A Study On National Government’s Gold Industry During Anti-Japanese War

Since the War of Resistance against Japan, gold production has been closely associated with the national treasury and foreign exchange reserve. As a result, a study on the development of gold-mining industry in this period will not be conducive to learn the evolution of this industry but also help us to understand the issue reserve policy of national government and thus make rational reflection on its policy of legal currency. Until now, studies on gold mine lie on the analysis of gold mine cases before the war or the exploration of gold policy during the war, leaving the special features and epochal character of gold industry untapped.Based on abundant files and newspaper materials as well as existing studies, this paper made an overall survey of the emerging, development and decline of gold industry during Anti-Japanese War according to a timeline and analyzed the significance and limitations of the gold industry in consolidating Chinese national currency’s status.Before the outbreak of the Anti-Japanese War, under the influence of the devaluation of silver,the national goverment began to strengthen the intervention of gold industry.In this period, gold resoruces was mined freedly by people because the national government efforts was limited to the exploration of gold resources, as a rusult,mine output was low.After the outbreak of Anti-Japanese War, with the reduction of silver and foreign currency, it became an important measure to consolidate Chinese national currency’s status by promoting gold production. Thanks to the policy support from government and Gold Mining Bureau, gold industry experienced a short boom. With less reliance on Northeast region, the gold resources in the rear area were fully developed. The basic industry structure transformed from dominant private mines to a balanced development between national and private mines. The form of organization has transformed from small individual proprietorship or joint operation to share-holding system. The gold output increased by folds comparing to the prewar period. Later on, in order to cope with financial deficit and meet military supplies, the government raised the issue of legal currency while remained the issue reserve unchanged, as a result, affected by roaring prices, the profits of gold production turned into losses. Coupled with the tight land use, backward tecknology and poor transportation during the war, gold business faded rapidly. Except the private mines of scale that apply for joint operation with government, most private mines shut down for bankruptcy because of capital turnover problem. State owned mines, though with the support of state, also faced expenditure in excess of income and falling production. The new gold policy that changed general management to free production and sale did not save this industry from recession on account of uncontrolled prices. After a systematic study and analysis of the gold industry of the National government in different stages, this paper discovered that the rise and fall of gold industry is directly affected by Ant-Japanese War:At the early stage of the Anti-Japanese War, Chinese national currency’s position was crashed, Coupled with a pick-up in demand for foreign exchange, gold has become an urgent strategic resource and experienced a short boom. During the middle and late period of the Anti-Japanese War, affected by the enlargement of the Anti-Japanese War and the outbreak of the Pacific War, the National Government reduced the demand for foreign currency, Together with the inflationary policy,the national government’s demand for gold declined, so did the gold industry. Moreover, the gold industry during the war made some progress in terms of output and scale, but still failed to meet the purpose of increasing national treasury and foreign exchange reserve:under the condition of rapid growth.the gold industry had positive effects on the Issue Reserve and Foreign Exchange Reserve, but the effects didn’t last long, especially in the decline phase of gold industry, it had significant limitations to strengthen the position of Chinese national currency.