Study Of The Nationalist Government Central Banking System

Central banking institution is a result of the development of commodity economy especially money economy. It was born from the need of government financing, banknote centrally issuing, lender of last resort, clearing and finance managing. In China, Hu Bu Bank and Da Qing Bank in the name of central bank were born from the need of government financing, not real central bank. During the period of the Northern Warlords Regime, Bank of China, Bank of Communications and life-shorted Central Bank in Guangzhou, Central Bank in Hankou which had the nature of central bank, were not real central bank either. Experience and reference had been offered during the late Qing Dynasty and the period of the Northern Warlords Regime, though central banking institution had failed to be set up.After 1928, China's national economy grew rapidly, especially in financial industry, demanding a central bank with perfect function . The Central Bank of China built by the National Government in 1928 bloomed rapidly in the later ten years and laid foundation for its perfect function as a central bank. After 1937, JOFGB( Joint Office of the Four Government Banks) performed part function of a central ..bank and promoted the Central Bank of China to be a central bank, but the banknote issue did not be centralized.From 1942, the Central Bank of China centralized the banknote issue and became the first central bank in the history of China. It had more perfect function in bank of issue and government's bank rather than in banker's bank and bank of supervision and management. This central banking institution benefited the Anti-Japanese War by controlling the economy. But this institution was not perfect because the deposit reserve had failed to be centralized.With the approach of new institutional economics, the author analyses the central banking institution of the National Government. The government defined and exercised the property right for the purpose of maximizing its own interest by using the comparative advantage of national violence. The independence of the Central Bank of China was very low, nearly controlled completely by the government. So the central banking institution was a institution arrangement to maximize the interest of the National Government and its ruling class. This is the economic nature of the central banking institution of the National Government. This institution was a progress in the development of central banking institution. However, it served the government much better than the development of the national economy. The development process of the central banking institution of the National Government embodied a dominated change and it resulted in a policy failure. The two reasons of the policy failure involved in the preference of the ruler and the problem of bureaucratic apparatus.