Research On Shanxi Banking Industry From 1927 To 1937

Since the Ming and Qing Dynasties,frequent commercial exchanges promoted the development of traditional financial industry.Among the traditional financial institutions,the development of the paper was the most prosperous,which profoundly affected the commodity trade at that time.On the eve of Xinhai Revolution,Shanxi Province has formed a relatively complete financial pattern.After the outbreak of the Revolution of1911,the rule of the Qing government was overthrown one after another.Taiyuan Uprising broke out in Shanxi Province,and the Jin Tai Official Money Bureau,which was acting for the Treasury of the Department of finance,was declared out of business.In order to solve the financial problem,the military government headed by Yan Xishan established Dahan Bank and Jinsheng Bank,and Shanxi banking industry rose formally.During the period of the Beijing government,Shanxi’s banking industry continued to grow,and private banks such as Yuhua Bank and Weifeng Commercial Bank were set up in the local area,which was also a beneficial attempt for private capital to set up banks.In order to adapt to the changes of The Times and enhance its own strength,the Bank of Shanxi was set up in 1919 under the order of Yan Xishan.The banking system of Shanxi gradually formed,led by the Bank of Shanxi,including private banks,agricultural and industrial banks and the branch of the Central Bank in Shanxi.After serving as governor of Shanxi Province,Yan Xishan actively carried out the "health and livelihood Plan",committed himself to developing the provincial economy and promoting the construction of local infrastructure such as farmland and water conservancy in rural areas.As a modern financial institution,banks provided more funds for economic construction.At the same time,the Yan Xishan government unified the currency through the banks,outlawed the private ticket,and returned the right to issue paper money to the government,reducing the losses and illegal acts caused by the confusion of currency system in the process of commodity trading.In the second stage of the Northern Expedition,Yan Xishan led the Jin army to participate in the war,and its influence expanded to Pingjin area.Yan Xishan promoted the Jin banknote in the area.With the support of the political forces,Shanxi’s banking industry once expanded to Pingjin and Hebei.Because the rise of Shanxi banking industry is closely related to Yan Xishan regime and deeply controlled by local government in the process of development,there is a huge crisis hidden behind the prosperity of Shanxi banking industry.Yan Xishan has expanded the army three times,but Shanxi’s finance has been in a state of income,so the high military expenditure can only be borne by banking institutions.After the conflict between Chiang Kai-shek and Feng Yan and other local powerful forces became public,in order to raise military funds,the Bank of Shanxi became Yan Xishan’s "banknote printing machine" and disorderly issuance of Jin banknotes.Yan Xishan fled to Dalian after the defeat in the Central Plains War.Shanxi’s banking industry was plunged into a huge crisis,and countless shops and financial institutions were forced to close down.The financial crisis in Shanxi Province has a lot to do with the failure of Shanxi banking industry to follow the financial rules for a long time.After Yan Xishan’s defeat,the Jin banknotes depreciated rapidly,and the provincial government struggled to come up with effective solutions,which eventually led to the loss of credit of Shanxi Bank.After Yan Xishan returned to Shanxi,in order to restore the economy and develop industry,he reorganized the Bank of Shanxi for the second time,set up three banking titles of railway,reclamation industry and salt industry,and set up county banking titles in local areas,forming a banking system with government-run bank titles as the main body,private financial institutions and central government bank in Shanxi Province as the auxiliary.After this adjustment,Shanxi banking industry gradually recovered,and its development showed both prosperity and deformity.The "prosperity" was reflected in that Shanxi banking industry,adhering to the will of the provincial government,vigorously developed and invested in various public undertakings,built railways,set up factories and enterprises,and promoted the modernization construction of Shanxi Province.The "malformation" is reflected in the unreasonable regional distribution of banking institutions.Bank lending and investment are mainly for government-run enterprises,while ordinary businessmen and private enterprises are excluded.The whole industry lacks risk awareness and autonomy,and nepotism within institutions leads to corruption,etc.The idea of this paper is to take the War of Central Plains as an important time node,sort out the development of Shanxi banking industry from 1927 to 1937,summarize the commonness and individual characteristics of Shanxi banking industry in the development through the way of connection and comparison,and evaluate the historical role and shortcomings of Shanxi banking industry with a relatively objective attitude.Reviewing the development history of Shanxi banking industry,we deeply understand that the modernization of Shanxi banking industry is not smooth,social environment,economic conditions,local government policies are all important factors affecting the modernization process,but it is undeniable that Shanxi banking industry promoted the modernization of Shanxi Province through investment and construction of factories,which laid the material foundation for the Anti-Japanese War in the future.