The Central Reserve Bank Law And The Construction Of The Central Bank System During The Nanjing National Government

Central banks emerged in Western Europe at the end of the 17 th century and developed gradually as the capitalist system matured.By the end of the 19 th century,major capitalist countries in Europe and America had already set up central banks to regulate macroeconomic development and manage financial markets.The establishment of the central bank system of China originated from the late Qing Dynasty.Following the example of the central bank system of European and American countries,the Ministry of Revenue established its own bank in 1906,which was later renamed as the Bank of Daqing.It was the first national bank established by authority in China.During the period when Beiyang government took control of China,the Bank of China was successively established and the Bank of Communications was reorganized.The government gave these two banks the power to act as the state treasury and issue currency.Thus,these two banks also have the nature of central banks.After Chiang Kai-shek formally unified China,the Nanjing National Government also established a central bank and the Bank of China and The Bank of Communications were reorganized to be specialized banks.Although such financial institutions as central banks have been established,the "central banks" mentioned above didn't have the power as it should have had.They have merely played the role of "bank to the government",being financial instruments to lend money to the government at its request.The central banks' functions as "issuing bank" and "bank of banks" are not well established.The Central bank are still far from the goal of becoming fully functional and true central bank.In order to make the bank can really become a national central bank that can literally regulate the development of macro economy,the national government set out to make a plan about the reconstruction of the central bank after the implementation of the policy of the Legal Tender.Combined with experts' opinion,the Ministry of Finance drew up the law of the Central Reserve Bank.finally.after two years' efforts,In June1937,The legislative procedure of the law of the Central Reserve Bank was completed and it would be put into practice in the near future.The draft of the Act of the Central Reserve Bank make up the missing part of the functions of the central bank in inheriting the central bank's function of being the government's bank on the basis of the original.The act gave the central reserve bank the authority to issue currency exclusively,and any other bank was not allowed to issue legal tender,meaning that the Central Bank really get "issuing bank" status.At the same time,the bill stipulates that the central bank shall collect and manage the deposit reserves of commercial banks,and supplements the implementation rules such as the deposit reserve ratio.It also stipulates that the central bank shall be responsible for clearing bills,providing services such as rediscount,and assuming the responsibility of helping the banking industry in the event of a financial crisis.The central bank's function of "bank of banks" is thus improved.In the end,the plan of setting up the Central Reserve Bank broke up because of the outbreak of Anti-Japanese War,However,this law played a connecting and vital role in the construction of the central bank system in modern Chinese history.It sumed up the experience and lessons of the construction of the central bank system from 1928 to 1937.And at the same time,the basic spirit and basic provisions of the bill were also absorbed and adopted by the construction of the central bank system during the war.After the outbreak of the Anti-Japanese War,in order to control the domestic finance and fight against Japan,the national government set up the Joint Office of Four Banks to take over the functions of the central bank.It has power over the central bank and other national banks.During the war,the Joint Office of Four Banks gradually weakened the status and influence of the national bank by virtue of their controlling position over finance and economy,and helped the Central Bank improve its functions according to the principles of the Central Reserve Bank Act.During this period,the Joint Office of Four Banks formulated laws and regulations and specific implementation rules to improve the functions of the central bank and supervise their implementation.With the help and support of the Joint Office of Four Banks,the Central Bank took the currency issue power of the state banks,obtained the exclusive dealership of the state Treasury,collected the reserve funds of the commercial banks,and actively carried out the clearing of bills.The national banks,under the supervision and orders of the Joint Office of Four Banks,have to deposit large sums of money in the Central Bank and no longer have any financial relationship with the National Treasury.The Central Bank thus gained greater control over the state banks,and thus got a dominant position over the state banks.With the help of the Joint Office of Four Banks,the central bank finally perfected the functions that were missing before the war and really became a national central bank with sound functions to regulate macroeconomic development.The construction of the central banking system in wartime made great progress by following the basic principles of the Central Reserve Bank Act on the construction of the future central bank.This paper will mainly study and discuss the forming process of the Central Reserve Bank Act,the construction process of the central bank system during the war and the contribution and influence of this Act to this process.