Chapter 70 Kong Xiangxi's dollar windfall

In December 1941, just four months after the China-U.S.-British Stabilization Fund opened in Hong Kong, the Pacific War broke out.The U.S. Congress, thoroughly enraged by the Pearl Harbor incident, decided in early 1942 to provide a huge loan of US$500 million to the Chinese government that persisted in the war of resistance in an atmosphere of common hatred and hostility, to help China improve its ability to fight against Japan. The currency circulation in the United States was only 9.6 billion U.S. dollars that year, and it gave China 500 million U.S. dollars at once!At that time, the annual fiscal revenue of the Chinese government was only 1 billion French currency. According to the official exchange rate, 500 million US dollars was equivalent to 10 billion French currency, which was the sum of China’s 10-year fiscal revenue!Moreover, this loan has no time limit for repayment, no interest requirements, and no additional conditions. It is the only "three noes" loan in the history of China's foreign debt.

For Americans, this loan seems to be an absolutely loss-making business on the surface, but in fact it is a huge profit!The US$500 million will greatly strengthen China's morale and ability to fight against Japan. The harder China fights, the fewer American casualties on the Pacific front. And Wall Street has already been conceiving the strategic pattern of the world currency after the war.From the perspective of currency strategy, the "capital" of 500 million US dollars will bring four huge returns: first, the loan will immediately stimulate the rapid expansion of the production scale of the US military industry, and at the same time drive the development of steel, mining, machinery manufacturing, transportation, etc. The revitalization of a large number of industries such as , shipbuilding, automobiles, and airplanes will get rid of the plight of the Great Depression, greatly improve the unemployment rate as high as 18%, and enhance domestic consumption capacity; second, loans will completely dollarize China's currency system, thereby At the height of currency issuance, it firmly controls China's economic lifeline; thirdly, by analogy, Europe's "Marshall Plan" and economic aid programs in other regions will greatly expand the US dollar's circulation area and strengthen the US dollar's global presence. Fourth, the expansion of the US dollar will eventually replace the British pound and establish the hegemony of the future world currency. When countries around the world compete to obtain US dollar loans, the US dollar's status as an international reserve and trading currency will be established.After the war, the United States will collect "seigniorage" from various countries every year by issuing additional US dollar banknotes, and the collection will last for 70 years!

If you come out to hang out, you always have to pay it back!The creator of the US dollar currency strategy, Gao Gao discovered that the "US dollar reserve" is equivalent to taxation in disguise, and it is a "super tax" that countries all over the world cannot get rid of and will never stop for generations!Such a lucrative business, why not do it? For the national government, 500 million US dollars is really a huge windfall!The four big families took great pains and suffered countless infamy before they snatched the financial power originally held by the chaebols of Jiangsu and Zhejiang into their own hands, and established a financial centralized system of "four banks and two bureaus". If he was not careful, he was seized by the Stabilization Fund Committee.In private, I hate it so much that my teeth itch, but because I don't have hard currency in my hands, and others have dollars and pounds in their hands, I have to ask for help, so I have to swallow my anger.Now, in the Federal Reserve's account, there are 500 million US dollars available for withdrawal at any time, so why should the stabilization fund committee with only 100 million US dollars be provided like a grandfather?

Therefore, under Kong Xiangxi's leadership, the Central Bank's Foreign Exchange Management Committee was established, which immediately took control of the huge amount of foreign exchange and returned to the real "central bank" position.At the beginning of the establishment of the Central Bank's Foreign Exchange Management Committee, Kong Xiangxi pretended to appoint Chen Guangfu, Xi Demao and others from the Stabilization Fund Committee as members of the Foreign Exchange Management Committee.However, Chen Guangfu sent out his resignation letter as soon as he received the appointment, and Xi Demao only appointed an agent to represent the Xi family as a member of the foreign exchange management committee, and his own ass was still sitting in the office of the Stabilization Fund Committee.

With the change of the general environment, when the bigwigs on Wall Street discovered the essence of "dollar reserves", they began to "grasp the big and let go of the small". It's not annoying enough.As a result, the Stabilization Fund Committee gradually fell out of favor.Members also have to "advance with the times" and move closer to the central bank's foreign exchange management committee. When Kong Xiangxi suddenly made a fortune, how to spend the money became a top priority.So, what exactly is the best way to spend money for yourself? Soon the plan came out: issue a savings fund of 100 million U.S. dollars; issue 100 million U.S. dollars in government bonds; use 220 million U.S. dollars to buy gold from the United States; use 50 million U.S. dollars to purchase various materials in the United States; the remaining money to pay various expenses, including Handling fee, shipping fee, insurance fee, etc.

The so-called "U.S. Dollar Savings Fund" means that the Ministry of Finance of the Nationalist Government allocated 100 million U.S. dollars to the central bank as a fund since April 1942. When the depositors of the "Four Banks and Two Bureaus" deposit, they convert the legal currency into US dollars, and the conversion rate is 1 US dollar to 20 yuan of legal currency.There is no limit on the denomination of savings certificates, the minimum denomination is 10 US dollars, the term is divided into 1 year, 2 years, 3 years, the annual interest rate is 3%, 3.5% and 4%, respectively, and the principal and interest will be paid in US dollars according to the face value.

The so-called "U.S. dollar bonds" means that the Ministry of Finance of the Nationalist Government issued 100 million U.S. dollars as a guarantee to issue national bonds starting from April 1942.Subscribers of government bonds paid 100 yuan of legal currency at a conversion rate of 5 to 6 US dollars to buy US dollar-guaranteed government bonds with legal currency. Starting from 1944, they began to repay the principal and interest, and paid off in 10 years.This kind of bond can be freely bought and sold as collateral, can be used as a security deposit in official business, and can also be used as a bank reserve.

It sounds beautiful, but ordinary people, including industrial and commercial enterprises and banks, are frightened by the "glorious tradition" of fighting for profits with the people and issuing debts from the Beiyang government to the national government. No bottom.However, at the beginning of 1942, with the backing of the stabilization fund and a large pie of 500 million U.S. dollars, the value of the legal currency was once strong. The black market price of the U.S. dollar was almost the same as the official price, and there was not much room for arbitrage. At the beginning, there were very few applicants, and they had to be forced to promote by means of "persuasion", "amortization", and "amortization". The "Four Banks and Two Bureaus" were ordered to "amortize" two types of investment products to the public. Regardless of the government or the public, all borrowers from the "Four Banks and Two Bureaus" will be forced to convert 5% to 20% of the loan amount into US dollar savings certificates. The "Four Banks" themselves must also subscribe to US$2 million in US dollar savings certificates, and even ordered the provinces to "sell" US dollar savings certificates to grain buyers by similar means when they sell grain.

The fate of U.S. government bonds is not much better. The government’s credit record is not good. Claiming to repay the principal and interest in US dollars?The public believes that the central bank and the Ministry of Finance have organized groups to fool the common people. Faced with this situation, the "Silian Headquarters", the highest financial control institution of the national government, had no better solution. It could only use the method of promoting US dollar savings certificates to sell US government bonds. In addition to the tricks of "selling out" and "linking", the central bank, the Bank of China, the Bank of Communications, and the Farmer's Bank of China were also forced to subscribe for US$2 million in public bonds to build momentum.

However, Kong Xiangxi, Minister of Finance and Governor of the Central Bank, realized the truth of making a fortune from the predicament. Others don't know the details of US dollar bonds, how can Kong Xiangxi not know?The US$100 million used as a reserve for bond issuance is stored in the account of the Federal Reserve, and creditworthiness is not a problem at all.Besides, the account of Lai can still be blamed on the Minister of Finance and the Governor of the Central Bank?And I don’t know how long it will take for the war to end. As long as there is a war, the legal currency will definitely depreciate, and the arbitrage space between the official price and the black market price will greatly increase with the passage of time. I don’t know how much money I can make with just this one hand!What is finance?Kong Xiangxi is finance; what is supervision?Kong Xiangxi is the supervisor!Just do it.Just when everyone gradually understood and began to eagerly try to buy U.S. government bonds, Kong Xiangxi ordered the Treasury Bureau of the Central Bank to stop selling U.S. government bonds from October 15, 1943 on the pretext that they were sold out.

Are they really all sold out?According to the memories of Chen Gengya, who was a member and director of the Yunnan Provincial Reserve Branch at the time, by October 1943, there were still a total of 50 million U.S. dollars in U.S. government bonds that had not been sold, but Kong Xiangxi ordered the termination of the sale and was purchased by the Central Bank’s Business Bureau.【14】 .In fact, the Central Bank Business Bureau did not buy all of them, and Kong Xiangxi bought 11.5 million US dollars of US government bonds himself!Kong Xiangxi bought this batch of government bonds at the official price of 1 US dollar equivalent to 20 yuan in legal currency, while the average price of US dollar government bonds that month was at the level of 1 US dollar equivalent to 250 yuan in legal currency.With this move alone, Kong Xiangxi and his henchmen embezzled more than 2 billion yuan in French currency! That's not all.After finishing this vote, Kong Xiangxi's group's appetite became astonishingly large, and he wanted to eat all the 50 million US dollars in public debt.However, no matter how powerful Kong Xiangxi is, he can only temporarily deceive all people, or permanently deceive some people, but in any case he cannot deceive all people forever.There is no impenetrable wall. After Kong Xiangxi's actions were exposed by public opinion, the government and the public were in an uproar! Huang Yanpei, Fu Sinian and a group of "censors" of the National Political Council jointly proposed an inquiry case on the private fraud in the sale of US dollar bonds at the National Political Council in July 1945. Fu Sinian also collected a large amount of Kong Xiangxi's US dollars The original materials and evidence of the public debt case are going to be formally submitted to the Political Council for discussion. It is necessary to play "American-style democracy" and be willing to die. It is also necessary to bring down Kong Xiangxi, a relative of the emperor and a pro-American chaebol. However, on the eve of the official meeting of the National People's Political Council, Chen Bulei, Secretary of Chiang Kai-shek's attendant office, came to his door and "talked earnestly" with Mr. Fu Sinian, asking Fu Sinian to "focus on the overall situation" and not to attack the government from "friends" and "reactionaries" I believe that Generalissimo Chiang will handle it impartially, and I hope that the file of Kong Xiangxi’s case can be brought to Chiang Kai-shek’s official residence first.Of course, this batch of dossiers must be "disappeared" forever in the end.Afterwards, although Kong Xiangxi was forced to resign and step down, and has been away from the power center since then, he has not been subject to judicial investigation, let alone any criminal prosecution. Chiang Kai-shek made it clear that he wanted to cover Kong Xiangxi. In fact, none of the four major families of Chiang, Song, Kong, and Chen who ruled the National Government was clean. As early as 1943, the "Asian Wall Street Journal" estimated that Song Ziwen's net worth was 70 million U.S. dollars. He had invested in General Motors and DuPont. With that salary, it is obviously impossible to earn so much money.When the American political writer Merle Miller interviewed President Truman, who failed to be re-elected in 1953, Truman vigorously accused Song Ziwen and Kong Xiangxi of planning to secretly embezzle the US government's aid to China.Truman became more and more excited as he spoke, and finally couldn't restrain himself, and yelled: "They're all thieves, every damn one of them (They'rhieves, every damn one of them)...they got nothing from the 3.8 billion we sent to Chiang Kai-shek. They stole 750 million U.S. dollars. They stole this money and invested it in Sao Paulo, Brazil, and right here, in real estate in New York!" [16] The U.S. dollars stolen by them ultimately need China Ordinary people work hard to create wealth to pay back.What they stole was actually not the money of the American taxpayers, but the hard-earned money of the Chinese people.Such a government is not a "national government", but a wealth squeezer for the four families of Chiang, Song, Kong, and Chen to squeeze the blood and sweat of the people! Such a "national government" will be abandoned by the people sooner or later!