Forman 1319 c1: Inflation was probably greatest contributing factor to downfall of Nationalists in China. The gold yuan, when originally issued in August 1948, was pegged at a cross rate of four gold yuan to one American dollar. Nine months later, when Reds occupied Shanghai the Nationalist's currency had plummeted to a cross rate of one hundred million gold yuan to one American dollar. Forman 1319 c2: Inflation, the scourge of war torn China. These speculators traded rapidly depreciating Chinese paper currency for Chinese silver coins or American dollars. Forman 1319 c3: Inflation in China breeds black-marketeers in forbidden Chinese silver dollars. These silver dollar hawkers carry bundles of inflated gold yuan (the Nationalist's currency) with which to purchase silver dollars. The dollars are bought and sold openly with a profit for the hawker with each transaction, thus accelerating inflation. (Fellow in center is clinking his silver dollars). 1949. Forman 1319 c4: Silver dollar hawkers. Fistful of inflated gold yuan in one hand, clinking silver dollars in other (note blur). Fellow in center holds up coins.