Chapter 83 Battle of Cotton Cloth

"Whoever can explain China's achievements in controlling inflation in the early days of the founding of the country is enough to win the Nobel Prize in Economics."【14】 — Friedman On October 1, 1949, Mao Zedong solemnly announced on the Tiananmen Gate: "The Chinese people have stood up!" Only half a month later, with Shanghai and Tianjin as the leaders, the national prices began to soar. The prices in November have doubled compared to the end of July!Before the people straighten their waists, they are bent by inflation. This situation was within Chen Yun's expectations.On the one hand, the war is still going on, and the military expenditure is huge. The government has to rely on increasing currency issuance to make up for the military expenditure.On the other hand, the speculators suppressed by Chen Yun's iron fist in the Silver Dollar War were unwilling to fail, and bet on the daily necessities of the common people.Their wishful thinking is that if the Communist Party can confiscate silver dollars, can it also ban the trading of grain and gauze?If the common people can't buy grain, they will definitely find trouble with the Communist Party. At that time, the Communist Party can only obediently go to speculators to buy grain and cotton cloth.

How did they know that Chen Yun has already figured out the key to stabilizing prices, that is, the government controls the quantity of major materials, "people are not disturbed, and food is in the center of the city."The strategy to deal with speculators is to hoard supplies compared to speculators on the one hand, and on the other hand to draw the bottom line on their sources of funds. This is to tighten money! Speculators made the fatal mistake of Hu Xueyan back then, and the hoarding party challenged the government, but if they do not have the power to issue currency, they are looking for death!

The Central Finance Commission organized large-scale transportation of grain, cotton, and cotton cloth across the country and conducted centralized management.Chen Yun sent Cao Juru, the backbone of the National Bank of the Soviet Area, to the Northeast to transport grain.He personally ordered Cao Juru to sit in Shenyang, send a carload of grain to Beijing every day, and store it in the Temple of Heaven, and let the grain dealers see that the grain stockpile is increasing every day. The country really has grain, and the price increase is not worth the loss.He also instructed Qian Zhiguang, the head of trade in the Soviet area, to go to Shanghai, Xi'an, Guangzhou and other places to adjust the gauze stocks in various places so as to act in a unified manner.

At the same time, various methods were adopted to tighten monetary conditions, one is to collect taxes, and the other is to issue public bonds.In addition, capitalists are ordered to pay wages to workers on time, and are not allowed to stop production and transfer funds to speculative activities.It is also required that state units must deposit cash in the national bank and are not allowed to deposit in private banks.Strict financial management was implemented on private houses.The People's Bank of China also introduced "deposit savings" to absorb social idle funds.In this way, the hot money in the society was gradually sucked up, but the speculators did not realize it, and continued to borrow funds at high interest rates to buy grain and gauze.

As of November 13th, the state could transfer no less than 5 billion jin of grain, the state-owned China Textile Corporation controlled half of the national output of cotton yarn and cotton cloth, the People's Bank of China absorbed 800 billion social idle funds, and speculators were already in deep siege. Know. At this time, Chen Yun believed that the basic conditions for stabilizing prices had been met, won 12 gold medals in a row, and formulated detailed rules for keeping a close eye on price targets, concentrating supplies, and cracking down on speculators, making the final deployment for the war.

Beginning on November 20, state-owned trading companies in major cities such as Shanghai, Beijing, Tianjin, and Hankou began to ship goods one after another.When speculators see that there are more supplies released, no matter how much the price is, they rush to buy them.This time, while the state-owned company is selling materials, it is actually gradually increasing the price, moving closer to the black market price.What kind of medicine is sold in this gourd?Does the government also want to take advantage of price increases?They didn't expect that this was Chen Yun's trick of "leading the snake out of the hole" to lure the speculators to take out all the funds in their hands.

Based on past experience, speculators judge that tight commodities can rise several times a day, which can not only meet the lending interest, but also obtain huge profits.They also didn't care much about the motives of the state-owned company's price increase, and they ate everything crazily, but the money in their pockets was sucked dry without knowing it.If the bank can't get a loan, it will borrow usury, even paying 50% or even 100% amazing interest every day! On November 24, the overall price level reached 2.2 times that of the end of July. This is exactly the price target set by Chen Yun. At this level, the materials in the hands of the state are equivalent to the amount of currency circulating in the market, and the government concentrates its efforts on speculators. It's time for a decisive battle to launch a general offensive!

On November 25, at the same time in various places, state-run trading companies began to sell gauze in an all-round way, and kept lowering the price. Speculators dared to accept the move at the beginning and continued to eat in.But the materials from the state-owned companies flooded in, and the funds in the hands of speculators were drained in a few strokes.At this time, the speculators realized that something was wrong, and quickly "cut the meat" to sell the gauze hoarded at a high price.The more they tossed, the more they lost, and the cotton yarn market fell like an avalanche.

After the government sold goods for 10 consecutive days, the prices of commodities such as grain and cotton plummeted by 30 to 40 percent.Many speculators couldn't bear it anymore and went bankrupt one after another. Speculators in Tianjin committed suicide by jumping off buildings one after another.Dozens of private wholesalers in Shanghai went bankrupt at once, and cotton cloth speculators lost a total of more than 25 billion yuan. Three months later, Chen Yun adopted the same tactic and dealt the final fatal blow to the stubborn speculators in the food war. Since then, the speculative forces have collapsed, and they have not been able to form a climate in the next 50 years until 2010 Years of "Garlic You Ruthless", "Bean You Play", "Ginger You Army".

Since then, prices have gradually stabilized, and the hyperinflation that has been rampant in China for more than ten years has finally been tamed! The speculators in Shanghai were defeated and lost all their money. They lamented: "The Communist Party really has capable people, we can't beat that little man (referring to Chen Yun) from the Commercial Press!" The only thing that gave them a little comfort was that they lost to a rival They are more budget-conscious and more able to play with their fellow Shanghainese in the market. The heavy blow to speculative capital has completely suppressed the Shanghai industrial and commercial people.Rong Yiren said that the CCP used political power to suppress the silver dollar craze in June, and this battle of grain and cotton can be stabilized completely with economic power, which has taught the Shanghai business community a lesson.

In this battle of grain and cotton, the government not only was able to take the initiative to deal with it, but also achieved the predetermined goal in a planned and step-by-step manner.Both the general price index and the prices of major commodities are at the expected level.Inflation that Chiang Kai-shek could not solve, and prices that the Americans thought could not be quelled, were realized in one fell swoop by Chen Yun and his colleagues through precise calculation and strict implementation. Zhang Naiqi, a well-known financier and advisor to the Central Finance Committee at the time, once admired Chen Yun’s timing of counterattacking speculative forces: “At that critical moment, intellectuals like us will inevitably suffer from the acute disease of subjectivism. I used to He repeatedly suggested to start early and exert pressure on the market. However, the person in charge of financial affairs (referring to Chen Yun) was so calm and firm, thinking that based on the comparison between the amount of currency and the amount of materials, the time is not yet ripe, and more strength should be prepared. At the same time, it is advisable to take a few steps back from the market position in order to gain the initiative and carry out a counter-offensive. The reality after the fact tells us that this strategy is completely correct. The economic counter-offensive starts in mid-November, taking Wufubu as an example, in November The market price on the 13th was 126,000 yuan per piece, which has more than doubled compared with 55,000 yuan on October 31. That is to say, if the counterattack was half a month earlier, the ability of two pieces of cloth to absorb money back into circulation would be the same. It won’t be as good as a horse half a month later. For example, when using soldiers, after the enemy has penetrated into the terrain that is absolutely beneficial to us, one division can display the strength of two divisions, and we can surely defeat the enemy.”【15】 What kind of person is Zhang Naiqi? In 1948, Chen Cheng once recommended Zhang Naiqi to Chiang Kai-shek as Minister of Finance to save the crisis.Chiang Kai-shek sighed and said: "I want to use Zhang Naiqi, but he is not for me!" It can be seen that Zhang Naiqi's level, and it can be seen that Chen Yun is the best of the best. Mao Zedong believed that the victory in this price defense war was of great significance, "no less than the Battle of Huaihai".Once, Bo Yibo reported work to Mao Zedong and said about Chen Yun: "Comrade Chen Yun is very effective in presiding over the work of the Central Finance Committee. He always has the courage to do what he sees right." After hearing this, Mao Zedong replied: "In the past, I I haven't noticed it yet." After finishing speaking, he picked up a pen and wrote the word "able" on the paper.Bo Yibo asked: "The word 'able' you wrote, does it mean that Zhuge Liang described Liu Bei's words of praise to Xiang Chong in "The Former Teacher": "General Xiang Chong, who has a good personality and good military skills, tried it in the past. The first emperor called it Neng.’” Mao Zedong nodded in agreement. 【16】 Judging from Chen Yun’s command of the entire battle of grain and cotton, he has both the sharp insight of a genius economist and the mastery of details and market timing of a super trader. He is the perfect combination of Friedman and Soros. No wonder someone once said that those who won the Nobel Prize in Economics are not at the same level as Chen Yun, Xue Muqiao, Nan Hanchen, etc., because none of them had the opportunity to actually test them in the most populous country in the world theory.Friedman and Samuelson and others focused on free markets, while Stiglitz emphasized government planning and regulation.As early as the early days of the founding of the People's Republic of China, Chen Yun put forward the guiding ideology of economic work of "big plan, small freedom", which not only emphasized government regulation, but also paid attention to the free market. If there were veterans like Chen Yun, Xue Muqiao, and Nan Hanchen, would the problem of uncontrollable high housing prices in China still exist today?