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            <text># CECRET

From: Shanghai (MARGERIE)

To: Vichy

2 June 1944

FAX

#456-457 (2 part message complete).

For the COMPAGNIE FRANCAISE DES THERMATS at Lyons from M. DUCREST.

As a sequel to my message of 5 May, the official European cost of living index for May shows a rise of 53% by comparison with February. This rise is continuing at an increased speed. A pical 10,000 dollars, that is to say 500 times dearer than at the beginning of the China incident.

The official cost of living index for May for Europeans and workers, respectively, is 185 and 276 for a --20--; the real index would be at least 200 and 300 for the reasons already given. Workers' salaries for June will show a coefficient of about 140, in other words a reduction in purchasing power of at least one half.

For the Europeans we propose as of 1 June:

1. A temporary allowance of 2000% for the first income group below 1000; 1500% for the second group between 1000 and 3000; and 800% for the group over 3000.

2. For dependents, 1000, 2000, 3000 and 4000 respectively for a (Part 2) wife and 1, 2, or 3 children.

3. (7 Compensation ?); 5000 to 12,000, increases varying from 35 to 45%, monthly supplement 700 to 1000. Same salary --G--, ours of 8 Mars, higher --G-- in May or in other words an increase of about 120%. New adjustments are anticipated in June.

My proposals restore the --G-- equilibrium in comparison with April 1943 but are far from restoring it in comparison with the

File D-2176 (continued)</text>
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