Spy Wars: Red Shopkeeper

Chapter 146 Japanese Enterprises
These words made Jiro Miura's blood pressure rise. He could no longer suppress his anger, slammed his hand on the table, and stood up abruptly.

Staring at Gu Yansheng, he said, "The Great Japanese Empire has spent more than 8000 million on Shanghai. Now the military scrip system has been abolished, Shanghai's economy has collapsed, and its reputation for forcibly requisitioning grain has spread all over the world. Public opinion around the world is criticizing us. Is this the answer your municipal government has given me? Is that it!"

Since the leader was standing, Gu Yansheng couldn't sit down either. He stood up and said, "Sir, if you want to vent your anger, then go ahead and curse. I'll take it on behalf of the municipal government."

However, if you are blaming me, I'm sorry, I dare not take responsibility for the municipal government, nor do I believe the municipal government should bear this responsibility.

The municipal government acted swiftly and decisively, leveraging connections and informants to locate most of the merchants' hidden warehouses within just a few days, thus completing the forced requisition mission. This exemplifies the effectiveness of rapid action.

My actions went unrewarded, and I was held accountable; I had no way to explain this to my colleagues and subordinates.

Who will be willing to put their heart into doing things in the future?
As for your opinion that the current result is not good.

I assessed the impact of the forced requisition from the beginning. The reduction in grain in Shanghai would inevitably cause some turmoil. This was due to the nature of the forced requisition and was unavoidable.

But I never expected things to turn out this badly.

On my way here, I was thinking, why has things come to this?
Although the forced requisition plan was a plundering plan, it would indeed make Shanghai's rice reserves scarce. However, people are animals that will seek their own survival. If Shanghai runs out of rice, people will buy it from the concessions. If the price of rice in the concessions is high, merchants will be able to make a profit and will import large quantities of rice from Jiangsu and Anhui.

Once the initial period of turmoil passes, time will naturally heal all wounds.

Why did this change happen? I think there are two reasons.

The first point is the military scrip system spearheaded by Mr. Kobayashi.

"How dare you criticize my military bill system?"

Kobayashi's eyes widened, completely taken aback that this matter could involve him. He laughed angrily, "How many times have I reminded you about this! I've called you several times to tell you that forced land acquisition would collapse the entire economy of Shanghai. Didn't you and Kagesa think you were so capable? Now you actually dare to criticize me, you idiots!"

"Kobayashi, it seems you're insulting me too." Kagesa was still unhappy after hearing this.

"You heard me right, I'm talking about you, you idiot." Kobayashi said defiantly.

"Baka yarou!" Kagesa roared in anger, hurling profanities.

"Alright! Shut up, both of you!" Miura Jiro shouted at the two men, then turned to Gu Yansheng and said, "You continue."

Gu Yansheng bowed: "You just said that the Japanese Empire spent more than 8000 million on Shanghai. Excluding the cost of the first military bill, let's say the second implementation of the military bill cost 5000 million."

The new military currency, valued at 5000 million yen, circulated in the Shanghai area and was open for unlimited exchange.

I know the motivation might be that the credibility of military scrip collapsed the first time, so they wanted to give confidence to the public and create a situation where military scrip could be freely and fully redeemed.

There was no problem with this in the first place, and the market has proven this point by the circulation value of military currency during this period.

However, after this incident, I have an additional question: since 5000 million yen worth of military scrip is circulating outside, then the Economic Affairs Department should have 5000 million yen worth of various foreign currencies waiting to be redeemed.

In the most extreme case, all the foreign currency was exchanged and taken away, but there were no more military notes available outside.

Why were there insufficient funds to pay out, leading to the collapse of the credit of military bonds?
As far as I know, the Economic Affairs Department did not seem to have over-issued military funds, and Mr. Kobayashi's promise at the time was that no matter how much was short, it would all be made up.

"Yes, right?" Miura Jiro seemed to be enlightened, and suddenly looked at Kobayashi Nobuo: "Why is there not enough to pay out? Could it be that counterfeit money from Chongqing has arrived again?"

Xiaolin suddenly fell silent, her brows furrowed, her expression hesitant.

"Stand up! Speak!" Jiro Miura roared.

Kobayashi stood up. "I'll report this to you later, sir, because it involves some other matters."

"I need to know the reason now." Miura Jiro walked towards Kobayashi, his eyes wide open. "Kobayashi-kun, you'd better tell the truth, or no one at headquarters can protect you."

Xiao Lin struggled for a moment and sighed, "There are some extra military notes circulating. Those are loans from several major military enterprises to us. They need to produce military supplies and purchase raw materials. Their foreign exchange reserves are tight, so their military notes are extra and have not gone through the Economic Department."

Gu Yansheng could now sit down. Originally, at most, they could take away a large portion of Japan's foreign exchange reserves in the Economic Division, but closing the company down was absolutely out of the question.

"How many? Why didn't you report to me?" Jiro Miura asked sternly.

"The deal involved several companies and was worth about 6000 million. This was negotiated by the local economics department; I was just the executor."

"You studied economics, don't you know that your actions will bankrupt the credibility of military currency?"

Jiro Miura, exasperated by his son's lack of self-respect, slapped him across the face: "Is this the grand plan for military scrip you've been telling me about? Is this the economic colonization you've been talking about?"

Kobayashi was slapped so hard his glasses fell off. He stood up straight and said, "Sir! I can't say no to things decided by the General Staff!"
The companies that lent me money—Mitsubishi, Kawasaki, Mitsui, etc.—any one of them could easily replace me. If I disagree with them, they'll simply replace me with someone else!

Moreover, my economics class had told me that although we had an extra 6000 million in funds, there was absolutely no risk of a bank run. They would borrow from major banks to replenish our foreign currency reserves should a bank run occur.

"And now? Why are they being squeezed out?"

Xiao Lin immediately deflated. "They didn't make up the difference. Military scrip is very cheap now. They want to go back on their word and just return the military scrip."

Kagesa snorted coldly, "You can believe what a businessman says? Kobayashi-kun, I think you've wasted your time studying economics."

"Don't talk about me!" Kobayashi roared at Kagesa, "Don't think I don't know you brought back a batch of military scrip from the mainland to support your own men!"

Yingzuo said with a straight face, "We are just distributing military funds normally. There are 35,000 soldiers in Shanghai. How much can this cost?"

Xiao Lin retorted, "You? Salaries and office expenses amount to several million a month, do you think that's a small amount? There's only 5000 million in reserve funds in total! When the Economic Department was squeezed out, you were partly responsible for the money you spent."

Kagesa shouted, "You even used the Military Police Headquarters? Are you saying that Mr. Miura Jiro made a mistake in his decision?"

Gu Yansheng stood up and bowed. "Your Excellency, I'm going outside for some fresh air."

Gu Yansheng was quite self-aware; there was no need to listen to the internal affairs of the Japanese, since they were almost at war.

As soon as he left, Minister Zhou also came out.

He shook his head and sighed, "After all this commotion, it turns out the Japanese themselves were the ones who stole from their own posts; otherwise, this wouldn't have happened."

"It's too easy to make money with nothing, tens of millions of yen worth of supplies. Moreover, military scrip is worthless now, so it's too difficult to make those Japanese companies give up the meat they've been eating."

After Gu Yansheng finished speaking, he said in a low voice, "I borrowed money from Shanghai merchants, and at least I paid back the bonds. At least we will pay it back after the new government is established. Minister Zhou, at first those merchants were a little dissatisfied with my semi-forced loan, but now they are very happy. If the military scrips were still in their hands, they would all become worthless paper."

"Is that so?" Minister Zhou thought about it and found it quite interesting, because the forced requisition actually allowed the businessman to escape a disaster.

But then I thought of the devaluation of military currency.

"But military scrip is worthless now. Wouldn't it be a loss if we kept it?"

“I’ve thought about it. I exchange it every day, and now it’s all foreign currency, deposited in HSBC. It’s over 1300 million dollars.”

Minister Zhou exhaled a breath of stale air and smiled with a refreshed expression. "You handled this matter beautifully."

Gu Yansheng added insult to injury: "Didn't I suggest borrowing 450 million military notes from the Finance Department at the beginning? Now that military notes are worthless, I'll collect some military notes later, and you can have Vice Mayor Luo cancel this debt, and the matter will be settled."

This is what you call getting something for nothing! He got a full 20,000 bales of cotton yarn for free, not even counting the 180,000 silver dollars he took privately. If it weren't for the inappropriate location, Minister Zhou would have laughed out loud.

After exchanging a few casual words, the person was called inside.

The Japanese men all had stern faces, while Kobayashi's face was bright red from the slap.

Jiro Miura said in a deep voice, "Director Gu mentioned two points just now, what's the other one?"

Gu Yansheng stood up and said, "Actually, the problem has been found, but there's one more thing I think is better left unsaid."

Jiro Miura narrowed his eyes. "What can't be said? Speak."

Gu Yansheng nodded, "Yes, and another point is hoarding and speculation."

The forced requisition led to a rapid decrease in rice supply on the market. We basically seized all the Chinese-owned enterprises that we could, but rice is still being sold in Shanghai.

However, the price is very high.

As far as I know, 60 kilograms of rice usually sells for 12 yuan, but now it's 2,400 yuan, a 200-fold profit.

So, after the raids on Chinese-owned businesses, what other businesses in Shanghai were still allowed to sell rice? I think the answer is quite clear.

British companies, American companies, and Japanese companies.

According to statistics from the Commerce Department, Shanghai has about 90,000 tons of grain in stock. We only collected 15,000 tons this time, and Shanghai is already experiencing a grain shortage. This is not the case.

Even if residents buy some of it to take home, there should still be 20,000 to 30,000 tons left on the market.

But the truth is that the price was inflated to 2,400 yuan.

According to the original action plan, if we had collected 15,000 to 20,000 tons, the price of grain in SH City would have indeed risen, but it would never have reached this level.

Theoretically speaking, if prices rise a bit, to 15 or even 18 yuan, and the inventory of Chinese-owned enterprises is confiscated, the companies I just mentioned can occupy the Chinese-owned market, sell like hotcakes, and make a considerable profit.

However, driven by profit, they were not satisfied with a price of 18 yuan and chose to hoard goods and speculate, driving the price up to more than 2000 yuan. This caused large-scale fluctuations in the prices of all goods on the market, ultimately destroying the credibility of military currency.

For example, you can buy a bag of rice for a little over 2000 yuan, then immediately exchange it for foreign currency at the Economic Department. That foreign currency can then be used to buy ten tons of rice elsewhere.

This time, Jiro Miura truly understood. "So, our foreign exchange reserves have been stolen by these speculative businessmen?"

"You could say that," Gu Yansheng nodded.

This was considered as helping Jiro Miura figure out how to report to the General Staff.

In principle, Miura should thank him, but this time it's unnecessary.

After venting his anger, Jiro Miura sat down and pondered.

Knowing is worse than not knowing. Talking about the conflict has dragged Japanese companies into the mix, but these Japanese companies can't be investigated. He remained silent, and everyone in the room remained silent.

Hasegawa patted his knees and stood up: "The matter is clear now, Miura-kun. I won't sit with you anymore. You should take responsibility for your own mistakes. Mr. Gu, I need to talk to you. Let's go together."

"Okay." Gu Yansheng stood up.

"Wait a minute." Jiro Miura frowned. "The food problem in Shanghai hasn't been discussed yet. How do we solve the food shortage and strike issues?"

Hasegawa looked at him and smiled faintly: "Didn't Mr. Gu already tell you the method? If there's grain, the workers won't make a fuss, and it's very clear where the grain is. You can just call the Japanese Chamber of Commerce and ask them to bring it out to sell."

Gu Yansheng nodded to Minister Zhou, said "I'll take my leave first," and followed Hasegawa Renchuan away.

out the door.

Hasegawa's expression was full of disgust. "The stupidity and greed of these people in the military are simply unbelievable. Such a good military bill plan has been ruined by their own people."

Moreover, these businessmen are far too brazen! They actually dared to target our own foreign exchange reserves! They must be punished.

“Interests are always the hardest thing to balance.” Gu Yansheng chimed in, “That’s just how businessmen are. It’s too difficult to get them to give up free profits. It’s just that Shanghai’s economy has suffered too much. So many factories have stopped operating. It’s all money.”

Hasegawa nodded, "I'm afraid Japanese companies won't be able to easily put their grain out to sell at a fair price."

The cabinet is already discussing the current situation in Shanghai, and the selection of the person to be stationed in Shanghai for the Asia Development Institute is also being discussed. If the army does not get this position this time, they will have even less motivation to revive Shanghai's economy.

This matter has nothing to do with them.

Mr. Gu, are you confident about Shanghai's economic recovery?

"You're really good at sabotage; the results are even better than I expected."

“I didn’t even exert much effort. I originally thought that it would take forcibly requisitioning 40,000 to 50,000 tons of rice to cause complete chaos, but who knew that Shanghai couldn’t handle just over 10,000 tons.”

Gu Yansheng pondered, "The current situation is far more complicated than I imagined when I started the operation. I can say a few words to Minister Zhou now, and I can also try to find connections in the concession, but I really don't have any connections with the Japanese companies."

What if I implement certain policies and Japanese companies don't comply? I have no control over them at all.

For Shanghai's economy to recover, the first priority is the food supply. Japanese companies must release some of their current food reserves to restore market share.

"Once the person has been chosen, the Asia Development Institute will resolve this issue."

Hasegawa reassured Gu Yansheng, "The Asia Development Council will coordinate the issues with Japanese companies. What I need you to do is restore Shanghai's economy to a level significantly better than when the army controlled it, and outperform them in one fell swoop."

The nature of plunder remains unchanged; nothing you say will change that, and the army simply won't listen.

However, if the Ministry of Foreign Affairs can really secure this position, then Gu Yansheng can indeed help the citizens of Shanghai enjoy a few days of peace.

If the environment were a little better, we could increase Lu Bowen's intensity; making money from the two flour mills is still too slow.

Gu Yansheng greeted him with a smile, "It seems Mr. Chang Gu is very confident of winning this time?"

Hasegawa smiled contentedly, "The army has failed twice already. The economics PhDs we painstakingly cultivated have both failed in Shanghai, which proves that the army is really no good."

I will submit what you said at today's meeting to the Ministry of Foreign Affairs for Cabinet review. I believe the Cabinet will make a wise decision.

(End of this chapter)