A century-old wealthy family that rose from Shanghai

Chapter 242 Hidden merit and fame

After the war stops, the first thing to do is to count the losses. This applies to countries, companies, and individuals.

So Chen Guangliang has been busy in recent days.

Just now, another management meeting of Ping An Bank was held, and all management members were present.

Among the management of Ping An Bank, they have the highest cultural level among all of Chen Guangliang's companies, and four of them have studied abroad.

Including General Manager Xia Gaoxiang who studied in the UK, Assistant Manager Ye Ximing who studied in Japan, Project Manager Wang Yaxin who studied in the US, and Savings Manager Qin Bohou who studied in the US.

In the future, Chen Guangliang will continue to strengthen the recruitment of talents, provided that Ping An Bank develops.

At the meeting, Xia Gaoxiang said, "In January and February, the Shanghai Stock Exchange experienced a wave of bank runs, and our Ping An Bank lost over 1 yuan in deposits. Our current deposits are 2 million yuan, reserves are 340.55 yuan, and loans are 90 yuan."

After the January 28 Incident, the financial situation in Shanghai was extremely severe. "Securities and real estate, which were the most valuable in normal times, almost lost their effectiveness for a while," and the effective operation of the financial industry suddenly became problematic.

The Shanghai banking industry held emergency consultations and decided to establish the Shanghai Banking Industry Association Joint Preparation Committee and Joint Reserve Warehouse. Each bank subscribed to 4000 million yuan of property in various forms such as real estate, securities, gold and silver as collateral for the deposit. The committee issued a "public order" to save the market.

This kind of public order "is enough to replace cash, which is actually no different from the silver deposits in Shanghai. It has suddenly increased by hundreds of millions. As the news spreads, people's hearts gradually calm down."

This is a disguised form of increasing currency issuance.

The money-making industry followed suit, first establishing the Shanghai Money Industry Special Property Custody Committee. By March 3, 5 peers had transferred a total of 70 million taels of silver in property, an average of 2583 taels per company.

The Shanghai Silver and Money Industry Joint Reserve played the role of "bank of banks" at that time. The bills they issued, such as "public bills", eased the financial tightness. Peers in trouble could use these bills to discount or pledge loans.

Chen Guangliang said: "Based on this scale, we are one of the banks that are less susceptible to bank runs."

Xia Gaoxiang replied, "Yes. First, our bank has just opened, and the deposits we've just taken in are regular deposits, which gives us a high degree of stability. Second, your companies frequently donate large sums, and these companies are our foundation, which has enhanced our credibility. Third, your personal influence is immense, so many people trust Ping An Bank."

Ultimately it comes down to the word "credibility".

Of course, of the remaining 340 million deposits in Ping An Bank, Chen Guangliang's four major companies account for about 90 in deposits, his relatives and friends account for 100 million in deposits, and the remaining 150 million is the real depositor deposits.

In addition, Ping An Bank has a reserve fund of 90, which is the remainder of the registered capital of 100 million.

Chen Guangliang continued, "The gold we invested in has already appreciated by 10%. This investment has been relatively smooth, and it also stabilizes our cash flow. It's more convenient than taking out a loan. If we had lent out a large amount this time, we would have suffered losses."

The bid price has now reached 750, but the average price they paid was only 670, so they made a profit of more than 10%.

Moreover, the appreciation of gold is even more important than oceans and silver.

Hearing Chen Guangliang's words, everyone naturally nodded in admiration.

At first, the boss repeatedly and cautiously refused loans, and they thought that the boss wanted to use the bank as his own 'cash machine' or 'investment institution'; now it seems that the boss has a very high level of analysis of the crisis.

Project Manager Wang Yaxin then asked, "Now that the war is over, what is Ping An Bank's loan plan?"

Chen Guangliang said: "Be cautious, but business will resume normally. After this battle, the Shanghai Stock Exchange should be able to usher in a long period of peace, and the overall economy will continue to grow."

Although there was the turmoil of "silver appreciation and outflow", there is no doubt that the next six years will be a period of economic growth for China.

Wang Yaxin nodded and said, "Okay."

The balance between the two will naturally be determined by their project department. Unless there are special circumstances, Chen Guangliang will not intervene.

Chen Guangliang then continued, "We're cautious about lending, but our bank needs to grow. Although the government bond market has been suspended, the Shanghai Huashang Stock Exchange has dark trading, and Ping An Bank is also investing in government bonds. Although all government bonds have lowered their interest rates (from 8% to 6%), as long as the market remains stable, it's a good time to buy on dips."

Xia Gaoxiang said, "Boss, do you mean to allocate some government bond assets?"

It is normal for banks to allocate government bond assets, so no one has any major objections to this.

What's more, the current government bonds are only about 4% of their face value, which is indeed a good time to buy on the dip.

Chen Guangliang nodded and said, "This configuration will be completed gradually. The quota can be set at 50 to 100 million, and it can be adjusted depending on the increase in bank deposits. In addition, considering that the three northeastern provinces have been lost, the 'whole six' and 'tariff' options will not be considered."

From 1927 to 1931, the Nanjing government issued 25 types of bonds, worth over 10 billion taels of silver. Of course, the bonds originally issued by the Beiyang government had either been re-merged or repaid.

Therefore, the public debt in the world is about 10 billion, and the current interest rate is 6% per year. Therefore, the Nanjing government will pay 600 to 800 million in interest to the public debt committee every month.

Chen Guangliang decided to let Ping An Bank invest in government bonds. The first reason was the asset allocation, and the second was that the government bond price was already very low.

The price of government bonds will not rise much this year, but next year (1933), they will definitely rise by 20 to 40 yuan (the general face value is 100 yuan, the issue price is around 80 yuan, and many are currently only around to yuan).
例如‘18年关税库券’26.5元、‘编遣库券’25.5元、‘19年善后库券’31.7元、‘19年关税库券’35.8元、‘裁兵公债’37.7元、‘21年卷烟库券’28.5元、‘盐税库券’30.5元.
It can be said that these bonds are only 20% to 30% of their face value and only 40% of the issue price.

If you don’t enter now, when will you enter?

Xia Gaoxiang then said, "Okay, we'll plan to invest in government bonds later. However, it's a dark market, so there are certain risks involved. We don't know when the exchange will open yet!"

Chen Guangliang said: "It is expected that it will take some time, but there will be no problem for the dark market to absorb a moderate amount of government bonds."

The issue has been settled.

Later, Chen Guangliang said, "Recently, there has been a trend in the market where some people are selling silver dollars and collecting silver taels. Ping An Bank will also follow suit and absorb 50 taels of silver and store it in its vault."

Currently, 100 oceans can be exchanged for 74 taels of silver.

Wang Yaxin said anxiously, "Boss, Ping An Bank has already invested 150 million taels of gold, and is preparing to invest 50 to 100 million taels of government bonds. Now they are preparing to store 50 taels of silver. This will require an estimated 68 taels of silver, and we only have 340 million in deposits. Add to that the current market capital shortage, and I'm afraid our project department will have difficulty carrying out activities!"

Chen Guangliang immediately said, "Don't worry! First, I personally believe that funds from across the country will soon pour into the Shanghai Stock Exchange. With Japan's withdrawal as the dividing line, the market's capital shortage will only be temporary, so our deposits will continue to grow. Second, don't worry about our loan-to-deposit ratio. I'll later deposit over two million yuan in gold certificates held by several insurance companies at Ping An Bank as collateral for our major shareholder. Therefore, even if our capital utilization rate reaches 90%, there's no risk."

When these words were spoken, everyone was shocked.

They knew the boss was capable, but they didn't expect him to be so capable.

Generally speaking, many industrialists claim to have assets worth tens of millions, but they may not even be able to produce a cash flow of 100 million, or even have very tight assets - first, the investment is too large, and second, there are too many fixed assets.

For example, Liu Hongsheng used a loan of 100 million yuan from the Shanghai Savings and Commercial Bank to establish his corporate bank, mortgaging the corporate building.

Wang Yaxin immediately said, "Okay, I was a little anxious."

Xia Gaoxiang immediately said, "We have over 350 million in bid money as collateral, so it's normal to keep only 10% of the funds for normal operations. By the way, Boss, I think we should use the company's reserves to buy the Ping An Bank Building you own. We don't need the reserve funds anymore, so we'll use the bid money as a reserve."

The standard gold is a large yellow croaker worth 10 taels of gold, which is indeed a stable cash flow.

Chen Guangliang nodded and said, "Okay, I'll have Changjiang Real Estate take over later!"

The cost of the land, construction, and taxes for the Ping An Bank Building totaled approximately 85 yuan, which was almost enough for Ping An Bank to use up its reserve funds. This meant that Ping An Bank's initial capital was 100 million yuan—85 yuan for the Ping An Bank Building, 10 yuan for the bank's preparation, and 5 yuan left over.

Since a considerable amount of deposits have been attracted, there is naturally no need to use "original capital" to operate.

Ping An Bank is expected to be put into use in October, and operations have not been suspended even during the war.

The meeting went smoothly and everyone felt that Ping An Bank would see greater development this year.

After the ceasefire, although Chen Guangliang counted the losses immediately, it would obviously take some time to develop the business normally.

The main reason was that the Chinese areas of Shanghai were basically under Japanese occupation, and secondly, there were also some Japanese Marines in the part of the concession that was building roads across the border.

Therefore, for the entire business in Shanghai to return to normal, the Japanese army must at least completely withdraw from Shanghai.

On March 3, China and Japan held a formal armistice meeting at the British Consulate, but the negotiations quickly reached a deadlock. The two sides argued over many points, with the timing and location of the Japanese withdrawal being particularly contentious.

On the 27th, British Minister to China Lampson proposed five compromise proposals for each clause.

The two sides held discussions from the 28th to the 30th without any results and the meeting came to a standstill. Hua Xia then submitted the above issue to the League of Nations Special Committee for resolution.

At the end of March, Wang Yunwu, general manager of the Commercial Press, published a major article in the Oriental Daily, stating that the Commercial Press had already moved its collection of books and some printing equipment before January 3th, and had recently concealed this fact out of concern that the books would become a target of enemy attack again. Statistics show that the main losses suffered by the Commercial Press this time were related buildings and some printing equipment, totaling 1 million yuan.

When the news came out, the whole of China was excited.

Because some time ago, including the commander-in-chief, Cai Yuanpei and others have condemned Japan's despicable behavior of destroying Chinese culture, the total loss of Commercial Press was also estimated at as high as 1520 million yuan.

Now that the war has stopped, the Commercial Press has unexpectedly revealed such shocking news, and this matter has been concealed from the Nanjing government and scholars across the country.

Of course, everyone was glad that this was the case and they understood the Commercial Press's "concealment". After all, the war was not over and anything was possible.

The story wasn't over yet. Following the lead of the Commercial Press and the Oriental Library, over forty other factories also issued statements thanking the "mysterious letter" for saving hundreds of thousands or even millions in losses. Collectively, these factories avoided losses totaling 5500 million yuan. The Yong'an factory alone saved 280 million yuan in losses, including machinery and raw materials.

For a time, media across the country used the phrase "God bless China" to describe it, and they also tried to find out who had warned so many factories and how they knew that Japan would bomb Zhabei.

There was no evidence, only the media published the typed letter, and everyone read it.

The content of this letter, from the "Japanese Monk Incident" to the "Sanyou Industrial Society Conflict Incident", was analyzed in detail, all of which were incidents created by Japan to invade Shanghai; at the same time, the purpose of Japan launching this war was to allow the puppet state of Manchukuo to be successfully established; and the direct evidence that Japan was going to bomb Zhabei was the Japanese aircraft carrier that arrived on the sea surface of Shanghai.

"If only this letter had been published in the newspaper, the losses might have been less!"

"Not necessarily. It's said that some factories received the letter, but didn't take it seriously. The person who issued the warning knew that if the letter were published in the newspaper, it might prompt the Japanese to bomb the factory prematurely, or even lead to reprimands from the Nanjing government."

"Yes, the person who wrote this letter may not have known how things would turn out. The letter simply said - it's better to be careful than to cry afterward."

Of course there are people who blame it, but more people think that this letter saved many factories and some Chinese industries.

In response to the outside public opinion, Chen Guangliang quickly made an appointment with Zhang Yuanji, chairman of the Commercial Press, and Wang Yunwu, general manager. The two sides met in a private room at the Shangri-La Hotel.

As soon as Wang Yunwu met him, he sincerely apologized: "Mr. Chen, it's not that I wanted to release this news in advance, but this matter has become unbearable and has been spread by many shareholders and employees. As a result, it has even attracted inquiries from all walks of life."

Before the bombing, the Commercial Press had 3700 employees, as it printed books for schools across the country and other businesses.

Starting from February, Wang Yunwu had to prepare for "layoffs", which offended many people and he was insulted or threatened all the time.

This news was leaked by several laid-off employees.

Chen Guangliang immediately said, "This matter is an internal matter of your Commercial Press. I have no intention of interfering. However, only a few of you knew that I provided advice. I don't want to be involved in this matter. After all, some people have been lucky enough to avoid it, while others have suffered huge losses, and it's inevitable that they will vent their anger on me."

It was originally a great achievement, but now it is mixed with some discordant voices, so Chen Guangliang is reminding Zhang Yuanji and Wang Yunwu today.

Of course, Chen Guangliang definitely has no regrets.

Zhang Yuanji then said, "Don't worry, Mr. Chen. If we don't do this well, we will be truly ungrateful. I also understand your difficulties and will never take it lightly."

He understood that with Chen Guangliang's influence, he no longer needed such honors, which would be a burden instead.

Chen Guangliang then said with confidence: "Okay, I believe you."

Wang Yunwu breathed a sigh of relief, then took the initiative to say, "We've rented several temporary warehouses and a number of safes in the concession to store these books. They can be vacated in a week. We don't want to delay the construction of the Times Cinema."

Chen Guangliang did not force it, but asked, "Are there any difficulties in rebuilding the Commercial Press this time?"

Wang Yunwu said, "It can be said that all difficulties are nothing compared to preserving those precious books. Regarding funds, we had 200 million yuan in deposits last year, and we mobilized another 130 million yuan from branches nationwide, including those in Hong Kong and Beijing. Regarding business operations, we have also retained over % of our printing equipment. We are currently printing autumn textbooks and other materials in a factory we rent in the concession. Of course, we have also transferred our inventory. As a whole, as soon as the Japanese withdraw from Zhabei, we will be able to resume operations and open for business immediately."

He was actually reporting on his work. Although Chen Guangliang was not a shareholder, he was better than a shareholder.

The Commercial Press is a listed company with a total of 1500 shareholders.

"Okay, then I feel relieved."

Zhang Yuanji smiled and said, "The buildings were severely damaged, but we can rebuild them. A lot of the printing equipment was lost, but we can buy new ones. We are very encouraged that more than 80% of the books and 100% of the collection were preserved. So we don't feel any hardship, but only feel very lucky."

Since the bombing began, they have never been truly sad, but instead feel lucky.

Chen Guangliang nodded, then changed the subject and said, "I heard that Mr. Xiaozhai has a son who is studying in the United States. I wonder what his major is and when he will graduate?"

He also heard about it from a friend, so he started to pay attention to it.

Zhang Yuanji said, "His name is Zhang Shunian. He has a Master of Business Administration from New York University and is scheduled to graduate this year!"

Although he had a son late in life, he was quite proud when talking about him.

Chen Guangliang asked, "Do you have a job offer? Could it be the Commercial Press?"

Zhang Yuanji said affirmatively: "Of course not, the work has not yet been completed."

Chen Guangliang immediately said, "Then you can introduce him to Ping An Bank, which is under my umbrella. I'm in need of some overseas students."

"Okay, I'll definitely ask him to come and do it with Mr. Chen, as long as you like it!"

"A Master of Business Administration from New York University is naturally something I would look up to."

Next, it was time for Chen Guangliang to develop the bank, so naturally he had to continue recruiting people.

(End of this chapter)