Chapter 35 Mao Zemin's financial "empty city plan"

One day in 1933, Mao Zemin, the president of the National Bank of the Chinese Soviet Republic, had just returned to his office in Ruijin from other places and was about to check the accounts. A fellow villager came to exchange banknotes for cash. The cash in the treasury has been reduced by half, and I think there is going to be a problem, so hurry up and think of a way!" When Mao Zemin heard this, he hurried to the bank's business hall.There was a long queue outside the business hall. When I squeezed into the business hall, I saw that the hall was full of people waiting for exchange. Everyone was talking and excited.Someone yelled: "Nowadays business only accepts cash, not banknotes. I want to exchange cash!" Someone answered, "Yes, banknotes are almost useless now. What's the use of keeping them?"

Mao Zemin frowned without saying a word, turned around and left the hall.He walked around the streets and alleys of Ruijin County, and he saw some daily necessities stores, cloth stores and salt stalls with signs saying "Foreign cash only".Mao Zemin realized that the run he was most worried about had finally happened! He hurried back to the Ministry of Finance to report to Minister Deng Zihui, and at the same time, he asked Qian Zhiguang, the newly appointed director of the State Administration of Foreign Trade, to discuss with him. Mao Zemin said: "The most taboo thing about banks is a run on the bank. I have a vague premonition recently, but I didn't expect it to come so soon. After the third anti-"encirclement and suppression" campaign, the Kuomintang imposed a strict economic blockade on us. The Soviet area was short of supplies and prices soared. , depreciation of banknotes. In addition, the enemy created a large amount of counterfeit currency and flowed into the Soviet area, spreading rumors everywhere to disrupt the financial market in the Soviet area. We must find a way as soon as possible to stop this situation.”

In fact, the reason is very simple. The credibility of the National Bank and the currency of the Soviet area must be guaranteed. To preserve the credibility of the bank and the currency it issues is to preserve the credibility of the Soviet government. At this moment, Mao Zemin is facing the same situation as Masayoshi Matsukata in Japan. The excessive issuance of banknotes led to a sharp depreciation of banknotes against silver dollars.Among Masayoshi Matsukata's banknotes, there are still a considerable amount of uncashable Japanese yen banknotes. Therefore, despite the depreciation of banknotes, the government does not have to be forced to exchange them for cash, and the situation is still under control.But Mao Zemin's problem was troublesome. The villagers demanded to be cashed immediately. Once the silver dollar reserves were run out, the credit of the currency in the Soviet area would immediately collapse, and the consequences would be disastrous.

Back then, Masayoshi Matsukata boldly adopted the method of exchanging as many banknotes as possible for silver dollars in order to restore the credit of the Japanese Yen, and all of them were exchanged at a one-to-one ratio until the market fully believed that the government's gold and silver reserves were sufficient.However, at that time, Masayoshi Matsukata used the Yokohama Specie Bank’s innovative method of foreign exchange bills to solve the problem of the inflow of gold and silver coins from overseas, but it was impossible for Mao Zemin to solve the problem by increasing the reserves of gold and silver coins.

In any case, the credit of the currency in the Soviet area must not be allowed to go bankrupt.Mao Zemin insisted that anyone who comes to ask for cash exchange, the bank must guarantee the exchange, and strictly stipulates that one yuan banknote is exchanged for one piece of cash, and no one is allowed to raise the price of cash! Determined, the National Bank immediately withdrew a large number of cash from the treasury and publicly exchanged banknotes.Two days have passed, and the number of villagers who come to exchange cash continues unabated, and the line at the bank gate is getting longer and longer.Cao Juru said to Mao Zemin: "President Mao, there are not many foreign currencies left. Do you want to stop the currency exchange?" Only the credit of banknotes can stabilize finance!" Cao Juru sighed: "That's the truth. But if Director Qian and the others can't come back tomorrow or the day after tomorrow, it will be a big trouble."

Mao Zemin lowered his head and pondered for a while, then suddenly his eyes lit up, and said: "It seems that we have to imitate Mr. Kong Ming and sing 'Empty City Strategies'. At midnight tonight, you..." Early the next morning, on the streets of Ruijin County, there appeared a basket transport team led by the Red Army guards and led by Cao Juru.Some baskets were filled with gold bricks, gold bars, gold necklaces, gold rings, gold earrings and silver bracelets, silver collars, silver dollars, and silver ingots, while others were neatly stacked with koyo.The snake-like transport team passed through the downtown area and the street, which was very spectacular.There are more and more fellow villagers watching on both sides, blocking up the streets.

The transport team squeezed a way through the crowd, and carried loads of jewelry and Guangyang into the bank.Every time a load was passed, some fellow villagers counted and excitedly praised: "The bank is really rich and powerful!" In the business hall of the National Bank, gold and silver jewelry piled up a golden "mountain of gold and silver". People who came to exchange silver dollars were shocked when they saw it: "I have never seen so much gold and silver in my life. The banks in the Soviet area are so rich! " The people who exchanged money dispersed a lot, and Mao Zemin's anxiety eased a little, and he was finally able to wait patiently for Qian Zhiguang's return.

On the same day, Qian Zhiguang finally shipped back the silver dollars, cotton cloth, salt and other large quantities of materials seized by the Red Army during the anti-"encirclement and suppression" campaign as planned. Mao Zemin praised them for saving the banks in the Soviet area and the Soviet government.Mao Zemin also told him that the "empty city plan" had already used all the gold and silver in the bottom of the vault.If Qian Zhiguang doesn't come back again, the "empty city plan" will be ruined. With the supplies brought back from the front, Mao Zemin immediately ordered to stop the exchange.The cooperative sells a large number of daily necessities, and the price tag reads: "Only accept banknotes, not cash."

People commented: "Who said that banknotes will expire, and who said that banknotes are worthless? You see, the government has exchanged Koyo for banknotes, but now it only accepts banknotes when selling things." People quickly took Guangyang to the bank to exchange banknotes and buy back what they needed.Some people don't buy goods, but also exchange cash back into banknotes. Within a few days, more cash was recovered than exchanged out! Facing the crisis of a bank run, Mao Zemin responded wittily, resorted to the "empty city strategy" of gold and silver, fought a beautiful psychological warfare, and took timely measures to ensure the supply of materials in the Soviet area, successfully consolidating the credibility of the National Bank and the government.The maintenance of the national bank's credit guaranteed the government's financing ability and material allocation ability, and laid an economic foundation for the victory of the Red Army's anti-"encirclement and suppression" campaign.

Mao Zemin may not be aware of Masayoshi Matsukata's battle to defend the yen's credit. Although they faced the same problem, the means of solving it were quite different.Masayoshi Matsukata eased the credit crisis of banknotes by increasing gold and silver, while Mao Zemin discovered another major law of currency. Gold and silver are not the only credit support for currency, and commodities can also be an effective means of supporting currency!The essence of common people's demand for money is that money can be used to realize the possession of various living materials. In this case, the credit of banknotes can completely bypass gold and silver reserves and directly use materials as the standard.

Mao Zemin's practice of monetary price standard influenced the later communists' monetary thought.In the revolutionary era of lack of precious metals and the plight of the economic blockade of the liberated areas, to establish a red financial high frontier, it is necessary to carry out major financial innovations in the practice of the currency standard! The reason why the red regime can exist for a long time under the white terror, and has organized five large-scale military operations against "encirclement and suppression", and at the same time promoted the economic development of the Soviet area, is that the Communists have grasped two vital points from the very beginning. Therefore, the revolution must hold the gun with one hand and the money bag with the other.The gun barrel can protect the money bag, and the money bag can effectively support the gun barrel! Snow made this comment on the banknotes of the Soviet State Bank in "Westward Journey": "No matter where it is, the Soviet currency seems to be based on the general trust in the government and the fact that it has real purchase value in the market. In fact, it gained its status." [1] The red regime's understanding of the extreme importance of currency was obtained from the bloody lessons of the Paris Commune.