Particular effort was made by the ROC government to instill this currency as the monopoly currency of China, stamping out earlier Silver and gold-backed notes that had made up China's currency. Unfortunately, the ROC government used this privilege to issue currency en masse; a total of 1.4 billion Chinese yuan was issued in 1936, but by the end of the second Sino-Japanese war some 1.031 trillion in notes had been issued. This trend worsened with the resumption of the Chinese Civil war in 1946. By 1947, some 33.2 trillion of currency was issued. This was done in large part as an attempt to close the massive budget deficits brought about by the war (taxation revenue was just 0.25 billion, compared with 2500 billion in war expenses). By 1949, the total currency in circulation was 120 billion times more than in 1936. The Chinese war economy (1937–1945) In 1937, Japan invaded China and the resulting warfare laid waste to China. Most of the prosperous east coast was quickly conquered by the Japanese, who imposed a brutal occupation on the civilian population, carrying out numerous atrocities such as the Rape of Nanjing in 1937 and random massacres of whole villages. The Japanese Air Force carried out systematic and often indiscriminate bombings of Chinese cities. Nationalist forces applied a "scorched earth" policy in response to the invasion; destroying the productive capacity of areas they had to abandon in the face Japanese military advances. The Japanese were in turn brutal in the face of any Chinese resistance they encountered, during one anti-guerilla sweep in 1942, the Japanese killed up to 200,000 civilians in a month. A further 2–3 million Chinese civilians died in a famine in Henan in 1942 and 1943. Overall the war is estimated to have killed between 20 and 25 million Chinese. It severely set back the development of the preceding decade. Industry was severely hampered after the war by devastating conflict as well as the inflow of cheap American goods. By 1946, Chinese industries operated at 20% capacity and produced just 25% of pre-war output. When Japan surrendered in August 1945, the KMT government was able to recover most of the economic centers lost in Second Sino-Japanese War without subjecting them to further destruction. However this ultimately made little difference given the extent of the damage caused by the war and subsequent Japanese occupation. Initially Manchuria, which Japan had transformed