The Qing Dynasty

Chapter 577 Stability and Resilience

Teng Yuzao then smiled bitterly and said, "And I don't think there is anything that can be verified about this matter!"

Seeing Zhou Fu's confusion, Teng Yuzao explained, "Cooperating with the Japanese to set up a bank was not a big deal in the court. After all, the court had never explicitly prohibited anyone from co-founding a bank with foreigners. It's just that Yixin's identity is special, so he won't be careless."

"Because there are Japanese involved in this bank, no one outside has heard of it, and the Japanese in the bank are only consultants. I suspect that even the princes and nobles who have invested in the bank may not know about this."

"Otherwise, there would be no news."

To many people in the conference room, Teng Yuzao's words sounded somewhat grammatically incorrect. Without any rumors, how did he know that the Japanese had invested in the company?

However, the generals of the vanguard army, including the Yang Shixiang brothers, Xu Shichang, Ning Xingpu and others completely believed what Teng Yuzhao said, because they were all well aware of Li Yaoting's existence.

Although Teng Yuzao realized that there were some problems with his words, he could not explain it, so he simply did not mention why he said that the information he received was absolutely reliable, and continued to speak.

"If this is the case, then Yixin must have been deeply involved with the Japanese, or perhaps he was just greedy for profit."

"However, no matter what, if no news came out, it is very likely that the Japanese gave the funds directly to Yikuang, and then Yikuang combined the Japanese funds and his own equity and used them as his equity."

Yang Shixiang nodded and said, "I also think so. Even if the court wants to investigate, they will definitely not find anything."

Xu Shichang also interjected, "No matter what, the court must intervene in this matter."

"Marshal, what Juren said makes sense. We should let the court clarify the rumors!" Yang Shixiang said thoughtfully.

Teng Yuzhao nodded, then shook his head.

"The imperial court must speak out about this matter, but they can only come out to dispel rumors and make it clear that the imperial court has no policy that is unfavorable to silver coins without dragon patterns. As for the rest, we still need to solve it ourselves."

Teng Yuzao thought for a moment and said, "Mr. Lian, once the meeting is over, you will immediately write two memorials in my name and send them to the Military Affairs Office and the Queen Mother to explain this matter. Then you will rush to the capital overnight."

"It would be best to communicate with Prince Duan first and submit the memorial tomorrow morning."

Teng Yuzao also instructed Yang Shixiang to "explain in the memorial that someone was deliberately targeting the Aurora Bank in an attempt to hinder the implementation of the new policies advocated by the court in Zhili and Shandong provinces."

"We also need to make it clear to the court that if the Aurora Bank is affected, it will be difficult for the Lu-Han Railway to proceed, so please ask the court to issue a statement as soon as possible to dispel the rumors."

"The court's announcement must be published in major cities such as Beijing, Tianjin, Shanghai, Hankou, and Guangdong by the morning of the day after tomorrow at the latest."

Teng Yuzao looked at Xi Ligong again, "Yucheng, what plan do you have to deal with this?"

Xi Ligong was well prepared, and when he saw Teng Yuzhao asking, he hurriedly spoke.

"In reply to the Marshal, I am worried that the relevant rumors will ferment in the capital today. Not to mention the day after tomorrow, even if the court issues a statement tomorrow, I am afraid it will be a little late."

"It seems that our branch in Beijing will definitely be hit by a run. A wave of withdrawals may occur tomorrow at the latest, or even today."

"Moreover, apart from the head office in Tianjin, it is difficult to guarantee that branches in Jinan, Qingdao, Anqing, Shanghai, Jinling, Hankou, and Guangzhou will not be in trouble."

"So, just in case, I have already ordered before the meeting at noon today that all branches, except the head office, will immediately suspend external loans and tighten the money supply to prevent any accidents."

"Secondly, the Beijing branch should allow all depositors to withdraw their money, whether it is current or fixed deposits."

"Third."

Xi Ligong looked at Yang Shiqi and said, "I also need to ask General Manager Yang for help. Ask him to add two silver cars to the train bound for Beijing at dawn tomorrow. I will arrange for the head office to transport silver to Beijing to deal with the bank run."

Teng Yuzhao was very satisfied with Xi Ligong's arrangement. These measures were all appropriate, especially the second one, which made Teng Yuzhao secretly admire it.

Zhou Fu became a little worried when Xi Ligong said that all depositors of the Beijing branch would be allowed to withdraw money, whether it was current or time deposits.

"General Manager Xi, if we allow depositors to withdraw their money, then the Beijing branch will become a hollow shell!"

"Also, it's okay for current depositors, but if we also lend money to fixed-term depositors, won't the bank suffer losses?"

"Moreover, this will also put pressure on the bank's cash flow!"

Xi Ligong said, "Mr. Zhou, once a bank run occurs, it will cause panic. At this time, there are only three ways to prevent the bank run."

"The first option is to temporarily close down, but this will cause even more panic among depositors, and even if they are not given a penny in the future, the bank's credibility will be ruined, and the bank will have no choice but to close down or go bankrupt."

"The second method, and the best one, is to allow depositors to withdraw their deposits as much as possible. This will make depositors begin to doubt the rumors about the bank. It will also make the people of Beijing understand that Aurora Bank is very powerful and will never go bankrupt."

"In this way, they will be more willing to deposit their money in our bank. Not only will the rumors soon be dispelled, but it will also greatly increase the credibility of our bank."

"The third method is actually similar to the second one, which is to have a very reputable bank or person as a guarantor, or to make it clear to the people that the bank is absolutely capable of repaying their deposits."

"What we are doing now is using the second method."

"Of course, in order to prevent people from withdrawing time deposits at will in the future, during this bank run, those who withdraw time deposits can only have their interest paid according to the current account."

Xi Ligong's words and Teng Yuzhao's calm attitude made everyone in the meeting room feel much more at ease.

Ye Zugui still asked Xi Ligong with some concern, "Brother Yucheng, since you still need to transport silver to the Beijing branch, I guess a lot of the depositors' deposits have been taken out!"

Xi Ligong nodded and said, "Minister Ye, that's true. Most of the money in the Beijing branch has been loaned out, mainly to merchants in the capital for turnover. A small portion was also loaned to ministers and civilians living inside and outside Qihua Gate in the inner city to build houses. Not only did many people's houses get damaged, but their property also suffered a lot in the war. These loans cannot be recovered in a short time."

Ye Zugui asked worriedly, "So, tomorrow, when the silver that was transported back is returned to the depositors, it will be equivalent to replacing the silver that was taken out. In this way, your head office will still have enough silver, right?"

"What if, I mean what if, the head office is also hit by a run, can we still handle it?"

Ye Zugui's words made Teng Yuzao and Xi Ligong laugh.

Obviously, Ye Zugui's biggest worry was that it would affect the purchase of his warships.

Xi Ligong smiled and said, "Minister Ye, don't worry. Our head office has plenty of money and we are not afraid of a run. Let me tell you this, as long as the Marshal nods, I can afford to buy a few more 10,000-ton ironclad ships for the navy."

The others also understood the meaning of Ye Zugui's words, and many people laughed, which relaxed the tense atmosphere. Obviously, the bank owned by Teng Yuzao had a lot of funds, and even if there was a run here, it would be able to cope with it.

This made some people wonder, in this situation, there is still sufficient funds to purchase 10,000-ton ironclad ships, and several of them at that. How much deposits did this "Aurora Bank" absorb?

When they thought of this, almost all of them were secretly surprised!

However, Xu Shichang was still a little worried and asked further.

"Yucheng, isn't it too late to deliver the cash tomorrow? If there is a run at the Beijing branch now, will the deposits there be enough to pay? Can it be enough to deal with it today?"

"Also, you just said that once a run occurs, it is likely to spread to other branches. If these branches outside are all run tomorrow or the day after tomorrow, can you still handle it?"

Xu Shichang's words were like a bucket of cold water, and everyone fell silent.

What Xu Shichang said was not impossible, but very likely. However, Teng Yuzao was not worried because he knew very well how much silver Xi Ligong could come up with.

However, this secret cannot be revealed; it is an absolute secret that must be kept.

Xi Ligong, the general manager of Aurora Bank, naturally had the same idea as Teng Yuzao, but he had to answer.

Xi Ligong smiled bitterly and said, "Master Xu, the bank deposits in the Beijing branch are indeed not very large, but if we can handle a bank run in the afternoon, there will be no problem at all."

Seeing that Xu Shichang still looked worried, Xi Ligong explained.

"In fact, when there is insufficient deposit, the Beijing branch still has ways to deal with the half-day run."

"For example, they can settle interest more slowly, especially for those regular depositors, and they can also settle interest more slowly, so that they can still handle it until the normal closure."

"As for branches in other provinces that are also experiencing runs at the same time, this method can be used temporarily."

"And one more thing." Teng Yuzao took over the conversation.

Because it was difficult to say what the next answer would be, Teng Yuzao was very worried that Xi Ligong's answer would be wrong, so he would have to speak for the rest.

"Good question, Kikuto!"

Teng Yuzao smiled and said, "Don't worry about that. First of all, we don't have a lot of deposits and loans in the provincial branches. Even if there is a run, we can handle it."

Teng Yuzao lied here. Although the branches in various provinces did not lend out much money, they attracted huge deposits. Especially the branches in Shanghai, Hankou and Guangzhou attracted astonishing amounts of deposits!

Under the propaganda and agitation of the Vanguard Army Support Association, which has now been renamed the "Westernization Society", the merchants and common people in these places are depositing their temporarily unused silver and working capital into the bank branches here. If there is a bank run, it will be difficult for them to respond in time.

Although the head office has a huge amount of silver stored in a huge silver vault in the basement, it is very time-consuming and labor-intensive to transport it.

Although some of the money can be turned around through foreign exchange, it will definitely not be done in time.

Teng Yuzao continued with a relaxed smile, "Moreover, Yucheng has already signed cooperation agreements with major banks in the UK, US, and Germany, such as Citibank, HSBC, Liru, and Dehua. Once the corresponding branches are short of cash, we can easily transfer a large amount of cash from them."

"Of course, we have to spend some handling fees to move cash, and there is also interest."

"also."

Teng Yuzao raised his voice, "President McKinley of the United States has already reached an agreement with me through Conger. The United States will provide us with a credit line of 100 million taels of silver. Of course, the premise is that we must use this money completely to purchase American products within four years."

"If necessary, we can temporarily use this credit line as collateral to borrow a large sum of money from foreign banks in China."

Conger did approach Teng Yuzao about the so-called credit line, but Teng Yuzao was worried about the price of the specific items. Because of the credit line, the Americans were unwilling to lower the price and did not agree.

As Teng Yuzao mentioned, Aurora Bank has cooperation agreements with major British, American and German banks such as Citibank, HSBC, Liru and Deutsche Bank. Xi Ligong is still negotiating with the other party on this matter, and only a foreign exchange agreement has been reached so far.

Teng Yuzhao said this at this time just to reassure everyone that when he takes out or spends a large sum of money, he will have a source of money.

Sure enough, Teng Yuzhao's words finally put these people at ease.

Now, we must not cause panic again within the country.

Teng Yuzhao secretly breathed a sigh of relief and said to Xi Ligong.

"Yucheng, even so, we can't take it lightly."

"I have a few suggestions, see if they are feasible."

"First, after this incident, we should forget about issuing banknotes this year. We should focus on anti-counterfeiting of banknotes and put more effort into preventing people from counterfeiting our banknotes in the future."

Teng Yuzao did not mention the possibility of a run on Aurora Bank right away. He wanted to create an atmosphere in the meeting room that he was not too worried.

"Second, the amount of silver shipped to the Beijing branch should not be too small. It should be more than the actual payment."

Xi Ligong understood what Teng Yuzao meant and said.

"The Beijing branch has more than 300,000 taels of silver in cash. If all depositors want to withdraw their money, the total will be nearly 2 million taels. I will transport 3 million taels of silver tomorrow."

"Also, don't leave too early tomorrow. It's best to get the money there before the branch opens. By then, the bank will be crowded with depositors waiting to withdraw their money. I'll have the money carried in through the front door, and all the cash boxes must have their lids open."

Hearing that Xi Ligong had completely understood what he meant, Teng Yuzhao nodded with satisfaction and continued.

"Third, don't stop lending, because that would make us look weak."

"Our loan interest rates have always been the lowest in the country, and those big and small banks have long been complaining."

"Why not take this opportunity to raise the interest rates of all branches except the Tianjin headquarters to the unified domestic level."

Finally, there is one most important thing.
(End of this chapter)