that Truman had hinted that Song-Kong families could donate 0.3 billion US dollars to Chiang Kai-shek. (Seagrave's book was a slander. TV Soong's family had contacted the publisher for a clarification with Seagrave. But Seagrave dared not to face the Soong family. Go to the Hoover Library for the TV Soong Papers if you want to know more about China's finance. It was claimed that as a result of slanders, the US government conducted a survey of funds under Chinese names in the U.S., with the conclusion that Chinese deposits totalled no more than 50 million US dollars, with the holders of the maximum amounts at the level of around 1 million US dollars.)
 
The Truman crap cited by Yuanyuan Peng in "The Chinese Banking Industry: Lessons from History for Today's Challenges":
 
I discovered after some time that Chiang Kaishek and the Madame and their families, the Soong family and the Kungs, were all thieves, every last one of them, the Madame and Him included, And they stole 750 million dollars out of the [US$3.5] billion that were sent to Chiang. They stole it, and it is invested in real estate down in Sao Paulo and some right here in New York. (Miller 1974:289)

 
The Truman crap cited by Harry Gelbe in "The Dragon and the Foreign Devils: China and the World, 1100 B.C. to the Present":
 
They're all thieves, every damnned one of them. They stole 750 million out of the billions that we sent to China. They stole it, and it's invested in real estate down in SAao Paolo and some right here in New York.
 
The Aug 1949, 1000 page US White paper published by D.G. Acheson claimed that the U.S. had given to China an aid of US$2 billion. After checking Freda Utley's calculation, we could tell the 2 billion amount consisting of the majority in the form of service(s) during and immediately after the WWII, which included the UNRRA goods that was said to be 685M USD by Seagrave and 500M by Kerr. The bulk of 2 billion, i.e., service(s), included the costs in dispatching Chinese troops to the coast and Manchuria as well as the costs in repatriating 2 million Japanese to the Japanese islands. The remnant of the Lend-Lease program, e.g., the rotten inventories on Pacific Islands, were probably the only U.S. flow to China after the outbreak of the 1945-1950 civil war. Jung Chang, in "Mao: The Unknown Story", repeated the cliché by exaggerating the American aid amount to be 3 billion US dollars, i.e., one billion more than Acheson's. Her brother, Zhang Pu, lurking on the internet, had found out the loopholes and began to whitewash the number to 1.5 billion financial aid and about 0.8 billion military aid [which were still untrue]. Communist China's Social Academy chief Liu Da’nian acknowledged that Chiang Kai-shek received no more than 0.6 billion in the form of American aid. The actual number won't be more than 0.2 to 0.3 billion, including the 0.125 billion from the 1948 China Aid Act which rolled over to the China Area Aid, to be squandered in Indochina, instead, in the 1950s and 1960s.
 
 
In the past decade, a new generation of academics had emerged in mainland China and reflected on the communist ascension to power in the 1949, including Yang Kuisong, Gao Hua, Niu Jun, Zhang Baijia, Dai Chaowu, Shen Zhidan & Li Danhui and et al.. But none of them wish to become China's Sakharov as Fang Lizhi had attempted prior to June 4th 1989 Massacre. We could not put blame on the courage and conscience of people still in China, though; the mere mentioning of their names could give them trouble, and the banning of their personal websites.
 
The conscience of China, meanwhile, had undergone setbacks in the information age that would supposedly open up China. Yahoo, for instance, has admitted to sharing user information for journalist Shi Tao with Chinese authorities earlier this year in a move that landed him a 10-year jail term. In doing so, the firm 'complied with local Chinese law', according to Yahoo spokeswoman Mary Osako.
 
Outside of China, Yu Maochun, as late as in "OSS In China", still failed to see through the agenda of Joseph Stilwell, as seen in Foreign Military Aid and Assistance to China. Some overseas dissidents, like Cao Changqing et al., had a blind faith in the so-called "American generosity" and the Republican Party's doctrines of 'democracy, freedom and liberty' as a result of delusion over the intermittent American for-show statements, like the Monroe Doctrine, Wilson's 14 Points, the Hull "ultimatum" of Nov 26th, 1941, & the American opposition to the British-Franco's colonialist activities in the Middle East. In or outside China, they failed to see the in-depth of the Russian/Comintern conspiracies against China. They have not come to discern the American plays of the Chinese cards, and are still arguing among themselves, blindfolded by Acheson's 2 Billion Crap aid to Nationalist China and Marshall's Dupe Mission To China & Arms Embargo, not to mention i) American President Grant's attempt at making Manchu China divide Ryukyu into three parts with Japan, ii) John Watson Foster 's collusion with the Japanese in selling the Shimonoseki Treaty, iii) the American navy's sailing gunboats and warships in the Yangtze to protest against the 1911 Xinhai Revolution, iv) the American navy's sailing gunboats and warships into the 'White Swan Pond' of Canton to protest against Sun Yat-sen's threat to withhold the customs tax surplus, v) J.P. Morgan and Wall Street's floating $263 million in loans to the Japanese by 1931 while refusing to aid China on the pretext of isolationism, vi) America's continuing sale of scrap metals and petrol oil after the Japanese sinking Panay in 1937, and vii) America's selling out China at the Yalta and colluding with the Russians [Soviets] in subversion of Nationalist China.
 
Incidentally, the underlying logic behind "The China Exception: Russian Communism being wicked, the Chinese are good communists" is an inherent fear of the Yellow Peril, i.e., billion Chinese would actually enjoy real democracy, go to college and develop their intelligence.

 
Before President Roosevelt, there was President Wilson's China policy, which this webmaster referred to as the 100-year American hypocrisy. It was pivoted from the hypocritical nature of America's Open Door Policy for China, which was originally an idea sold to the Americans by the British career customs officer working in Manchu China's customs office. During WWI, President Wilson, who was in the shoes and mindset of the British colonialists, believed that the U.S. had to keep China intact for securing the fate of the white civilization, while during WWII, the British impressed the Americans with the inverse of the former doctrine to state that a victorious Republic of China, which was to emerge from WWII, would pose a threat to the white civilization. The reason that China should remain open to all powers, in the opinion of the U.S. president Thomas Woodrow Wilson, was that the 'white civilization' and its domination in the world rested largely on the ability to keep China intact, in the sense that should China fall completely under the Japanese [or the Tsarist Russian or someone else] influence, then the massive Chinese manpower could be utilized like by Genghis Khan to conquer the world. This was the theme of the Yellow Peril, which was inverse to what the British ambassador claimed to Albert Wedemeyer during WWII that a strong and unified China would pose a threat to the Whitemen’s position in the Far East and immediately throughout the world. So to say that the nation of China should be managed delicately, that is, should not be allowed to grow too powerful to pose a threat to the white civilization, nor should it be allowed to be hijacked by a non-U.S. power since China's immense human labor could be turned against the [Anglo-American] white civilization.
 
American Involvement in China: Soviet Operation Snow, IPR Conspiracy, Dixie Mission, Stilwell Incident, OSS Scheme, Coalition Government Crap, the Amerasia Case, & the White Paper [Modified : Monday, 25-Feb-2013 22:00:00 EST]
 
 
The following is a compilation of money trails before I discovered the writing by Freda Utley

The China Story by Freda Utley
 
Chapter 2, Too Little, Too Late --
The Facts About "Aid to China"

Historical Context - 1933 - national vault 3 million yuan cash, to-be-issued bonds worthy of 27 million yuan, no foreign currency, and no gold.

Just prior to the 1927 Shanghai worker uprising, American mayor Fessenden [Fei-xin-dun] was fetched by the French for a meeting with Du Yuesheng, which was for sake of approving the transportation of 5000 guns to the gangster forces through the "international settlement" zone. The fuse was the repeating conflicts between the settlement and communist- and Comintern-instigated picket forces as well as the nightly shootings into the settlement and concession ares by the communist saboteurs. There is no record that the colonialist powers had offered any financial aid to Chiang Kai-shek. The Shanghai merchants, with gangster elements included, were said to have formed a consortium for loaning Chiang Kai-shek 3 million yuan for delivery on April 1st, 1927 as a downpayment. Seven million followed. Then, another delegation promised to loan Chiang Kai-shek 30 million yuan currency for establishing a moderate government in Nanking. Zhang Yufa pointed out the Shanghai bankers offered Chiang Kai-shek 15 million and 30 million loans after the purge by citing some primitive documents, like "Moscow & Chinese Communists" (Robert C. North, pp.97), "The Tragedy Of The Chinese Revolution" (Isaacs, p. 151-152), and "A History Of China" (Wolfram Eberhard, p. 315). --Young pointed out that the C$30 million, May 1, 1927, loan for "extraordinary military expenses" was securitized, meaning that Chiang and Soong could not obtain a loan at will without pledging the customs surtax. Hence the rumors of extortion were not founded.

During Chiang Kai-shek's trip to Japan in Dec 1927, rumor went that the American ambassador to Japan visited Chiang Kai-shek and obtained a guarantee as to the American interests in China. In early 1928, Huang Fu had to make an apology for the British-American human loss and property damages that were incurred after the communist-dominated N.R.A. 6th & 2nd Corps of the Nationalist Army took over Nanking on March 24th, 1927 and engaged in a rampage against the foreigners for provoking a wider anti-imperialist war. (Chiang Kai-shek blamed on the communist-infiltrated 6th & 2nd Corps for the turmoil. Seagrave mistakenly cited an "American investigation" in pointing out that the northern lineage troops pillaged the foreigners for instigating the international intervention though the KMT rightists blamed the 1927 Nanking Bloody Incident on the communists. - Dorothy Borg and Leighton Stuart were adamant that it was the Chinese communists who perpetrated the crime of killing the Westerners in Nanking. The communist culprit who directed the rampage later instigated the 1933 Fujian Mutiny, by the way.)

Chiang Kai-shek was still short of money. Li Zongren memoirs pointed out the so-called fundamental cause of the explosive growth of communist bases and enclaves in the early years, i.e., Chiang Kai-shek deliberately ignoring the Communists for sake of exercising economic, military & political dictatorship. Numerous times, Li Zongren claimed that he had advised Chiang Kai-shek of the need to quell the communist rebellion while Chiang Kai-shek merely treated the communist as banditry. At one time, Jiangxi Prov's chairman Zhu Peide requested with Li Zongren for a joint visit to Chiang Kai-shek by having Li Zongren offer to allocate a portion of his Gui-jun army for deployment against the communists in Jiangxi Prov. (Zhu Peide's 3rd Corps had only six regiments.) Chiang Kai-shek declined this proposal. The Jiangxi Prov native association in Shanghai also petitioned with Chiang Kai-shek for quelling the communist rebellion. In Sept-Oct 1928, Li Zongren proposed that Liu Zhi's 2nd Div be sent to Jiangxi for quelling the communist rebellion, stating that the communists were not mere banditry but brigands possessing the "ideals" and "ism". On another occasion, Chiang Kai-shek had Song Ziwen assemble a group of Shanghai financiers for sake of extracting loans and funds in the name of quelling the communist insurgency. Chiang Kai-shek was said to have made a quick appearance at the meeting and scared the financiers by hinting that the communist insurgents might come to Shanghai to stage a rebellion should the financiers fail to assist his government in the crackdown on the communist enclaves. Li Zongren pointed out that the Shanghai financiers shook their heads at the statement made by Chiang Kai-shek. Though, Li Zongren claimed that Chiang Kai-shek still failed to put the raised funds to usage and refrained from dispatching the Whampoa lineage military against the communist bases. (The immediate danger to Chiang was continuous rebellions by warlords and militarists, behind whom could be seen the black hands of the Chinese communists on each and every occasion.) On another occasion, Zhang Jingjiang complained that Chiang Kai-shek, after marriage with Soong Mei-ling, no longer listened to his admonitions. (Seagrave, who was influenced by the pro-communist American academic writings, called it a blackmail, and claimed that Chiang Kai-shek did it again in late 1940s with demands for aid from the USA.)

On April 6th, 1933, Kong Xiangxi tacked on the post of President of the Central Bank. On Nov 1st, took over the finance minister post from Song Ziwen. Chiang Kai-shek's national vault had 3 million yuan cash, to-be-issued bonds worthy of 27 million yuan, no foreign currency, and no gold.
 

How Kong & Song Families Make the Money? - part I

H.H. Kung nominally registered the Yuhua Commercial Savings Bank with 100,000 silver dollars in mid-1910s, but appropriated most of the funds for importing kerosene oil, candle oil, soap and matches under the Xiangji (H.H. Kung) Company. With profits from the export and import business, H.H. Kung injected funds into the Chinese Publishing House (zhonghua shuju??) of Shanghai, speculated in Shanghai’s real estate market, and cooperated with Chen Guangfu and Zhuang Dezhi in launching the Shanghai Commercial Savings Bank. Separately, Madame H.H. Kung started business dealings with Du Yuesheng, i.e., the ganster leader "Big-Eared Du", (1887-1951).

After examining the history, we could see clearly that communist-published records mostly leveled accusations that Kong had mostly profiteered from bonds and foreign exchange manipulations BEFORE 1945.

On April 6th 1933, Kong Xiangxi tacked on the post of President of the Central Bank. On Nov 1st, took over finance minister post from Song Ziwen. Chiang Kai-shek's national vault had 3 million yuan cash, to-be-issued bonds worthy of 27 million yuan, no foreign currency, and no gold.

On March 23, 1935, Kong Xiangxi forcefully announced the takeover of privately-held Bank of China and Transportation Bank even though Central Bank was an empty shell with no significant assets. Two banks were converted to state-owned banks on June 4th. In June, four provincial agriculture banks were forcefully converted to state-owned China Agriculture Bank. On Aug 15th, Central Trust Bureau was established for handling munitions purchase. Something to be clarified would be his acts to naturalize banks in 1930s. Criticisms of this act lacked an understanding of the international financial predatory system at the time. Roosevelt's hijacking the silver price of the world definitely would bankrupt China. A conversion to CNC paper money, in lieu of silver, had paved the way for China to beat Japan financially during WWII. Kung had one shortcoming: Kung said he always upheld Chiang's prestige in any conference or debates. TV Soong, though, offended Chiang numerous times.

Two avenues of profiteering were possible. One involved the Debt reorganization of February 1932 and 1936, which were meant for the extension of maturities and lowering of interest rates on most of the debts inherited from the Peking government. Mme Kong Xiangxi, i.e., Soong Ai-ling, was said to have created the "seven star company" and profited from bond market trading through insider information. (One of HH Kung's lieutenants, who was imprisoned by the ROC government, stayed on in mainland China and could be purportedly one of the reliable sources to provide the truth to the bond trading scams if any.)

In this year, Mme Kong Xiangxi, i.e., Soong Ai-ling, profited from bond market through manipulations by her "seven star company".

In 1933, US raised the price of silver, and passed Silver Act in 1934. Nancy Tucker agreed that US had hurt China's economy deeply while not giving any aid to China "for fear of antagonizing Japan". In 1935, US forced China into abandoning the Silver Standard.

In Spring of 1934, Kong Xiangxi revoked 5000 categories of taxes. On April 17th, Japan announced the intent to control China's economy. In July, Kong Xiangxi decreed the forceful purchase act to have banks spend 25% assets to buy government bonds. In Sept, 0.18 billion yuan worthy of silver flowed out of China. On Oct 15th, issued rules as to export tax and balance tax on export of silver, and further ordered Bank of China and Transportation Bank to work with Central Bank to balance the foreign exchange market. In November, China abandoned silver standard. On Nov 4th, Kong Xiangxi announced the adoption of "legalized currency" policy for averting Japanese attempt at robbing China's silver. On Nov 13th, America agreed to buy 50 million ounces of silver from China. The receipts from silver deal were used as China's reserves for "legalized currency" paper money. Americans, to thwart HH Kung’s attempt to sell silver on the London market and peg the CNC to the sterling, temporarily halted the silver purchase, which led to a drop of silver price and a dry-up of silver trades. HH Kung promised to detach from sterling and hence won Morgenthau's help in selling silver as reserves.

In this year, Soong Ai-ling's "seven star company" continued to profit from bond markets.

In Jan 1935, Soong Ai-ling's "seven star company" profited from bond markets through the conversion of old bonds to newly-issued united bonds.

The second avenue would be the non-official China Development Finance Coorporation (CDFC) which was launched on June 21, 1934, against Japanese consul's objection but with the acquiesce of the British-American interests. The CDFC participants bought 500k as capital, and 17 banks were asked to contribute. First shareholder meeting was held June 4, 1934. Kung became chairman of the board, Soong and Pei as executory director, and Z L Soong general mamager – altogether 21 directors and 7 supervisory. Both Kung and Soong profited from the operations of CDFC which controlled dozens of enterprises. CDFC actively penetrated the Japanese economic blockade to strike deals with the British and Chinese Corporation. For example, CDFCobtained a deal in November 934., which was an arrangement for the issuance of a loan of C$16 million for completion of the Shanghai-Hangchow-Ningbo RR, including the long bridge over the Chientang River near Hangchow. Prior to the war, CDFC worked on numerous projects as organizer of the syndicate, including Chungking-Chengtu line, Kunming-Kweiyang line, Belgian venture, from Paoki, to connect with Chengtu the Lunghai RR whose construction Belgian interests had largely financed.

In 1937, Kong Xiangxi toured Europe and America, with a mission to buy firearms. Possibly, Kong Xiangxi might receive kickbacks and commissions which was standard practice among all belligerent and non-belligerent European and American states. Though, per Wellington Koo memoirs, any commission kickback was mandated to be returned to the government. Whereas, foreigners actually benefited from the kickbacks and commissions. Example: Bill Pawley to get "Curtiss-Wright pay $4.5 million in the sale of the hundred P-40Cs to CHina for the Flying Tigers.

On Aug 13th, 1937, Kung and Soong organized joint representative office of four Chinese state-owned banks. Moved 452 factories to hinterland, away from Japanese invasions.

China, for purpose of purchasing Russian planes, exported huge amounts of wool, tea, silk, tung oil, stibium ore [Hunan Prov], and tungsten ore [Jiangxi Prov] to Russia by citation of 1938 barter-loan agreement

Japanese, together with Zhangjiakou's puppet Mongolian Bank, Peking's Hebei Province puppet government and Shanghai's Huaxing Commercial Bank, tried to assert "Japanese military currency" and Wang Jingwei's "puppet reserve bank currency" over Nationalist Government's "legalized currency". (Prior to puppet reserve bank, Japanese-controlled puppet currency etc totaled no less than 0.666 billion equivalent Chinese currency; Japanese military currency, with no numbering, in 1940 alone, totaled 1 billion printed amount; and total Japanese military currency was equivalent to 3.5 billion equivalent Chinese "legalized currency" by 1940.) Foreign exchange, which was maintained by Nationalist Government in cooperation with Britain and America, had been fluctuating in synchronization with the war developments. China's "legalized currency" was impacted by the 1937 war outbreak in Shanghai when there was a flight of capital to HK and elsewhere. US bought 312,000,000 taels of silver from China in 1937-1938 for lending support to exchange rate with "legalized currency". (China had stored in both US and Europe considerable amount of silver prior to war.)

Prior to the loss of Canton to Japanese, US finance minister had invited Chen Guangfu to DC for barter talk on tung oil. The loss of Wuhan two days after Canton would make US statesmen uneasy about barter trade with China. On Oct 25th 1938, US approved a barter trade in loaning China 20 million US dollars after dispelling any doubt of a quick fall of Chiang Kai-shek government. US finance minister Morgenthau pressured State Department into accepting this barter by emphasizing the need of becoming China's friend like Russian. US and China established shadow commercial corporations to engage in this barter trade for sake of avoiding the antagonism from Japan. On Dec 15th, US Import & Export Bank officially cut the loan of 25 million to China. Five days later, Britain followed through with an offer of 500,000 pounds credit line to China for purchasing trucks in the transport of tung oil on Sino-Burmese Highway. After the eruption of European War, China obtained second batch of "tung oil" loan on March 7th 1940, with collateral requirement of China's tin ore.

In March 1939, "legalized currency" already devalued 46%. European war outbreak would see some of the 'flight' money back to Shanghai's French concession and International Settlement.

From March 1939 to Aug 1941, China exported tung oil via primitive transport tool to Haikou for selling to US as a means of exchanging 33 million US dollars worth of machinery parts. After loss of Haikou, transport path for stibium ore and tungsten ore went to Zhennanguan Pass of Vietnam or Rangoon of Burma. Later, export was lifted to India.

In Feb 1940, US-China signed a second barter agreement for Yunnan-Guangxi Prov's tin ore in exchange for a loan of 20 million US dollars. China also exported Guizhou Prov's mercury to US

On March 14th 1940, with communist instigation, hungry people in Chengdu rioted to rob the rice. Dai Li secretly arrested and executed communist cadre Che Yaoxian and Luo Shiwen for this incident. On Aug 11th, Kong Xiangxi informed Song Ziwen that rice price had risen more than eight folds within one year

In June 1940, France stopped China from using Vietnamese-Chinese highway and railway; in July, Britain forbade China from using HK and Burma as transport routes. Ma Yinchu attacked Kong Xiangxi for 1) bond market manipulation, 2) foreign exchange manipulation. On April 1st, America agreed to provide a loan of 50 million US dollars for balancing foreign exchange rate with Chinese currency. On April 25th 1941, Song Ziwen and US finance minister made a joint announcement that US would supply a loan of 50,000,000 US dollars while Britain would supply 5 million pounds for standardizing the exchange rate of China's "legalized currency". British provided funds were restricted to deployment on Shanghai Bund, which basically fell into the hands of Japan-controlled companies. Both American and British loans and usage in foreign exchange market were subject to cancellation with short notice as well as British/American government approvals. (Seagrave pointed out half of 50M, from US Treasury, was for currency stabilization, while another 25M, from Export-Import Bank was for Chinese purchase of US goods.
 
 
China's Enemies Being Ignorant of Republican China's Economy & Finance

The "four families" term was concocted by the communists as a propaganda. Chiang family had almost nill 'chiang' surnamed officials in the government or in business. (From Chiang's mother side was a former airforce official Mao Bangchu who colluded with his White-woman mistress-secretary in embezzlement - the public trial of which from 1951 to 1952 completely restored China's innocence from the corruption charges by the American State Department.) Chen brothers could be said to be so-called "liang xiu qing feng" people, i.e., winds in two empty sleeves. Among KMT factions, Chen brothers in charge of party affairs, "politics studies" or "politics research" faction in charge of about 50% of government, academics and career officials another 50%, Whampoa cadets in charge of about 40% of China's military, and provincial heads another 60%. All of them, Chen brothers included, had no say in economy or finance. It was not merely CCP who disliked Chen brothers. George Marshall repeatedly pointed fingers at Chen brothers as 'reactionaries'. -Don't be surprised that G Marshall could be an undercover Russian spy.

China's republican finance was what you should call "collective" economy and "planned economy". China's three people's principles were similar to socialism. The officers and officials of Republican China were deeply immersed in nationalism and planned economy. Pre-WWII, you have numerous foreign advisers working inside of Chinese government, including American Arthur Young and TV Soong's Polish attaché (possibly a Comintern agent). During WWII and after WWII, foreigners were worried about the dominance of China's governmental intervention and control over the economy. The point to make was that China's economy was not in favor of private enterprises, trust and cartel. The only private businessmen who made success in profiteering would have to seek protection under the laws of international settlements.

Chiang Kai-shek had an interesting habit of using the talents through referrals. The spy agency by Dai Li was a product of suggestion by a returnee student called Dong Xianguang. Economically, Chiang used somebody called QIAN CHANGZHAO, a graduate of the London economics school, as economic czar, not H H Kung or T V Soong. At Qian's urging, China established a National Defense Design Committee in Oct 1932 which consisted of 39 technocrats, academics and entrepreneurs. In April 1934, the committee changed into the China Resource Committee [sounding similar to the communist-controlled China Resource Company in HK?]. Qian acted as deputy while having Wen Wenhao act as the chief throughout the operations. This committee was in control of China's heavy industries, ammunition plants, minerals, iron and steel, chemicals, cement, electricity and paper. By 1947, it had 33000 staff and 230,000 employees. During WWII, it had a company registered in Washington DC [NY?] for dealing with purchases from the U.S.A.

-Chen brothers failed to even set up the party branch committees or unions in the China Resource Committee enterprises. So, you should say that Republican China's economy was directly controlled by the government through technocrats.

The Chen brothers had one economic success before 1946. In 1930s, the Chen brothers tried to penetrate the economic field. Chen was a stockbroker in 1920s. But Chiang repeatedly stopped Chen from engaging in the economic activities. So, the Chen brothers smartly launched a nationwide "agricultural cooperatives" movement. Sounds like the communist People's Communes? I will say better than the communes. The Chen brothers were definitely socialists by any definition. After the Japanese surrender, the Chen brothers got a chance to accept part of the 'surrender' of the puppet-run and Japanese-run enterprises. Claiming that the ROC was to adopt the constitutional government and hence a cut off of funds for the KMT party operations, the Chen brothers operated flour, wine, beer, ice, cigarettes, press and real estate in the name of the KMT party enterprises. This would snowball into the current KMT vault as existed in Taiwan and Taipei. The Chen brothers themselves had no financial corruption, though.

After reading Wellington Koo's memoirs, I obtained an alternative picture of the Soong family. The Soong simply had no time to take care of his own business during WWII, and spent almost all his time shuttling on the globe; besides, any of their private businesses would have been lost to the Japanese occupation already. Ai-ling Soong was having influence over the matter of stipulating the diplomatic protocols for the foreign ministry, taking Stilwell's "bribe" in influencing Chiang Kai-shek's decision as to recall of Stilwell, and dominating sister Mei-ling Soong as to whether to make a visit to Britain or not. Mei-ling Soong was very much hijacked by David Kung, the son of Ai-ling Soong, throughout the visit to U.S./Canada, which led to lots of bad decision-making regarding the relations with the U.S. and Britain.

Unlike the communist-China-published books, the Soong family members did not spend time on money and profiteering as the propaganda went. They spent more time overseas than inside of China. Reading through the years of 1944-46, there was no trace to show that Chiang had lost confidence in HH Kung over the purported implication in Stilwell's assassination against Chiang Kai-shek. James Liley's alternative account had shown that the assassination, possibly suspended by Stilwell, had gone forward under the umbrella of the American collaboration with the Southwestern military generals like Long Yun.

On basis of the communist-China-published books, the vice of Ai-ling Soong could be said to be "insider trading", which Mei-ling Soong, during a news conference, had refuted by pointing to the practice by American politicians. Privately, HH Kung's wife registered some companies which were involved in insider trading as to bonds, foreign currency and gold. Kung's private business, so-called Yuhua Bank of Shanxi Province had developed with injection of government funds after the relocation of China's capital to wartime capital Chungking. Through some manipulations, Kung family controlled some private businesses in Chungking, including a company called Zhongxing Company. Kung's daughter, Jeanette Kung, was very much the operator of the company and companies. (The conflict in communist records would be: Both Yuhua and Zhongxing were said to be nureaucratic capital, meaning that after an injection of government funds, the bank was no longer a wholy-owned private enterprise, and hence any acquisition and control by the said bank, such as Zhongxing Company, should be deemed non-private company as well.)

Kung Family's enterprises in Brazil: This is a tricky matter. Conflicting records, which dated from the Comintern-instigated Stilwell assassination against Chiang Kai-shek of 1943-1944, claimed that both Mms Chiang and Mme Kung were kicked out of China due to implication in the assassination. The truth was that the Associated Press bureau in Chungking reported Mrs. Chiang has been under the care of Commander Frank Harrington, assistant U. S. naval attache there, for four months; Dr. harrington said that Mrs. Chiang's condition was aggravated by the intense, humid heat of Chungking and that she needed a change badly, i.e., a leave for treatment in Brazil; and that President Chiang and a group of close friends bade her farewell at the airport. The Communist-published writings painted the assassination as something shrouded in mystery. The origin of all the rumors should still be ascribed to Stilwell and Dorn's scheme in assassinating Chiang Kai-shek, not something to do with the Kung family. The Communist-records claimed that the Kung Family had transferred funds to Brazil on this occasion. The big chunks of money could have been made by Kung family during the 1947-1948 time period when China underwent a currency reform and imposed the foreign exchange conversion restriction, two means by which the people with connection could easily have circumvented. David Kung, who was spending his years in the U.S. after a kickout by the British from Hongkong over operating a secret telegraph transmitter, returned to China post-WWII, and set up a Yangzi (Yangtze) Company. By 1947-8, Kung's son had to be kicked out of China for the dollar conversion scheme.

The Kung family had an instinct to take advantage of the insider trading benefits. The Kung daughter, at the initial years of WWII, had bragged about converting CNC to USD. The vice seemed to rest on the guidance of Ai-ling Soong. (David Kung, i.e., Kong Ling-kan, once boasted of making a chunk of money for China in the currency operations in HK. That should be for sake of China, not private profiteering.)

H H Kung's younger son, Louis Kung, who married Debra Paget, an American Hollywood star, had bought a stake in a Texas oil company at the turn of 1950-60s. Wellington Koo's memoirs painted this son as someone who was forced to serve the ROC in the embassy. Reluctantly, he worked for the ROC government till the end of 1950s. It was likely he made a fortune in Texas without much of the family help. His character was interesting as well. He built a bunker in 1980s to counter the possible nuclear attacks by the Soviet Union.
 
 
The U.S. Involvement In China Due To the Russian Spies' Manipulations

WWII History Needs To Be Construed As the result of the British instigation, the Anglo-American Appeasement, the COMINTERN Conspiracy, and the Japanese Beastly Ambition. With the Soviet archives and American Venona archives opened to the public, almost all history books should be completely rewritten. This is true for books that were published even at this moment should the author fail to grasp the archives in the necessary perspectives.

At http://www.larouchepub.com/other/2004/3123...n_v_dr_sun.html, Mike Billington wrote for "Executive Intelligence Review" an article entitled "How London, Wall Street Backed Japan's War Against China and Sun Yat Sen", pointing out the behind-the-scene manipulations as to "SYNARCHISM AND WORLD WAR". As stated by Mike Billington, "... British synarchist banking interests, centered around Bank of England head Montagu Norman, Hongkong and Shanghai Bank director Sir Charles Addis, and J.P. Morgan chief executive Thomas Lamont, deployed militarily and politically to destroy Sun Yat Sen and his influence. ... when their subversion and looting failed to crush Sun's republican movement, the British threw their weight behind the synarchist/fascist forces in Japan, financing the Japanese military occupation of the Chinese mainland... By 1931, J.P. Morgan had floated $263 million in loans for Japanese borrowers, including direct loans to the government in 1930", with quite some of the funds going direct to the Southern Manchurian Railway under disguise to avert the world opinions. Note that President Wilson rejected Reinsch's 1917 financing arrangement for building an alternative rail route to the South Manchurian Railroad, "even assured Japan that the United States would honor their special position in Manchuria", and in Oct 1918 agreed to the formation of a new bankers' Consortium which was orchestrated by Anglo-American bankers for sake of depriving China of any chance of obtaining an international loan.

Chiang Kai-shek's relationship with Britain and America never progressed before WWII. There were hiccups during WWII, especially so when Stilwell could be implicated in assassinating Chiang Kai-shek in early 1944. After WWII, Marshall had adopted the "carrot and stick" policy as to Chiang Kai-shek, and implemented an arms embargo against China in 1946-1947. (Nancy Tucker acknowledged this embargo.)

You may ask why would USA ever got involved in China over WWII? It would be a Soviet setup, i.e., Operation Snow. Russians, after signing a neutrality pact with Japan on April 13th 1941 [by betraying the 1937 non-aggression treaty between China and USSR], had sealed off China's continental exit to the north and northwest. Russian, being concerned that China could lose the resistance to Japan, secretly ordered their proxies, Launchlin Currie & Harry Dexter White, to recommend to Roosevelt that China be given the Lend-Lease materials. Currie went to China on an inspection mission in Jan 1941.

16 out of 17 of the AMERICANS that were involved in creating the U.N. were later identified, in sworn testimony, as secret communist agents. The first Secretary General was the AMERICAN Alger Hiss. Hiss served time in prison pursuant to his involvement in a Communist spy ring. Who were the 16 American citizens who helped create the UN that were identified as communists? Alger Hiss; Harry Dexter White; Virginius Frank Coe; Noel Field; Laurence Duggan; Henry Julian Wadleigh; Nathan Gregory Silvermaster; Harold Glasser; Victor Perlo; Irving Kaplan; Solomon Adler; Abraham George Silverman; John Carter Vincent; David Weintraub; William K. Ullman and William H. Taylor.
 
 
The LEND-LEASE - conclusion that there was not much for the Chinese to embezzle during WWII.
 
Germany was the only country to have given China a loan before the 1937 war outbreak. The term was 100 million German marks. By 1938-1939, the balance of the loan was written off. The exact amount of the German marks allocated was not clear.
 
After the outbreak of the resistance war, from 1937 to 1939, the U.S.S.R., which of course provoked the Sino-Japanese War through repeating G.R.U. operations in China and espionage activities within the Japanese/American governments, gave China three generous loans, with no strings attached, in the amount of 50 million USD, 50 million USD, and 150 million USD. (One minor string attached, it was said, was to have Chiang Kai-shek agree to equip the small communist army as the New Fourth Army [Corps] and the Eighth Route Army plus funding.)
 
The United States did not give an unsecured loan to China till the eve of the Japanese launch of the puppet Nanking regime in Nanking in March 1940, with the only purpose of keeping China in the war with Japan. (In 1931, there was a customs-revenue-securitized loan of 9 million USD dollars to purchase wheat [Young, p. 49]; and in 1933, there was a cotton and wheat loan of US$50 million, actually a credit offered by Americans for boosting the American Agricultural Price, which China had to cut down to 10 million from the original 40 million on the cotton component due to hyper-price set in the unfavorable terms of trade. )
China's Millions Paving the Burma Road (in English)
While China's people, in millions, were paving the Burma Road to barter-trade the mercury, tungsten, pig hair bristles with the "neutrality"-observing U.S., for some meagre credit of 15-25 million US dollars, the Soviet Comintern agents, who surrounded Eleanor Roosevelt as the so-called "China Defense League" front organization, funneled from 1938 to 1941 at least 20 million US dollars to the Chinese Communists in Yenan, who in turn pincer-attacked the R.O.C. government troops and guerrila fighters in synchronization with the Japanese invaders.
The Enemy From Within;
Huangqiao Battle;
Wan-nan Incident.

The lend-lease amounts were merely US$26 million (1941, mostly squandered in Burma in the aftermath of the Japanese invasion), US$100 million (1942), US$49 million (1943), and US$53 million (1944).
 
The Aug 1949, 1000 page U.S. White paper published by D.G. Acheson claimed that the U.S. had given to China US$2 billion. After checking Freda Utley's calculation, we could tell the 2 billion amount consisting of the majority in the form of service(s) during and immediately after the WWII, included the UNRRA goods that was said to be 685M USD by Seagrave and 500M by Kerr. The bulk of 2 billion, i.e., service(s), included the costs in dispatching Chinese troops to the coast and Manchuria as well as repatriating 2 million Japanese to Japan islands. The remnant of Lend-Lease program, e.g., the rotten inventories on Pacific Islands, were probably the only American flow to China after the outbreak of 1945-1950 civil war. Jung Chang, in "Mao: The Unknown Story", repeated the cliché by exaggerating the American aid amount to be 3 billion USD dollars, i.e., one billion more than Acheson's. Her brother, Zhang Pu, lurking on the internet, had found out the loopholes and began to whitewash the number to 1.5 billion financial aid and about 0.8 billion military aid [which were still untrue]. Communist China's Social Academy chief Liu Da’nian acknowledged that Chiang received no more than 0.6 billion in aid. The actual number won't be more than 0.2 to 0.3 billion, including the 0.125B from the 1948 China Aid Act which rolled over to China Area Aid, to be squandered in Indochina, instead.
After General Marshall became Acting Chief of Staff effective 1 July 1939, he wrote to Japanese Army the following: I am "sure that the cordial relations which have existed between the Imperial Japanese Army and the Army of the United States will continue, and I shall look forward to pleasant contacts with you [Japanese general] during your tour of duty in Washington ." (Marshall to Yamauti, July 5, 1939, GCMRL/ G. C . Marshall Papers [Pentagon Office, Congratulations] . ) More, Brigadier General John Magruder, in October of 1941, relayed the fear of Chinese leader [Chiang Kai-shek] that the "Japanese Army was poised to launch a major drive against the southern city of Kunming, aimed at cutting the Burma Road, China's last important supply link with friendly powers. Marshall's reply was "he knew Magruder very well and ... stated that he knew Magruder when he was in China before, and General Marshall was himself in China . When the Japanese were about to advance on Nanking [in 1937], Magruder, from his sympathy with the Chinese and from his viewpoint as gathered by his experience in China, became quite stampeded... and he knew Magruder so well that he, General Marshall, could properly interpret Magruder's messages." That is, China, who cares!
 
The American aid to China was completely sabotaged by i) colonialists and ii) communists inside of the U.S. government. The American Production Mission to China wasn't set up until September '44. Per Edwin Locke, "Well, the problem had just never been attended to before, for one thing; and for another, we were just getting into a position where militarily we could supply a lot more help to China. You see, China was at the end of the line before; she was almost an orphan, and we didn't do very much more than maintain Chennault and his hundred airplanes there in South China, until we began building big bomber bases in China for bombing Japan. China then began to assume a great deal more importance. I think this is your reason..." --The airfields completely bankrupted China's wartime finance and led to spiraling inflation from 1942 to 1945, which replayed again from 1947 to 1949 when George Marshall left China.
Stilwell, the slimy who itched "to throw down ... shovel and get over there and shoulder a rifle with Chu Teh" the communist commander, before his kickout from China, paid a visit to Mme Sun Yat-sen the No. 1 Comintern agent in China. George Marshall quit his job twice, J.I.T (just in time), in anticipation of some pre-arranged phonecalls from Truman to tack on the jobs as 1) first the mediator in the Chinese civil war and ii) second as defense minister for the Korean War, respectively. George Marshall returned Zhou Enlai's address book to Zhou Enlai, sealed, while never alerting Chiang Kai-shek of communist spies like Xiong Xianghui. While Currie stopped German weapons from shipping to China and Truman dumped China's Lend-Lease weapons to the Indian Ocean, Acheson and George Marshall personally pushed for the 1946-47 arms embargo against China and imposed three ceasefire onto the Chinese government, Jan-10-1946, June-6-1946, & Nov-8-1946. Marshall deliberately flew back to China in April 1946 to stop Nationalist troops from chasing communists north of the Sungari River. This is how CHINA WAS LOST.
 
As disclosed by the documents at the George Marshall foundation, George Marshall, possibly the most hideous agent working on behalf of Stalin and the Soviet Union, saved the ass of the Chinese Communists with a threat to withhold the economic aid that was supposedly coming from the U.S. export-import bank, which never materialized. G Marshall, from 1946 to 1948, repeatedly probed numerous Chinese officials and generals as to who could be Chiang's successor. The U.S. Department of State, run by Russian agents, were repeatedly sending out rumors about getting a successor for Chiang. Marshall's hands had the blood of millions of Chinese killed in civil wars. G Marshall, as Wedemeyer said, first armed China and then disarmed China. The U.S. arms embargo continued till the China Aid Act of 1948, and ammunition did not get released till Nov of 1948. After weapons were shipped out, Acheson and the undercover Russian agents further attempted to order the ships to turn around at Guam and Okinawa. In Oct 1949, Acheson pleaded with the British, where the Cambridge Soviet Spy Ring was at work, for recognition of Communist China, which Britain did on Jan 1st, 1950. After that, Acheson declared the Aleutian curvature, which direcly led to the eruption of the Korean War.

* In Commemoration of China's Fall under the Alien Conquests in A.D. 1279, A.D. 1644 & A.D. 1949 *
At the time [when China fell under the alien rule],
Korean/Chinese Communists & the 1931 Japanese Invasion of Manchuria
* Stay tuned for "Republican China 1911-1955: A Complete Untold History" *

In talks with the U.S. State Department, H H Kung stated: "It cost us something about ninety CNC dollars to feed an American soldier a day...We in China are vegetable eaters...in China your boys need six eggs a day, and now it is cut down to four eggs. But you eat a pound of beef a day. In Kunming alone we are keeping cows and oxen to supply you... 12,000 catties of beef alone every day...in this country you raise animals for the purpose of meat; in China we don’t do that. In order to supply the meat we are feeding our oxen, used for farming purposes." Wesley Marvin Bagby, following the paper trail of the Comintern agents, while acknowledging that "the number of U.S. troops in China rose from 1,255 at the end of 1942, to 60,369 by August 1945...and that...carnivorous Americans decimated water buffalo, the principal nonhuman energy input into Chinese farming," did not appreciate a thing about China's contribution to the war efforts.
 
- The airfields completely bankrupted China's wartime finance and led to spiraling inflation from 1942 to 1945, which replayed again from 1947 to 1949 when George Marshall left China. This webmaster's conviction is that China's economic woes of 1942-1945 and 1947-1949, psychologically related, both were related to the American sabotage, i.e., alternatively, by what Hurley called the colonialists and communists inside of the U.S. government.

 
On July 24th 1941, Roosevelt ordered an economic embargo on Japan, and on Aug 1st, further ordered an oil embargo on Japan.

In this year, Soong Ai-ling's "seven star company" profited from exchange rate fluctuations.

http://64.233.167.104/search?q=cache:NPthg...lient=firefox-a

Eventually becomes $50 billion dollars in lend-lease during the war to many countries: 60% to UK, 20% USSR, 20% France, China, others. 30Nov40. Sat. United States lends [pre-lend-lease] $50 million to China for currency stabilization and grants an additional $50 million credit for purchase of supplies.

http://64.233.161.104/search?q=cache:bdlPw...hina+wwii&hl=en

Magruder acquiesced, and eventually large amounts of lend-lease weapons and equipment, originally earmarked for Nationalist China, went to the British for use in the defense of Burma. With Rangoon threatened, Magruder ordered the destruction of all lend-lease stocks in an effort to deny them to the invading Japanese. As the Japanese approached, there had been frantic activity to move as much materiel as possible north to the Burma Road, but it was still necessary to destroy more than 900 trucks in various stages of assembly, 5,000 tires, 1,000 blankets and sheets, and more than a ton of miscellaneous items. Magruder transferred much materiel to the British forces, including 300 British-made Bren guns with 3 million rounds of ammunition, 1,000 machine guns with 180,000 rounds of ammunition, 260 jeeps, 683 trucks, and 100 field telephones. In spite of the destruction and transfer to the British, however, over 19,000 tons of lend-lease materiel remained in Rangoon when it fell to the Japanese on 8 March.

http://64.233.161.104/search?q=cache:9FO_S...hina+wwii&hl=en


Furthermore, the Lend-Lease program was used to obtain the aircraft required by the AVG."

Stilwell himself acknowledged that China did not get the needed aid from Lend-Lease. On pages 180-181 of FF Liu's "A Military History of Modern China", Liu pointed out that "The British influence was strong in the ranks of the combined chiefs of staff, however, and Chinese stockpiles rapidly diminished while material was reallocated to other recipients. When aircraft originally intended for the Chinese theater was reallocated by Washington, Stilwell complained, 'Now what can I say to G-mo [Chiang Kai-shek]? We fail in all commitments and blithely tell him to just carry on, old top'."

To build the roads and airfields, China issued unbacked bonds. ( In Nov 1944, Kong Xiangxi, at Chiang Kai-shek's order, demanded with Morgenthau that the U.S. pay back the 0.6 billion U.S. dollar cost China incurred in building the airfields for the American bombers. Morgenthau, knowing black market rate of 120 against 1 U.S. dollar, refused to pay China. Roosevelt agreed to pay 0.1 billion U.S. dollars in cash)

The huge loss of the Chinese forces in the Kumon-Gaoligong Mountains, as a result of the British betrayal in the Burma Campaign, had yielded only one good thing: Sun Liren, against Chiang Kai-shek and Du Yuming, retreated to India where the British realized that the Chinese could be used for defending India. Stilwell thought about making Sun Liren's 38th Division into his private army. The Expedition army was rebuilt into the New 1st Corps. Stilwell agreed to equip the Chinese armies with the American weapons. Chiang Kai-shek's future crack force, as commonly known, were the remnants of Stilwell's X-force from India and the Y-force from Yunnan-Guangxi provinces. However, Stilwell had tried to take over the Chinese force by implanting 200 American officers, attempted assassination of Chiang during a planned Ramgarh inspection, wasted the Y-force needlessly in attacking the Japanese positions on perpendicular hills, refused to reroute the Y-force to China during the Japanese Ichigo Campaign, and fought Chiang Kai-shek for control of the Chinese army with Marshall's acquiesce. If you want to know how much the U.S. did for China, I would say that's basically all before Stilwell was recalled in Oct 1944. Stilwell had no interest in giving aid to China other than direct control over the Chinese army. When China was attacked by Japan in the No. 1 Campaign, Stilwell refused to direct the X-force against the Japanese from south or allow the Y-force to back off from the Burma border.

Wedemeyer continued on with Stilwell's training by promising to equip 39 Chinese divisions, with actual numbers trained uncertain. Stilwell controlled the Lend-Lease program, and refused to even replenish Chennault’s Flying Tiger airforce, not to mention Chiang Kai-shek's R.O.C. troops. Wedemeyer continued the Stilwell line in controlling the Lend-Lease program direct. On page 193 of FF Liu's book, Liu stated that "The Chinese even agreed to Wedemeyer's insistence that Americans supervise the purchase of food locally when paid for with lend-lease funds.". Wedemeyer wanted to feed the Chinese army with better nutrition. This shows that China had no control over the lend-lease materials or funds, with the conclusion that there was not much for the Chinese to embezzle during WWII.


 
 
How the Kung & Soong Families Make the Money? - part II - Kong had accumulated over 1 billion U.S. dollars for Chiang Kai-shek's National Government after eight years of resistance war

After the Pacific War, the Japanese intruded into Shanghai's settlements, opened a new reserve bank, printed the "puppet money", exchanged into the "legalized currency" with the "puppet money", and then exchanged into the international currency with the "legalized currency". The Japanese then reversed the prior policy of maintaining the "legalized currency" to deliberately devalue the ROC "legalized currency" for sake of grabbing more purchasing power of the Chinese commodities with the Japanese "military currency" [i.e., "jun piao"]. In March 1941, the Japanese and Chinese collaborators launched counter-assassinations against the Chinese bank employees in the French Concession and International Settlement of Shanghai. After one month bloody killings, a truce was brokered by Du Yusheng, yielding to circulation of the Japanese puppet money together with the Chinese "legalized currency".

On March 21st, 1942, Song Ziwen successfully obtained an American loan of 0.5 billion [which was not fully used as the Americans imposed restrictions, and the loan was morale-boosting political loan]. Kong Xiangxi immediately made arrangement for printing two batches of 0.1 billion Chinese government bonds, including 0.1 billion US$-denominated debts. From 1938 to 1942, Kong Xiangxi issued bonds valued at 15.192 billion "legalized currency".

According to communist records, in Oct 1943, Kong Xiangxi and his crony were personally involved in controlling the remnants of one batch of the 0.1 billion US$ denominated Chinese bonds. When China's "legalized currency" devalued against the US$, Kong Xiangxi secretly stopped the issuance of about 50 million US$ equivalent of the original 0.1 billion US$-denominated debts. Kong Xiangxi's crony Luu Xian took charge of swallowing the debts on behalf of Kong Xiangxi and the staff of the state vault bureau of the Central Bank. Total profit could reach 2.647 billion "legalized currency". - The black market exchange rate was like US$1 = Chinese "legalized currency" 250 yuan, but the official exchange rate was pegged at 1 against 20.

The Communist-China-published books repeatedly claimed that "in Nov 1943, with possibly Stilwell acquiesce and encouragement, 600 Chinese officers plotted to assassinate Chiang Kai-shek on Dec 12th, prior to the Cairo Conference. Kong Xiangxi could be implicated in the plot. Long Yun as well. 16 generals [????? whom??? ] were executed upon Chiang's return from Egypt." The Communist records claimed that the assassination was under Stilwell's order, code-named the "Blue Whale", for the time period of March 1944 when Chiang Kai-shek was expected to inspect on the Chinese army in India. The truth was that Roosevelt dispatched a WWI-era ace with the assassination order to Stilwell who passed it on to Frank Dorn. Though Roosevelt did not give the go-ahead order, Stilwell and his cronies apparently took advantage of every possibility to sabotage the cause of Chiang Kai-shek. James Liley, in memoirs about his brother, hinted a continuous American plot against Chiang Kai-shek through 1946 in collusion with the local Chinese military leaders.

At the Cairo Conference, Roosevelt promised to loan China 1 billion U.S. dollars, but changed mind afterwards - after the instigation of Stilwell and Davies, as well as Frank Dorn. [Zheng Langping, on page 33 of "The Everlasting Glory", also mentioned this.] Chiang Kai-shek then sought for reimbursement of costs in building roads and airfields for the Americans.

The "Political studies faction" [Da Gong Bao] and the CC Clique [Zhong Yang Ri Bao] attacked Kong Xiangxi. According to the communist records, with Chiang Kai-shek authorization, the Chongqing city raided Kong family's warehouse where they hoarded flour, medicine, cloth valued at 40 million Chinese yuan. The Central Statistics & Investigation concocted accusations to have Kong Xiangxi's crony, Gao Bingfang, arrested. To save Gao from a death sentence, Kong gave away control of some posts at the finance ministry and the legislative house

In June of 1944, Soong Mei-ling and Soong Ai-ling left for Brazil where the Soong family had purchased properties, and other assets. The Communist-China-published books rumored that "Kong Xiangxi, for his implication in plot against Chiang Kai-shek, was sent away to the U.S.A. as well." Kong, though spending next 12 months overseas, was acting as a special emissary of the Republic of China, with full trust and authority from Chiang Kai-shek, which certainly contradicted the communists' rumor. In Nov 1944, Kong Xiangxi, at Chiang Kai-shek's order, demanded with Morgenthau that the U.S. pay back the 0.6 billion U.S. dollar cost that China incurred in building the airfields for the American bombers. Morgenthau, knowing the black market rate of 120 against 1 U.S. dollar, refused to pay China. Roosevelt agreed to pay 0.1 billion U.S. dollars in cash, but complained to Chiang Kai-shek for firing the "corrupt" Kong Xiangxi from the finance minister post. The puppet government in Nanking was surprised that Chiang fired Kong under the pressure of the Americans and the Chinese communists

Kong's daughter claimed that Kong had accumulated over 1 billion U.S. dollars [including the value of gold and silver] for Chiang after eight years of resistance war. Seagrave claimed a total of 0.9B USD equivalent and 6M ounces of gold which were all "from the American taxpayers" [????? The Chinese coolie work for free, and the Chinese war deaths in vain???]. The 1 billion certainly included the 0.1 billion that Roosevelt paid to China for the coolie labor in building the airfields. (Note the Americans were stunned by the scene of millions of peasants peeling off the hilltops with hoes, dustpans and shoulder-poles. They don't fear the sheer number of Chinese, but the tenacity of the Chinese coolie.)



How the Kung & Soong Families Make the Money? - part III

After Kong Xiangxi lost his finance minister post, Yu Hongjun temporarily took over the job. Kong's son bought a house on Long Island for him. Song Ziwen returned to China. Song Ziwen still had his brother Song Ziliang control the US and UN aid programs inside US. We could not tell how much TV Soong had spent the 0.9 billion on the war efforts. It is not likely that TV Soong had embezzled any of the 0.9 billion.

Seagrave accused TV Soong of halving Chiang's 0.9 billion reserve within two years. In Nov 1947, US media accused Soong of having 0.1 billion deposits in US and Switzerland.

In China, Chiang Kai-shek was fighting an exhaustive war against the communists. US, from 1946 to 1947, had a de facto arms embargo against China. Marshall strictly implemented the embargo policy to force Chiang Kai-shek into peace talks with communists. This is so-called "stick and carrot" policy. (Nancy Tucker also pointed out the embargo.)

The UN goods came to China via the docks and wharfs controlled by the Kong-Song families and the gangster-background families like Du Yuesheng. The profit from administering UNRRA goods was not in the base amount of 685M USD, but in the extra billing to UN for storage and shipping as well as price markup of UN aid goods in selling to the Chinese public. In Shanghai, Jiang Jingguo launched a sweeping campaign against the profiteers, including Du Weiping [hoarding 60 million yuan worth of goods]. Possibly, Du directed Jiang Jingguo to raid Kong Lingkan's warehouse where a lot of the UN goods were found. Mme Chiang Kai-shek personally flew to Shanghai to rescue Kong Lingkan and then sent him overseas

Kong Xiangxi and his son were accused of being implicated in supporting Tom Dewey's presidential candidacy against Truman. The American media ridiculed the Kongs as tycoons with 0.5 billion U.S. dollars against Truman. The U.S. media accused Mme Kong Xiangxi of possessing the most deposits among the overseas Chinese in the U.S. banks in 1939. In May 1950, the U.S. media, which was controlled by the pro-Soviet cronies, accused the Kung-Soong families of having 0.5 billion U.S. dollars in the U.S. banks. In March 1951, the U.S. media accused the two families of having as much as 0.85 billion U.S. dollars. The two never disputed any accusation. Kong Lingjie, another son of Kong Xiangxi, did marry a U.S. movie star and controlled the Western Oil in Houston. Chiang invited Kong-Song back to Taiwan. Possible conclusion was that the Kung family, alone, [excluding T.V. Soong], did profiteer, but not as much as the media [U.S. media controlled by communists and leftists in 1940-50s] wanted you to believe. Seagrave claimed that the UNRRA goods totaled 685M U.S. dollars from 1945 to 1947. (Kerr claimed UNRRA was worthy of half a billion U.S. dollars, with 470M from the U.S. contribution. George Wei's book on the Sino-American Economic Relations, however, completely rebutted the assertions as to the Chinese corruption in the UNRRA program.)

Alternatively speaking, Wellington Koo's memoirs pointed out that the most Kung family had ever done in the U.S. would be Mme HH Kung's wish to establish an award scholarship for essays relating to China's civil wars in a women's club. Mme Chiang Kai-shek had paid out of her private accounts for some financial expenses incurred by some Chinese delegation in the U.S. Other than the two incidents, there was no trace that Republican China was ever involved in bribing the U.S. Congress, at least not before 1954. This is especially true after the only hired American defected to the anti-China side in 1948 over the contract renewal issue.

 

 
 
Final Accusations

Chiang Kai-shek, for defeating Li Zongren's vice-presidency, had transported China's gold to Taiwan. The total amounts, per his attaché account, would be:

2,600,000 ounces - Taipei

900,000 ounces - Amoy

380,000 ounces - USA

200,000 ounces - Shanghai

[Another 400,000 ounces as turnover funds in Shanghai]

After 4 years of civil wars, the Chinese government was in collapse economically. Once they arrived in Taiwan, they had to consume 280,000 ounces gold per month to take care of 2 million soldiers, government staff and refugees. This is a tragedy for Chinese on both sides of the Straits. With millions killed on the battlefield, still more people continued to suffer. -- Taiwan government should pay back to mainland Chinese for the GOLD, at least to the families of whoever got implicated, killed and persecuted by the communist government after 1949.

Communist documents claimed that US government had ratified a "secret US-China military agreement" in June 1946, agreeing to supply 1000 planes, 7000 guns; on July 16th, gave 271 warships to KMT government; and on Aug 31st, sold 0.8 billion US dollar equivalent of war surplus materials to China. Wellington Koo Memoirs, however, completely rebutted any American complicity in supporting Chiang Kai-shek at all.

We have to bear in mind that Marshal, and Truman, had an arms embargo against China from 1946 to 1947. Marshall had pressured Chiang Kai-shek into separate truces by means of "carrots and stick" policy, i..e, 1st truce order on Jan 10th 1946 [excluding Manchuria], and 2nd truce order on June 6th 1946 [including Manchuria]. Here, we could tell whether George Marshall was a closet communist or not. Marshall gave the communists a respite when Sun Liren defeated Lin Biao in Manchuria by chasing across the Sungari River. Sun Liren left a battalion on the northern bank of Sungari, which held out with KMT flag till well after Changchun's surrender.

We would dispute communist claim as to the US offer. Why? Because Marshall was said to have gone into a rage when lobbying for an Europe-equivalent "Marshall Plan" for China inside of US. Upon hearing of the renewed fighting between KMT and CCP, Marshall flew back to China till he was recalled in Jan 1947 by Truman. George Marshall, who cursed to topple Chiang at any cost at one time in Chungking, had completely choked the Republic of China financially and militarily.

The remnant of Lend-Lease program was probably the only US flow to China after the outbreak of 1945-1949 civil war. The outdated ships etc were released. When KMT spy Gu Zhenglun fled Shanghai in 1949, he went to Huangpu River on a sampan or boat to intercept such an American ship.

The Aug 1949, 1000 page US White paper published by D.G. Acheson claimed that US had given to China US$2 billion. I could not tell whether this included the UNRRA goods that was said to be 685M USD by Seagrave and 500M by Kerr. US aid was more likely in the form of Lend-Lease. It was in 1941 given to British for defending Burma; It was in the form of commodities that were destroyed when Japanese closed in to Rangoon; It was used by Stilwell for equipping X-force and Y-force; It was MOSTLY used for paving the Ledo-Burma Highway that did not open till 1945; It was for funding the Hump Course airlift that went exclusively to Chennault's airforce but still failed to fuel the planes - because of Stilwell trickery against Chennault not because the American pilots' laziness; and it was finally used for shipping 1-2 million Japanese home from 1945 to 1946.

Mme Song Mei-ling spent 1-2 years in US in vain. Why? The full US government was permeated with Comintern spies. US vice president, presidential assistant and candidate, and et al. were all communists. Majority of American academic don't believe it to be true till after the USSR archives were released. In another word, McCarthy was at least 95% correct about his roster of communist agents.

Alternatively, Li Dongfang mentioned something interesting by stating that there was a rumor that "Truman, under the pressure of the Congress, had agreed to give China 0.4 billion US dollars, with 0.125 billion allowed on military spending. But 16 million worthy of weapons, having arrived in Peking, were found to be unusable ... Hence, Fu Zuoyi decided to surrender to the communists with Peking city"

Fu Zuoyi did procrastinate with communist negotiators for close to one year. One of Fu Zuoyi's claims would be expectation that Americans would be involved in China. And, when Chiang Kai-shek declared a blockade of Chinese coasts, hundreds of thousands of American-made mines lacked fuse, which was contrived to be a deliberate American action.

After half a century, Chiang Kai-shek never went well with Americans. Wellington Koo Memoirs extensively recorded the actions and words of the American State Department whose China policy, designed by Russian agents, was to topple Chiang Kai-shek's government, to the extent of going all the way to India to find an Asian "anti-communist" leader and threatening other Asian nations not to follow Chiang Kai-shek's suit in establishing an Asian version of the Atlantic Charter. There are many kinds of Americans, like those sharing British colonial sentiments, like those who were Soviet spies, like those who unconsciously worked as communist fellow travelers, and like those [Kerr] who despised Chiang Kai-shek's background and personality. There are last two categories, missionary Americans and true sympathizers of Chinese cause, including Chennault who was shouldered to the airport by the Chinese in a jeep, and John Birch who devoted his life to the missionary duty in China. [http://www.thenewamerican.com/tna/2000/04-24-2000/vo16no09_birch.htm] We Chinese need to discern the truth and know who are our friends and who are not. We need to bear the lesson from true and real history, not to be misled by perjured or fake history.
 
(To be rewritten. Song Ziwen family had donated precious documents to Stanford University, which left an impression on some scholars that some of the accusations of "financial crimes" could be over-blown. This webmaster was reviewing the balance sheets and ledgers in T.V. Soong Papers, from 1940s, and concurred with scholars who had reviewed the said documents and derived the conclusion that T.V. Soong was at most a millionaire, never a billionaire. TV Soong - I have photocopied his financial papers from Hoover Library and did not see anything particular about him. His notoriety was related to 1) financial storm of Shanghai in June, July 1946; and 2) selling gold in Dec 1946. Both times, TV Soong sought to quell the inflation. With George Marshall mediation declared a failure, China's inflation went out of control even with gold sold continuously in the months after Marshall's departure. -This is what I said that Americans were at fault for two Chinese inflation, from 1942-1945, and from 1947 to 1949, both times sabotages by undercover Russian and communist agents inside of US government.)

 
 
Armed Uprisings Against Manchu Qing Dynasty
Song Jiaoren's Death & Second Revolution
The Republic Restoration Wars
The Wars For Protecting 'Interim Agreed-Upon Laws'
Civil Wars Among Northern Warlords
Guangdong-Guangxi War & Sun Yat-sen's Return To Canton
Guangdong-Guangxi War & Li Zongren's Emergence
Li Zongren Quelling Guangxi Prov
Whampoa Academy & Chiang Kai-shek's Wars
Northern Expeditions & Unification Of China
Invasion Of Manchuria, Chaha'er & Jehol 1931-34
Mukden Incident - 9/18/1931 & Battle Of Jiangqiao
Shanghai Provocation - 1/28/1932
Battles of the Great Wall
China In Crises Of Internal Turmoil & Foreign Invasions
Japanese Invasion (1937-1945)
Marco Polo Bridge Incident & Battle of Tianjin-Peking
Campaign Of Nankou & Campaign of Xinkou
Air Battles Directed By Chennault & With Russian Pilots
Battles of Shanghai, Jiangyin, Si'an & Nanking Defence
Rape Of Nanking & The Great Rescue Of 1937
Eight Year Long Resistance War
Mingguang, Linyi-Tengxian, Tai-er-zhuang , & Xuzhou
Battles of Lanfeng, Wuhan, Nanchang, & Sui-Zao,
1st Changsha Battle, Kunlunguan, Wuyuan, & Zao-Yi,
Fatigue Bombing of Chongqing by Japanese
Aggression Against Vietnam & Southeast Asia
Yu-nan & E-bei, Shanggao, & Mt Zhongtiaoshan
2nd Changsha Battle, & Pacific Wars
3rd Changsha Battle, Zhe-Gan, Changde, & E-xi
First, & Second Burma Campaign, & Phase II
[ revolution.htm & tragedy.htm]
Communist Armed Rebellions
Second Northern Expedition
War Of Chiang Kai-shek versus Gui-xi (March 1929)
War Of The Central Plains (May 1930)
Campaigns Against Communist Strongholds
The Long March
Xi'an Incident - Turning Point of Modern History
Demise Of Red Army Western Expedition
[ campaign.htm & terror.htm ] [ default page: war.htm ]

1945-1949 Civil War
Liao-Shen Campaign
Korean War
Vietnamese War

 
 
Written by Ah Xiang
 


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This website expresses the personal opinions of the webmaster (webmaster@republicanchina.org, webmaster@imperialchina.org, webmaster@uglychinese.org). In addition to the webmaster's comments, extensive citations and quotes of ancient Chinese classics (available at http://www.sinica.edu.tw/ftms-bin/ftmsw3) were presented via transcribing and paraphrasing the Classical Chinese language into the English language. Whenever possible, links and URLs are provided to give credit and reference to ideas borrowed elsewhere. This website may be used or reproduced in any form or by any means, with or without the prior written permission, on the pre-condition that an acknowledgement or a reciprocal link is expressively provided. All rights reserved.
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This is an internet version of my writings on "Historical China" (2004 version assembled by http://www.third-millennium-library.com/index.html), "Republican China", and "Communist China". There is no set deadline as to the date of completion for "Communist China" (Someone had saved a copy of my writing on the June 4th [1989] Massacre at http://www.scribd.com/doc/2538142/June-4th-Tiananmen-Massacre-in-Beijing-China). The work on "Historical China" will be after "Republican China". The current emphasis is on "Republican China", now being re-outlined to be inclusive of 1911 to 1955 and divided into volumes covering the periods of pre-1911 to 1919, 1919 to 1928, 1929 to 1937, 1937 to 1945, and 1945-1955. This webmaster plans to make the contents of "Republican China 1929-1937, A Complete Untold History" into a publication soon. The original plan for completion in year 2007 was delayed as a result of broadening of the timeline to be inclusive of 1911-1955. For up-to-date updates, check the RepublicanChina-pdf.htm page. The objectives of my writings would be i) to re-ignite the patriotic passion of ethnic Chinese overseas; ii) to rectify the modern Chinese history to its original truth; and iii) to expound the Chinese traditions, humanity, culture and legacy to the world community. Significance of the historical work on this website could probably be made into a parallel to the cognizance of the Chinese revolutionary forerunners of the 1890s: After 250 years of Manchu forgery and repression, the revolutionaries in the late 19th century re-discovered the Manchu slaughters and literary inquisition against the ethnic-Han Chinese via books like "Three Rounds Of Slaughter At Jiading In 1645", "Ten Day Massacre At Yangzhou" and Jiang Lianqi's "Dong Hua Lu" [i.e., "Lineage Extermination Against Luu Liuliang Family"]. It is this Webmaster's hope that some future generations of the Chinese patriots, including to-be-awoken sons and grandsons of arch-thieve Chinese Communist rulers [who had sought material pursuits in the West], after reflecting on the history of China, would return to China to do something for the goodness of the country.

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Li Hongzhang's poem after signing the 1895 Treaty of Shimonoseki:
In Commemoration of China's Fall under the Alien Conquests in A.D. 1279, A.D. 1644 & A.D. 1949
At the time [when China fell under the alien rule],