Chapter 51 Chiang Kai-shek's Financial Centralization: "Abolishing the Two and Changing the Yuan" and "Four Banks and Two Bureaus"

Chiang Kai-shek understood that in order to achieve financial centralization, the central bank is not enough, the key is to unify the currency.Without a unified currency, there would be no unified finance, and no unified political and military power base.The premise of a unified currency is that the currency standard must first be determined. In order to realize the unification of the currency standard, the Nanjing government is determined to implement the "abolishing the two to change the yuan", changing the currency standard from the silver to the silver dollar, and the value base of all banknotes is unified to the silver dollar.

In China at that time, the fineness, weight, and size of silver taels varied, and it was very difficult to convert silver taels in transactions.And all kinds of silver dollars are also very complicated. The silver dollars commonly used in the market are the Spanish silver coins brought into China by foreign businessmen in the early years-called "Benyang".Later, the business of "Yangzhuang" became bigger and bigger, so the Mexican silver coins, called "Eagle Ocean" at that time, gradually became popular in China. [6] Many provinces in China have also cast a lot of "Dragon Ocean" similar to "Eagle Ocean", plus various imitation silver coins, it is really dazzling.

In circulation, the conversion between various silver taels, silver dollars, and copper coins is quite troublesome, and how to exchange them is up to the bank.To abolish all silver coins on the market, the resistance mainly comes from banks. Banks are engaged in the exchange business of silver coins, silver dollars and copper coins. To unify the currency, banks will lose the right to exchange and lose the right to speak financially.Of course, when Chiang Kai-shek later wanted to unify the finances, these "little shrimps" in Qianzhuang naturally had to be incorporated. Regarding the problem of silver dollar as a currency standard, the national government has long been aware of it. It also organized a special research meeting, led by Song Ziwen, who believed that the abolition of silver dollars and the use of silver dollars needed to be implemented step by step.Song Ziwen began to reform the currency system, and Xi Demao once again "friendly" participated in the "abolishing the two and changing the yuan".

"Abolishing the two and changing the yuan" is a very difficult systematic project, which not only involves Chinese banks and money houses, but also involves foreign banks and foreign exchange exchanges.As a representative of the central bank, Xi Demao is a key member of the "Shanghai Silver Dollar Exchange Management Committee". From the design of the plan to the specific implementation, and then to dredging and coordinating all parties, he has done everything by himself. On the eve of the fifth "encirclement and suppression campaign", under the personal supervision of Generalissimo Jiang, in April 1933, the "abolishing the two and reforming the Yuan" finally came to fruition.

The unification of the monetary standard made Chiang Kai-shek a crucial step in his monetary unification.Next, he will completely control the Bank of China and the Bank of Communications, establish the authority of the central bank, and complete the overall layout of financial centralization. Therefore, Chiang Kai-shek called Kong Xiangxi, the Minister of Finance, with stern words: "The country and society are on the verge of bankruptcy, and the key lies in the two banks of CCCC. If they do not make corrections, the revolution will be hopeless and people's livelihood will be ruined by CCCC and Bank of Communications." It's just a foil.

On March 27, 1935, the Legislative Yuan of the National Government approved the issuance of 100 million yuan of financial bonds, which were used as funds for the capital increase of the Central Bank, Bank of China, and Bank of Communications.Subsequently, Bank of China was forcibly "restructured", the general manager system was changed to the chairman system, Song Ziwen was directly appointed as the chairman, and Song Ziliang and Du Yuesheng joined the board of directors.At the same time, 15 million yuan of official shares were forced to be added, and the total share capital was expanded to 40 million yuan, which was divided between government and businessmen, increasing the official shares from the original 5 million yuan to 20 million yuan.The transfer of Zhang Jia H to the vice president of the Central Bank actually emptied Zhang Jia H and only gave him a title.Zhang Jiahong knew nothing about such an important matter in advance.Then Chiang Kai-shek "accepted" the Bank of Communications in the same way. In April, the Bank of Communications revised its articles of association, and the proportion of official shares was changed to 63%, and the Bank of Communications was also "government-run".

The Japanese side was extremely dissatisfied with Chiang Kai-shek's "perverse actions" in driving out the pro-Japanese Zhang Jiahong.Kawagoe, Consul General of Japan living in Tianjin, mentioned in a confidential telegram to Counselor Ruoshan in Beijing: "[April 6, Showa 10th (1935)] According to a secret conversation of a certain dignitary: drive Zhang Gongquan (Zhang Jia H) away from the Bank of China , this is because Chiang Kai-shek, in order to fight against the Communist bandits and expand armaments, caused a monthly deficit of 25 million yuan in the financial revenue and expenditure of the Nanjing government, and the annual deficit reached 300 million yuan. This was planned by Kong and Song in order to strengthen Chiang Kai-shek's regime ...In the final analysis, what they plan is to seek the unification (currency issuance rights) under the name of controlling finance and rectifying currency, so that the power of the Nanjing government can uniformly issue non-convertible banknotes... At present, the friendship between China and Japan When the air is rising day by day, it is simply a big joke to drive away Zhang Gongquan, who has a close relationship with Japan, just for the sake of Kong, Song and others..."

After taking down China Communications Bank and Bank of China, the "four banks and two bureaus" controlled by bureaucratic capital have formed a new pattern of China's financial industry.The four banks are the Central Bank, the Bank of China, the Bank of Communications, and the Farmer Bank of China, which was added later; the second bureau is the Central Trust Bureau and the Postal Savings and Remittance Bureau.The general manager of the Bank of China, Zhang Jia H, was forced to resign and broke away from the Bank of China. From this day on, the Bank of China became a tool of bureaucratic capital, which also marked the end of the era of free capital in China.In view of Zhang Jiahong's influence in society and the sentiment of Japan, Chiang Kai-shek still has some scruples.In order to win people's hearts, half a year later, Zhang Jia H was included in the cabinet and appointed a minister. Later, Zhang Jia H resigned as a minister because of poor health, and sadly went to the United States for "investigation".

The cleansing of private capital has just begun. Chiang Kai-shek, who has completed the first step of "taking over" China Communications Bank, then ordered the Central Bank, China Bank, and Communications Bank to accumulate a large number of banknotes from China Commercial Bank, Industrial Bank of China, and Siming Bank. And cashed out to the three banks at once, creating a wave of runs. China Commercial Bank was the last of the three banks to experience a run. The chairman and general manager of China Commercial Bank, Fu Xiaoan, was the confidant of Sheng Xuanhuai.He had estimated in advance that Chiang Kai-shek was going to do this, so he begged Du Yuesheng, a director and "personal friend" of the Commercial Bank, to help him "drag".

Du Yuesheng was very happy: "With our support, don't be afraid." In fact, Fu Xiaoan just fell into Du Yuesheng's trap. Du Yuesheng patted his chest and said: "How many positions are missing, just come to dismantle them. This is a small favor, and the younger brother should help, but you still have to be fully prepared. As for the higher-ups, try to play by ear." Fu Xiaoan decided to sell the soon-to-be-completed "Commercial Bank Building" at a cost of 1.8 million yuan paid for "friendship".Asked Du to convey to the "above" to buy it, Du Yuesheng agreed immediately.

Immediately, Song Ziliang, Song Ziwen's younger brother, came forward to purchase the building on behalf of the Shanghai Postal Savings and Remittance Bureau.Song Ziliang immediately changed the name of the building to "Construction Building", and started construction overnight to replace the signboard of the building. The outside world immediately spread rumors that the China Commercial Bank was about to collapse, and even the building was sold.At this time, the central bank notified Song Ziliang that the money for the purchase of the building should be repaid to the central bank first. Before Fu Xiaoan got the money for selling the building, Song Ziliang transferred it to the central bank, and China Commercial Bank was pulled from the bottom of the pot. On the eve of the Dragon Boat Festival, Fu Xiaoan pieced together some securities and asked the central bank for a mortgage loan of 3 million yuan.Unexpectedly, after the Dragon Boat Festival, she suddenly received a call from the central bank: "There is no position in the account." Fu Xiaoan hurried to the Ministry of Finance, knelt down and begged, but it was still invalid.At this time, Du Yuesheng continued to spread wantonly outside, China Commercial Bank was about to close down, and depositors withdrew their money one after another. Fu Xiaoan could only beg Du Yuesheng again to help maintain the mess.Du Yuesheng was pretending to be polite again.In the end, Fu Xiaoan held the asset list of China Commercial Bank with both hands, handed it over to Du Yuesheng, and stepped down sadly. The Commercial Bank of China was reorganized into a "government-business joint bank", and the old shares were discounted. After some bargaining, the Ministry of Finance only agreed to discount the old shares by 15%, that is, every 100 yuan was converted into new shares at 15 yuan.China Commercial Bank only has 525,000 yuan in old shares, and the Ministry of Finance has added 3.475 million yuan to official shares.All official shares are allocated by the Ministry of Finance with the same amount of "Fuxing Bonds", and Du Yuesheng is the chairman.This should be part of the remuneration given by the party-state to the Youth Gang, but the Jiangsu and Zhejiang chaebols who failed to "keep up with the times" and were still fighting against the government were completely "played" by Chiang Kai-shek. After all these banks have been dealt with, there is only one peasant bank left, and its situation is quite special.The Peasant Bank of China was reorganized from the Peasant Banks of the four provinces. Chiang Kai-shek himself served as the chairman, and the private shares were all in the hands of Chiang himself or Chiang’s direct descendants. This bank printed and issued banknotes at any time according to Chiang’s needs, and the issuance reserve was not under supervision. , Chiang Kai-shek built the Peasant Bank as his "back garden".Later, when Liz Ross, a British financial advisor, came to China and asked for an inspection of China’s banking reserve fund, Kong Xiangxi informed the Farmer’s Bank to cooperate, but Chiang Kai-shek was furious and shouted: “Don’t I even have this right?! " According to a report by Snow, the Farmers' Bank may have secretly had opium revenues.The annual income of the National Smoking Ban Bureau is nearly 200 million yuan, part of which is controlled by the Youth Gang and other underworld organizations, and part of which is handed over to the government is directly controlled by Chiang Kai-shek's military committee.Due to the "ambiguous" business nature of the Agricultural Bank, it was not granted the right to issue banknotes during the currency system reform. However, the Agricultural Bank quickly joined the three major banks and had the right to issue banknotes. Obviously, Chiang Kai-shek was behind this rapid change. . A key figure in pushing the government to further manipulate the private sector was Soong Ziwen, who, after resigning as finance minister, retained the position of the National Economic Council, an agency whose basic policies were determined by Chiang Kai-shek, and Soong who undertook the "day-to-day work."Later, Song Ziwen became the chairman of the Bank of China, and controlled almost a quarter of the capital of China's banking industry.Song Ziwen also established the China Construction Bank Corporation, and made extensive investment in industry and commerce with CCB Corporation as its headquarters, including cotton trade, chemical industry, automobile manufacturing and other industries. Song Ziwen used his power to increase the private investment of himself and his relatives, Eventually controlled a huge number of enterprises. After the "slap incident", Song Ziwen resigned as the Minister of Finance and was succeeded by Kong Xiangxi. At the same time, Kong Xiangxi also served as the vice president of the Executive Yuan and the president of the Central Bank, and was recognized by Chiang Kai-shek as "the person around him."The board of directors of the central bank once passed a plan to sell 40 million of the 100 million shares to commercial shares. Kong once "solicited" Jiang for the subscription of private shares, but in fact, the central bank shares were never sold to "private individuals" .Chiang Kai-shek's original intention was to centralize power, how could it be possible to reduce control over this key institution. Kong Xiangxi's central banking system controls the insurance industry, so he naturally wants to set up a "private plot".He established the famous Central Trust Bureau, the main trust and investment business.As the president of the Central Bank, Kong also served as the chairman of the board of directors. He appointed his eldest son Kong Lingkan as the executive director. The Chinese banking system controlled by Song Ziwen and the central bank system controlled by Kong Xiangxi coordinated and cooperated in important decision-making and complemented each other.After a dizzying reshuffle, China's financial system has become the possession of bureaucratic capital with the "four major families" at its core. Of course, this group of people also includes Du Yuesheng, Chiang Kai-shek's direct thug.