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Chapter 21 Without "Trust" No Establishment: From Qianzhuang Bank to Commercial Bank (1)
The prosperous Shanxi bank
The TV series "Qiao Family Courtyard", which once won the first rating on CCTV, depicts the story of Qiao Zhiyong, a generation of Shanxi merchants.In the history of Chinese national business development, "Shanxi merchants" is a heavy name full of legends. Those ancient pawnshops, banks, ticket offices, and business names are the symbols and marks left by Shanxi merchants in history. "Wherever there are sparrows, there are Shanxi merchants." Qiao Zhiyong is an outstanding representative of Shanxi merchants.He pursued the business dream of "connecting the world" all his life, and created the Shanxi Bank, which was very popular for a while.

After the mid-Ming Dynasty, China's feudal social economy, due to the improvement of social productivity and the stimulation of the inflow of foreign silver, had a relatively obvious development of the commodity currency economy.This development continued to the early Qing Dynasty, especially during the Kangxi and Qianlong periods. Due to domestic political stability and the development of agricultural production, the commodity currency economy was more active than before.With the expansion of the domestic market, not only many local markets have emerged, but also a large national market is gradually taking shape.Liu Xianting, a native of the Qing Dynasty, once described this economic prosperity: "There are four gatherings in the world, the capital is in the north, Foshan is in the south, Suzhou is in the east, Hankou is in the west, and on the coast of the East China Sea, beyond Suzhou, there are Wuhu and Yangzhou. , Jiangning, and Hangzhou to distinguish their strengths, and the west is Weihan Kouer." (Liu Xianting's "Guangyang Miscellaneous Notes" Volume [-]) From this description, we can find that in the Ming and Qing Dynasties, the development of the commodity economy was the development of commodities. The transition opened up a wide range of circulation, which naturally put forward new requirements for currency and finance. The new development requirements of the commodity economy prompted feudal financial institutions to break through the scope of pure exchange and gradually transition to the credit stage.On the other hand, the development of inter-port trade has expanded the scope of commodity circulation, and new problems such as debt settlement and cash balance in different regions have emerged. Therefore, this situation also requires more professional exchange.What measures can be taken to cope with the new development requirements of the economic situation?

During the Daoguang period of the Qing Dynasty, a large number of Shanxi businessmen did business between Shanxi and the capital, so there were often truckloads of gold and silver that frequently moved between Beijing and Shanxi.However, the distance from Beijing to Shanxi is long, and there are many thieves on the road. Therefore, when merchants transport gold and silver, they must spend money to hire bodyguards to escort them, which is not safe and expensive.Xiyucheng Pigment Factory in Shanxi has a branch in Beijing. Lei Lutai, the general manager, came up with a trick: if you want to send money back to Shanxi merchants, you can first hand over the cash to the Beijing branch of Xiyucheng Pigment Factory. I issued a ticket to the merchant, and at the same time wrote a letter to Shanxi Xiyucheng Pigment Factory. After the merchant arrived in Shanxi, he went to Xiyucheng to withdraw cash with the ticket.For a while, there was an endless stream of people who came to ask Shanxi Xiyucheng Pigment Factory for help.Lei Lutai found out that this was a way to make money, so he gave up the business of the paint shop, and started the "Rishengchang" bank, which was the first bank in Chinese history.Soon, "Rishengchang" began to absorb cash and issue loans again, which is similar to today's banks.

The "ticket number" was born in response to this economic situation.The Shanxi bank, which was first created by Shanxi merchants, has gradually become the leader in China's financial circle with the development of the bank industry.At the same time, due to the combination of commercial capital and financial capital, Shanxi merchants became a pivotal force in the domestic commercial and financial circles at that time.

After the Opium War, modern banks appeared and gradually developed in China.The Shanxi Bank, which was inextricably linked with the Qing Dynasty, eventually disappeared in the long river of history with the decline and demise of the Qing Dynasty.

everything comes from credit

In 1596, a Dutch captain and 17 sailors were trapped in a place in the Arctic Circle by the frozen sea. During the 8 months of long winter, 8 people died.But the Dutch merchants did an unimaginable thing. They did not touch the goods entrusted to them by others, and these goods included clothes and medicines that could save their lives.The freezing season was over, and the surviving merchants finally brought their goods back to Holland, almost intact, to their consignors.The Dutch have good reason to contingency. They can open the checked box first, eat what can be eaten, and when they reach the destination, they can double pay the shipper.Anyone would agree with this humane approach.However, the Dutch did not do this.They regard business credit as more important than their own lives.They used their lives as the price, kept their promises, and created business rules that were handed down to future generations.At that time, the Netherlands was only a small country with a population of more than 100 million, but because of its outstanding reputation, it became a powerful country in maritime trade, which has blessed the Dutch for generations.

Obviously, this story shows the importance of the word "credit".For the understanding of the word "credit", many people only stay at the level of "can only be understood, not expressed".What exactly does "credit" refer to?Credit refers to our positive record of fulfilling our commitments in the past. It is also a kind of performance art, a behavior management model that everyone can try and manage themselves.This definition is elaborated from the behavior of the individual.In life, "credit" is more involved with economic behavior.In the "New Pagrave Economic Dictionary", the explanation of credit is: "Providing credit (Credit) means giving up the property rights to something (such as a sum of money) in exchange for a specific future Ownership of another item (such as another part of money) at all times.” The Oxford Dictionary of Law explains it as: “Credit (Credit) means not immediately after receiving or providing goods or services. The practice of paying remuneration in the future." "Money and Banking" also explained credit: "The category of credit refers to the behavior of lending. The characteristic of this economic behavior is to pay back as a condition, or to return as an obligation. obtain; and the lender lends because he is entitled to interest, and the latter may borrow because he is bound to pay interest."

To understand "credit" from an economic point of view, it actually refers to the relationship between "debit" and "credit".Credit actually refers to "the expectation of receiving a sum of money within a limited period of time".When you borrow a sum of money and a batch of goods (sale on credit), it is actually equivalent to that you have obtained a "limited credit line" from the other party. The reason why you can get this "limited credit line" from the other party is largely Partly because of the other party's trust in you, sometimes because of strategic considerations and other factors.

In the eyes of the credit creation school, credit is money and money is credit; credit creates money; credit forms capital.This is to look at the word "credit" from the perspective of currency.

The "Credit Creation School", pioneered by John Law in the 18th century, represented by McCluder Hahn in the 19th century, and Schumpeter in the 20th century, is an important school in monetary finance.In the eyes of this school, credit is money and money is credit.John Law said: "Credit is necessary and useful. An increase in the amount of credit has the same effect as an increase in the amount of money, that is, they can also generate wealth and prosper business. The creation of credit through banks can be achieved within a year. The amount of money increased within ten years is much more than that of ten years of trade...As long as money is abundant, it can create prosperity for a country; as long as there are credit facilities (he mainly refers to banks, etc.), it can supply abundant money and give the economy The initial shock; relying on this shock, it will be able to produce a lot of wealth for France." John Law's basic logic is this: money is wealth - money does not have to be gold and silver, but land, public bonds, stocks, etc. Guaranteeing the best paper money issued—Paper money is a credit of the bank—By supplying this credit, the bank can provide an abundance of money—Giving an initial shock to the economy—By virtue of this shock, the The country is rich and strong, and the economy is prosperous; in short, credit is money; money is wealth, that is, capital.

"No Credibility, No Credibility": Credit is the life of a bank
There is such a story about money, credit and economic cycles.

There were two farmers in Louisiana. Their names were Pierre and Chasson.One day, Pierre came to Sasson's farm and praised Sassoon's horse: "This is such a beautiful horse, I must buy it."

Chasson replied: "Pierre, I can't sell it, I've owned this horse for many years and I love it."

"I'd pay ten bucks for it," Pierre said.

Sassoon said, "Okay, I agree."

So they signed a contract.About a week later, Chasson came to Pierre's farm and said to him, "Pierre, I must get my horse back, I miss him so much."

Pierre said, "But I can't because I've bought a trailer for five dollars."

"I'd pay 20 yuan for the horse and the trailer," Chasson said.Pierre silently calculated—an investment of 15 yuan earned 5 yuan a week—the annualized rate of return exceeded 1700%!So, he said, "Just do it."

So Pierre and Chasson kept trading the horse, the trailer, and other accessories.In the end, they finally didn't have enough cash to trade.So, they went to their local bank.The banker first ascertained their credit status and the history of the horse's price evolution, and then lent money to the two of them, and the price of the horse continued to rise in each round of transactions.Every time a transaction is completed, the banker can recover all the loans and interest, and the cash flow of Pierre and Chasson also increases exponentially.

This continued until years later when Pierre bought the horse for $1500.Then an Eastern guy (MBA from Harvard) heard about this amazing horse, made some delicate calculations, came to Louisiana, and bought it from Pierre for $2700.

Chasson was very angry when he heard the news. He came to Pierre's farm and shouted, "Pierre! You idiot! How can you sell a horse for $2700! Our lives depend on this horse." Horse!"

If the banker hadn't valued the "credit" of Pierre and Chasson, he would not have lent money to these two people easily.And if no funds were raised, then the following series of wonderful stories about "borrowing money to make money" would not have happened.Therefore, the most critical link still falls on the word "credit".

The modern economy is an expansionary economy. It needs to rely on debts to expand production scale and update equipment, and also needs to rely on various forms of credit to raise funds, improve technology, and sell products.Secondly, the most basic and common economic relationship in the modern economy - the creditor-debt relationship, also embodies the key role of "credit" everywhere.Every sector and every link in economic activities is permeated with creditor-debt relations.The more the economy develops, the closer the credit-debt relationship becomes, and the more it becomes a necessary condition for the normal operation of the economy.Credit money is the most basic form of money in the modern economy.Various economic activities form a variety of monetary receipts and payments, and these monetary receipts and payments are ultimately the assets and liabilities of the bank, and they all reflect the credit relationship between the bank and other economic sectors.So credit has become the ubiquitous and most common economic relationship.

Bank credit is credit granted to enterprises or individual consumers by commercial banks or other financial institutions.In the process of credit sales, banks and other financial institutions provide financing support for buyers and help sellers expand sales.Commercial banks and other financial institutions grant credit to enterprises in monetary terms, and the determination of loan and loan repayment methods is based on the credit level of enterprises.Commercial banks will require mortgages and pledges as guarantees for enterprises that do not meet their credit standards, or guarantee companies for these enterprises.The latter situation is essentially that the guarantee company provides credit to the enterprise applying for the loan, which is a special form of credit.

Asset Management: Putting yourself in the role of the banker

As early as 2004, Goldman Sachs and Industrial and Commercial Bank of China had made clear their willingness to cooperate.The industry generally believes that with Goldman Sachs as a strategic partner, ICBC should speed up the pace of developing asset management business.In the United States, commercial banks focus more on personal financial services.Because investment banks, hedge funds, private equity funds, mutual funds, and retirement funds in the United States have a long history and each has its own solid customer base and distribution network, it is difficult for commercial banks to compete with these financial institutions in their asset management business.

(End of this chapter)