The Research On The United States’"Silver Purchase Act" And China’s Monetary Reform In 1935

In June 1934, the US Congress passed the " the silver purchase act",then the United States buy a lot of silver in the world, the price of silver was skyrocketing in the world. China’s silver outflow largely. And China used silver as its currency then, the price of silver is related to the stability of China’s currency and economic lifeline. After silver went though a large loss, there was a deflation in China, and China’s economy was more depression. In 1935, the national government has carried on the significant monetary reform to rescue the financial crisis. This paper analyzed the impact of "the silver purchase act" on China’s economy with data comprehensively. The author analyzed macro economy by using the detailed data, including the index of inflation, stock prices in the economy as well as import and export trade, to illustrate different changes of China’s economy, after the implementation of the silver purchase act, and to illustrate the dangers of sudden silver purchase to China who used silver as its currency. After the silver purchase act implementation, compared various macroeconomic indicators in 1932, China’s economy was significantly worse. In 1935, the national government has carried on the monetary reform to rescue the financial crisis. The reform of China stood for the collapse of the silver standard, and China implemented exchange standard issued legal tender from then on. The monetary reform has a far-reaching influence on China. Studying the silver the impact that the act brought on China’s economy (including monetary reform of the national government in 1935),not only provides the certain reference value to the study of this period of economic history of the republic of China,but also provides some revelations for China’s economy’s development today. With the further deepening of economic globalization, countries contact more closely. Facing strong powers such as the U.S.’s economic policy, China how to deal with effectively, hoping that the study of this period of history, provide certain enlightenment for China’s economic development today.The introduction part, mainly introduced the background, significance, and literature review of the research subject.This paper is divided into four parts:The first part introduce the act’s background, content and its impact on itself and the world.The second part analyze the silver policy’s impact on China’s economy by using data, it made the depressive China’s economy into a more depression. Analyzing that the silver policy trigger a lot of Chinese silver’s outflow, and led to China’s silver stock reduction directly.Then it triggered a drop in the price of China, a comprehensive deflation. Then analyze the silver’s outflow caused by exchange rate and the impact of economic recession on China’s import and export trade.The third part analyze the monetary reform of the national government in 1935. Concretely analyzes the content of the monetary reform, the implementation process, the monetary reform’s positive and negative effects.The end of the article is conclusion and revelation.This paper get two conclusion:one is that a country’s economic policy may has an effect on other country,and other revelation is that the over circulation of paper money can cause inflation.