A century-old wealthy family that rose from Shanghai

Chapter 192: Forced to Subscribe to Government Bonds

The next day.

Chen Guangliang was in a good mood. He didn't expect that the incident of a cousin of the Yan family running away from marriage would actually promote his marriage with Yan Renmei.

Judging from his time with Yan Renmei yesterday, marriage wouldn't be a problem in a year's time; it would be a natural progression. As for Yan Renmei wanting to continue her studies after marriage, he naturally wouldn't stop her.

Chen Guangliang pays more attention to "family values" and "family values" rather than "pleasure", so he maintains enough respect for his future wife.

In the office of Changjiang Real Estate, Chen Guangliang did not devote himself to his work, but began to think about the "next move of the business empire."

By early July 1930, Chen Guangliang's business empire was enormous and his wealth had exceeded 7 million oceans.

Real Estate: Yuyuan Road, Jing'an Temple Road (Nanjing West Road), Weihai Road, and Xiafei Road (Huaihai Road). These four real estate projects alone have amassed Chen Guangliang an estimated fortune of 600 million yuan. The Shangri-La Hotel, once operational, will continue to generate revenue, and there are also some other rental properties.

Finance: Changjiang Money House earned a total profit of 410 million yuan from gold futures and over 160 million yuan from gold spot trading. Changjiang Real Estate also profited approximately 60 yuan from the gold and silver exchange rate. In total, Chen Guangliang made a whopping 570 million yuan from finance (9% equity in Changjiang Money House).

Industry: Tongchang Car Manufacturing Plant (30% equity) can bring Chen Guangliang a profit of 10 yuan each year, Vitasoy's annual net profit is also more than 10 yuan, and Jierui Coal Briquette Factory can also bring him nearly 10 yuan in profit each year. The three items add up to an annual profit of yuan.

Transportation: Last month (June), Changjiang Taxi put its second batch of 6 vehicles into operation, making it one of the largest taxi companies in Shanghai (comparable to Yunfei, with 100 vehicles). However, its assets are low, as all vehicles are purchased with loans. Furthermore, Changjiang's rickshaw business is valued at approximately 220 yuan.

Newspaper Industry: Although Oriental Daily and Capital can provide the newspaper with nearly 150,000 yuan in profit a year, Chen Guangliang does not focus on their economic benefits, but pays more attention to their influence on public opinion.

To sum up, Chen Guangliang's current wealth has reached about 1300 million, making him a truly "rich man".

Song Zaiwen, the 'God of Wealth of the Nanjing Government', came to Shanghai in a low-key manner, and then walked into Yu Qiaqing's residence at No. 18 Gaolan Road, and was then entertained by Yu Qiaqing.

Yu Qiaqing was a representative figure of the "Jiangsu-Zhejiang Financial Group". It was with the support of the Jiangsu-Zhejiang Financial Group that the Nanjing government formally unified China.

"Lord He De, I came to Shanghai this time for only one thing, and that is to ask for your help in selling out the '19th Year of the Republic of China Customs Bonds' as soon as possible."

The so-called "public debt" is the means by which the Southern Whale government raises funds, which generally accounts for 25-30% of government revenue each year; in fact, the return on public debt is not low, almost 8% per year, and the Southern Whale government uses future tariffs as collateral.

Since 1927, government bond prices have actually been rising, but they have been stagnant in the first half of this year.

In this case, it will naturally be difficult to sell out this year's government bonds.

Generally speaking, it is the major banks that come to the rescue, but it is impossible for all of them to be purchased by banks, money houses, etc., so wealthy businessmen are naturally a good choice.

Upon hearing this, Yu Qiaqing feigned enthusiasm and said, "Since this is what the government needs, I will naturally provide my full assistance. I wonder how much of this '19th Year of the Republic of China Customs Bond' remains unsold?"

Song Zaiwen knew he had found the right person and immediately said, "There are still 300 million left. The first 1700 million has been subscribed by the banking industry and some wealthy businessmen. We will soon prepare a lottery to decide on debt repayment, but the subscription is not yet full, which is a problem."

The so-called drawing lots to repay debts is to decide which companies’ bonds will be repaid first.

After a moment's reflection, Yu Qiaqing said, "I've been troubled by the municipal bond issue lately. The Shanghai Municipal Government has asked me to be the director of the 'Municipal Bond' program to raise three million yuan for the Greater Shanghai development project. This matter has reached a deadlock. However, I'm starting to worry. Some banks in Shanghai have made a lot of money from the bidding money recently, including Chen Guangliang of the Yangtze River Bank. He undoubtedly has the financial resources to subscribe to a portion of it."

Anyway, I've been cheated once, so it doesn't matter if I'm cheated again.

Upon hearing this, Song Ziwen said, "I've often heard of Chen Guangliang. However, his business is mainly in the concession, and he also controls the Oriental Daily News, so I've never confronted him about the government debt."

Yu Qiaqing smiled and said, "As long as you are Chinese, you should naturally share the country's worries. Moreover, Chen Guangliang has made millions in profits from speculating on gold and has the financial resources to subscribe to government bonds. I am trying to get his support and hope that he will subscribe to 10 municipal bonds."

If Chen Guangliang were here, he would definitely curse Yu Qiaqing.

The 'Municipal Fund Custody Committee' had previously sent a letter to Chen Guangliang's Changjiang Real Estate Company, hoping that Changjiang Real Estate would subscribe to 10 shares, but Chen Guangliang had no intention of subscribing to the 'Greater Shanghai Plan Development Bonds (a total of 300 million)', so he remained silent.

Unexpectedly, Yu Qiaqing came up with a bigger trick.

Song Zaiwen said, "In that case, it shouldn't be a problem for him to subscribe for one million, right?"

Yu Qiaqing immediately said, "It's not a big problem. The rest will be shared equally by several banks. However, if you want Chen Guangliang to subscribe, you have to meet him in person. I am willing to introduce you!"

Song Zaiwen nodded and said, "Okay, I want to meet him today!"

"I'll contact you right away."

More than two hours later, Chen Guangliang appeared at Yu Qiaqing's residence leisurely.

When he saw Song Zaiwen, he was not surprised, but greeted him politely.

Although it is said that 'since ancient times, money has never competed with power', there is no need for him to flatter.

Of course, Chen Guangliang himself has a very good impression of Song Zaiwen. After all, he believes that Song Zaiwen is a person with real abilities and has made great contributions to the country in his previous life. He is worthy of admiration.

In his previous life, Song Zaiwen was a staunch "anti-Japanese element" and even lost his job because of this incident; secondly, during the War of Resistance Against Japanese Aggression, Song Zaiwen secured a large amount of American aid and also fought for China's international status; finally, Song Zaiwen did not engage in corruption, but instead had real skills.

After a brief greeting, Song Tsai-wen got straight to the point. "Mr. Chen, we still have a small subscription quota for the '19th Year of the Republic of China Customs Bonds.' Our Ministry of Finance hopes your Shanghai bank will assist us, especially if you can subscribe to the one million quota."

Chen Guangliang was not surprised. After all, he was now a financial figure and a wealthy man, and he could not escape the public debt.

So, he said readily: "Okay"

This time, Song Zaiwen and Yu Qiaqing were a little surprised, after all, government bonds have shown signs of weakness this year.

Song Zaiwen said, "That's great. With you, Mr. Chen, taking the lead, I believe it will be no problem for Shanghai banks to subscribe to the remaining quota."

Chen Guangliang replied, "I don't deserve that. I'm just a newcomer to the Shanghai money exchange, and I don't deserve Mr. Song's praise. But I do have a humble request!"

"Please say"

Chen Guangliang then said, "I want to upgrade the Changjiang Money House to Changjiang Bank. I hope the Nanjing Finance Department can give me some advice and guidance!"

There is no mention of "care", but rather the hope for "guidance", which means that you should state directly what to do. The conditions can be met, but the procedures must not be difficult.

Upon hearing this, Song Zaiwen immediately said, "That's no problem. Mr. Chen, feel free to apply for the license. We believe you can meet the requirements."

"Okay," Yu Qiaqing said, seizing the opportunity to mention the "Greater Shanghai Construction Bonds." Chen Guangliang did not refuse this time and subscribed to a 100,000 yuan quota. The committee had previously sent letters to the Shanghai Zhabei Hydropower Company several times, hoping that the company would subscribe to 50,000 yuan.

Afterwards, the three of them had dinner at Yu Qiaqing's house and discussed some things.

Song Zaiwen volunteered, "At the end of last year, after reading Mr. Chen's article, I ordered the central bank to increase its gold reserves, which was quite rewarding. I also personally admire Mr. Chen's theory of the 'Great Depression.' Now, I'd like to ask, what impact will the Great Depression have on my country?"

He is a top student who studied in the United States and a Minister of Finance of the Southern Whale Corporation, but now he is not ashamed to learn from others. Two things can be seen: first, Song Zaiwen is not only capable but also very humble; second, the articles written by Chen Guangliang in the "Oriental Daily" have indeed won him many honors.

Chen Guangliang quickly said, "I dare not. I have some personal opinions, and they may not be well expressed. Please don't take them to heart, Minister. In my opinion, the main reason is that the reduction in agricultural imports has led to a sharp drop in the prices of our exports, such as raw silk, tea, bristles, and tung oil. Even if the prices are reduced to very low, they will be difficult to sell. This has led to the devastation of rural areas, the decline of agriculture, and the hardship of farmers. Secondly, European countries and Commonwealth countries and regions like Britain and France may withdraw from the 'gold standard' and allow currency devaluation in the next year or two to cope with the economic depression. Japan will also suffer a severe economic blow, and may invade our Northeast in the next year or two to obtain strategic resources."

From these remarks, it can be seen that Chen Guangliang hates Japan very much. He has also made such remarks in newspapers. It can be said that he is not afraid of offending the Japanese, let alone Japanese spies.

Sooner or later, he will kill some Japanese with his own hands!

Song Zaiwen never expected that a young man who had only attended a private school could have such far-sighted insights.

He could feel that Chen Guangliang's analysis was correct, because raw silk, tea, pig bristles, tung oil, etc. had begun to drop in price a lot.

"If Japan invades Northeast China, what insights does Mr. Chen have?"

"No, I never make such comments. This is a government matter. Even if I were in control of the Oriental Daily, I would not comment on it. We only speak objectively about facts."

Even though he knew that Song Zaiwen was a staunch anti-Japanese, he would not say much.

After all, he can't change too many things, so why bother worrying about it.

"Mr. Chen is quite cautious, but it doesn't matter. I also gained a lot today!"

"Thank you for the award"

After dinner, Song Zaiwen hurriedly said goodbye.

Chen Guangliang said to Yu Qiaqing, "Lord Hede, I plan to establish the Yangtze River Bank and hope to have your support and cooperation!"

Of course he knew that Yu Qiaqing had cheated him twice, but he just acted as if nothing had happened. After all, what else could he do?

"Okay, Chen Guangliang, if you start a business, you will definitely make money. How much capital do you plan to invest?"

"200 million. If you're willing to invest, you can subscribe to 5%!"

"Well, there's no need to invest. You have strong financial resources anyway, so I can fill the gap."

"Row"

This is quite normal. After all, once such a bank opens, it will essentially be Chen Guangliang's personal bank. Yu Qiaqing is not as wealthy as he seems to be. He is somewhat of a hollow tycoon, primarily due to his overly large investments.

The next day, Chen Guangliang urgently convened a meeting of shareholders and management of Changjiang Money House. Those attending the meeting included shareholder Yan Zhiduo, as well as management including Wu Xinhe and Hu Jinshun.

"Have all the funds been sorted out?"

Upon hearing his boss's words, Wu Xinhe immediately replied, "Every single payment has been received. Currently, the Changjiang Bank holds 8080 gold bars (large yellow croaker weighing ten taels), valued at 510 million taels, and another 360 million taels in cash."

Yan Zhiduo was so excited when he heard this that he invested 87 yuan. In less than a year, the value of the money had increased to yuan, and he made a net profit of more than yuan.

Chen Guangliang nodded and said, "Don't rush to distribute the dividends. Just treat the Changjiang Bank as a bank. Uncle, if you need money, you can withdraw your rights at any time."

Yan Zhiduo waved his hand and said, "Don't worry, just keep it in the bank."

There was no rush. Following his son-in-law, he not only earned millions in assets from Dahua Real Estate and Changjiang Bank, but also exchanged a lot of gold, which appreciated significantly. Furthermore, he still trusted Chen Guangliang.

Chen Guangliang continued, "The Changjiang Bank is about to enter the government bond market. Managers Wu and Hu, please immediately arrange for a partnership with the Securities Brokerage Company to arrange the transaction."

Currently, government bond transactions in the Shanghai Stock Exchange are conducted at the Shanghai Securities and Commodities Exchange and the Huashang Securities Exchange. Coupled with the "Minshi Xinjiaoda Movement" of that year, the amount of government bond transactions has always exceeded that of securities.

Wu Xinhe asked, "Boss, do you want to sell short?"

Chen Guangliang didn't hide it from everyone and said, "Yes, it's short selling, but we don't have physical delivery. But it doesn't matter now, the market allows this operation."

Yan Zhiduo said solemnly, "As the saying goes, 'Don't do what you don't know.' How much do you know about the government bond market?"

He was not worried about his own money, but was worried that Chen Guangliang would be carried away by victory.

Chen Guangliang confidently stated, "Three factors could cause a sharp drop in government bond prices: First, the skyrocketing gold prices from April to June severely impacted imports and exports, impacting tariff revenues. Second, the stalemate in the Central Plains War, coupled with the forced takeover of the Tianjin Customs by Yan Xishan, will cause bondholders to suspect that their government bonds backed by tariffs will be affected. Third, the financial sector is generally facing tight liquidity, driving up interest rates and exacerbating bank lending. Therefore, I predict a sharp drop in government bonds in July and August."

Hearing this, Yan Zhiduo finally felt relieved and said, "So that's how it is."

After the meeting, everyone started to get busy, while Chen Guangliang was thinking in the office.

His sudden announcement of entering the government bond market was naturally influenced by yesterday's events.

It wasn't as if the '1931th Year of the Republic of China Customs Bonds' would make his million dollars go to waste. After all, there was a stipulation that repayments should be made within eight years, and the Nanjing government was in power from 1937 to 8. Add to that the % annual interest, and it was actually a very good investment.

So this investment was purely due to Chen Guangliang’s sudden interest, that’s all!

In the summer of 1928, as the main force of the Fengtian clique withdrew from the areas outside the Great Wall, the Southern Whale Nationalist Government announced that the situation had stabilized and promised to maintain the various public bonds of the Beiyang period. The bond market became optimistic. Except for the 50 public bonds, the market prices of various bonds rose rapidly. The "whole six" bonds rose from more than 70 yuan to more than 80 yuan, and the "seven years" bonds rose to nearly 4 yuan. Although in late April, due to the rapid progress of the Northern Expedition, the prices of various bonds fell sharply due to the issuance in the north, they soon rebounded. Later, there was news of lottery repayment for the "seven years" and "whole six" bonds, and the market prices rose day by day. The "whole six" bonds reached 84-85 yuan, and the "seven years" bonds hovered around 80 yuan, which was a huge increase of 1927-20 yuan compared with the end of 30.

Other bonds, such as "financial" and "whole seven" bonds, saw significant price increases despite low trading volumes. Financial bonds, due to lottery draws, reached a high of 98 yuan, while whole seven bonds reached 83.5 yuan by the end of the year, both rising by over 1927 yuan compared to 20. The market prices of various bonds issued by the Nationalist government, including the % Treasury Notes, the % Treasury Notes, the Cigarette Tax Coupons, and the Post-war Bonds, were also popular, with prices steadily rising.

It was not until 1930 that the Shanghai government bond market began to show signs of weakness.

Therefore, Chen Guangliang concluded that the government bond market would experience another big drop in July and August, so he might as well make some money first.

The losses inside the dike can be compensated by those outside the dike!

(End of this chapter)