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Inflation's bad precedent old China - Jin Yuanquan issue of Inside

Jinyuan Quan After the KMT government issued a legal tender notes after, beginning August 20, 1948, stop at the July 3, 1949, lasted just more than in October, is the unprecedented speed of the history of currency devaluation. So far, those who still remember them when the body, fear. For this section the history of hyperinflation, should be fine comb, profound summary alert the world. Textbook on economic history, despite the book discussed this, then more elaborate, the lack of specific research. What exactly is in the context of Jinyuan Quan issue? How currency reform program introduced? Jinyuan Quan issued at the beginning of the effects? The process of its final collapse and how? To learn anything? The need for a system to explore and answer. The state of the following points, inappropriate, please remedy.

one extreme to curb expansion of the failure of legal tender

- Jinyuan Quan background

the issue why the KMT government to cancel legal tender, replaced by Jinyuan Quan is because of the extreme expansion of legal tender to its financial and economic, political and military brought a deadly threat, forcing them to have to change course to meet their urgent needs.

issue legal tender in the beginning (November 1935-July 1937), throughput, more stable, China's economic development has played a role. During the war, due to increase in fiscal expenditure, legal tender issuance rose sharply, totaling 556.9 billion yuan issue than war on the eve of an increase of about 396 times. However, the expansion rate, compared with the Japanese surrender, nothing less than heaven soil apart. KMT counting on strong, resumption of fighting in an attempt to quickly eliminate the CPC, resulting in voluminous military spending, the deficit surge, France Coins vertical rise. To the August 1948 issue Jinyuan Quan ago, legal tender issuance increased to 604 trillion yuan, an increase of more than 1085 when Japan surrendered times higher than the war on the eve of an increase of more than 30 times. Fabi expansion joint soaring prices, the price shot up, in turn, accelerate the velocity of the law and the depreciation of the currency rate, and even the printing of money is also the end of the factory, has been less than its paper and printing costs of the price. Guangdong, a paper mill, went so far as to buy 800 boxes par 100-2000 dollar bills, as the paper-making raw materials. (Note: Jack Baden:

legal tender in the extreme swelling caused great panic in the Kuomintang government. Cabinet Executive Yuan Soong, Qun cabinet have taken measures to attempt to check the legal tender swelling mad potential, but unfortunately begin with ended in failure, currency reform became no way of approach.

Soong's killer is selling gold. In the Japanese surrender on the eve of a meeting of national politics, he raving: . To February 1947, a total of 3.53 million two gold sales, accounting for 60% of the gold stocks, coins withdrawn from circulation method 998.9 billion yuan. (Note: Shanghai People's Publishing House, 1958, p. 96.) sell the gold coins withdrawn from circulation in the law which only 1 / 3. Can be seen selling gold coins is not to control the expansion of the intended purpose of law. Hold a lot of hot money to buy gold dignitaries to see more profitable than the hoarding of goods, so the big speculation in gold, gold buying wave of day upon day. Central Bank gold reserves can not meet market needs, Soong was forced to order a halt to the sale. Just days before the sale of gold, some speculators realized that the central bank to deposit the gold has done more to step up buying, so that the price of gold soaring, commodity markets chaos, namely, Shanghai famous Soong acknowledged

cabinet after the fall of the Song, the head of the Political Science successor Premier Chang Chun, Wang Yun-wu as vice president, Yu Hongjun was still finance minister, Zhang Jia @ ① for the central bank. Chiang Kai-shek would like to change the cursory, to suppress the gold trend and inflation. Chang's immediately forbidden to sell gold, gold against foreign exchange speculation and control methods, replacing the free gold selling policy Soong. At the same time, strengthening the puppet goods sold, issued $ 400,000,adidas scarpe,000 of short-term bonds and Treasury bills in an attempt to withdrawn from circulation legal tender. But all of these practices are futile, the rate of inflation continued to accelerate, and prices high tide coming up, Qun cabinet was forced to step down. In the meantime, Qun Wang Yun-wu had proposed special study by the financial, Wang said: quote from the fall, came to naught.

1948 年 5 months, the National Government, Weng was appointed Minister of Finance Wang Yun-wu, Yu Hongjun, president of the Central Bank. Chiang Kai-shek decided to carry out currency reform, and the bet to Weng Wenhao cabinet head. Since then, Jin Yuanquan into the intense preparation.

Second, Wang Yun-wu introduced currency reform program in charge of financial

Wang Yun-wu, a burst of noise caused by people inside and outside government. Commercial Press

Wang is a big publisher, multi-culture and education in China contributed to, as the January 1946, to personages without party affiliation to participate in the CPPCC session, was appointed as Minister of Economic Affairs Chiang Kai-shek. Weng Wenhao took office, Chiang Yu Hongjun original still finance minister, but Yu had just assumed the central bank president, and former president of Chia @ ① is in the process transfer procedures, Chiang Kai-shek then told his ministers to find themselves Weng Wenhao. Weng and Wang Yun-wu usually a good personal friend, and given the term of office, Vice Premier Wang studied finance, so the election of its palm financial. Wang Yun-wu no intention of claiming the starting job, 2, quoted in few sources, the management of their business experience alone, worthy of financial re-responsibility? Shanghai, some newspapers ridiculed for his big increase, the National Government Legislative Yuan also mistrust their.

Dion after the formation of the tax, Chiang Yu Hongjun Wang Yun-wu and currency reform were made to the instructions, they were organized experts to study, come up with specific programs. The results showed that Jiang Yu Hongjun rejected plans, and adopted a program of Wang Yun-wu.

Yu Hongjun specified in Shanghai, a 4 person research team, members of the Central Bank of Shanghai Financial Management Audit Director and the Secretary Li Lixia, Nankai University, Professor of Economics and Central Bank consultant Wu, central banks and economic research Deputy Director of Fangshan Jia, Hankou financial management of the Secretary Susie Yong (Shanghai Li Lixia, after replacing the post of Secretary for Financial Management.) 4 person team agreed that: In the case of civil war continue, not suitable for fundamental reform of the currency, if you suddenly changed, it will collapse faster. View of the fiscal balance is too large, you can not change the law on the basis of currency-based, the other by the central bank called the circle of gold currency, foreign exchange and pay taxes as a trading purposes, not circulation. With this approach, resulting in revenue increase to the equivalent of a large expenditure of 40% to 50%. Yu Hongjun be approval, and 4 person team that developed a specific program. Later, Yu asked the Chiang Kai-shek in Nanjing to bring this program, full of thought it would be much appreciated, but unexpectedly was not immediately tactics, Chiang believe that this program can not cope with the situation. Yu returned to Shanghai on the 4-member team that it appears that the Ministry of Finance to adopt the program Chiang, but also known as the Ministry of Finance does not know the specific content of the program. In fact, Yu Wang Yun-five participated in the study had presided over the currency reform plan can not know the ins and outs of this program, because Chiang Kai-shek told his side of Shanghai stress keep their secret, so he can only 4-member team did not know. (Note: see Li Lixia, to the study of currency reform plan to go, claiming He first asked the meeting were the Ministry of Finance officers, so that it review the old cases were related to currency changes and comments. In order to keep a secret, not to the Ministry of Finance staff aware of these practices has a relationship with the currency reform, Wang Yun-wu deliberately made the way only to listen, does not mean that personal views. He also cut and paste the Secretariat Room saved over the years by the domestic currency reform on seven, eighty kinds of data, one by one to read and summarize. After devoting a lot of thought, the king that balance of international payments and the control of economic and financial matters.