Research On Cooperative Bank In The Republican Period Of China (1935-1949)

Cooperative bank was a kind of financial organization originated from thewestern world. Aiming at adjusting the fund of cooperative economic organization, itconstructed the cooperative financial organization based on cooperatives. In1920sand1930s, with the widespread of western cooperative Economic though, being facedwith rural economy in the crisis, developing cooperative finance was becoming one ofthe most important measures in stabilizing the rural economy and consolidating thegovernance of the National Government. Under the efforts of the NationalGovernment, financial institutions and social groups, in middle time of1930s, Chinarural cooperative financial organization had gained preliminary development.However, there still existed defects such as fund shortage, over-dependence on banks,and lack of system. To solve these problems, building Cooperative banks had becomea general consensus of the National Government and society. Therefore, cooperativebanks came into being in modern China.The development of cooperative banks of China was promoted by the NationalGovernment. Since1935, the National Government enacted the special regulations fordeveloping cooperative bank. Since then, local governments and agricultural bureaustarted the construction of cooperative banks. Before the Anti-Japanese War, severalprovince cooperative banks and county cooperative banks had already been built.During the Anti-Japanese War period, government adopted the policy of expandingagricultural loan, and the organizations of promoting the development of cooperativebanks was increasing, therefore cooperative banks had entered a high-speeddeveloping period and achieve at climaxed in1940. Since1941, the government madea series of adaptations to the related policies of cooperative bank, which slowed downthe speed of the development of cooperative bank. In1946, the National governmentset up the central cooperative bank. However, its function has been very muchconstrained under the weakening ruling power of the National Government. From1935to1949, cooperative bank in China experienced a complicated development,gain a certain level of scale and became an important power among various ruralfinancial institutions.Cooperative bank is a kind of financial organization introduced from the foreigncountries. In Europe, the USA and Japan, cooperative banks mainly developed fromthe power of the society and the functions of government was to supporting, supervising and regulating. From the perspectives of funding source and management,the rural cooperatives and farmers were in the dominating position. Moreover, apyramid-style cooperative bank system was formed. By comparison, there existobvious alienations in cooperative banks of China. First, the development ofcooperative banks were mainly promoted by the government. The social powers werein a passive position. Second, cooperative banks heavily depended on the fundsupported by government and the banks or bureaus controlled by government. Third,the operation and management of cooperative bank are under the control ofgovernment and the banks or bureaus controlled by government. Fourth, the innerstructure of cooperative bank system has the characteristics of multiple and split, yetthere exists no organic relationship among the cooperative banks of different levels.These alienations reflected the fact that cooperative banks in China onlyborrowed the shell of cooperative financial organization, but it didn’t have the actualcharacteristics of cooperative finance, such as voluntariness, self-governance,democracy and mutual aid. In practice, cooperative banks were the policy instrumentof the government and an medium for rural loans by banks or bureaus controlled bygovernment. The reasons were that, for one thing, the National Government had astrong controlling desire for the economy, especially for finance; for another, in thattime, rural economy of China was in difficulties. The financial resource thatcooperative banks could get from inside the rural areas was very limited. Additionally,the restriction was from rural social environment and the strong control of thegovernment for rural society. These factors made the development of cooperativebank lack of appropriate soil.Although there were several defects in cooperative banks in the RepublicanPeriod, in general, cooperative banks were still a positive attempt of promoting therural finance by the National Government. The development of cooperative banks, tosome extent, mitigated the problem of rural fund shortage, pushed ahead theagricultural production, and made positive contributions to the Anti-Japanese War.Furthermore, as a form of modern financial organization, the development ofcooperative bank brought new power to the rural finance of China, and promoted thetransformation and modernization of rural loan relationship. Therefore, it took up amemorable page in the history of rural finance of China.