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Chiang Ching-kuo's frustration put the capstone on his father's well-meaning, ill-devised effort to reform the currency. Chiang had returned from a trip one day last summer and sprung his plan on Chinese bankers. It would tap the last savings of the Chinese people—gold, silver and U.S. $10 bills hidden in mattresses and iron pots all over China. The worthless Chinese currency would be thrown away; new "gold yuan" notes would be issued in exchange for the savings. The bankers were appalled, but they tried to make it work. It did work—too well. In an act of faith, the Chinese people turned in $150 million worth (U.S.) of hard money. The economic result was a trebling of "real money" in circulation—with no more goods to buy with it than before. The political result (as the new currency spiraled higher & higher): almost total disillusionment in the Gimo on the part of his old middle-class supporters.
Work for Peace Alley. What did the people of China think of it all? They did not want Communism, but they did want an end of the war. The peace-at-any-price movement was gaining ground, especially in the cities. Chiang, however, was still respected in the countryside. The armies which had stood their ground at Suchow showed that China was not 99% demoralized, as some Chinese and U.S. businessmen said it was. TIME Correspondent Frederick Gruin took a look last week at the village of Swallow Rock, ,a few miles downstream from Nanking, on the mudflats of the Yangtze. His report:
"The Yangtze flows by, broad, brown, abustle with sampans, its far-off northern bank blurred by haze. The paddyfields are a monotone of patchwork brown, broken by the bright green plantings of winter greens. There is a hum of sound in the village marketplace: banging hammers, barking dogs, the rattle of cartwheels, and above all the plaintive chant of the coolie bearers—the wordless Ai-ho, ai-ho of a bitterly burdened people.
"The village has a narrow cobbled main street called Peace Alley. There are no docks; scores of sampans shove their flat bottoms on to the mudbank. Coolies load rice and bamboo brush into two-wheeled donkey carts. One of the cart drivers, a burly, pock-faced man from Shantung, says he has not heard from his people in a long time—'Perhaps the Communists have destroyed them.' What will he do if the Communists come to Swallow Rock? 'Flee,' he says simply.
"Nearby in the shadow of a smoking brickkiln a crew of workmen dig up Yangtze mud, knead it with blue mortar dust, slap it into forms before baking. What are people saying about the government leaders? One answers: 'They still respect and support the Generalissimo, but some members of his family, such as the Soongs and Kungs, aren't so good. It's a shame they have such money and power.'
"A plump ricedealer agrees. 'The Generalissimo,' he says, 'has been doing his best.' What if the Communists come? 'When the Japs came I fled, but the Communists are Chinese. I'll stay—once in a lifetime is enough for fleeing.' The barber feels the same way: 'A petty barber like me can't know too much about politics. I'm too poor to run away if they come. I'll stay and leave my fate to them.' "