A century-old wealthy family that rose from Shanghai

On March 8, 1946, in order to stabilize the exchange rate of the legal tender and the domestic economy, Song Ziwen formulated a policy to liberalize foreign exchange and gold exchange. The official exchange rate of the legal tender was 1 US dollar to 2020 yuan of legal tender, and 17 designated banks could freely exchange it. At the same time, the Central Bank began to buy and sell gold on the open market, with each gold bar (10 taels) priced at 165 million yuan of legal tender, equivalent to 3300 yuan per gram.

Upon hearing this news, Chen Guangliang's first reaction was that Song Ziwen was too idealistic.

Song Ziwen believed that the Nationalist government had taken control of the country's economy, including shipping, textiles, finance and other industries, with 70% of the capital currently state-owned. At the same time, the Nationalist government held a large amount of US dollars and gold, as well as receiving loan support from the United States.

He felt he could stabilize the domestic situation and rashly introduced such a policy.

In reality, Song Ziwen dug his own grave.

The Nationalist government was already rotten to the core, beyond saving no matter what it did. It was better to hold onto US dollars, gold, and a large amount of supplies to stabilize the domestic situation first. In this way, at least the 'wealth' wouldn't flow into the private sector.

Of course, Chen Guangliang was no longer interested in how the Nationalist government had lost.

Shanghai, Ningbo Road, Ping An Bank Building.

The core management team, comprised of Xia Gaoxiang, Zhang Shounian, and Guo Deming, is currently engaged in secret discussions.

At this time, Ping An Bank continued to operate normally and was among the first to resume business in Shanghai.

The "bank run" of that year is now history. Since it did not cause any defaults on funds at the time, some depositors only lost some interest. Moreover, later public opinion shifted to the claim that someone deliberately spread rumors to cause a bank run at Ping An Bank, thus making Ping An Bank a victim.

Today, Ping An Bank's deposits remain substantial, but as for its investment business, only Xinfeng Textile Factory remains.

Xia Gaoxiang said, "The boss's idea is for us to break down our money into smaller amounts and exchange it for US dollars or gold. The fiat currency won't last more than six months and will inevitably depreciate significantly. In addition, the boss also hopes that Ping An Bank will acquire his shares in the Shangri-La Hotel and then deposit the funds into Ping An Bank in Hong Kong."

To put it bluntly, it's about using depositors' funds to buy the properties held by Chen Guangliang.

However, once the fiat currency depreciates, Ping An Bank holds a large amount of foreign exchange and gold, which means that the depositors' money depreciates, while Ping An Bank makes money by "getting something for nothing".

Guo Deming nodded and said, "The boss probably thinks that civil war is inevitable, or even worse, due to the corruption and hedonism of the Nationalist government."

Zhang Shounian said in shock, "No way. In terms of the army, the Nationalist government's army is several times larger, and the weapons are worlds apart. Even if the Nationalist government is corrupt and pleasure-seeking, it shouldn't have lost the war."

Guo Deming did not argue, but simply said, "But no matter what, everyone can see the state of the Shanghai economy; in addition, civil war is also possible. In short, the boss's approach is very clear, and we know he rarely makes mistakes, so let's exchange foreign exchange and gold as much as possible."

The three had no objections and quickly formulated a specific strategy.

Directly exchanging for US dollars and gold was definitely not an option. If the Ministry of Finance of the Nationalist Government found out, they would definitely launch a bank run to deal with Ping An Bank.

Therefore, the only option is to break it down into smaller parts and exchange them secretly.

Xia Gaoxiang sighed and said, "This time the Nationalist government is too confident. If everyone does the same, the credibility of the legal tender will inevitably be lost. If there is another civil war, I don't know how much the legal tender will depreciate."

Zhang Shounian remained slightly optimistic about the Nationalist government, saying, "The Nationalist Ministry of Finance's thinking is very simple—they have huge gold and dollar reserves, as well as strong support from the US government. Moreover, the Nationalist government now controls 70% of China's industry and economy; to put it bluntly, it all belongs to the government now."

After the war, the Nationalist government quickly seized the spoils of war from Japan, and Song Ziwen's dream of a 'trust' was realized, making him the Morgan of China.

In shipping, China Merchants Group quickly developed in river transport, coastal transport, and even international transport by acquiring Japanese ships and repurchasing American and Canadian merchant ships through loans; while private shipping companies were left without ships because their ships had been requisitioned and destroyed.

In the textile industry, Huaxia Textile quickly acquired Japanese companies such as Yufeng Textile and Toyota Textile, capturing more than 70% of the market share in Huaxia's textile industry. Meanwhile, private textile enterprises faced various difficulties in resuming work. The Nationalist government not only failed to provide assistance but also created various obstacles (importing equipment, restricting foreign exchange, refusing loans, etc.), making it difficult for private textile enterprises to resume work.

In the financial sector, the Nationalist government controlled approximately 17 banks, which were privately owned banks acquired over the years.

In other areas, the Nationalist government gradually acquired the equity of companies in Nanyang Tobacco, Chemicals, and other industries by taking advantage of their urgent need for loans, either by gaining full control or becoming a major shareholder.

It was probably because Song Ziwen saw that his 'large trust organization' was complete that he decided to open up foreign exchange and gold to stabilize the fiat currency.

But clearly, he underestimated what the wealthy people of this era saw and thought. Many of them saw the corruption of the Nationalist government and had long lost their confidence.

In the conference room, the discussion continued.

The exact amount of US dollars Ping An Bank plans to exchange and the amount of gold it intends to purchase require detailed calculations.

Guo Deming also raised a key issue: "During this period, bank deposits in fiat currency will inevitably decrease because people will likely choose to buy gold and US dollars. Therefore, non-fixed-term deposits are probably not worth touching."

Xia Gaoxiang nodded and said, "That's right. However, we have a lot of funds from selling the land in Xinfengchang and some textile machinery, which can be exchanged. In addition, we need to consider the funds for purchasing the Shangri-La Hotel shares, which needs to be exchanged and then transported to Hong Kong. Finally, there are the depositors' savings. We can consider a reasonable amount to exchange. I think 10 billion yuan is appropriate."

10 billion yuan is roughly equivalent to 50 US dollars.

Today's Ping An Bank is not the Ping An Bank of its peak, and its capabilities are limited.

“Okay, the boss said he only wants $30 for a 55% stake in the Shangri-La Hotel. Adding our own funds, the total will be $100 million or gold.”

"Yes, that's about right."

Chen Guangliang arrived at the HSBC building again. This time, the HSBC tycoon's secretary was waiting for him at the main entrance of the HSBC building. This scene surprised many of HSBC's British employees - a Chinese man was actually arranged to have a secretary wait for him by the HSBC tycoon.

"Mr. Chen, please."

"please"

Ignoring the surprise of those around them, the two went upstairs.

"Who is he? Why is he receiving such treatment?"

"I've only heard that there's a person in Hong Kong who holds a large amount of Hong Kong dollars issued by HSBC, and that person is Chen Guangliang, the owner of Ping An Bank. Could it be him?"

"My God, is he crazy? We and the Hong Kong government have already announced that we will not recognize forged Hong Kong dollars, yet he still holds a large amount of forged Hong Kong dollars. What is he planning to do?"

"I don't know. But we all know that in the past six months, the reputation of the Hong Kong government and HSBC has been poor because of the forced signing of Hong Kong dollars. Many people who held forced Hong Kong dollars have been running away."

"Could it be."

While everyone was gossiping behind his back, Chen Guangliang had already arrived at Morse's office, this time accompanied by two senior executives from HSBC.

After sitting down, Morse quickly explained the purpose of the invitation, this time sincerely saying, "Mr. Chen, I wonder how many Hong Kong dollars you have?"

Chen Guangliang understood that HSBC had now backed down.

HSBC's reputation has suffered due to the forced signing of Hong Kong dollars. After all, some of the holders of these currencies are wealthy individuals, and if they are disappointed with HSBC's reputation, they will choose other banks.

Moreover, this matter has been a constant source of controversy, with many people petitioning the Hong Kong government and demanding compensation from Japan. In short, it has been a very public and widely discussed issue. If HSBC were to accept the 1.19 million Hong Kong dollars that had been "forced to be signed," it would be a huge burden for the bank.

But in any case, HSBC should have already made its decision.

Chen Guangliang calmly said, "I guess HSBC and the Hong Kong government have decided to recognize this batch of forced Hong Kong dollars, which is why you, Morgan Stanley, came to me."

This time, Morgan Stanley decisively stated, "Indeed, we have secured the support of the Hong Kong government, and given that HSBC values ​​its reputation highly, we have decided to recognize the legality of denominations of HK$50 and above. As far as I know, Mr. Chen should have quite a few on hand. I wonder what the exact number is?"

He was very worried, and HSBC was also very worried, because HSBC could only provide a 'foreign exchange guarantee' of £100 million. And this guarantee only ensured the legality of HK$1600 million.

The remaining 'foreign exchange guarantees' can only be provided from the Hong Kong government's 'Exchange Fund', otherwise HSBC would not dare to acknowledge the legality of the forced signing of Hong Kong dollars.

Even so, if Chen Guangliang holds a large amount of stock and takes the lead in withdrawing it, HSBC may face serious trouble.

"I have approximately HK$1400 million in expedited visa applications."

Chen Guangliang readily admitted it.

He wasn't there to directly oppose HSBC; after all, he still needed to develop his career in Hong Kong, so it wasn't wise to make enemies with HSBC. On the contrary, he hoped to build a friendly relationship with HSBC.

Moss and the others were shocked. The amount was enormous. If Chen Guangliang were to withdraw it, it would mean that their £100 million foreign exchange guarantee would be wiped out.

Then, the three of them quickly exchanged glances.

"How does Mr. Chen intend to handle this, assuming we admit it?"

Morse spoke in a very sincere tone.

Chen Guangliang said, "I trust HSBC very much. Assuming you accept this, I will not withdraw the money immediately."

If acknowledged, the forced-signature Hong Kong dollars are usually exchanged for Hong Kong dollars reissued by HSBC, thus completely invalidating the forced-signature Hong Kong dollars.

Upon hearing this, Morse's face lit up with joy, and he immediately said, "Mr. Chen, why not use some of your stubble in Hong Kong dollars to purchase shares in our HSBC bank? We would also like to invite Mr. Chen to serve as a director and advisor of our HSBC bank."

HSBC's management structure is not something that can be interfered with in the stock market, so even if Chen Guangliang is a major shareholder, he cannot enter HSBC's power circle; it is more of a symbolic gesture.

Chen Guangliang deliberately said, "But I'm still the chairman of Ping An Bank, won't that cause a conflict?"

Morse said, "What does it matter? It's not uncommon for people to hold multiple positions."

The others also extended invitations.

Chen Guangliang then said, "That's possible, but I only want the shares issued by HSBC in Hong Kong, and I only want half of them; as for the other 700 million Hong Kong dollars, I can keep them in HSBC for three years without touching them."

Three years is enough time for HSBC to recover.

In 1945, Hong Kong had an issuance of only HK$2.2 million, which had increased to HK$6.8 million by 1948. Because the Hong Kong dollar was pegged to the British pound, its issuance was guaranteed by foreign exchange or gold reserves (i.e., foreign exchange reserves held in London), so the Hong Kong dollar would not depreciate; its value would only increase, especially compared to domestic currencies.

"Well, Mr. Chen is indeed a friend."

"Mr. Chen will be a friend of HSBC from now on."

Everyone reached out their hands, indicating their satisfaction with the plan.

HSBC is not likely to take Chen Guangliang's Ping An Bank seriously for the time being, as the reputation of Chinese banks has always been an issue, and it doesn't pose a threat to HSBC at the moment. Moreover, Ping An Bank is more like a private bank, and such a bank has limited prospects for development.

Chen Guangliang took Yan Kuan to the Phoenix Film Studio in Mingyuan Mountain, North Point, to inspect its location.

After the tour, Chen Guangliang asked, "What do you think?"

Yan Kuan immediately said, "The location is good. It faces Kowloon across the sea and is adjacent to Victoria Harbour to the west. If properly planned and constructed, it can become a mixed commercial and residential area, which will also boost the economic development of North Point."

In his previous life, after Lu Gen went bankrupt, Phoenix Film Company fell into the hands of whoever it was. However, the wasteland on Mingyuan Mountain was just the old site of Lianhua Port Factory or Phoenix Film Studio. It should have flowed into the hands of Wang Kuancheng in 1947.

After purchasing the land, Wong Kwun-shing immediately began planning and construction, building the Metro City Tower. The lower floors housed restaurants, department stores, and supermarkets, while the upper floors were residential areas with more than 1500 households, which boosted the economic development of the North Point area.

Now that the land is in Chen Guangliang's hands, he naturally needs to consider how to develop it.

This plot of land in Mingyuan Mountain, totaling approximately 30 acres, or slightly over 200,000 square feet, is large enough to be developed into a large community.

Thinking of this, Chen Guangliang said, "Well, let's keep the land for now. I'll have the film studio relocate later. This land can be considered our reserve land."

"Ok"

Yan Kuan was also amazed; the amount of land and properties in Hong Kong owned by his boss was simply enormous. Ping An Bank, Times Pictures, Xinfeng Textile, and Vitasoy all had considerable land and properties.

At this time, Chen Guangliang had already decided to move the production studio of Times Film Studio to Clearwater Bay, which was the Shaw Brothers Studio in the previous life.

Meanwhile, Era Films can sell the two plots of land—the abandoned Kowloon Studios and the North Point Studios—to Cheung Kong Property Holdings, where the prices have already increased significantly.

To maintain its reputation and long-term interests, HSBC reached an agreement with the Hong Kong government on April 2, 1946, declaring "forced-signed banknotes" (commonly known as "New Big Banknotes") with a face value of over HK$50 legal. HSBC would initially pay £1 million to the Exchange Fund in exchange for certificates of indebtedness, with any shortfall to be repaid annually from the Exchange Fund's revenue.

Recognizing that "forced signing of banknotes" is a very welcome measure has laid the foundation for the long-term stability of the Hong Kong dollar. The fact that its reserves are jointly managed by HSBC and the Hong Kong government is also a reasonable solution.

Shortly thereafter, HSBC announced that Mr. Chen Guangliang would serve as a director and advisor to HSBC.

This news immediately became major news in Hong Kong, as he was HSBC's first Chinese director, and it was hard to imagine that HSBC would lower itself to invite Chen Guangliang to serve as a director.

It's not that Chen Guangliang isn't high-profile enough, after all, he is already the most outstanding representative of Chinese businessmen; rather, HSBC has always been rather arrogant, but now it has lowered its stance.

Of course, some news cannot be kept secret forever, and soon rumors began to circulate—that Chan Kwong-leung had a large amount of forcibly issued Hong Kong dollars, and that HSBC had reached some cooperation agreements with Chan Kwong-leung in hopes of gaining his support.

Also.

Whether it was transporting and procuring food for the Hong Kong government to help stabilize Hong Kong's order, or secretly acquiring "forced Hong Kong dollars" and establishing a cooperative relationship with HSBC.

Chan Kwong-leung did these things to integrate into Hong Kong's upper class and better develop his business plans in Hong Kong.

Around 1948, Chen Guangliang also planned to establish the "Ningbo Chamber of Commerce in Hong Kong," creating a powerful business group to severely suppress the "Chaozhou Chamber of Commerce." (End of Chapter)