Chapter 81 The Birth of the Renminbi

In July 1947, the People's Liberation Army turned to a strategic counter-offensive, and the liberated areas of Shanxi-Sui, Shanxi-Chahar-Hebei, and Shanxi-Hebei-Luyu gradually became one.The different currencies originally used in the liberated areas are now pouring into the unified liberated area market.As a result, many "monetary troubles" have arisen.In the unified liberated area, if you go hundreds or even tens of miles away, you have to change to another currency. Dong Biwu, who was in charge of financial work in North China at that time, experienced such troubles himself.He set off from Yan'an and came to the Jinchaji base area for investigation.He was hungry and thirsty along the way, so he stopped with his wife and children to rest under the big locust tree by the roadside.The dry food he brought with him was gone, and the guard ran to the small grocery store in the village to buy some sesame seed cakes and roasted sweet potatoes.Unexpectedly, when it came time to pay, something went wrong.

The sesame seed seller took the money and took a look. He didn't know where the money came from. The guard had to explain that it was the border currency of the Shaanxi-Gansu-Ningxia Liberated Area.The sesame seed seller took the money and looked it over and over several times, and finally returned it and said, "No, we don't spend this money here!" It turns out that the local currency is only used in the Jinchaji Liberated Area, and no other money is used. ! The guard had no choice but to take the money to a nearby public agency store to change it, but the salesperson in the agency store refused to change it, and replied firmly: "The Jinchaji area only recognizes the Jinchaji border currency, and other money tickets are accepted." No, I took your money for nothing, who can do such a stupid thing?"

At this time, Dong Biwu's wife said to the guards: "Don't worry! I have a piece of fabric for the children with me. You can use it to exchange goods with others! I think, use this piece of fabric for a few One biscuit is enough!" [13] Dong Biwu, a dignified revolutionary veteran, was forced to exchange cloth for biscuits to satisfy his hunger due to the currency problem. At that time, the financial systems in the Liberated Areas were fragmented. Not only were the currencies not unified, but they also levied taxes on each other and engaged in trade protection.In order to reduce the trade deficit, some liberated areas even raised the prices of local specialties and refused the entry of goods from other liberated areas.

The Shandong base has the most "strong" sea salt, and the Beihai coins issued are the strongest; the Hebei banknotes of Shanxi, Hebei, Shandong and Henan come next; the northwest region needs to import a lot of materials because of the lack of supplies, and the Northwest agricultural currency issued is the weakest.As a result, Shanxi, Hebei and Henan boycotted Shandong's sea salt, and southern Hebei seized the coal ordered by Jizhong. When Dong Biwu reported to the central government at the end of 1947, he seriously criticized all regions for "building tariff barriers against each other, suppressing and boycotting each other's bills and currencies, competing with each other in business, friction with each other, and forgetting to fight against the enemy."

It has become an urgent matter to unify the financial work in the liberated areas, establish banks in the whole liberated areas, and issue a currency that is used uniformly throughout the country.If there is no unified currency, when Beijing is liberated, armies from all walks of life will pour into Beijing with their own banknotes, and the market will inevitably be in chaos. To issue a unified currency, there are two options. One is to learn from the currency reform of the Soviet Union in 1947. After the end of the Second World War, the new currency was exchanged for the old currency, and differential exchange was implemented. The old and new currency were exchanged at a ratio of 1:10. The more old coins you hold, the greater the depreciation, taking the opportunity to deprive some people of their currency wealth, compress the currency circulation, and achieve the goal of currency stability.

In fact, when Chiang Kai-shek took over the occupied areas after the Anti-Japanese War, he exchanged French currency for counterfeit currency at a ratio of 1:200, and the Soviet Union exchanged new currency for old currency at a ratio of 1:10, both of which were plundering the wealth of the holders of the old currency.In the same way, the United States forces the renminbi to appreciate. If the international purchasing power of U.S. dollar assets remains unchanged, if the ratio of 1:7 to the U.S. dollar suddenly becomes 1:6, this is equivalent to the "old-for-new" of the renminbi. At that moment, the "new currency" of RMB "replaced" the "old currency" at a ratio of 6:7, and the result must be the loss of wealth of the holders of the "old currency"!This is the reason why the appreciation of the renminbi is a "nominal appreciation" externally and an actual depreciation of domestic purchasing power.

From the perspective of protecting the interests of the people, Nan Hanchen believed that it was not suitable for China to imitate the currency reform policy of the Soviet Union. Another option is to consolidate and simplify the currencies issued by each liberated area first, and then issue new currencies after prices and currencies stabilize.At the same time, considering the negative impact of the KMT’s currency reform, the common people must understand that what the Communist Party implements is a unified currency, not currency reform, which is completely different from what the KMT did.The currency system reform of the Kuomintang used more serious inflation as a means to plunder the wealth of the people. As a result, prices soared, people complained, and the economy collapsed.The currency unification is to simplify and consolidate the currency system in the liberated areas, and to promote economic development and commodity exchange, it is entirely based on the interests of the people.

On December 1, 1948, the People's Bank of China was established in Shijiazhuang City, Hebei Province, with Nan Hanchen as the general manager, and the People's Bank of China banknote "RMB" will be issued from now on. In order not to harm the interests of the people in the process of currency unification, the government adopted the policy of "fixed price ratio, mixed circulation, gradual withdrawal, and responsibility to the end", and gradually withdrawn the currencies issued by the liberated areas. According to the price level of the liberated areas, the government stipulated a reasonable price comparison between the RMB and the currencies of the liberated areas, and stopped the issuance of currencies in each region, and required banks in all regions to gradually withdraw them according to the stipulated exchange rate.In this way, the economic relations among the formerly independent regions were quickly adjusted.The emergence of RMB has greatly facilitated market circulation.

In order to dispel the common people's doubts that the liberated area currency in their hands will be invalidated if it is too late to exchange, the government promises to be responsible not only for the new currency of the People's Bank of China, but also for all the old currency issued by the liberated area banks in the past.From then on, the government not only took back the currency issued during the Anti-Japanese War and the War of Liberation, but also took back the currency, promissory notes, and public bonds issued during the Agrarian Revolution at a reasonable price.It fully protects the interests of the people from loss, thereby establishing the credit of RMB in society.

On the eve of the founding of the People's Republic of China, the government successively took back the currencies issued by the liberated areas in the customs through banking business, financial collection, and trade withdrawals, which laid a solid foundation for China's currency unification and successfully prevented the currencies of the liberated areas from being noisy in the capital. chaos. In 1950, after the domestic economic situation stabilized, Northeast currency began to be recycled.Gao Gang, who presided over the work in the Northeast, wanted to become independent. He once instructed the president of the Northeast Bank to propose to keep the Northeast currency.

So far, since 1911, China has realized the real unification of national currency for the first time.In the past nearly 40 years, the problem of China's "currency separatism" has been completely eliminated. In addition to the gradual unification within the Liberated Areas, in order to ensure the circulation of RMB, the government has learned from the experience of “detoxification” of expelling legal currency in base areas, and adopted different “detoxification” measures for gold round coupons, foreign currencies, and gold and silver in the RMB circulation area: first, resolutely eliminate legal currency Hejinyuan coupons, which are the chief culprits of hyperinflation, must be resolutely eliminated to pave the way for the RMB to occupy the market. The second is to implement foreign exchange management.Cancel the currency issuance rights of foreign banks, prohibit the circulation of foreign currencies, and implement unified management of foreign exchange.All foreign exchange and foreign currency must be deposited in the Bank of China, and sales or transfers are prohibited, and are managed by the National Bank. Thirdly, the circulation of gold and silver is strictly prohibited.Hyperinflation caused gold and silver to be priced and circulated in the market, and became the main object of financial speculation, and it was also the main obstacle for the RMB to occupy the market.The government strictly prohibits the circulation of gold and silver, and stipulates that the trading and exchange of gold and silver should be handled by the National Bank. Private trading and pricing are illegal.For the gold and silver in the hands of the people, they will be exchanged at an appropriate price, and the gold and silver will be gradually concentrated in the national bank for use as an international reserve. However, when the RMB was first issued, it could only solve the problem of unifying the national currency, and it was too late to solve the problem of currency stability. 1949 was the year when the War of Liberation was fully victorious. Fiscal expenditures soared, and a large number of RMB had to be issued to cover the deficit. Inflation was unavoidable.In this year, there have been several inflations of varying degrees. Inflation and speculative forces are like the relationship between fire and wind. Fire without wind is not enough to cause trouble, but fire takes advantage of wind, and wind boosts fire power, then inflation will immediately escalate!The core job of combating inflation is to combat speculative forces. In Shanghai, China's economic center, the government and speculators staged a massive price war.In the throes of inflation, the government finally got rid of the speculators and realized the stability of the RMB and commodity prices.