The chapter offers a general introduction to the Ichigo campaign, particularly with reference to its economic impact. Launched late in the war when Japan’s position in the Pacific was deteriorating, it was the largest military campaign ever undertaken by the Japanese Imperial Army. The armies of Chiang Kai-shek performed very poorly, often just melting away. There was general pessimism about the war in China even as the Allies did well elsewhere.

The campaign had a calamitous economic impact on Free China. Food supplies were cut off. Hyperinflation continued to have a devastating impact on the lives of Chinese. There were struggles in maintaining the exchange rate of fabi and the beginnings of conflict with the United States over this issue. US treasury secretary Morgenthau became angry with Chiang. A second dispute over the sale of gold in China supplied by the United States created tension between Morgenthau and T. V. Soong who represented Chiang in Washington.

This chapter looks at the two men, T. V. Soong and H. H. Kung, who dominated financial positions from 1928 until the collapse of the Nationalist regime on the mainland. Both had personal ties to Chiang through his wife Madame Chiang Kai-shek (Song Mei-ling). A bitter rivalry developed between them that impacted the entire coterie of financial and banking officials. On a related issue, it examines the prevalence of American education among financial officials and its impact on ties to America, particularly in the Soong family. This chapter uses the papers of Lauchlin Currie, a key aide to Roosevelt, who made several trips to China on his behalf. The chapter closes with an examination of the way in which the two men have been portrayed in writings about the Chiang Kai-shek era, suggesting some reevaluation is needed.

This chapter examines the scandal associated with the American Dollar Bond issue and the resignation of H. H. Kung