The idea of writing this book came to me soon after my departure from China in May 1949. At that time, when nearly the entire Chinese mainland had already fallen under the rule of the Chinese Communists, the Chinese currency had completely collapsed as a result of galloping inflation, and the entire Chinese economic and political system had been laid waste. Thus the moment seemed opportune to put down my thoughts on the most important factors in the tragedy of Chinese inflation and to record its course of development for future historians; and the first draft of the manuscript saw the light of the day in Sydney, Australia, where I lived for nearly three years before I came to the United States.
However, I hesitated for some time in making the manuscript public. It was addressed to a controversial subject at a time marked by conflicting views of American policy toward Nationalist China before its fall. Moreover, the acuteness of the problems during the war and postwar years gave me doubt as to how my work would be judged by my friends who were directly involved in the administration of China's economy and who had exerted strenuous efforts in fighting for the national cause. Yet not to tell the full story would have nullified my single purpose, which was to draw a lesson from the cause and effects of China's inflation.
I was persuaded to publish this account by the fact that, since the phenomenon of runaway inflation in China was in itself evidence that serious errors of policy and management had been committed, to point them out now so that similar mistakes would not be made elsewhere, especially in the many new Asian countries, would constitute a service I should perform. I cannot emphasize too strongly that this post- mortem of the Chinese tragedy has not been undertaken in a spirit