Central Bank of Manchou
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The Central Bank of Manchou (;
Japanese Japanese may refer to: * Something from or related to Japan, an island country in East Asia * Japanese language, spoken mainly in Japan * Japanese people, the ethnic group that identifies with Japan through ancestry or culture ** Japanese diaspor ...
Hepburn: ''Manshū Chūō Ginkō''), was the
central bank A central bank, reserve bank, or monetary authority is an institution that manages the currency and monetary policy of a country or monetary union, and oversees their commercial banking system. In contrast to a commercial bank, a central ba ...
of the
Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
- sponsored state of
Manchukuo Manchukuo, officially the State of Manchuria prior to 1934 and the Empire of (Great) Manchuria after 1934, was a puppet state of the Empire of Japan in Northeast China, Manchuria from 1932 until 1945. It was founded as a republic in 1932 afte ...
. The bank was established by the ''Bank of Manchukuo Act'' at
Hsinking Changchun (, ; ), also romanized as Ch'angch'un, is the capital and largest city of Jilin Province, People's Republic of China. Lying in the center of the Songliao Plain, Changchun is administered as a , comprising 7 districts, 1 county and 3 c ...
(today
Changchun Changchun (, ; ), also romanized as Ch'angch'un, is the capital and largest city of Jilin Province, People's Republic of China. Lying in the center of the Songliao Plain, Changchun is administered as a , comprising 7 districts, 1 county and 3 c ...
) on 11 June 1932, as a
joint stock company A joint-stock company is a business entity in which shares of the company's stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their shares (certificates of ownership). Shareholders are ...
with a capital of 30,000,000 ''yuan'', with the government holding at least 25% and at most 50% at any time. The bank officially opened its doors for business on July 1 as the amalgamation of the four note-issuing banks active in
Manchuria Manchuria is an exonym (derived from the endo demonym " Manchu") for a historical and geographic region in Northeast Asia encompassing the entirety of present-day Northeast China (Inner Manchuria) and parts of the Russian Far East (Outer Manc ...
prior to that time, namely: the Bank of the Three Eastern Provinces, the Bank of Kirin, the Bank of Heilungkiang and the Frontier Bank controlled by local
warlord A warlord is a person who exercises military, economic, and political control over a region in a country without a strong national government; largely because of coercive control over the armed forces. Warlords have existed throughout much of h ...
Zhang Zuolin Zhang Zuolin (; March 19, 1875 June 4, 1928), courtesy name Yuting (雨亭), nicknamed Zhang Laogang (張老疙瘩), was an influential Chinese bandit, soldier, and warlord during the Warlord Era in China. The warlord of Manchuria from 1916 to ...
. It was later revealed by audits that acquiring the four previous banks of Manchuria to be financially irresponsible as the Central Bank of Manchou held a deficit of 30,000,000 yuan in combined liabilities, but the action was deemed necessary as it was the only way to get rid of the overabundant currency issued by those banks in Manchuria in order to create a better foundation for the new
Manchukuo yuan The Manchukuo yuan ( zh, 滿洲國圓, ''Mǎnzhōuguóyuán'') was the official unit of currency of the Empire of Manchuria, from June 1932 to August 1945. The monetary unit was based on one basic pure silver patron of 23.91 grams. It replaced t ...
. When the Central Bank of Manchou was created it had a sufficient number of
gold reserves A gold reserve is the gold held by a national central bank, intended mainly as a guarantee to redeem promises to pay depositors, note holders (e.g. paper money), or trading peers, during the eras of the gold standard, and also as a store of v ...
for the new currency and paid out a dividend of 6% to investors, the stable value of the Manchukuo yuan was a major contributing factor for the development of the economy of Manchukuo.The Currency Collecto
JAPANESE SPONSORED COIN AND BANK NOTE ISSUES FOR THE OCCUPIED REGIONS OF CHINA
by John E. Sandrock. Retrieved: 11 April 2018.
The principal functions of the Bank were to act as a repository for the funds of the Manchukuo State Treasury, control the
money market The money market is a component of the economy that provides short-term funds. The money market deals in short-term loans, generally for a period of a year or less. As short-term securities became a commodity, the money market became a compon ...
, unify the
monetary system A monetary system is a system by which a government provides money in a country's economy. Modern monetary systems usually consist of the national treasury, the mint, the central banks and commercial banks. Commodity money system A commodity m ...
of Manchukuo and stabilize its
currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" is a standardization of money in any form, in use or circulation as a medium of exchange, for example banknotes and coins. A more general def ...
. However, the Bank also engaged in ordinary
bank A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...
ing business such as granting agricultural, industrial and commercial
credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), ...
. In addition, the Bank served as Japan's agent in Manchukuo with the withdrawal of the Korean
Bank of Chosen A bank is a financial institution that accepts deposits from the public and creates a demand deposit while simultaneously making loans. Lending activities can be directly performed by the bank or indirectly through capital markets. Because ...
from the region. With its head office in Hsinking, the Bank had nearly 140 branches throughout Manchukuo,
China China, officially the People's Republic of China (PRC), is a country in East Asia. It is the world's most populous country, with a population exceeding 1.4 billion, slightly ahead of India. China spans the equivalent of five time zones and ...
and
Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...
proper. Pursuant to the Currency Law of 1932 which authorized the creation of the Bank, Manchukuo adopted a unit of currency, the
Manchukuo yuan The Manchukuo yuan ( zh, 滿洲國圓, ''Mǎnzhōuguóyuán'') was the official unit of currency of the Empire of Manchuria, from June 1932 to August 1945. The monetary unit was based on one basic pure silver patron of 23.91 grams. It replaced t ...
, containing 23.91 grams of pure
silver Silver is a chemical element with the Symbol (chemistry), symbol Ag (from the Latin ', derived from the Proto-Indo-European wikt:Reconstruction:Proto-Indo-European/h₂erǵ-, ''h₂erǵ'': "shiny" or "white") and atomic number 47. A soft, whi ...
, the metal on which Chinese currencies traditionally were based. The Bank was required by its charter to hold as a
reserve Reserve or reserves may refer to: Places * Reserve, Kansas, a US city * Reserve, Louisiana, a census-designated place in St. John the Baptist Parish * Reserve, Montana, a census-designated place in Sheridan County * Reserve, New Mexico, a US vi ...
against its issued notes at least 30% of the value of such issue in gold and silver bullion, reliable foreign currencies and deposits with foreign banks in
gold Gold is a chemical element with the symbol Au (from la, aurum) and atomic number 79. This makes it one of the higher atomic number elements that occur naturally. It is a bright, slightly orange-yellow, dense, soft, malleable, and ductile met ...
and silver accounts. The Bank's notes were not required to be redeemable in
specie Specie may refer to: * Coins or other metal money in mass circulation * Bullion coins * Hard money (policy) * Commodity money * Specie Circular, 1836 executive order by US President Andrew Jackson regarding hard money * Specie Payment Resumption Ac ...
. Due to worldwide fluctuations in the price of silver during the 1930s, Manchukuo took the ''yuan'' off a silver standard in 1935 and subsequently pegged the ''yuan'' to, and later reached approximate exchange parity with, the
Japanese yen The is the official currency of Japan. It is the third-most traded currency in the foreign exchange market, after the United States dollar (US$) and the euro. It is also widely used as a third reserve currency after the US dollar and the ...
. The Bank initially issued approximately 150 million ''yuan'' in notes in 1932. By 1936, their aggregate value exceeded 200 million ''yuan'', rising to 300 million in 1937, 400 million in 1938 and 620 million by the end of 1939. Throughout this period about half the value of the issued notes was backed by specie reserves. The notes issued were in five denominations, one hundred, ten, five and one ''yuan'' and five ''chiao'' (one-half ''yuan''). To keep up with the
inflation In economics, inflation is an increase in the general price level of goods and services in an economy. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation corresponds to a reductio ...
ary pressures typically experienced by Japanese controlled areas towards the end of
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, a 1,000 ''yuan'' note was issued in 1944. In 1948, after the end of
World War II World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposin ...
, approximately 12 billion ''yuan'' of Central Bank of Manchou notes were redeemed by the Tung Pei Bank. As with Chinese coinage of the time, Manchukuo's coinage was based on the decimal system, one-tenth of the ''yuan'' being called the "chiao," one-hundredth called a "fen" and one-thousandth, a "li." Under the Currency Law the Central Bank of Manchukuo was authorized to mint 1 ''chiao'' and 5 ''fen'' coins of a nickel-copper alloy; and 1 ''fen and 5 ''li'' coins of a copper-tin-zinc alloy.


Dating system

Manchukuo was established in March 1932 with
Puyi Aisin-Gioro Puyi (; 7 February 1906 – 17 October 1967), courtesy name Yaozhi (曜之), was the last emperor of China as the eleventh and final Qing dynasty monarch. He became emperor at the age of two in 1908, but was forced to abdicate on 1 ...
assuming the title of Chief Executive of the new state using the
era name A regnal year is a year of the reign of a sovereign, from the Latin ''regnum'' meaning kingdom, rule. Regnal years considered the date as an ordinal, not a cardinal number. For example, a monarch could have a first year of rule, a second year o ...
of Datong ( Wade-Giles: ''Ta-tung''; 大同). Following the traditional dating system based on the year of the ruler's reign, the year 1932 became the first year of ''Datong'' . Two years later, Manchukuo was changed into an empire, with Puyi ascending the throne as Emperor of Manchukuo under the reign title,
Kangde Aisin-Gioro Puyi (; 7 February 1906 – 17 October 1967), courtesy name Yaozhi (曜之), was the last emperor of China as the eleventh and final Qing dynasty monarch. He became emperor at the age of two in 1908, but was forced to abdicate on 1 ...
(Wade–Giles: ''Kang-te''; 康德). Accordingly, 1934 was designated the first year of ''Kangde'' (''Kang-te''), while 1942 was the ninth year of ''Kangde'' (''Kang-te'').


References


External links


Economic conditions in the old Manchukuo
{{DEFAULTSORT:Central Bank Of Manchou
Manchukuo Manchukuo, officially the State of Manchuria prior to 1934 and the Empire of (Great) Manchuria after 1934, was a puppet state of the Empire of Japan in Northeast China, Manchuria from 1932 until 1945. It was founded as a republic in 1932 afte ...
Economy of Manchukuo Neoclassical architecture in China