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Volume 2 Beijing Story Chapter 149 The Birth of Zhongyuan

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    Update time: 2012-08-09

    "The first step is to take advantage of the opportunity of the Ministry of Finance to issue 380 million treasury bonds. The Bank of China will underwrite 180 million of the treasury bonds, and the remaining 200 million will be underwritten by the Bank of Communications. The two banks will issue new banknotes uniformly!" Wang Geng said and  A long-planned plan by Lu Ding, Song Hanzhang and Zhang Jiayao.

    "Are you crazy, Wang Geng? The recycling of old Beijing banknotes has not been completed yet, and you are actually thinking of re-issuing new banknotes? What's the difference between issuing old Beijing banknotes? Then why are you still sorting and recycling old Beijing banknotes?"  Xu Shuzheng jumped up instinctively to object.

    "Wang Geng, what are you planning? You are right. The old banknotes issued by the two banks have not been recovered, so you are randomly issuing new banknotes? What kind of medicine are you selling in this gourd?" the Prime Minister asked in confusion.  He said, he knew that Wang Geng must have a plan in mind, but he couldn't figure out the problem for a while.

    "The problem with the old Beijing banknotes was that the random printing of banknotes led to the collapse of credit. Now with the expansion of the Bank of China's shares and capital and the determination of the new "Bank of China Rules", the disadvantage of banks issuing banknotes out of thin air to the Ministry of Finance has been banned.  To issue new banknotes in this way, the Ministry of Finance must issue treasury bonds as collateral in exchange for banknotes issued by banks. There will be no problem with credit, for one!¡±

    Wang Geng calmly explained to Duan Qirui and Xu Shuzheng on his fingers,

    "Secondly, the mainstream developed countries in the world all adopt the gold standard. Of course, with the outbreak and extension of World War I, the gold standard of various countries is now a gold standard that has been suspended, but gold is after all the reserve of currency issued by the banks of the powerful countries!" Wang Geng said goodbye!  The second finger came down!

    "Wang Geng, everyone has mentioned your idea a few years ago, but China has almost no gold reserves and low gold production. Now that the European war is going on, even the gold in the British Empire's treasury has gone into the basement of the Federal Reserve. China  It¡¯s hard to make a living without rice, and China¡¯s currency during the Ming and Qing Dynasties was mainly copper coins and silver, so it was forced to establish a silver standard! What, you want to issue new banknotes to establish a gold standard?¡±

    Xu Shuzheng has both military and political excellence. He serves as the Deputy Minister of the Army and is also the Secretary-General of the State Council. His understanding of modern finance and economics is not bad at all. This statement is not ambiguous at all.

    "China's silver standard will bring down China's finance and economy. First, silver is currency in China but a commodity outside of China. Second, China itself is not a silver-producing country, so abandoning the silver standard is the general trend!" Wang Geng  He insisted unmoved.

    "Wang Geng, the Beijing banknote is the government's attempt to change the currency from silver dollars to banknotes. You have seen the results. What's more, China is now in a situation where each province operates independently. You just issue new banknotes at the central bank. I'm afraid that except Beijing  It cannot be implemented in places other than Tianjin and other places, and it will eventually become the next Beijing note!" Duan Qirui's words are quite pertinent. Obviously everyone is well aware of the shortcomings of the silver standard, but without gold reserves!  How to promote the gold standard?

    "The sorting and recycling of old Beijing banknotes is the best time to launch the new national currency. Of course, given that China has not yet been truly unified, there will be huge resistance and difficulties in the local implementation of the new national currency issued by the central government. However, when China participates in the war,  With foreign aid from Japan and the United States pouring in at this great opportunity, the central government¡¯s financial resources and industrial and agricultural production strength must far exceed those of the local governments, especially industrial products. As long as we seize this opportunity to establish and improve the light and heavy industry system, then our future  Wherever the goods go, our new national currency will be promoted!¡±

    Wang Geng's words couldn't help but arouse the deep thinking of the Prime Minister and the Deputy Minister of the Army. If only the central bank can issue banknotes in the country, all localities will have to use new banknotes just to pay taxes, not to mention education, medical administration, etc., which are allocated by the central government.  Support industry!

    But, is it possible to issue new banknotes again now or even directly jump from silver-standard silver dollars to gold-standard banknotes? This is such a big step, is it feasible?

    "Adopting silver dollar currency under the silver standard is like drinking poison to quench thirst. Our wealth is constantly being lost with the violent fluctuations in international silver prices. When the international silver price is higher than the domestic price, we lose a lot of silver. When the international silver price is lower than  At home, our silver dollar has become worthless again. Therefore, taking advantage of China's entry into the war, the postponement of the Boxer Indemnity for ten years, the issuance of public bonds, and the rolling in of US aid to Japan, it is best to issue new banknotes once and for all.  opportunity!"

    Wang Geng's tone was full of confidence and bewitchment, and the Prime Minister couldn't help but be greatly moved. If the central government had enough silver to mint silver coins, then the Beijing banknote trend caused by the indiscriminate issuance of banknotes would never have happened. If Wang Geng had  It is said that newly issued banknotes can maintain strong national credit. The benefits brought to the central government by this currency reform alone are more valuable and far-reaching than US aid to Japan!

    "Zheng Zheng, do you think what Wang Geng said is feasible? Use the new banknotes issued to recycle the old Beijing banknotes, and gradually promote and gradually adopt them."?Silver dollars and silver taels!  "Duan Qirui turned around and asked his favorite general!

    "It is certainly good to use gold as the currency reserve to issue a gold standard using banknotes. The question is, where does China get so much gold? How can we issue banknotes without gold as a reserve? Isn't issuing banknotes out of thin air going back to the old path of the old Beijing banknotes?" Xu Shuzheng certainly knows  Paper currency under the gold standard is beneficial to the country and the economy, but how to solve the problem of insufficient gold reserves?  Without the precious metal reserves of the national treasury, the issuance of banknotes would have no basis!

    "We don't reserve gold, we reserve US dollars, and let the Americans reserve gold! We adopt a fixed exchange rate pegged to the US dollar. With the support of the United States and the all-round economic, trade and military cooperation that both sides will further expand as they enter the war, the US dollar is  Our gold! Of course, the Japanese yen can also be used as part of our reserves!" Wang Geng used his long-planned killer weapon. When he told Lu Ding and others about his plan, the whole room was shocked.  Wang Geng's brothers.

    "As long as the Americans don't print US dollars indiscriminately, we won't have the problem of printing new banknotes indiscriminately. For example, if we want to put 100 million new national currencies on the market in the future, we will issue 100 million public bonds and use the US dollars in the national treasury as currency issuance reserves.  !" Wang Geng said with a smile.

    "Is this okay? Where do the U.S. dollars used as reserves in the national treasury come from? Our exports to the United States are far less than the U.S.'s imports to China!" Xu Shuzheng thought quickly and couldn't wait to point out the problem.

    "Where do the U.S. dollars come from? Export trade, investment in China, mortgage loans, and even buying directly from the United States with new national currency. Of course, it also includes us putting the recycled silver taels and silver dollars into the international market and taking advantage of the rebound in silver prices to exchange them for U.S. dollars!  The U.S. dollar reserve is only used as a reserve for currency issuance. The reserve reserve means that we can issue up to 500 million to 1 billion currency by holding 100 million U.S. dollars, which corresponds to a reserve ratio of 10% to 20%!¡±

    Wang Geng¡¯s unhurried answer made both the Prime Minister and the Under-Secretary of the Army¡¯s eyes light up.

    "While the price of silver is rising, exchange banknotes for silver dollars and then cash them out in the international market for U.S. dollar reserves! If it works out, this will be a really good deal! I'm sorry you figured it out!" Duan Qirui laughed.  Standing up, Xu Shuzheng beside him also nodded slightly. Regardless of whether Wang Geng's plan is really as easy as he said now, but if it is really successful, this guy will have made a great contribution to the country and the nation!

    The premise is that the newly issued banknotes must be very strong!  Credit must be very high and very good!

    "Prime Minister, brother Zheng, in troubled times, you will use heavy instruments. If you miss the opportunity, you will never come back. What the local warlords believe in is that political power comes from the barrel of a gun. I believe that as long as we do not print money randomly and rely on the United States, the world's most powerful industrial country, we will  If Japan, the self-proclaimed strongest country in Asia, is not causing trouble, then the model army will form ten divisions, with artillery and aircraft in its left hand, and new national currency in its right hand. It will be easy to unify Beiyang and unify the whole country.  !¡±

    Wang Geng vowed to confess his love, with incomparable confidence and determination in his eyes.

    "Wang Geng, if you are really confident that you can issue new banknotes without causing credit problems or financial collapse, the Bank of Communications can be completely restructured and managed in accordance with Feng Gengguang's Bank of China regulations!" Xu Shuzheng was moved by Wang Geng's tone.  Infection, finally stood up and took a stand!

    "Okay! Again, Wang Geng, as long as the two of you can unite sincerely, I don't have anything to worry about! This matter has been settled. Wang Geng, the Beijing banknote sorting supervisor, will be fully responsible. The Ministry of Finance will take the lead in the Bank of China and the Bank of Communications.  , to solve the recycling and sorting of old Beijing banknotes and the issuance of new banknotes in one go!" The Prime Minister happily made the decision in front of his two confidants.

    "What do you think of the new banknotes issued uniformly?" Duan Qirui did not forget to ask this.

    "The United States is called the U.S. dollar, Japan is called the yen, and China is called Zhongyuan or Huayuan. Prime Minister, Brother Zheng, which one do you think is better?" Wang Geng said with a smile. Obviously, this name has been planned for a long time!

    "Zhongyuan!" the Prime Minister and the Undersecretary of the Army said in unison!
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