Shadow Spy

Chapter 307: Stabilizing the Market and Destroying Fiat Currency

Li Junhao determined that a rapidly depreciating currency itself is a bad currency. Policies that promote bad currency or ignore this phenomenon are bad governance and severely punish behavior that infringes on the interests of the people.There was nothing he could do when he said it didn't count, but now that he has the ability, of course he can't let this phenomenon continue any longer.

As early as when he first came to this world, when the portable system was first launched, the system mall clearly did not accept legal currency. He has tested it one after another, and the system recognized that the currencies that can be exchanged for gold coins are mainly the currencies of major economic countries and heavy metals such as gold and silver. , oceans can also be used, but using the Mexican Eagle Ocean as a specimen, other oceans need to be colored.

After the German-Polish War began on September 9 last year, the system mall began to reject Western European currencies such as German marks and French francs. At the beginning of this year, in addition to gold, silver, and eagles, the only banknotes recognized by the system were British pounds and U.S. dollars, and the value of the U.S. dollar is rising. As of mid-April, the system exchange ratio has risen to 1 gold coin = 1 pound = 1 U.S. dollars = 4 eagle oceans.

Li Junhao had a feeling that as the war progressed, the value of the pound would continue to decline. He was even thinking that when Germany started bombing London, the only banknote that might remain strong would be the U.S. dollar. Thinking of the hegemony of the U.S. dollar in his previous life, He decided to follow the rules and use the US dollar as the base currency of the concession.

To this end, he specially met with three directors of the Ministry of Industry and Commerce Bureau, Meinert Fudges of Citibank Shanghai Branch, F. Greco, President of UBS Shanghai Branch, and Liu Haifeng, President of the Chinese Banks Association, and they This issue was explored.

Three banking professionals affirmed his idea, but raised a key issue that could not be solved - money supply!

The current money supply in Shanghai is actually quite chaotic, with various foreign currencies, legal currencies and oceans being used in a mixed manner. If only a relatively single US dollar is used, the supply of US dollars on the market will be insufficient.

In this regard, the solution proposed by the three bankers is to add Yingyang as one of the main currencies. However, considering that there are as many as seven or eight kinds of Yingyang on the market, how to balance the currency value is another problem.

Li Junhao had thought about this problem before, so he came up with a new idea: using tax revenue as a guarantee, the Ministry of Industry and Commerce Bureau of the Concession would issue a voucher corresponding to the US dollar, which was called "US dollar voucher" or "foreign exchange voucher" to make up for the amount of currency. As for the issue of Dayang, Yingyang is used as the standard to determine its exchange rate with the US dollar. Other types of Dayang need to be exchanged at designated banks or have their prices verified before they can be used.

The three bankers looked at each other in confusion after hearing this. After some thought, they felt that this method was good, but they also raised several new questions:
[-]. How to control the number of U.S. dollar bonds issued?
[-]. In order to make the transition smooth, the best way is to recycle legal currency and exchange it for citizens to US dollars or US dollar coupons. If the number of US dollars is not enough, how can we make citizens believe in the value of US dollar coupons?
[-]. After the US dollar bonds are successfully issued, how to deal with the large amount of recovered legal currency?

[-]. How to determine the ratio between the standard eagle ocean and the variegated ocean in the hands of citizens?
[-]. What should I do if the quantity of Yingyang is not enough during the exchange?
Compared with these main issues, there are other issues, such as: How to obtain approval from all banks?How many outlets need to be arranged for redemption?How much work and time will it take to convert all the products on the market into US dollars? …

Li Junhao thought for a while and felt that although these problems were difficult, they were not unsolvable. What he needed now was this kind of professional knowledge and solutions... Well, these three people in front of him are all good experts, so he must take advantage of them. stand up
He looked at the colors of the light spots in his mind, and they all met the requirements. Let's become one of our own first!
More than half an hour later, the three bankers who had become comrades-in-arms, after listening to his ideas, left with the task of formulating a currency reform plan.
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On Monday, April 4, Li Junhao rarely attended the weekly meeting of the Ministry of Industry and Commerce Bureau at the beginning of the month. He first raised the issue of concession currency, and then the three directors explained their proposed reform plan... After more than two hours of meeting, everyone The directors understood most of this reform plan, and seeing that Vice President Mr. Pan Sen firmly expressed his support for this plan, of course everyone had to support it. Anyway, this matter had nothing to lose to them.

At noon that day, the Ministry of Industry and Industry announced the establishment of a Financial Management Committee under the Board of Directors, with Director and Commercial Counselor of the U.S. Consulate General Shizi Hempry as the Chairman, and Directors Maynatt Fudges, F. Greco, and Liu Haifeng. People are appointed as committee members.

Just when people from all walks of life had not figured out what the responsibilities of the Financial Supervisory Commission were, the Financial Supervisory Commission’s No. 30 Announcement was published in major newspapers early on the [-]th.

"In order to maintain financial order in the Shanghai Concession and stabilize the market, the Financial Supervisory Commission has decided to launch the following measures:

“1. Starting from May 5th, the circulation of legal tender in the concession will be completely stopped. All industries in the concession will determine the US dollar as the base currency, which will circulate simultaneously with the standard Eagle Ocean. The exchange ratio between the two is [-]:[-];

"31. From May 1st to 9.25st, Citibank Shanghai Branch, UBS Shanghai Branch, banks affiliated to the Chinese Bankers Association and their business outlets will follow the U.S. dollar exchange rate at [-] a.m. on April [-]th. The legal currency exchange rate is [-]:[-] for currency exchange in Shanghai and Shanghai residential areas, and no acceptance will be accepted after expiration;
“三、为了弥补美元货币供应量的不足，工部局以租界税收为担保，发行2亿美元币值的美元兑换券，美元券与美元币值为1:1，同等流通，发行券种为1分、2分、5分、10分、20分、50分、1元、2元、5元、10元、20元、50元、100元；
“[-]. All industrial and commercial enterprises in Shanghai and Shanghai are not allowed to refuse to accept U.S. dollar coupons for any reason. Violators will be severely fined;
"[-]. In order to stabilize the value of the currency, except for the US dollar and the standard Yingyang, other currencies are prohibited from circulation. Various foreign currencies can be exchanged for U.S. dollars at various banks at the exchange rate within the specified period; Dayang needs to be exchanged for Yingyang.

"This announcement will come into effect from the date of issuance. We hope that the general public will inform each other."

This announcement undoubtedly dropped a bombshell in Shanghai and even the whole country. The reaction from all parties was extremely fierce, especially the Kuomintang government, which issued the legal currency, was so frightened and angry that it almost jumped to its feet after receiving the news. A protest was lodged with the U.S. Embassy immediately.

Ambassador Johnson, who had already been notified by the Consulate General in Shanghai, certainly did not accept this protest. He replied that this was a political decision made by the Shanghai Concession and the Ministry of Industry and Commerce and had nothing to do with the US government.

(End of this chapter)