In China, money is synonymous with money. Chinese silver, currency, long time. In the late Ming Dynasty, China's currency system of silver began in the core position. To the Qing Dynasty, has formed the bulk of trade with the silver, civil small transactions the situation with copper. can be said that since then, China has established a silver-based monetary system.
the world, other countries also adopted the silver standard, but in 1870, although the market still a large number of silver coins in circulation, but the gold standard become the mainstream of the international monetary system has been adopted by most countries. Another big bank based in India, in 1893 abandoned the silver standard, gold standard adopted in 1899. to the 20th century, 30 years in the world's major economies, only China is still using the silver standard.
China and other countries in the world based on the currency resulted in a situation such differences: silver in other countries they're a commodity, and in China, silver is a core element of the economic system, currency mm.
this situation for China is favorable or unfavorable do?
first look at the silver at the world's major producing areas.
Although the implementation of Bank standard system, but China is not rich in silver deposits. silver currency needed to rely heavily on imports. played an important role in history is a microcosm of the situation. America is the world's main producers of silver. this one, the United States position is essential. First, the U.S. itself is a large country producing silver .20 century, 20's, the U.S. silver production accounts for 32% of world production; and, through investment, the United States control 34% of Canada's silver production in Peru, 87%, 89% of Central America, Chile, 83%; merged, the U.S. controls the world's silver production of capital two-thirds. In this case, the world market price of silver to the United States have a special meaning, while silver prices will inevitably be a significant impact on U.S. domestic policy.
major U.S. silver production concentrated in the western Utah, Idaho and other seven states. Although this is less than the total population of seven states, a state in eastern New Jersey, but the U.S. Senate, both houses of Congress, one of the seats in the Senate, all states are the same, are two. So, seven silver producing states in the U.S. Congress to become an important force. Thus, for the U.S. president, on the other issues in order to get the support of the senators, employment rate. Therefore, when the world market price of silver fell, these senators to put pressure on the U.S. president, asked the Government to maintain the large number of acquisitions by the market price of silver.
government needed money to buy silver from print out their new silver certificates. This naturally will bring inflation. and inflation is another group of powerful congressional mm agriculture group needed, because inflation can make the prices of agricultural products. The results, the two forces in Congress Group on this issue to stand together, jointly contributed to the June 1934 about half of China's two) the market price of silver reached $ 1.29 so far.
Act were published, the U.S. government began a large number of acquisitions in the domestic market of silver. Although the bill has not reached the required level of prices, but the silver market So there is indeed a substantial price increase. to the end of 1934, silver prices rose by 26.7%; 1935, further price increases.
. The subsidy does not generate any positive economic benefits to a large extent, just a waste. But this waste for the United States, only a local problem. After all, silver is only a common U.S. goods. other silver standard is not adopted country, even if there are silver coins in circulation, the rising price of silver did not cause any harm to them. When the price of silver exceeded the face value of silver since, people take it as long as the silver coins melted down to re-cast block to avoid the loss of silver.
but for China, big trouble.
then Shanghai is China's financial center. a lot of silver accumulation in Shanghai, the banks vault. When the price of silver rise, in pursuit of profits, these banks have to save the silver out of China into the world silver market in the profit. For a time, appeared in Shanghai on board the export of a huge picture of .1934 silver in August, the Shanghai silver output than in July jumped by 3.5 times. to the end of the year, Shanghai has kept the total 393 million ounces of silver fell to 253 million ounces. other than the financial city of Shanghai and the port, such as Tianjin, Qingdao, also appeared in the outflow of large amounts of silver situation. In addition to legitimate exports, but also large numbers of smuggled silver, all over the South China, Central, North, Southwest and other parts of the coastal border .1934-1936 years, the customs and smuggling channels, China a total of 645.31 million ounces of silver outflow, or about 1.29 billion yuan . The majority of the outflow of silver went to the United States.
large outflow of silver, a direct result of China's silver crisis, which is deflation. the market's sharp decline in silver. As trade with China, the major countries have adopted the gold standard , silver prices surged makes China's currency, reducing exports and increasing imports. soon, China's trade surplus into a deficit from the original. and this deficit further increased the outflow of silver.
deflation also caused domestic prices plunged .1934 in July to October, prices fell by 21.7%, a large number of industrial and commercial bankruptcy. rural areas are particularly hard hit, farm prices plummeted. coupled with adverse weather in 1934, China's rural regions the economic decline.
significant reduction in currency in circulation, and ultimately caused the crisis in the financial system. First interest rates rise, then there depositors cash in the bank run. The first big Xi Chu Shanghai Commercial and Savings Bank reduced the amount of savings 30 million yuan, a decrease of 18%. Shanghai, Tianjin, Ningbo and other places have closed down there a lot of banks and banking crisis. The Government had to purchase silver at high prices from Hong Kong to support the basic flow of market needs, to save the financial system crisis .
sharp rise in the price of silver, so that China's economy faces the risk of total collapse.
then many people are aware, it is caused by the U.S. government acquired a large number of China's silver silver crisis. Embassy Minister Sze submit a note to the United States have added that the U.S. silver policy for the Chinese government can not tolerate. The Chinese Government has also taken to combat smuggling of silver, silver the introduction of export taxes and other measures to suppress the domestic price of silver, but because the U.S. government to continue the existing silver policies China's domestic price of silver has not been controlled.
the end, the Chinese government implemented a law in 1935 currency reform, abolition of the silver standard, the implementation of Baiyin Guo a, and the silver sold to the United States, in exchange for foreign exchange, as the basis for issue of legal tender . Fabi landmark in the history of the Chinese currency reform is a major event. The success of the reform made out of China due to rising silver prices caused the silver crisis, the unity of the modern Chinese economy has been troubled by the chaos of the currency out of the system surrounded by silver standard nations gold standard countries disadvantage. Law currency reform, law that is in the economic integration of the world, a country with other countries stick to the importance of different economic systems, it is likely to be in a vulnerable position. silver for the Chinese currency, it is common for products of other countries. This As a result, the natural meaning of the price of silver in China and to other countries for very different. The result is that, if other countries have the need to change the price of silver, the Chinese would be forced to be implicated. the reality is really the case, the U.S. president to please a few senators, determined to among the general approach by the world. Only in this way can China become a beneficiary of global economic integration, rather than the victim.
Although the law out of silver dollars in the currency reform has made significant achievements in the crisis, but, after all, this reform is forced by the crisis in the Silver Dollar forced, and the required systems and economic conditions are not fully mature, it laid for the future of the monetary system an important negative factors, that is, the precious metal as a currency no longer value of security, inflation has become a major potential hazard.
China's misfortune is that misfortunes never come singly. Act shortly after the currency reform in 1937, the overall Sino-Japanese War broke out. war dramatic increase in government spending. In order to meet such expenditures The Government had issued a large number of printing money. At this time, the absence of the precious metal as a guarantee, the ability of government-created inflation has greatly increased .1937 -1945 years, the currency issue increased by almost 300 times. And the price is almost the same period rose 1600 times. because of the war and the role of foreign aid, inflation did not cause serious damage. But after the end of the War, in the face of civil war, once again, inflation to solve the financial crisis. This time, the expansion rate is unprecedented may also create a new record level of world inflation. Chinese people suffered a terrible trauma for this.
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