A century-old wealthy family that rose from Shanghai

Time flew by and it was already the second half of 1936.

On a summer's day, Chen Guangliang and his family were relaxing in the backyard of the Chen family mansion on Weihai Road.

He sat in the middle, with his mother Yang Hui on his right and his wife Yan Renmei on his left. On the small table were coffee, tea, and some snacks.

The eldest son, Chen Wenjie, who is over three years old, is already at the age where he can run around freely, while the eight-month-old "third son," Chen Wenming, is being looked after by a maid.

The whole family is enjoying themselves.

"By this time next year, our whole family will have arrived in Hong Kong to start a new life."

By July of next year, the situation will be quite tense. At that time, some signs of Japan's full-scale invasion of China can already be seen, but most people are still living a life of "drink today, for tomorrow we die."

Yang Hui said worriedly, "I don't know if my old bones can withstand the journey. Xiuying said that boating is very uncomfortable!"

Chen Guangliang laughed and said, "Mom, you're in such good health, there won't be any problem. Besides, it's our own boat, it's like living in a palace on the sea. We'll eat and drink and we'll be in Hong Kong soon."

He understood that Yang Hui's anxiety stemmed from being away from home, not necessarily from concerns about her health. She had been in Shanghai for eight years and had become accustomed to the life of a wealthy wife; she wouldn't willingly leave her comfortable home in Shanghai.

Yang Hui continued, "Guangliang, are these Japanese really capable of invading Shanghai?"

Yan Renmei immediately said, "Mom, if there wasn't any indication of this, Guangliang wouldn't have arranged for us to evacuate to Hong Kong. Besides, it's just a two-day ferry ride. Just think of it as a vacation. If there's really nothing to do, you can just go back to Shanghai and enjoy your life!"

Older people are reluctant to leave their hometown.

Yang Hui is actually not very old, only 46 years old this year, but she is, after all, a woman, and a traditional woman at that.

She still said, "Wherever Guangliang goes, I'll go too. There aren't that many rules."

Chen Guangliang smiled without saying a word. If he went to Chongqing, Yang Hui would still have to go with her younger brother Guangcong's family to Macau later, to avoid the hassle of traveling.

At this point, Yan Renmei asked, "Will Jiang Meiying take the child to Hong Kong, or will she go directly to the United States?"

Chen Guangliang was taken aback. Yan Renmei hadn't mentioned 'Jiang Meiying' directly for a long time, and he thought they had already tacitly understood each other. Could it be that she was going to cause him trouble again today?

"Go to Hong Kong first, then go to the United States when the time is right."

"Oh," Yan Renmei replied casually.

This made Chen Guangliang feel a little uncomfortable, so he said directly, "Renmei, just say what you want to say. Speaking in half-hearted sentences makes people confused!"

Yan Renmei replied, "I was just asking, I didn't mean anything by it, don't overthink it!"

They still haven't budged!

Chen Guangliang could only put the matter aside for now and had to make some sacrifices for Jiang Meiying and her son, since he couldn't afford to offend the main branch of the family because of this.

Take it easy.

In a Japanese restaurant, the heads of Japanese textile companies in Shanghai gathered together to discuss matters.

Last year, the "protect cotton" campaign launched by Jiangsu and Zhejiang conglomerates in the Yangtze River basin caused significant losses to Japanese companies; now, with the annual "cotton harvest season" approaching, Japanese textile companies in Shanghai are on high alert.

Yu Feng Textile's Yamada Hideichi said, "Given our failure last year, I suggest that everyone jointly establish a 'Cotton Purchasing Committee' to pre-purchase cotton from middlemen and farmers in advance, in order to prevent the Chinese from using tricks again!"

Last year, if it weren't for the cotton provided by the puppet state of Manchukuo, Japanese textile companies in Shanghai would probably be in even worse shape.

However, this situation is not a good thing. If more cotton is sent to Japanese companies in Shanghai, then less cotton will be sent to Japan's domestic market.

The intangible impact is still significant.

Harada Tadao then said, "Pre-purchasing cotton is indeed a precaution. However, I've learned from the Chinese that the cotton-growing areas haven't suffered from any floods or droughts this year, and there's a good chance of a bumper harvest. In fact, we don't need to be nervous!"

Last year (1935), China's cotton production suffered a severe decline, with only 800 million dan (a unit of weight) produced nationwide. In contrast, in 1934, the national output was 1100 million dan, demonstrating the dire situation of cotton shortage last year.

Last year, cotton was once speculated to be priced at 54-55 yuan per dan (a unit of weight), while the year before it was only 43-45 yuan per dan. The price difference between these two prices is unprecedented.

“Harada-kun, whether the harvest is good or bad is a matter for later. But we can’t afford to make the same mistake again. If the Jiangzhe conglomerates join forces again and buy up large quantities of cotton in the market, we will still be in a passive position.”

"Yes, I agree with the pre-purchase of cotton and actively competing with Huaxia Textile Factory to buy cotton, so as to avoid being cheated by them again."

Japanese companies that prefer to 'pre-purchase' cotton hold a major advantage.

Seeing this, Yamada Hideichi was very pleased. This way, he could gain the upper hand, become the most influential person in Japanese companies in Shanghai, and further entangle himself in power.

Taking the opportunity, Yamada Hideichi said, "For the sake of the Great Japanese Empire, we must defeat the Jiangzhe financial groups, make them all go bankrupt, and paralyze China's economy."

Last year, on Mid-Autumn Festival alone, 100 companies went bankrupt in Shanghai, something Japan was very happy to see. Without a strong commercial system, the strength of Chinese resistance in the future will be significantly weakened.

If it weren't for the support of the United States and the United Kingdom for China's economy and for the establishment of a legal tender (foreign exchange standard), Japan would consider China's economy to be paralyzed.

When Chen Guangliang arrived at Xinfeng Textile Factory No. 2, he saw that the workers and textiles were still busy. Compared with more than a year ago, the factory scene of Xinfeng Textile was astonishing.

Xinfeng Textile Factory, which implements the '3S' management system, is currently the most efficient and profitable textile enterprise in Shanghai.

Of course, Chen Guangliang did not further exploit the textile workers. Although he had not raised wages since taking over, he implemented the policies of "holiday greetings" and "13th-month salary." In effect, this was equivalent to giving them two extra months' salary.

While many factories are trying to lay off workers, cut salaries, and extend work hours, Hsin Feng Textile is being very lenient.

Xinfeng Textile's advantages in the Shanghai textile industry are not particularly obvious. Apart from the addition of technical personnel such as Tong Runfu and Li Shengbo, its biggest advantage is probably the substantial profits it made from cotton speculation last year.

Last year, Xinfeng Textile purchased a total of 120,000 dan of cotton, worth 5 million yuan. However, Xinfeng Textile did not actually need the 5 million yuan worth of raw materials. So, after the cotton was spun into yarn, it cashed out a small portion of it during the peak season from October to December, making a profit of more than 500,000 yuan (after deducting interest) from this alone.

When accompanying the inspection.

Chen Guangliang said, "This year, Xinfeng Textile will stockpile more cotton, so you need to be prepared for that!"

Tong Runfu, Li Shengbo, and others were somewhat puzzled.

Then, Tong Runfu said, "Mr. Chen, this year's cotton harvest is sure to be bountiful, and hoarding cotton is probably not profitable."

Chen Guangliang confidently stated, "I have never been wrong in my predictions in this regard. I also believe that there will be a bumper cotton harvest, and I think it will definitely be a huge one. But a bumper cotton harvest does not mean that the price of cotton yarn will drop. War is coming, and stockpiling supplies is the most promising investment."

Tong Runfu and the others were surprised. They also knew that Chen Guangliang was a famous "economic strategist" and was once the most persuasive commentator of the Oriental Daily.

"Okay, we will prepare for the acquisition and warehousing work."

Purchasing cotton is the first step. Xinfeng Textile will spin the purchased cotton into yarn, which is yarn spindles or cotton yarn bales.

The trading object in the futures market is cotton yarn bales. The peak season for textiles is from October to December each year, while the off-season begins in February of the following year.

Those who own textile factories will almost always get involved in futures trading, mainly to reduce costs.

"This year's funding will be even larger," Chen Guangliang added.

Tong Runfu nodded and didn't ask any more questions, because they knew that Ping An Bank was the one providing the loan support.

This time, Chen Guangliang was indeed planning to "play big." He wanted to speculate on cotton yarn profits that would exceed the profits from running a factory, making a fortune in it. By controlling cotton, he would control the initiative, and those who played the futures market would not be able to compete with a big speculator like him who held the physical commodity.

At this point, a senior executive said, "Mr. Chen, it seems that Japanese businesses have become smarter this year; they have also started to pre-purchase cotton."

Chen Guangliang laughed and said, "This isn't about being smarter; it's about not understanding the market. You're bound to suffer a big loss!"

He then added, "Then let's turn the tables on them."

Since the Japanese have come to deliver more casualties, he is determined to deal with them again; he already has a complete plan in mind.

Two days later.
Shanghai financiers and textile tycoons flocked to Xinfeng Textile Factory No. 2, a scene that naturally did not escape the notice of Japanese spies.

Following the same steps as last year, Chen Guangliang invited everyone to visit the Xinfeng Textile Factory and introduced the effectiveness of '3S management'. Everyone took the visit very seriously and learned a lot.

Afterwards, everyone had a meal at the factory, and drinks were provided.

However, during the dinner, Chen Guangliang revealed the purpose of inviting everyone.

"The Japanese are actually making a pre-purchase of cotton this time, but as everyone knows, this year is a bumper year for cotton. My personal analysis is that the national cotton production will probably double, reaching about 1600 million dan."

Nie Yuntai, president of the Textile Chamber of Commerce, said, "Last year, Mr. Chen's scheme caused the Japanese to suffer a great loss, but they have learned their lesson this year!"

Today, Chen Guangliang's influence in the business world surpasses that of many of his predecessors; some even compare him to figures like Hu Xueyan and Sheng Huaixuan. At the very least, he is comparable to Yan Xinhou, the great-great-grandfather of Chen Guangliang's wife, Yan Renmei.

Chen Guangliang laughed and said, "Have you really become smarter?"

Upon hearing this, everyone perked up, realizing that Chen Guangliang was clearly trying to set a trap.

Rong Zongjing asked, "What does Mr. Chen intend to do?"

Chen Guangliang did not hide anything from everyone, but said: "My idea is that we should also show a pre-acquisition posture. The Japanese will definitely feel nervous and will inevitably raise the price of the acquisition, which will greatly increase their costs."

Upon hearing this, everyone exclaimed that it was brilliant.

However, some people said, "Won't this drive up cotton prices, and we'll suffer losses in the end?"

Chen Guangliang said, "I don't think so, because this year's cotton harvest is huge. We're just putting on a show for Japan. When the cotton harvest comes back later, prices will become more rational."

Although some people have such concerns, Chen Guangliang also explained that it is just a "false phenomenon" for the Japanese, mainly affecting the places where Japanese companies are acquiring goods and the middlemen, and will definitely not affect the entire market afterward.

"Alright, let's teach those little devils another lesson!"

“I think it’s OK”

Soon, they came up with a specific plan: Japan would pre-purchase the goods there, and they would compete for them.

This will inevitably create the misconception that there is still not enough cotton this year, so the Japanese will naturally raise the purchase price.

Because it is a pre-acquisition, Japanese companies will inevitably reach an agreement within this month. After they complete the acquisition, market opportunities will gradually return to normal.

The office of Ping An Bank.

Chen Guangliang was reviewing the accounts; the growth of Ping An Bank had shocked all the shareholders.

In just a few years since its establishment, its assets have grown from 100 million to over 600 million, surpassing many established "Northern Four Banks" and "Southern Three Banks" in terms of asset value alone.

Moreover, the investments of banks like the "Northern Four Banks" and the "Southern Three Banks" are basically made with depositors' money, but Ping An Bank mainly invests its own money.

Today, Ping An Bank has vast assets and investments in Hong Kong, the Shanghai International Settlement, and Chongqing, with annual rental income and returns far exceeding loan interest.

Ping An Bank's assets in Hong Kong have exceeded HK$300 million, including the Ping An Bank Building worth HK$100 million, a factory site worth HK$100 million, and a residential site and building worth HK$120 million.

In late June of this year, he cashed out government bonds and made a profit of more than 500,000 yuan, which he then used to invest in construction projects in Hong Kong.

As for Ping An Bank's deposits, they have now exceeded 35 million yuan, showing very rapid growth. In terms of loans, external loans amount to 8 million yuan, and internal loans amount to 8 million yuan (1.5 million yuan to Xinfeng Textile, 1.5 million yuan to Times Film Industry, 5 million yuan to Neijiang Sugar Factory, and 5 million yuan to Alcohol).

The loan-to-deposit ratio is around 50%, but this ratio will continue to increase as Xinfeng Textile is about to purchase cotton. However, the risk is not significant, as most of the funds in the sugar mill and alcohol plant are still in their accounts; Xinfeng Textile's cotton purchase is essentially a form of cash flow.

"boss"

Soon after, Xia Gaoxiang, Ye Ximing, and Zhang Shounian arrived at his office.

Zhang Shounian has risen through the ranks rapidly in recent years, from assistant manager of the Hong Kong branch to manager of the Hong Kong branch, and now he has been promoted to second assistant manager of Ping An Bank headquarters.

Chen Guangliang nodded and said, "Xinfeng Textile needs to purchase a large amount of cotton as reserves by the end of August. Ping An Bank should be prepared to provide a loan of at least 5 million yuan, the more the better."

Xia Gaoxiang immediately said, "Given the current situation of Xinfeng Textile, it is no problem to break through 150 million in profit this year, which is equivalent to making back the money from the Hong Kong factory. If we take out a loan of 500 million, Xinfeng Textile will actually have 700 million in funds available for cotton purchases, and cotton production should increase significantly this year."

Ye Ximing asked, "What about the Chongqing factory?"

Chen Guangliang said, "We'll talk about the Chongqing factory next year; let's postpone it this year."

The factory can be built in the first half of the year, and the machinery and equipment can be ordered or packaged from Shanghai and then delivered to Chongqing in the first half of the year.

In terms of timing, Chen Guangliang can be very strict, making the most of the funds.

Xia Gaoxiang then said, "Then we can support Xinfeng Textile with a maximum of 7 million yuan. After all, Shidai Film Industry also has deposits, and the funds for Neijiang Sugar Factory and Alcohol Factory can also be delayed. The advantage of purchasing cotton is that it can be spun in October to December and cashed out at any time during the peak season."

Chen Guangliang said, "How about 800 million? That way, Xinfeng Textile can use 1000 million to buy cotton. The sugar mill and alcohol plant's funds won't be needed until next year, and Shidai Film Industry also has several hundred thousand in savings."

“I think it’s OK”

"Yes, cotton is also considered a commodity, so the risk is not high."

Soon, the four reached an agreement to grant Xinfeng Textile a maximum loan of 800 million yuan, which, together with the funds in Xinfeng Textile's own account, amounted to a total of 1000 million yuan.

If these cotton fibers are spun into 'cotton yarn bales', it would be equivalent to Hsin Feng Textile having over 1000 million yuan worth of stock on hand.

Chen Guangliang is already looking forward to seeing if anyone will drive up the price of cotton yarn next year.

Of course, even without price gouging, Xinfeng Textile Industry will not lose money. It's simple: once war breaks out, the price of goods will rise.

Soon, Japanese textile companies saw that textile companies and banks in Shanghai were joining the pre-acquisition effort, and they were momentarily panicked.

At this time, Japanese textile companies such as Yufeng and Tongxing offered a high price of 52 yuan per dan (a unit of weight) for "pre-purchase" of cotton, and raised the deposit to 30%.

It’s a sure win!

This scene left Chinese textile companies dumbfounded. However, some companies, having not received any news, also joined the rush to buy cotton, something Chen Guangliang and others had not expected.

However, textile companies and cotton merchants in Shanghai are still well-informed. They just talk a lot but don't actually do much, and there is basically no real 'pre-purchase' of cotton.

After all, anyone with a basic understanding of the market knows that cotton prices are unlikely to reach 50 yuan per dan (a unit of weight) this year, and may even be lower than in 1934. (End of Chapter)