The world developed to the beginning of the 20th century, and the capital world was already highly developed. However, China was still a country with silver as its main currency. Even the treasure banknotes and other banknotes of the Ming Dynasty quickly withdrew from the historical stage. There were many paper money issued around the Republic of China, but they had never become a unified currency in the country, nor were they accepted by the market, nor were they modern central bank system.

Even Hualian failed to establish a national legal currency, but only rely on its own strength and credit mechanism to maintain Huayuan's strong currency status at home and abroad. However, because of the implementation of the authority value setting, Huayuan's circulation status is also declining.

The erecting of barriers and protection also means a decline in external purchasing power. For Hualian, which is implementing a planned economic system, this is a price that must be paid.

In this era, as the most important silver standard country, changes in the world's silver price will have an impact on China's currency and economy. When the international market's silver price falls, silver will pour into China, and when the international market's silver price rises, silver will flow out in large quantities.

Silver is a general commodity in the international market, but in China, it is currency. Therefore, once silver flows out in large quantities, it will lead to a series of economic chain reactions.

The West's financial and monetary war against China was carried out through such fluctuations in silver prices. To control the benefits of China's Western powers abandoning such continuous plunder, it also requires special background and price to pay.

Jiang Ruiyuan actively seeks support from Britain and the United States, and the fundamental reason lies in the fact that he uses the country's monetary dominance to peg the monetary system of Britain and the United States to gain full support from the other party. Only in this way can the government maintain a strong position in the country and resist Japan's invasion militarily.

In the 1880s, China's national income was about 2.78 billion silver taels, and the tax burden of the people accounted for about 3.2 billion silver taels. Based on this tax rate, based on the fiscal revenue of 104.92 million silver taels in 1903, the total national income that year was about 3.28 billion silver taels.

According to the national income of 3.28 billion silver taels, the total debt of 650 million yuan in compensation for the Sino-Japanese War and the Gengzi Indemnities was approximately 20% of the national income in 1903, which is a little lower than the balance of 2.9 trillion yuan in treasury bonds in China after opening up in a certain time and space. The balance of 21.6 in GDP was 21.6.

From this perspective, the financial and national debt situation in the late Qing Dynasty was not worse than that in the Red Dynasty. From the search of Heshen’s house, he could get 900 million taels of family wealth, all the compensation for foreign defeats in China was not as much as that of a corrupt official in China.

Therefore, in terms of amount, the defeat to the foreign war will not cause China to collapse. However, due to the lack of a modern financial system, all the silver circulating in China was only 600 to 1.1 billion taels. In the 1930s, China collected silver dollars against the whole country in fiat currency, including a large amount of inferior yuan with extremely impure private castings by warlords from all over the country, and the income was only 1.4 billion yuan.

A silver dollar is only about 0.7 taels. Such a huge amount of foreign debt causes silver to depreciate externally and appreciate internally. The currency invasion of Western powers greatly plunders China's resources, and the wealth that flows out every year is about four Shimonoseki Treaties.

Let the great powers give up such huge benefits and allow China to achieve financial integration with the world financial system. Without additional costs and special historical background, it is impossible to establish a modern financial system in China.

From 1931 to 1933, during the crisis of the entire capitalist credit system, Western countries abandoned the gold standard and implemented a policy of currency depreciation to improve the competitiveness of their own products in the international market, thereby achieving the goal of dumping domestic surplus products and passing on the crisis.

Even Hualian has begun to completely abolish the silver standard system, but has established a financial and monetary system, and used hard provisions such as authority values ​​to maintain Huayuan's autonomy and stability and avoid being infiltration and control by the great powers.

Unlike the government that was forced to deliver its own currency issuance rights to the United Kingdom and the United States, Hualian has an independent industrial system and has very little foreign trade demand. The members of the China Economic Union are also happy to maintain their consumption capacity within Hualian rather than external procurement.

But for China at this time, through such a banknote-to-silver game since the Sino-Japanese War, the West has long made a lot of profits in China. China's assets are very low, and the use of real silver is the weakness of Western financial currency plunder.

Until this time, China was already poor and had no much benefit to be extracted through financial currency. At the same time, China's huge population and market were a good place for the West to dump excess capacity. This situation changed. How to improve China's purchasing power and get Western dumped products out of the crisis was the focus of the time.

Of course, the above places only include areas directly controlled by the government, and do not include the ruling areas of Hualian and the puppet Manchukuo built by Japan in the Northeast.

After the September 18th Incident in 1931, Britain and the United States supported China in issuing paper money. Another major reason was that Japan's influence in China expanded and Japan penetrated a large amount of Chinese capital.

Japan recycled a large amount of silver controlled by its monetary reform after establishing the central bank, and then lent it to and invested in China in the form of capital, achieving huge benefits and controlling China economically. A large amount of China's borrowing and investment in Japan, and trade was calculated in silver.

At the same time, there are also a large number of Japanese yen loans that are guaranteed by China's silver income. Not allowing Japan to control China is also one of the strategic priorities of Western powers. The demands of Western powers for China's economy and finance have changed, so China's monetary reform can be implemented.

Due to the bankruptcy of major countries in the crisis, a large amount of money hoarded in the gold market was transferred to the silver market, and the speculation of silver caused fluctuations in the silver price.

In order to stabilize the world silver price, eight major silver-producing or using silver powers, including the United States, China, and India, signed an International Silver Agreement at the London World Economic Conference in July 1933.

It stipulates that the US government purchases no more than 35 million ounces of silver per year, while China promises not to sell it, and destroys the silver obtained from silver dollars from 1934 to 1937.

However, in less than a year, the United States violated its international obligation to stabilize silver prices. On June 19, 1934, under pressure from the silver group in the US Congress, US President Roosevelt signed the Silver Purchase Act of 1934.

The bill stipulates that the U.S. government should try to increase the price of silver per ounce to $1.29 by purchasing it; or increase the proportion of silver in the U.S. currency reserves to a quarter.

These policies caused the price of silver to rise, and the law was implemented on August 9, 1934, ordering the nationalization of silver and purchasing silver from the world market.

This action by the United States immediately triggered a soaring price of world silver, from $0.35 per ounce at the beginning of 1934 to $0.55 in October, and to $0.81 in April 1935.

Silver prices soared. The West's efforts to purchase resources in China have increased. At the same time, due to the influence of international gold prices and fluctuations in silver, the continuous outflow of silver flowed out 180 million taels in 1934 and 186 million taels in 1935.

This makes it difficult to maintain the central government's silver standard currency system, resulting in serious consequences such as severe tight monetary policy, sharp drop in prices, rising interest rates, sluggish sales, bank bankruptcy, and bank closures.

The acquisition of silver by the United States, on the surface, was to increase China's purchasing power and stabilize its own banking industry, but in fact, it allowed other Western powers to purchase resources in China and increase the cost of raw materials. The silver produced and acquired by the United States could also purchase resources in China to control Chinese finance, thus making the American products of the resource-rich country at that time more competitively out of the crisis.

Therefore, under the pressure of the US silver policy, the UK needs China to change its silver standard and become a paper currency in order to make it profitable under China's financial interests. If China wants to issue paper currency, it must also be linked to the UK with the strongest financial strength and the US currency with the most silver control.

At the same time, China is also a market for Western dumping products. In order to ensure the market competitiveness of the great powers in China, reforming China's financial issuance of paper money has become a consistent need for China and the great powers, and it has also become a historical opportunity and window for China to abandon the silver standard metal currency into the financial monetary system established by the central bank era.

Against this background, the Jinling government began to issue paper money. On November 4, 1935, it stipulated that the banknotes issued by the Central Bank, the Bank of China and the Bank of Communications were legal tender, and the circulation of silver was prohibited, and the national credit legal currency was issued to replace the silver standard silver rounds.

The silver dollars stored by various financial institutions and private institutions are collected and exchanged by the central bank. At the same time, the exchange rate of fiat currency is 1 yuan equal to 1 shilling 2.5 pence. The three banks of central, China and transportation are unlimited to buy and sell foreign exchange.

After the government negotiated with the United States in 1936, the Silver Agreement was signed, and China sold silver to the United States. The United States maintained the stability of the silver price in exchange for US dollars as foreign exchange reserves issued by fiat currency, and the fiat currency was changed to be pegged to the British pound and the US dollar.

As soon as the Chinese government's policy of issuing fiat currency was announced, the British ambassador to China immediately issued an imperial edict, requiring all British merchants and British expatriates to abide by Chinese laws and accept fiat currency and no longer use silver.

At HSBC, which is in a financial monopoly position in China, British banks such as McGalley were the first to hand over the inventories of silver to the Central Bank of China, which allowed the Chinese government to concentrate 300 million taels of real silver at once. The printing of banknotes by the Republic of China exchanged for the silver of the number one power, which had an irresistible force on the fragmented financial market of China's various forces.

Don't underestimate this, it's like having the reputation of printing RMB to find the United States for gold and silver

After the Northern Expedition and the military unification of China by encircling and suppressing bandits, the central government under Jiang Ruiyuan successfully achieved national unification once again in economic and financial terms.

The issuance of paper currency in Chinese history has failed repeatedly, and the key to the successful issuance of paper currency in China is actually the credibility of Western foreign exchange and the support of the Bank of England, a foreign capital that accounts for China's financial monopoly.

The central government's fiat currency pegged to the British pound is a greater interest in British financial capital, and its greater significance for China is a further alliance between China and Britain. Such an alliance is very critical for China to change its status in the future. Britain is willing to support China to become one of the great powers in East Asia to restrict Japan and Russia from protecting British interests.

So what we must see here is that the issuance of Chinese paper money is inseparable from the support of the number one power in the past, Britain and the rising superpower United States. Their support also has the strategic purpose of limiting Japan's growth in East Asia.

The more critical reason why China can abolish China's unequal treaties at this stage is that China's finance is linked to Britain and the United States. After economic and financial integration, these unequal treaties have become obstacles to international financial capital for free trade.

Otherwise, Britain and the United States would not abolish these treaties during the War of Resistance Against Japan, Jiang Ruiyuan would also have to form an alliance with Britain and the United States. Japan would gradually abolish the unequal treaties against it by Britain and the United States, and it was also after Japan's currency was pegged to the British pound and integrated with the British economy.

But later Japan wanted to integrate China and Japan to abandon Britain and the United States, which also became the economic basis for Britain and the United States to support China.

By 1936, China's foreign debt was 2.046 billion yuan in customs silver, countries invested 2.9 billion yuan in China, and private debt, property, real estate, etc. in China, etc. 7 billion yuan in China.

All such foreign assets were replaced from silver to fiat currency. These wealth were three times that of China's GDP, eight times that of China's currency issuance, and nearly ten times that of China's all defeats since 1840

It has to be said that it is a major historic victory in the Chinese financial industry. Since the loan of these assets and debts, Japan has been the most important of them. The policies of Britain and the United States are generous to others.

However, this move greatly alleviated the government's financial problems under Jiang Ruiyuan's control, and his total wealth even surpassed Hualian.

The fiat currency issued by the government is linked to the British and American currencies, which is in line with the major interests of Britain and the United States. At the same time, China's currency issuanced by a large amount of silver and replaced with the British and American currencies to foreign exchange, which is their paper currency.

The silver exchange exchanged in foreign exchange flowed into the pockets of Britain and the United States, and became an important precious metal reserve after the economic crisis, calming down and controlling the hyperinflation that Britain and the United States may have caused due to the crisis and credit bankruptcy.

Similarly, China has consumed the excess production capacity in the British and American crisis due to the increase in purchasing power of issuing paper money, which is very beneficial to Britain and the United States.

It should be noted that such binding British and American currencies is very different from the fixed exchange rate system where the Red North Korean RMB and the US dollar is pegged in a certain time and space. Because at this time, the currencies can be completely freely converted, and such a peg must be replaced by your precious metal silver as reserves and replaced by the great powers.

This actually leaves China's financial control to Britain and the United States. Changes in Britain and the United States' monetary policies directly affect China, and also provides convenience for Britain and the United States to exchange paper money for China's silver. The government's finance is not the credit of its own country but the foreign credit of Britain and the United States. The credit of Britain and the United States' currency replaces your precious metal natural credit------------------------------------------------------------------------------------------------------------------------------------------------------------------

By turning precious metals into credit currency, the market will depreciate and the dominance will be transferred under the market controlled by the government. Just through the reform of fiat currency, Jiang Ruiyuan greatly reversed the financial difficulties and difficulties of the central government and gained huge wealth.

But this does not have much significance for Zhong Yang and the entire Hualian. The comparison between national strength is not just about comparing each other's wealth. It also lies in the comprehensive hedging of their respective industrial strength, military strength and political systems. If it were just a comparison of heritage, the Qing Dynasty would not have been beaten like a dog by Britain back then.

Hualian is now standing at the fork in history, and under Zhong Yang's secret guidance, he embarked on a completely different path of social development from the government. Because of the lack of an industrial production system, Jiang Ruiyuan could only rely on Britain and the United States to introduce the Jewish free economic rules to play games dominated by Western civilization.

Hualian began to close the country, and introverted people accumulate national strength and wisdom, and play this game of defeating the country according to the rules of the game.

An open country does not necessarily become prosperous and progressive, and a closed government does not necessarily fall behind or ignorant. The key is the development strategy of a government and the differences in the nature of the rights of the ruling class.

The big reason for the Sino-Japanese War was that the government gave up the issuance of fiat currencies on the silver standard. In the financial and monetary reforms like China, Japan did not gain any benefits and suffered huge losses.

Because the large amount of loans from various warlords to Japan were calculated in silver, the reason why Japan borrowed a large amount of money from these warlords was to control China and invade China. However, after the government, which occupied the central government, abandoned the silver standard, Japan could not use it as currency even if it wanted silver, and its value was greatly reduced.

But if you don’t want silver but want the party’s legal currency, it will definitely be a big loss.

These loans are also a major financial asset and national strategy for Japan itself. Once they become Chinese paper currency and are linked to British and American currencies, these loans will depreciate with the depreciation of British and American currencies and will also be controlled by Britain and the United States.

At the same time, Japan also holds a large amount of silver, and Japan's investment in China is calculated based on silver. Such financial reforms are suffering a lot. Japan is China's most important creditor and economic exchange country, but China's monetary reforms do not have relationship with the Japanese yen, so Britain and the United States also gain the benefit of indirectly manipulating Japan's interests.

In order to cope with the huge pressure from Japan, China signed a peace agreement with Japan before abolishing the silver standard, making major concessions, allowing Japan to station troops in North China without defense, etc. The military barrier in northern China is gone, but it should also be noted that the establishment of China's financial system is not linked to the Japanese yen, nor the Japanese currency that has the closest economic and debt exchanges with China. This is China's major interests.

No matter how disgusted Zhong Yang was with the party-state that implemented the red system, Jiang Ruiyuan and his ministers did have deep scheming in this regard. Unfortunately, Zhong Yang did not agree with this path, nor did he agree with the so-called free trade market economic system in the West.

No matter how outstanding the Party does, this path has no future for Chinese civilization. If this continues, China will only become a vassal of the great powers and chaebols and sink forever.

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