Henri Cartier-Bresson | Shanghai, Jan 1949

On the day the Japanese Army surrendered in September 1945, the wars in Asia were far from over. As Ronald Spector notes in a recent book, “A Continent Erupts,” the peoples under the territories until recent occupied by Japan had vastly different visions about their postcolonial future which led to savage and bitter conflicts.

Nowhere was this brutal conflict more pronounced than in China were 2.5 million combatants and 16 million civilians were to perish between 1945 and 1949. The World War in Asia had practically began in 1931 with the Japanese invasion of Manchuria, and it has dragged on as the Nationalist leader Chiang Kai-shek cut secret deals with the defeated Japanese commanders in 1945-46 to engage some Japanese troops against the Communists.  

The Nationalists nominally still controlled the cities, but the power was slowly slipping away from them. Economy, after seventeen years of war, was in a nosedive and in order to keep funding the war (now without major support from the Western Allies), the Nationalists began printing paper money in vast quantities. Technically, they were backed by gold, but amount of Chinese fabi in circulation grew from 189 billion to 4.5 trillion by 1946.

The government tried to intervene – firstly by introducing a new currency, gold yuan and then eventually by trying to return China to silver standard – but nothing would work. In a typical dictatorial fashion, the government mandated all Chinese holding gold, silver, or foreign currency were required to surrender such assets in return for “gold yuan,” under penalty of death. Chiang appointed his own son in charge of these measures who led a reign of terror, sending trucks from house to house to confiscate the assets.  In mid-1948, currency was trading at one million yuans to a US dollar. By February 1949, it was six million yuans to a dollar. Paper factories in Kwangtung found it more cost effective to pulp hundred yuan bills to making new paper.

By now, the end was drawing near. Starting in December 1948, the government had been shipping out the nation’s gold reserves to Taiwan, knowing that the Communists would soon over run the major cities. In December, 2 million taels of gold (~75 tons), nearly half of the government’s gold, carried out of the central bank in the traditional manner – by coolies, parceled up on bamboo poles – down the gangplank onto a freighter bound for Keelung in northern Taiwan.  

This action, observed by George Vine, a British journalist looking out of his fifth-floor office window one night, would prompt a nationwide bank run. That was the situation when Henri Cartier-Bresson arrived in Shanghai in January 1949. Outside four government banks on the old Bund, a vast crowd teemed. In order to prove that there was still gold in the vaults, the government started selling gold from the reserves at around half the price what the black marketers were charging. Each person was limited to forty grams of gold, and thousands had been waiting in line since eight pm the previous night, ignoring the eleven pm curfew. The police made only a token gesture toward maintaining order, resulting in ten deaths by suffocation or by being trampled, by five pm the following day.

The government gave up this scheme quickly.  Meanwhile, they were shipping off gold — another 14 tons of gold was being moved out of Bank of China’s vaults under the Bund just as Cartier-Bresson was documenting the chaos above. The gold and silver was escorted down to Taiwan by Mei Ching, a ship which would later defected to the Communists, highlighting the risks involved in such a transfer.

By the time Shanghai fell to the Communists, almost 100 tons of gold reserves were safely in Taiwan already.

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General Douglas MacArthur

When President Obama fired General Stanley McCrystal yesterday, the Americans were reminded of another painful episode in American history — the firing of General Douglas MacArthur by Harry Truman. “When you have nothing to say, take refuge in history” notes one aphorism and that’s precisely what I am going to do: the stories were pretty similar; the extremely bureaucratic ways of the Truman administration, which was then struggling with the nascent Cold War, annoyed more gung-ho MacArthur.  The general believed Truman was unfit to be his commander-in-chief while the latter thought the general was “Mr. Prima Donna, Brass Hat”.

The first bone of contention was with Chinese Nationalist leader Chiang Kai-Shek, whom the general was specifically asked by the White House to stay clear of. Communist forces under Mao Tse-tung had taken over China, chasing Chiang’s Nationalists off to the island of Formosa (now Taiwan). As the conflict in Korea grew, Truman felt that courting Chiang might prompt the entry of Red China and the Soviet Union into the Korean peninsular. MacArthur, however, believed Chiang could be a valuable ally, if not an ideal one: “If he has horns and a tail, so long as Chiang is anti-Communist, we should help him,” he declared. “We can try to reform him later,” he added.

In late July, MacArthur visited Formosa under his own initiative, and was photographed (above) kissing the hand of Madame Chiang. Madame Chiang looked both shocked and delighted, but Truman was incensed and more incensed were the etiquettists. The fact was that MacArthur was shown not only kissing a gloved hand, but also wearing his hat and grasping a pipe in his left hand. The question of whether this was proper for a gentleman was passed around and furiously debated until the-then Due de Levis Mirepoix, the world’s foremost authority on manners and the writer of La Politesse, Son Role, Ses Usages delivered the verdict that it is okay.

Truman probably couldn’t care less. In September, he met the general for the first and the only time. When he decided to dismiss the hero of the Pacific Treater in April, 1951, the Army, including MacArthur was the last to know. The public outrage was unprecedented; newspapers reacted furiously, with the New York Times lamenting “Asia apparently will be surrendered to Communism.” City councils adjourned. The American Legion was outraged, and in California Truman was hung in effigy. Truman’s approval ratings pummeled to low 20s, and he decided not to seek a second term.

MacArthur, on the other hand, returned triumphant. Half a million greeted him on his arrival in San Francisco; New York threw him the biggest ticker-tape parade ever, with five million people turning out to see MacArthur. The general gave an address to a defiant Congress; the speech which was interrupted by fifty ovations ended with the iconic line, “Old Soldiers never die, they just fade away.” In fact, that’s what happened to the general. His subsequent presidential candidacies came to nothing, and the only American ever to become a de facto emperor slowly fade into oblivion.

The above photo is in a poor condition. If anyone has a better version, please send it my way. 🙂