- Chinese name
- Legal currency
- Foreign name
- legal tender
- Issuing government
- National Government
- Date of issue
- November 4, 1935
- Stop circulation
- August 1948
- Definition
- Legal Currency of the Republic of China
1929 capitalism The world has broken out economic crisis The crisis has spread widely, damaged deeply Procrastination Its length is unprecedented in the history of capitalism. In 1931, due to the deepening of the crisis, the world financial crisis was triggered, and the old financial empire Britain also announced its stop gold standard 。 Starting from this point, all countries launched a currency war based on World War I Post prosperity based international monetary system , embarked on the road of collapse. Japan took advantage of the opportunity of World War I to expand vigorously, but all countries built tariff barriers , forcing Japan to enter other countries' markets by devaluing the exchange rate. In addition, after the UK abandoned the gold standard, Japanese goods were seriously threatened in the Chinese and Indian markets. Japan announced a ban on gold exports on December 13, 1931, making Japanese yen Internationally Non convertible banknotes 。 The United States after the First World War is the world's largest Creditor country It is also the largest gold deposit country in the world. Postwar Economic recovery Mislead ordinary capitalists into thinking world economy It will be prosperous forever. They will invest crazily and expand production, so the finance will relax suddenly and form credit Overexpansion 。 U.S. government To ease Financial panic And to avoid gold flight, announced the ban on gold export. After Britain and Japan abandoned the gold standard, their commodities invaded the markets of various countries. The United States was hit hard commodity market For the sake of this, the gold standard had to be abandoned in April 1933. The United States' actions aroused the world Monetary system More confusion, the currency war between countries tends to sharpen. Britain, America and Japan use their own monetary policy , on international market Start a fire fight on the. Both Britain and the United States hope to win and maintain International Financial Center Although they tried to save the failure of international trade by devaluing their currencies, they could not specifically safeguard their position Trade interests At the expense of greater financial interests. Japan's financial power is relatively weak, so it has no scruple to lower the currency price in order to export trade Expansion of. Therefore, at that time The currency of the world In the war, Japan was the only winner in trade. In this competition, western countries compete to reduce Monetary Value In the fight to devalue the exchange rate to increase exports and reduce imports, China export trade Suffer a lot the West The number of export goods has decreased and the price has fallen, resulting in the stagnation of domestic planting and manufacturing as well as agricultural, industrial and commercial activities; China domestic market On the one hand, due to the influence of unreasonable exchange rates of various countries, Imported goods Bargain sale , under great pressure Chinese Agriculture Market price of industrial products. With the development of the economic crisis, the financial tension has become more and more serious. In addition, the purpose and ambition of monopolizing the whole country's finance have driven these factors the Nanjing National Government Fundamentally consider China's Currency reform 。 China's monetary system reform based on the silver standard was implemented soon, and the economy in the early 1930s Great Depression Just swept through western world 。 Due to serious unemployment caused by the economic crisis, since April 1931, major capitalist countries such as Britain, Canada, Japan and Austria have abandoned the gold standard system, implemented currency devaluation, and attempted to Depreciation of exchange rate Open markets in other countries. The United States has also been hit hard in this crisis. In order to get rid of the economic crisis, President Roosevelt began to implement the "New Deal" in 1933, which stimulated domestic economic growth by increasing government spending, which requires the government to increase currency. Under the gold standard system, the issue of currency is subject to the government's Gold reserves Limitations. Under the balance, the United States adopted Gold silver standard system 。 The US government believes that buying silver in the market and increasing reserves can promote the price of silver to rise and increase the purchasing power In order to sell surplus goods to these countries; On the other hand, taking silver as the currency reserve can expand the currency. For this reason, in 1933 and 1934, the United States promulgated《 Silver Act 》A series of bills, including measures to raise silver prices, purchase silver, ban silver exports, issue silver bonds and nationalize silver, aim to reach the "three gold, one silver and one silver" ratio in reserve funds. At that time, in the United States Silver reserve Only $1.45 billion, only target value Half of. So the US government began to buy a large amount of silver in the New York and London markets. world market The price of silver rose sharply. According to the data, the silver price in London was 19.96 in June 1934 penny /In June 1935, the silver price rose rapidly to 36.25p/ounce, and within one year, the silver price rose 81%; In the same period, the silver price in New York rose from 45.4 cents/ounce to 81 cents/ounce, Increase 78%. According to statistics, the silver price in London on April 26, 1935 was three times higher than that in 1931, while the silver price in New York was 3.3 times higher than that in 1931. US Silver Policy 1929-1933 World economic crisis Later, the United States adopted a series of measures on the silver issue Policy measures The general name of. For example, the gold standard was abandoned in March 1933, and President Roosevelt announced to raise silver on December 12 purchasing price On June 19, 1934 Bank Purchase Act That is, to raise the price of silver, ban the export of silver, and stipulate that silver accounts for one fourth of the gold and silver reserves of the United States. Under the control of the US silver policy, the international silver price rose sharply. The reason why the United States implements Silver policy , for the following three reasons: (1) United States Congress Among them, there is a silver group composed of members of the silver producing state. They put pressure on President Roosevelt to improve Silver price 。 (2) The US government believes that the root cause of the world economic crisis is that the gold production is insufficient to meet the needs. It should adopt the method of combining gold and silver, and use silver to supplement the shortage of gold. It advocates the adoption of gold Duplicate digit system 。 (3) Adopt the method of raising the silver price to stimulate the purchasing power In order to sell surplus products to these countries and pass on the crisis. The impact of the U.S. silver policy involves many countries Reporting currency China, which suffered from the low silver price, fell into the disaster of high silver price, outflow of silver and deflation. The outflow of silver and the increase of silver price have greatly raised the value of China's currency and seriously hindered the development of foreign trade. All this eventually led to national economy The collapse, the reduction of national taxes, the emptiness of the national treasury, the difficulty of spending, the financial panic, and the deepening of the social crisis affected the ruling basis of the Nanjing National Government. The high price of silver in the world market has brought a heavy blow to silver standard China. Since the silver price in the international market is much higher than that in China Silver dollar Price, Foreign banks in China Buy silver dollars in China and ship them to New York and London interest arbitrage , leading to a large outflow of Chinese silver. Since 1926, the inflow of silver in China has always been greater than the outflow, money supply Abundance. Since 1932, Chinese silver began to flow out. In 1934, influenced by the US silver policy, China's currency outflow reached 227 million silver dollars. Reuters It is reported that from the end of June 1934 to January 1935, a total of 230 million yuan of silver in circulation in Shanghai was reduced. Except a small part of silver went into China, the rest was shipped to London or the United States. In the face of the outflow of silver, the National Government began to collect silver on October 15, 1934 Export tariff And balancing taxes to reduce silver exports. On October 16, the Foreign Exchange Stabilization Committee was set up to intervene when necessary foreign exchange market To stabilize the foreign exchange market price level 。 According to Market situation The central bank is entrusted to buy and sell foreign exchange and gold and silver. The market stabilization fund comes from the silver balance tax collected by the government and the Ministry of Finance. However, these measures failed to fundamentally solve the problem of Chinese silver outflow, and instead promoted the prevalence of silver smuggling. In the last few weeks of 1934, more than 20 million yuan of silver was smuggled out. The Japanese government's financial policy In 1935, the amount of silver smuggled reached 150 million to 230 million yuan. The silver policy of the United States made China's silver standard monetary system implemented less than two years in jeopardy. The outflow of silver has posed a serious threat to China's economy. Economic panics frequently occur Monetary tightening , people in the market are unstable, Bank run Occasionally, many banks and small and medium-sized bank So it went bankrupt. In June 1935, of the 92 cotton mills nationwide, 24 were shut down and 14 were under construction, reducing spindle More than 40%. Shanghai closed down in 1934 Industrial and commercial enterprises 510, and the number of closed enterprises from January to October 1935 reached 1065, 1.1 times the total number of closed enterprises in the previous year. In view of the above situation, the Nanjing National Government A series of Emergency measures : (1) Formulated silver export Tariff Additional export tax Balancing tax , curb the outflow of silver exports, and strive to recover the loss caused by silver exports Direct economic loss 。 (2) Illegal traders are strictly prohibited from smuggling silver for export. (3) Through diplomatic channels, the United States was asked to "stop buying world silver". These measures have played a certain role in rectifying the chaotic finance, but they have not and cannot stop the outflow of silver. Therefore, the Nanjing National Government had to seek a thorough solution, that is, implement Reform of legal currency 。 Sino British reform negotiation
stay China's economy In the danger of collapse, the government decided to give up Silver standard , implement the legal currency policy, but suffer from Monetary reserve Deficiency and Foreign exchange shortage , must obtain British and American Imperialism Only with the support of, can the currency system reform be carried out smoothly. China initially pinned its hopes on the United States. In order to avoid conflict with Japan, the United States adopted a "non cooperative" approach to China's currency system reform during this period Negative attitude 。 Britain is the oldest western country to invade China capitalist country In China economic interest Its attitude is much more proactive than that of the United States. In February and March 1935, Britain proposed to the US, Japan and other governments to jointly agree on a plan for collective assistance to China, which was rejected by the US and Japan. On June 10, Britain decided to send its chief economic adviser Liz Ross to China to investigate China's economic situation. At the same time, the United States, Japan and other major countries were invited to act together, but no response was received from all countries. Before Liz Ross went to China Bank of England President Norman discussed and drew up the loan to China - currency system reform plan: China should abandon the silver standard as soon as possible; The central bank is responsible for issuing banknotes; Only when China adopts the pound as the basis of its currency system can Britain provide loan assistance; This new note is in line with the rate of exchange , shall not exceed one yuan equal to one shilling and two pence; China can sell its cash abroad to get enough foreign exchange to prevent the collapse of the new currency system; Before the currency reform, China may require a loan as foreign exchange reserve Britain can provide a loan or credit only for currency reform. The Chinese side shall accept the following conditions: (1) Provide sufficient guarantee for the loan, including keeping British nationality General Tax Department Administration of customs; (2) Control the use of loans, which can only be used for monetary reform; (3) Reorganize the central bank and hire British consultants; (4) Reform the budget. There are also other political conditions. Norman even imagined that China would actually recognize Manchukuo As a condition, the proposal of a joint British Japanese loan to China was strongly opposed by Japan, and the Chinese side also said it was unacceptable. On September 21, Liz Ross arrived in Shanghai and held many talks with Kong Xiangxi and Song Ziwen on the currency reform plan. The Nanjing National Government was eager to carry out the currency system reform with the help of the United Kingdom. To this end, it was prepared to carry out the currency system reform in the relevant banks, currency system, budget, finance Customs management And taxation. UK Treasury They were basically satisfied with the negotiations with the Ministry of Foreign Affairs, but both believed that the cooperation of other major countries was important in the implementation of the loan to China - currency reform program, especially Japan's cooperation was the most basic. Because the British authorities feared that Japan's opposition would delay the loan to China, the initially agreed scheme of linking the Chinese currency system with the British pound deviated from the original idea of the British authorities. On the other hand, the United States took advantage of China's urgent need for foreign exchange reserves and Britain's failure to provide large loans to further manipulate world market Silver price, intervention Chinese currency With respect to foreign exchange affairs, China's currency system is even more unlikely to adopt the pound standard Sterling Group Has. China US Silver Diplomacy
Japan used to "support China and Japan's economy"“ loan on credit ”By other means, the Nanjing National Government was forced to incorporate the French currency into the yen system, and Britain appeared as the initiator of helping China to carry out currency reform, trying to incorporate the Chinese currency system into the British pound group. Kong Xiangxi adhered to the principle of "China's currency is pegged to whoever can provide loans for China's currency reform", so that the United States could no longer restrain its silence in the past, and first adopted a moratorium on London The method of buying silver in the market retaliated against the UK, and then attracted China. As a result, the silver price in London fell sharply, and Chinese silver could not be sold and could not continue to exchange for pounds as foreign exchange reserve The foundation of the fiat currency was thus shaken, which was negotiated and signed between the Nanjing National Government and the United States《 Sino US Silver Agreement 》Motivation. In early April 1936, Chen Guangfu 、 Guo Bingwen （ Ministry of Industry international Trade Bureau Director) Gu Yiqun (Deputy General Manager of Zhongfu Bank) and his party arrived in Washington. At first, China had two purposes in determining Chen Guangfu's mission: (1) to sell silver to the United States at a better price; (2) Restore the unused portion of the 1933 US cotton wheat loan. Henry Morgenthau China's requirements were considered as far as possible, and the requirement of pegging the French currency to the US dollar was completely abandoned. The discussion between the two sides went smoothly. On April 23, the expert group reached an agreement. On May 12, Morgenthau confirmed the agreement. Its main contents include: (1) The United States will Buy in China 75 million ounces of silver; (2) The proceeds from China's bank sales are deposited in New York Bank of America : (3) China's monetary reserve should be at least 25% silver; (4) China has expanded the use of silver in art and industry; (5) China will cast one yuan and half yuan with 72% silver in the United States Fractional currency ； (6) China has changed the way its legal currency and foreign exchange are quoted to avoid the impression that the legal currency is linked to the pound; (7) With 50 million ounces of silver in New York as collateral, Federal Reserve Bank of the United States Provide 20 million US dollars to China Exchange Fund 。 After the currency system reform, until the outbreak of the War of Resistance against Japan, China sold 187 million ounces of silver to the United States, plus 2 million ounces sold in 1934 but not delivered until December 1935, and 2 million ounces quietly sold in London with the consent of Morgenthau in May 1936. The total income of the Chinese government from selling silver during this period was almost 100 million dollars. These coins are the indispensable backing and pillar for the reform of legal currency.
Japan's sabotage and obstruction
In the process of China's legal currency reform, the United Kingdom and the United States colluded and fought for their own interests, and the results of their struggle played a positive role in the reform of the legal currency. However, Japan hopes that China will always be poor and backward. It opposes any innovation measures taken by China and maintains a destructive and hostile attitude towards the legal currency policy from beginning to end.
On the eve of the currency reform, Japan Silver Tide China has taken all kinds of despicable measures to try to completely destroy China Financial currency At the same time, the Nanjing National Government was attacked and pulled at the same time. It adopted a dual policy of "China Japan support" and "separation by force", in an attempt to exclude British and American forces in China, and then completed the war against China, first of all North China Economic control And encroachment. The Nanjing National Government did not Backward Japan, on the contrary, is more inclined to Britain and the United States under the pressure of Japan. In September 1935, the British government sent Liz Ross, its chief economic adviser, to visit China. After many secret talks with Liz Ross, the National Government, including Kong Xiangxi and Song Ziwen, officially announced the implementation of the currency system reform on November 3, 1935. Japan was very angry about this, and adopted the so-called "complete stop" method, mainly by exerting military and political pressure to force the Nanjing National Government to give up its intention to rely on Britain and the United States, and at the same time, it also prohibited the southward movement of silver to prevent the concentration of cash. Since the monetary reform carried out by the Nanjing National Government was successively supported by Britain and the United States, the Japanese government felt that Financial strength It is impossible to compete with it, so we changed our strategy, no longer obstructing the reform of the currency system on the surface, but secretly planned to issue Japanese banknotes in China and establish the so-called "independent currency system", which is nominally linked to the French currency, but actually is a colony with the Japanese yen as the exchange standard Monetary system Its purpose is still to directly target and undermine the reform of the national government's legal currency. International factors The impact on the reform of legal currency can be examined from both indirect and direct aspects. Indirectly, 1929 World Economic Crisis After the outbreak, countries have abandoned the gold standard, competing to devalue the value and exchange rate, and launched a currency war. China was oppressed by various countries in the international and domestic markets, rural bankruptcy, industrial and commercial stagnation, and financial panic caused by the economic crisis. The national government had to consider fundamentally reforming the currency system; Directly, the United States Silver Act As a result, silver prices rose, a large amount of silver flowed out, financial panic and social crisis deepened, which became the main factor promoting the reform of the French currency. All countries are trying to Legal currency reform China has imported their private goods. For their own interests, major Western countries such as Britain and the United States adopted a supportive attitude towards the reform of the legal currency of the Nanjing National Government. Britain was the first to intervene in China's currency system reform in 1935, but because Britain was afraid of offending Japan, it delayed lending to China, providing an excellent opportunity for the United States to intervene in China's currency system. Since then, in the fight for China's financial control power The United States gradually gained the upper hand in the competition, and its economic ties with the Nanjing National Government began to surpass that of Britain. Japan's opposition and destructive attitude towards the reform of the French currency has formed an external pressure, which has made the Kuomintang authorities further turn to the United States and Britain, especially the United States. Accordingly, the Nanjing National Government also changed its diplomatic policy towards Japan from compromise to toughness. Thus, Japan monopolizes China's Aggressive policy And British and American interests in China Sphere of influence The conflict between China and its Far East policy gradually intensified and became public. The currency reform Chinese currency Completely decouple from silver. But at that time, the Chinese government lacked enough gold or silver to determine the legal currency Gold content Therefore, the government plans to concentrate the silver and gold of the national treasury and the private sector, sell the foreign exchange in the New York and London markets as a reserve to guarantee the issuance of French currency, and use foreign exchange as the basis for determining the value of French currency. On November 5, the Central Bank announced the French currency pair pound Price comparison : 1 French franc=1 shilling 2.5 pence (based on the foreign exchange rate of 1930-1934 average OK). From this day on, Foreign exchange rate It is announced day by day, and the above three banks assume the responsibility of stabilizing Market exchange rate Responsibility. This provision actually marks that the National Government has joined Sterling Group ， China's economy and British economy The relationship between them is closer. The US government is very dissatisfied with China's joining the Sterling Group. Implemented in the National Government Legal currency reform Previously, the United States used to purchase 100 million ounces of silver from China as a condition, requiring the French currency to dollar Established between fixed rate However, the National Government did not accept it. So on December 9 of the same year, the United States stopped in London Market acquisition Silver, international market The silver price then fell, so if the National Government sold silver at market price, China would suffer huge losses. The unilateral plan to sell silver in exchange for legal reserve was frustrated. Forced by reality, the National Government again contacted the United States Government. 1936 Shanghai Commercial Savings Bank Chen Guangbu, General Manager Ministry of Industry international Trade Bureau Director Guo Bingwen Manager of Shanghai Zhongfu Bank Gu Yiqun The delegation visited the United States, and Secretary of the Treasury Morgan talks about money. Signed by both parties in May《 Sino US Silver Agreement 》。 According to the agreement, the US government purchases 50 million ounces of silver from China at 50 cents per ounce; The French currency is pegged to the US dollar, 100 French dollars=30 US dollars; In order to keep the fluctuation of the exchange rate of the United Kingdom and the United States within the range limit triangular arbitrage , China expands Foreign exchange trading Price difference range. (21) The agreement enabled the National Government to regain the support of the United States in monetary reform and maintain the stability of the external value of the French currency Although the National Government established a fixed price relationship with the British pound and the US dollar, the French dollar was not pegged to the British pound and the US dollar. In fact, what the National Government implemented was adjustable exchange rate system 。 After the implementation of the French currency policy, the external value of the French currency was realized by pegging the British pound and the US dollar. The Central Bank, the Bank of China and the Bank of Communications have no restrictions on buying and selling foreign exchange, Selling price 14.625p, Buying price 14.375p. In September 1936, the National Government expanded the exchange rate as needed Bid ask spread , the selling price is 14.75p, the buying price is 14.25p, and the above three banks still supply foreign exchange indefinitely to maintain Exchange rate stable. Subsequently, the external value of the French currency gradually declined. After the outbreak of the Anti Japanese War, in order to reduce the need for foreign exchange and prevent funds from escaping, the National Government implemented financial measures to stabilize and restrict depositors from withdrawing funds. During this period, the foreign exchange rate of the French currency gradually decreased. In March 1938, in order to prevent the puppet organization Counterfeit currency Exchange French currency, get foreign exchange, and apply for approval to purchase foreign exchange exchange control 。 stay Primary currency On the basis of continuous reform, the National Government also unified the standard of fractional currency, and announced on January 11, 1936 Fractional currency Regulations, completing the last step of this round of reform. So far, the monetary modernization reform of the National Government came to an end. silver The price increase also caused China to the West currency exchange rate The increase stimulated imports, while exports declined significantly over the same period. Main Commodities of China in 1935 raw silk , tea, etc value This is about 65% less than that in 1929. National Government And many times U.S. government Negotiation, requiring the US government to follow London Silver Agreement In principle, the purchase of silver was stopped, but the US government turned a deaf ear to the request of the National Government. serious economic crisis Forcing the National Government to give up Silver standard Degree, further Monetary system Reform. Britain is old school capitalist country , there are huge economic interest Therefore, he paid close attention to the choice of monetary system of the National Government. On June 7, 1935, the British government appointed Sir Liz Ross as China's financial adviser. On September 21, Li's Arrive in Shanghai, and then visit North China south China and Yangtze river basin And communicated with the National Government for many times Monetary reform Many suggestions were made. Subsequently, the US government also appointed Yang Ge to participate in China's currency Institutional reform 。 With the support of the British and American governments, the National Government began a new round of monetary system reform. On November 3, 1935, the Ministry of Finance issued an announcement announcing the implementation of the legal currency system nationwide. The announcement pointed out: "Since recent years world economy Panic, major countries lead to phase change monetary policy , no coins are allowed to circulate. Our country takes silver as its currency. Silver price Since the drastic changes, it has been greatly affected. domestic currency The phenomenon of austerity is extremely significant. As a result of the industrial and commercial relocation, all businesses are not thriving, and capital flows out, Balance of payments Mongolia is not good, national economy As time goes by, all kinds of bad situations have arisen simultaneously. " "If no effective measures were taken at that time, the domestic cash deposit would be exhausted End it Yu, this is known to the Chinese people. " "The Ministry specially implemented the bank levy on October 15 of last year export duty Concurrent courses Balancing tax , in order to stop resource spillover and preserve the country Economic lifeline The emergency crisis was saved. Although Gu Chengxiao has been working for a while, it is not a fundamental remedy. " "Recently, domestic inflation has become more and more tight, people are panicking, and the market has become more depressed. In the long run, Economic collapse There must be some unimaginable. In order to save itself and revive the economy, the government must preserve the currency of the national lifeline reserve To seek permanent stability in monetary and financial affairs. With reference to the recent precedents in various countries, the measures are hereby formulated and will come into force today. " The announcement stipulates six measures, including: the issuing authority of legal currency is central bank 、 Bank of China 、 Bank of Communications , (awarded in 1936 China Rural Bank publishing right ）, while other bank notes are gradually withdrawn; Establishment and issuance Prepare the management committee to maintain reserves and manage the issuance of legal currency; country unified management Silver, industrial, commercial, public and private exchanges must use French currency, and silver held by individuals must be converted into French currency; The Central Government, China and the Bank of Communications have no restrictions on buying and selling foreign exchange to stabilize the legal currency External value And keep the exchange rate stable. 
The value of 100 francs
The value of 100 francs During the War of Resistance against Japan, expenditure The number of legal coins was increased. By the end of the war, it had reached 556.9 billion yuan, about 400 times more than that before the war. After 1946, the circulation of French currency increased even more, from 556.9 billion yuan in the victory of the Anti Japanese War to 604 trillion yuan in August 1948, an increase of more than 1000 times in three years, resulting in runaway inflation 。 There was Paper mill Make profits by using low denomination legal coins as raw materials for paper making. Song Ziwen dean When, try to financial policy Stabilizing fiat and selling inventory Gold purchase Back to French currency. However, because the circulation of French currency is still increasing, no results have been achieved. After May 1948, Weng Wenhao became the president of the administration, Wang Yunwu Be appointed as finance minister , start planning another Monetary reform , with Gold Coupon Replace legal tender. [2] Some people believe that: national bank Issued in the country Credit guarantee The legal currency of Price fluctuation The decoupling of precious metals was a kind of progressive finance in China at that time Institutional reform ； It is also a modern country banking system The characteristics that should be under. The issue of legal currency unifies the domestic currency, while the issue of currency control power In the hands of the government, domestic silver, etc Hard currency Therefore, it is concentrated in the hands of the government. The fiat has contributed a lot to maintaining China's finance during the Anti Japanese War. However, the actual effect of the implementation is that the official banks plunder the wealth of the people, making the people's savings into nothing. 
