Research On Interest Groups And Feng Paper Issuing System Evolution

Feng Paper was a kind of paper currency mainly issued and circulated in Fengtian Province(Liaoning Province)from 1905 to 1931.It is the official paper currency issued by Fengtian local government.At the last years of the Qing Dynasty,the centralized financial system of the Qing government was on the verge of collapse after the outbreak of the Taiping-Rebellion.Due to the decline of the national power and the central financial power,as well as the invasion of foreign capital,the Qing government actively set up official money bureaus in local areas to issue large amounts of coin and banknotes in order to raise funds for military supplies,disaster relief,official expenses and various construction projects.In1905,the Fengtian Official Silver Bureau was established in Fengtian Province and began to issue banknotes.In 1909,the Fengtian Official Silver Bureau was renamed as the Official Bank of the Northeast by increasing its capital,and upgraded to the central bank of the three northeastern provinces.The Official Bank of the Northeast(including its predecessor Fengtian Official Silver Bureau)and other relevant financial institutions issued 114 types of Feng Paper in 23 categories,among which the two most representative banknotes were Xiaoyangpiao and Dayangpiao.It can be said that the evolution process from Xiaoyangpiao to Dayangpiao is the change of the Feng Paper issuing system.In 1905,Fengtian Official Silver Bureau began to issue Xiaoyangpiao.Because of their small denomination,and easy for carrying and trading,Xiaoyangpiao was welcome by the citizens and became the most widely circulated currency in Fengtian Province.However,this had seriously affected the economic interests of Japan financial capital interest groups in northeast China.Japanese banks tried to destroy the plan of setting up the Fengtian Official Silver Bureau by suggesting to establish a joint venture bank and giving financial support to private financial institutions.And the Japanese banks wanted to replace the dominant position of Fengtian Official Silver Bureau in currency issuance of the Fengtian region.However,Japan's forces were not strong enough to succeed.After that,Japan organized many people to go to Chinese banks and change Xiaoyangpiao tosmall silver coins.On the other hand,due to the lack of sufficient reserves for issuing Xiaoyangpiao,it was difficult to cash them in full,so that Xiaoyangpiao lost its credit base.Since 1914,Xiaoyangpiao had been seriously devalued.Fengtian local government had adopted various ways to maintain the market price of Xiaoyangpiao,but all of them had no effect.Finally,after negotiation with Japan,The Official Bank of the Northeast issued Dayangpiao to replace Xiaoyangpiao.In 1917,The Official Bank of the Northeast began to issue Dayangpiao and collected Xiaoyangpiao at the same time.In order to ensure the smooth circulation of Dayangpiao,the local government was not only mandatory to use Dayangpiao,but also severely forbade the huge amount of private paper notes in the market.Under these measures,Dayangpiao became the main currency in Fengtian and even the three northeastern provinces.However,because the local government fought against others for many years,the government's financial revenue was insufficient.In order to raise military fund,the local government increased its wealth by issuing paper money,which seriously violated the economic law.In 1931,Japan invaded Northeast China,and took over the currency issuance power.From the late Qing Dynasty to the Republic of China,the evolution of the Feng Paper issuing system was a compulsive institutional change in the field of modern China's monetary and financial system dominated by local governments.In this process of change,there are three interest groups: local bureaucratic financial capital interest group,foreign financial capital interest group and private financial capital interest group.These three interest groups represent the interests of Fengtian local government,Japanese government and local businessman in Fengtian.Among them,local bureaucratic financial capital interest group and foreign financial capital interest group are the main antagonists of the contradiction,while private financial capital interest group is secondary to the contradiction in this process.At that time,when the Japanese militarist forces had invaded the Northeast,both China and Japan were competing for controlling over politics,military affairs,economy,especially finance in the Northeast.In this process,the currency issuance power has become the core content of the struggle.Whoever had the power to issue money would control the economic and financial initiative of Fengtian Province and Northeast China.In this situation,the governments of Fengtian Province did not give up the dominant power ofissuing currency to formulate and implement various of monetary and financial policies to compete with Japanese forces,and sometimes gained the upper hand in this period.In this process,although the private financial capital interest group had been trying their best to safeguard their own interests,they also played a role in helping Fengtian local government to maintain the dominant right of currency issuance.From the essence of this historical phenomenon,the struggle between China and Japan for the power of issue currency shows the fierce and sharp struggle between China and Japan in national interests and sovereignty.Based on the interest group theory in the new institutional economics,this paper combines the methods of inductive analysis and comparative analysis in the historical research method to study the status and roles of interest groups in the process of the change of Feng Paper issuing system,and draws corresponding conclusions.According to the theory of new institutional economics,institutional change is a public choice formed by the game between different interest groups.The process of institutional change is inevitably the result of the conflicts,influences and actions of various interest groups.This paper sorts out and studies a large number of historical materials,archives,relevant works and articles,and analyzes the economic and political reasons for the generation,circulation,emergence and decline of the Feng Paper.By studying the specific performance of interest groups in the process of issuance and circulation of Feng Paper,as well as the function and influence of the game between interests on financial markets and financial policies,this paper makes a thorough analysis of the interest demands,strategies,objectives and behaviors of the three interest groups,and reveals the power changes and contradictions among the three major financial capital interest groups,and the impact of this relationship on the generation and decline of Feng Paper.The conclusion is that the process of issuance,circulation,decline and recycling of Feng Paper is mainly the result of the game among the three financial interest groups.