T. V. Cracks Down

Cried Radio Pundit Raymond Gram Swing: "China is going through its worst scandal of the war. It is a gold scandal, and arises from insiders, with high Government connections, making a cleanup when the price of gold was officially raised on March 28. ... The gold involved . . . is part of the $500,000,000 this country loaned to China. . . . Fortunes have been made. . . . There is strong pressure on the Government ... by public opinion. . . ."

In San Francisco China's able Acting Premier T. V. Soong took time out from the world security conference to set the record straight. His explanation:

China has been using U.S. gold to buy up large blocks of Chinese currency and thereby combat Chinese inflation. On March 28 the Government gave secret instructions to its banks that the price of gold would be raised on the 30th, March 29 being a bank holiday. When the returns on the sale of gold on March 28 came in. Premier Soong promptly noticed that the figure was double the average of preceding days. This was prima facie evidence of a leak.

T. V. hurried to Generalissimo Chiang Kaishek. The Ministry of Finance was ordered to conduct an immediate inquiry. "We decided on this measure," said T.V.. "because, at the slightest suspicion of corruption in the Government, immediate and thorough investigation and punishment should follow. This could only result in strengthening . . . the authority of the Government . . . enhance the confidence of the people."

On the basis of the Government's probe and a preliminary report, the Chinese press demanded a crackdown on those responsible. Censorship withheld the news from distribution abroad. The alleged "fortunes" made by "insiders" were enormous only in terms of inflated currency. The 45 billion Chinese dollars pocketed by one group amounted to 45 thousand Chinese dollars in terms of prewar purchasing power. (The retail-price index has risen to 1,250 times what it was in 1937.)

This week Chungking announced its first action against the culprits. Two junior officials of the Central Government's Central Trust were arrested for their part in the gold sales.

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