In the last days of fabi, T. V. Soong heads south to become provincial governor of Guangdong province. On the introduction of the gold yuan currency in August 1948, Chiang Kai-shek turns to his son Jiang Jingguo (Chiang Ching-kuo) who begins a reign of terror in Shanghai. He alienates major capitalists and bankers and tackles David Kung, Madame Chiang’s favorite nephew, creating a family crisis.

Jiang Jingguo cannot hold the line on commodity prices in Shanghai. Controls are abandoned at the start of November, and hyperinflation explodes. The communist military victories exacerbate the situation. Capitalists begin fleeing China for Hong Kong, America, and elsewhere.

Why did the Nanjing government wait so long to introduce the new currency? Chiang’s focus on military issues had led him to ignore the issue until it was too late. Chiang resigns and T. V. Soong heads to America. Afterward – a bitter exile for the Soongs and Kungs.

The introduction establishes the background to the hyperinflation crisis and outlines the major issues explored in the manuscript. It begins with the creation of the fabi currency in 1935 and argues that it was set up to fail because there were few checks on expanding note issue.

It examine the currency war that erupted after the fall of Shanghai and the establishment of Japanese client regimes in Beijing and Nanjing. Each of the latter had separate currencies that were rivals with fabi.

The chapter presents the overall thesis of the study and the sources which have made it possible. New material gives an inside look at the decision-making process of the Chiang Kai-shek government. The most important has been the archives at the Hoover Institution at Stanford and material in Taiwan. The study particularly benefited from eight academic conferences at Fudan University in Shanghai.