The issuance of a new silver currency has been proposed as a future measure to combat inflation. If the government continued to finance budgetary deficits by unbacked note issue, the silver would probably go into hoards and the price inflation would continue. The effect would be no more than that of the gold sales in 1944-1947, namely, a slight and temporary retardation of the inflationary spiral. The proposal could be carried out, moreover, only through a loan from the United States of at least $200 million in silver. In the construction field, China has prepared plans for reconstruction of communications, mines and industries. Some progress has been made in implementing them, notably in the partial rehabilitation of certain railroads and in the textile industry. Constructive results have been handicapped by a lack of funds, equipment and experienced management, supervisory and technical personnel. On August 1, 1947, the State Council approved a “Plan for Economic Reform.” This appears to be an omnibus of plans covering all phases of Chinese economic reconstruction but its effectiveness cannot yet be determined. SOCIAL—CULTURAL Public education has been one of the chief victims of war and social and economic disruption. Schoolhouses, textbooks and other equipment have been destroyed and the cost of replacing my considerable portion cannot now be met. Teachers, like other public servants, have seen the purchasing power of a month’s salary shrink to the market value of a few days’ rice ration. This applies to the entire educational system, from primary schools, which provide a medium to combat the nation’s grievous illiteracy, to universities, from which must come the nation’s professional men, technicians and administrators. The universities have suffered in an additional and no less serious respect—traditional academic freedom. Students participating in protest demonstrations have been severely and at times brutally punished by National Government agents without pretense of trial or public evidence of the sedition charged. Faculty members have often been dismissed or refused employment with no evidence of professional unfitness, patently because they were politically objectionable to government officials. Somewhat similarly, periodicals have been closed down “for reasons of military security” without stated charges, and permitted to reopen only after new managements have been imposed. Resumption of educational and other public welfare activities on anything like the desired scale can be accomplished only by restraint of officialdom’s abuses, and when the nation’s economy is stabilized sufficiently to defray the cost of such vital activities. MILITARY