Chinese gold yuan

The purpose of the issuance of a new currency was to replace the original hyperinflated Fabi currency that was issued by the Nationalist government since 1935. In early 1947, Fabi currency issues totaled 3.5 trillion yuan, rising to over 10 trillion yuan by July. With no real increase in government inventories gold, foreign currency, such huge issuances led to the extreme inflation. In the beginning, some paper mills were profiting from the use of low-denomination Fabi currency resource recovery as raw material for paper making. T.V. Soong, when he was in Executive charge of the Yuan, tried to stabilize the Fabi currency with a financial policy of selling inventory gold to buy back the Fabi currency. But it was fruitless because the Fabi currency kept being issued massively, so it couldn't be fully backed by gold. After the constitutional election in May 1948, Weng Wenhao became Executive Yuan Head and Wang Yun-wu was appointed Minister of Finance and began planning for monetary reform. At the same time, Chiang arranged for Yu Hung-chun, former Minister of Finance and former president of the Central Bank, to also draw up a proposal for currency reform. The drafting team, led by central bank experts organized by Yu, believed that the Fabi currency could be maintained for some time without fundamental reform, and would collapse faster if fundamental reform was carried out. The program elaborated by Yu's team focused mainly on the increase and improvement of fiscal revenues, proposing to use this special currency for all tax payments and foreign trade remittances without depreciating along with the Fabi currency, following the example of the 1937 tariffs levied by customs, which would increase the proportion of fiscal revenues to fiscal expenditures from more than 10 to 40 or 50 percent. The government's efforts to improve the economy and the economy of the country were not satisfactory, but Chiang was not satisfied with this and thought that it could not collect the country's gold, silver, and private foreign exchange reserves to cope with the difficult situation. At the meeting, Executive Yuan President Weng Wenhao, Foreign Minister Wang Shijie and Central Bank President Yu Hung-chun agreed. In addition to the attendees, Chiang only approached Chang Kia-ngau, the former general manager of Bank of China, who had just resigned as president of the Central Bank, and Weng Wenhao, who informed U.S. Ambassador to China John Leighton Stuart a few days before the reform was to take place. ==Later Issue==

On August 19, 1948, the Chinese Kuomintang convened a Central Political Conference to approve the currency reform proposal put forward by Weng Wenho, Wang Yunwu. Weng Wen-hao held a meeting of the Executive Council that afternoon to discuss and approve the currency reform proposal. According to the Temporary Provisions against the Communist Rebellion adopted by the First Session of the First National Assembly, Chiang issued a "Financial and Economic Emergency Disposition Order" on August 19, issuing Golden Yuan Bills while stopping the issuance of Fabi; and placing economic control supervisors. Chiang made a speech calling on his compatriots to follow the decree and embrace the new currency system for the benefit of the nation. And Du Yueh-Sheng's son Du Weiping was also imprisoned for hoarding. Chiang Ching-kuo's severe "tiger hunting" in Shanghai had slightly gained the people's confidence in the Golden Round. == Collapse ==

The Golden yuan had no cash provision and no restrictions on issuance, resulting in a total failure. The currency collapse began prior to the Nationalists' military defeat. == Denominations ==

In 1946, the Republic of China government experimentally commissioned the British Thomas de Narro Banknote Printing Company to print 10 cents (10 cents) and 20 cents (20 cents) in two small denominations, and in August 1948, five types of banknotes - 50 cents, 10 cents, 20 cents, 50 cents and 100 cents - were issued. The ROC Central Printing Office printed 50-cent and 10-yuan notes, while the Central Printing Office and China Book Office were ordered to issue two plates of each denomination, and the ROC government commissioned the British Walt's Road Company to print several gold circulars, but they were issued in very small numbers and circulated only in Shanghai; In January 1949, 100-yuan Central Printing Office red plate notes and 500-yuan notes were issued, and in February the production and issuance of 1,000-yuan notes began gradually; in March 1949, 5,000-yuan notes were issued, followed by 10,000-yuan notes; in April, 50,000-yuan notes and 100,000-yuan notes; in May, 500,000-dollar notes and 1 million-dollar notes were issued, but the Shanghai was immediately occupied by the PLA and was not issued. == Impact ==

The rapid devaluation of the Gold yuan and the resulting hyperinflation stem from the government's fiscal and monetary policies. The Republic of China's government continued to maintain the war despite the financial constraints. The government deficit is paid for by printing money, causing sharp inflation. The government, unable to control the issuance of a common currency on its own, merely tries to maintain prices and currency values by executive orders that violate the laws of the market, eventually causing financial chaos and market collapse. The people most affected by the Gold yuan crisis were the lower middle class in the city. They had no greater capital and resources to protect what little they had, nor were they as unproductive as the rural peasants or proletariat. In the early days of the issuance of the Gold yuan, or when forced, or out of trust in the government, to exchange the accumulated property for the Gold yuan, the greatest losses were suffered in the hyperinflation, and some people became destitute as a result. The Republic of China's government, despite the hundreds of millions of dollars of gold and silver foreign exchange seized from the people through the issuance of the Gold Yuan notes, lost the trust and support of the most inclined class in the country: the urban people. In 1948, the Nationalist Government had already suffered a series of military defeats, and the Gold Yuan storm had deprived the ROC government of all its remaining popular support and morale. Currency abuse was one of the reasons for the rapid collapse of the entire national government regime on the continent. ==The Golden Yuan and Taiwan==

At that time, the Taiwan Provincial Government was ordered to transfer Taiwan Sugar's total assets of 120 million U.S. dollars to the custodianship method under the Golden Yuan issue, and Taiwan Paper's total assets of 25 million U.S. dollars to 8 million U.S. dollars, thus further drawing Taiwan into the deteriorating economic situation of Mainland China. And at that time, the exchange of the Golden Yuan for Taiwan Dollar $1,835 was also significantly overestimated, and the inflow of mainland China into Taiwan hedging brought Taiwan under severe vicious inflationary pressure and worsened the economic situation In June 1949, Taiwan reformed its monetary system and issued New Taiwan Dollar. == See also ==