Chapter 29 Chiang Kai-shek's "Refinancing"

At this time, Yu Qiaqing, who had completed the important tasks of "project investigation" and "first-phase financing", retreated behind the scenes, and the director of the investment committee of the "Chiang Kai-shek Project" was replaced by Chen Guangfu, a representative of the Mesozoic generation of Jiangsu and Zhejiang chaebols.Chen Guangfu graduated from the Wharton School of Business at the University of Pennsylvania in his early years. Shortly after returning to China, he founded the Shanghai Commercial Savings Bank, which is unique in China's financial history.He started with a deposit of 18,000 silver dollars in 1915, and reached an astonishing scale of 33.3 million silver dollars in deposits in 1933. He can be called a financial wizard.

In addition, Chen Guangfu has a close relationship with the families of Kong Xiangxi and Song Ziwen.When Chen Guangfu founded the Shanghai Commercial Savings Bank, he raised a total of 70,000 yuan in share capital, of which Kong Xiangxi had 10,000 silver yuan in shares. The Song family also invested 5,000 silver yuan in the name of Mrs. Song’s wife Ni Guizhen. Write a letter to Chen Guangfu, inviting him to go south.With this relationship, Chen Guangfu seemed to be Chiang Kai-shek's most important banker. Chen Guangfu lived up to his mission and mobilized the "Jiangsu and Shanghai Finance Committee" to underwrite public bonds for Chiang Kai-shek and provide large-scale financing for Chiang Kai-shek, who was seriously short of money.At that time, the Chiang Kai-shek regime under the banner of "National Revolution", in order to highlight its "revolutionary nature", inherited the previous policies of the Guangzhou and Wuhan National Governments, and imposed an additional 2.5% additional tax on top of the 5% customs tariff controlled by foreigners. This is the so-called "Two-Five Additional Tax" in order to protect national industries.Of course, before the foreigners agreed, this "two-five-year taxation" was just a slogan, but this did not prevent bankers from using this "unnecessary" future income as collateral to issue Chiang Kai-shek's government bonds.

Shanghai's financial circles and business circles subscribed for the "Jianghai Customs 25-year tax-paid treasury bonds" in order to "prevent warlords and the Communist Party."Politically, they chose the Nanjing National Government and supported Chiang Kai-shek economically.The issuance of bonds clearly stipulates the repayment of principal and interest, and establishes the credit of government debt.In order to supervise the rational use of the funds obtained from the issuance of public bonds, the Jiangsu-Zhejiang chaebol also specially established the "Jiangsu Customs Treasury Bond Fund Custody Committee" with the second five-year taxation. The director is Li Fusun, another giant of the Jiangsu-Zhejiang chaebol and the general manager of the Shanghai Branch of Zhejiang Industrial Bank.This fund custody committee strengthened the cooperative relationship between Chiang Kai-shek and Shanghai's financial and business circles.

The total amount of "Jianghai Customs 25-year tax-paid treasury bonds" is 30 million silver dollars, with a monthly interest of 7%, which will be amortized in 30 months starting from July of the same year.The public debt was jointly borne by Shanghai's financial circles, industrial and commercial circles, and Jiangsu and Zhejiang provinces. In addition, an additional 3 million silver dollars were distributed to Lianghuai salt merchants.Among all the people who subscribed for Chiang Kai-shek’s government bonds, the Jiangsu and Zhejiang chaebols accounted for 80%, and the Bank of China undertook the largest amount. 【21】The general manager of Bank of China is Zhang Jia H, another financial wizard.Zhang Jia H studied at Keio University in Japan in his early years. In 1914, at the age of 28, he became the deputy manager of the Shanghai Branch of the Bank of China.Under the leadership of Zhang Jia H, the Bank of China refused to cooperate with the Beiyang government, and raised nearly 6 million silver dollars from major banks, exchanges, and large enterprises of the Jiangsu and Zhejiang chaebols. In 1923, it bought the 5 million silver dollar official shares of the Beiyang government. , The shares of the Beiyang government were squeezed out of the Bank of China's system, so that the commercial shares of the Bank of China accounted for more than 99%, and the privatization of the Bank of China was completed.

The famous Zhang Jia H became inseparable friends with powerful figures in Shanghai's financial circles such as Li Fusun and Chen Guangfu.In order to make Shanghai banking colleagues unite with the outside world, he initiated the establishment of a Friday dinner party attended by managers of various banks to exchange financial information, connect feelings, and exchange opinions.Zhang Jiahong used this dinner party to make friends, analyze various information, and disseminate scientific business methods, which quickly opened up the situation, making the dinner party gradually expand, and later evolved into the Shanghai Association of Banks.The Shanghai Association of Banks has three people at its core, namely Zhang Jiah who raised the most funds for Chiang Kai-shek, Chen Guangfu who is in charge of organizing financing, and Li Fusun who supervises the whereabouts of funds. The three are closely related and are regarded as the "three tripods" of the Jiangsu and Zhejiang chaebols.

From April to May 1927, in just two months, Chiang Kai-shek received 40 million silver dollars in financing, which greatly exceeded the 30 million gold rubles that the entire national government received from the Soviet Union from 1924 to 1927.Chiang Kai-shek's "speculative business" seems to have won a big victory. He "stripped off" the "dangerous assets" of the Soviet Union and the Communist Party within the Kuomintang, and brought in a larger and more well-established venture capital-the Jiangsu and Zhejiang chaebols and the international bankers behind them.However, he still faces a huge challenge, which is the Wuhan Nationalist government, which is still controlled by the Communist Party and the left wing of the KMT.