简体中文 | ENGLISH


Online Banking

 
 

History

 
 


A Four-Bank Joint Office Established by the Nanjing Government (1939)


 

With the breakout of the Lugouqiao Incident, the financial market became instable. The government desperately needed an institution able to deal with financial problems in war time. However, the Central Bank at that time was not strong enough to meet such a requirement. It was necessary to establish a supreme authority over all financial institutions so as to combine strength of the Central Bank, Bank of China, Bank of Communications and Farmers Bank of China to stabilize and vitalize the financial market and to strengthen the monopoly of the Central Bank.

In September 1939, the Nanjing Government promulgated the Outline for Improving Central Financial Institutions in War Time, requiring the Central Bank, Bank of China, Bank of Communications and Farmers Bank of China to establish a joint office to take charge of various special business activities related to financial and economic policies of the government in war time. On October 1, the Four-Bank Joint Office was established. Chiang Kai-shek served as the chairman of the council to take charge of overall affairs, and Kong Xiangxi, T.V. Soong and Qian Yongming served as the executive directors. The council consisted of the Chairman of the Military Commission, the Premier of the Republic of China, the Financial Minister, the Economic Minister and leaders of the four banks. The Joint Office, acting as the decision-making center in war time, was authorized to command and control the four banks without restraint.

The Joint Office, after establishment, externally strengthened financial and economic monopoly and internally enhanced position and strength of the Central Bank.

In March 1942, the Nationalist Government borrowed USD 500 million from the U.S. to enrich foreign exchange funds, so Chiang Kai-shek decided to issue a unified currency by the Central Bank and adjust the functional division of the four banks. On May 28, 1942, the temporary council of the Joint Office adopted the Measures for Business Definition and Evaluation of the Central Bank, Bank of China, Bank of Communication and Farmers Bank of China. It stipulated that the main business of the Central Bank included unified issuance of cash and notes, unified collection and payment of foreign exchange, agency service as the state treasury, military and government remittance, and regulation of financial market; and the main business of Bank of China included collection and payment of foreign payments for the government as entrusted by the Central Bank, developing and supporting foreign trade and handling loans and investment of relevant affairs, and dealing with deposit trust as entrusted by the Central Bank. Bank of China was restructured into a bank specialized in international trade from an international exchange bank.


An advertisement published after Bank of China was turned into an international trade bank

After dividing specialization of the four banks, strength of Bank of China was weakened to some extent.

I. Business development was restricted. After the functional division among the four banks, foreign exchange was collected and paid uniformly by the Central Bank, leaving Bank of China in the field of international trade. However, retardant international transportation at that time caused difficulties in developing international trade. Bank of China had a long history of handling overseas remittance and enjoyed the advantage of multiple overseas branches. But when the right to issue legal tender notes was centralized under the Central Bank after the functional division, the enthusiasm for overseas remittance was affected because of frequent delayed supply of banknotes from the Central Bank, thus impacting the overseas remittance business of Bank of China. Bank of China also used to be engaged in agricultural loans. Statistics showed that the balance of agricultural loans reached 182 million yuan by the end of 1941 before the handover, accounting for 40.1% of total agricultural loans among the four banks and one bureau, which was close to that of Farmers Bank of China. However, according to requirements of the functional division, all agricultural loan business of Bank of China was handed over, which was no doubt a loss of Bank of China.

II. Strength of Bank of China was weakened. Most of its business activities used to take the leading position among the four banks. In 1941, its ordinary deposit balance stood at 5.115 billion yuan, accounting for 52.1% of total deposit balance among four banks, while the Central Bank only had 2.229 billion yuan, accounting for 22.7%. Regarding to loans, in 1937, loan balance of Bank of China accounted for 39.5% of the total loan balance among the four banks, while the Central Bank only had a share of 34.2%. After the division, deposits, loans and subsequently the income of Bank of China decreased substantially.

  [ Close Window ]
Personal Banking Login
Personal Banking(VIP) Login
Corporate Banking Login



   Overview
   Anti-Money Laundering
   Corporate Social Responsibilities
   Organization
   History
   Awards
   Bank Card Gallery
   Commemorative Bank Notes



 
  Site Map | Contact Us | Term & Conditions | Copyright | 京ICP证 060399
 
Copyright © BANK OF CHINA(BOC) All Rights Reserved.