On The Legal System Of Bank Organization In Modern China(1897-1949)

At late 1800's and early 1900's, with the rising of western learning, the western banking theory was firstly introduced to China. The large profit, reaped by foreign merchants, forced Chinese to reflect on the backwardness and limitations of traditional financial institutions like exchange shop and native bank, etc. Under the joint effects of various factors, Chinese started the development of modern bank system. In 1897, the first capitalist bank-Imperial Bank of China was established, and then lifted the curtains on bank construction by Chinese Businessman.In the process of standardizing and maturing banking and financial market, financial supervision and management by government was called to be put in force to make up for the lack of market rules. Hence bank legislation was started in modern China. "In January 16,1908 (34th year of the reign of Qing Emperor Guangxu), was promulgated, which was the beginning of Chinese Banking Law." Meanwhile,"The Banking Law of 1947 represents the highest level of modern bank legislation in China". In the resent 40 years legislative history, successive administrations have tried and made great efforts to establish a banking system, which absorbs the latest foreign financial legislative achievements with the specific conditions of our country. However, civil unrest, class antagonism, discrepancy between legislation and native resources and other factors all limited the performance of bank law.After reviewing the modern legal system of bank organization, this thesis will analyze the legislative content, significance, limitations, and performance from the three perspectives of capital organizational law, internal organizational law and branch banking law. Meanwhile, other legal issues like the composition of capital and property rights of the bank, internal management mechanism, settlement and supervision of branch banks are within study, so as to generalize the development and basic features of modern legal system of bank organization.This thesis is divided into introduction and body part. The main points are as the follows.The introduction part induces the reason of study, reviews the achievements and limitations of modern researches on bank laws and deliberates the context and creativities of the research. Besides, the definitions of the Legal System of Bank Organization and Bank Law are given in this part in order to standardize the research.Chapter 1 Establishment of Bank Organization in Modern China.In this chapter, the first two sections induce the modern Chinese banking circumstances and the origin and development of modern bank organization. Before modern times, there existed, in China, various credit institutions with different names like Quan Fu, Zhi Ku, Piao Hao, Qian Zhuang, and etc. However, these institutions differed distinctly from those of western capitalism. Therefore, with the dissolution of modern Chinese natural economy, institutions like Piao Hao could not adapt to the new environment and disappeared for their limitations in organization and management, while some native banks (Qian Zhuag) survived by advancing with times. In this period, foreign banks were more powerful as they set foot in China to corporate the political and economic invasion, which encouraged the input of foreign goods and capital and endangered Chinese economy. At the same time, the foreign bank system majoring on joint-stock company system set good demonstration to the Chinese local banks, which was finally brought forward and set foothold together with native banks and foreign banks.The rise of the Chinese Local Banks is the result of a variety of factors in modern society, such as the collapse of natural economy, the establishment of national capital industry and stimulation of foreign banks. In addition, there is a factor that can not be ignored, that is the spread of modern banking theory and the ideas of organizational construction. Modern intellectuals, Yan Fu, Xie Lin and Li Hui wrote many books to expatiate upon the construction of capital organization, which took shareholding system as its core, and they all agreed that joint-stock system was the best form of organization; in the respect of internal organizational construction, the official of late Qing Dynasty, Lu Chuanlin and bankers, such as Chen Guangfu contributed their wisdom. They discussed about the internal governance mechanisms and management systems; on how to set up and improve branch system, the official of late Qing Dynasty, Sheng Xuanhuai and bankers such as Chen Bengu and Zhou Zuomin hold that it should base on the actual economic needs.Chapter 2 Legislative Evolution of Bank Organization in Modern ChinaThis chapter is divided into seven parts, which respectively discuss about the legislative transformation and evolution of modern bank organization, legal sources, legislative evolution of capital organizational system, internal organizational system and branch bank system, and the conflict between legal system of bank organization and customary law of monetary industry. Lastly it will deliberate on the modern legal system of bank organization from legislative significance, features, limitations and etc. Started from the late Qing Dynasty and perfected during the Republic of China, the modern legal system of bank organization, taking Banking Law of 1947 as its representative, shaped a specific bank law system with both the features of Anglo-American Legal System and Continental Legal System and the Chinese characteristics. The new system introduced shareholding organizational system, internal management system of separation of power and branch banking system. Meanwhile, it enriched the content of modern Civil and Commercial Law, which was in favor of breaking the legal tradition centralized on criminal law. But limited to a variety of factors, modern legal system of bank organization still had a lot of shortages, such as non-standard legal concepts, conflicting legislative contents and discrepancy between legislation and practice.Chapter 3 Legal System of Capital Banking Organization in Modern ChinaThis chapter covers mainly four parts. Section 1 is the introduction and development of capital banking organizational system in modern China. It briefly reviews the history of the emergence of joint-stock system in western banking industry and the process of introducing and spreading of this system in China. Section 2 is the case of joint-stock by government and commercial-Bank of China. It divides the joint-stock banking system into by government and commercial and by wholly private according to the source of capital. Section 3 is the capital organizational system in modern private banks. Taking Imperial Bank of China and Shanghai Commercial and Savings Bank as examples to analyze the differences between the banks operated by bureaucrats and warlords and the banks operated by national bourgeoisie in the field of composition of capital and shares. Section 4 is the innovation of capital banking organizational system in modern China.Chapter 4 Internal Banking System in Modern ChinaThis chapter analyzes the legal system of modern banks' internal organization and covers the following four sections:organ of power, executives, internal management mechanism and innovation of internal organizational system. Section 1 is the organ of power of modern banking institutions. It mainly introduces the composition and features of modern banking shareholders and board of shareholders, directors, board of directors and supervisors. And through the regulations of Kincheng Banking Corporation and Zhejiang Industrial Bank, this section will analyze the classification, running and function of bank shareholder meetings and the composition and personnel structure of board of directors. Section 2, the implementing agencies, mainly introduces the internal organization of general management office and branches, so as to explore the setup and operation of the three powers of internal organization. Section 3 introduces the internal personnel management system in modern China from the aspects of employment, promotion, income and rewards and punishment. The last section summarizes the innovations of internal system of banking organization from three aspects:the optimization of internal organization, humanization of personnel management system and the internal inspiration system.Chapter 5 Legal System of Branch Banks in Modern ChinaThis chapter is divided into three parts. Section 1 is the Overview of Branch Banks, which mainly discusses about the types of organizational form and the spread and application of branch banks in Chinese banking industry. Unitary system and branch system, as the major banking system both have merits and drawbacks. Based on economic and traditional impacts, branch system is mainly applied in modern China. In this section, the example of Zhejiang Industrial Bank is taken to introduce the establishment of branch system in modern banking industry. Section 2 is the branches setting principles in modern China. The principles of how to set up branches in home and abroad are introduced. Section 3 is the supervision of branch banks in modern China. According to the regulations and statutes of Republic of China, this section emphasizes on the branch setting and governmental supervision after Anti-Japanese War, meanwhile it introduces the modern on-site and off-site banking supervision measures.Chapter 6 The Features and Impacts of China's Modern Banking SystemThis chapter is the summary and conclusions of the whole thesis and is divided into three parts. Section 1 is the modernization of banking system in modern China. Compared with the traditional financial institutions like Piao Hao, the modern banks enjoy unparalleled vitality in organizational system. Section 2 is the local features of China's modern banking system. Compared with foreign banks, we find that there are some local features, such as joint-stock by government and commercial, government-oriented dividend distribution, and excessive government intervention within corporate governance mechanism. Section 3 is the impacts and inspiration of the legal system of modern banking organization. This legal system mainly influences the development of modern banking industry, the expansion of national industry and the establishment of banking system in New China; while in the respect of enacting modern commercial banks law, it also offers some suggestions like making specific legislative modes besides consulting the modern commercial banks law so as to make up for the lack of policy banking legislation in our country nowadays. In addition, we can also refer to the modern legislation on supervision to establish a legal system, regulating the business conduction of both foreign and native banks on one single standard. Lastly, combining the national conditions and foreign legislative experiences also benefits the modern banking system.