Study On The Hidden Accounts Of Enterprises Under The Wartime Economic Order(1939-1949)

1939-1949 was a decade of gradual monetary and economic collapse in China.As a result of the National Government of the Republic of China’s wartime controls,inflation and irrational tax policies,the paper surpluses of industry and commerce are increasingly out of line with the real value of the currency.In order to avoid serious losses,the industrial and commercial enterprises generally take the means of hidden accounts for passive resistance.In the face of the rising tide of hidden accounts,the National Government of the Republic of China has frequently changed its tax regulations and interpretations and introduced various regulations to severely punish false accounts,but has never been able to address the underlying problem of inflation.This led to the income tax levy since 1936 to promote the“Build account”,“Health account”trend turned to build false accounts,health hidden account road.In 1937,the outbreak of the Second Sino-Japanese War,the Core Enterprises Yuhua,Dahua Textile Company to evade material control and tax,in 1939 began to set up hidden accounts.Because of the importance and privacy of the hidden account,the important matters through the hidden account are only known through the consultation of the core directors of Yuhua,the rest of the shareholders out of a common position,often acquiescing in support of the state.From 1939 to 1941,the company’s hidden accounts were not complete,which contained only a portion of the profits concealed in the original accounts.Since 1942,the company’s real operating situation has been dominated by hidden accounts.Combining the two sets of books,it can be seen that during this period companies set up hidden accounts for three purposes:first,to raise production costs and avoid price-fixing policies;second,to evade material control and engage in black market transactions to earn speculative profits;and third,to hide dividends and increase capital,evasion of for-profit profits tax.It can be seen from the way that the hidden account is not an individual enterprise behavior,but has the characteristics of profession and collectivity.In order to strengthen the fund management of the group and absorb the floating capital in the society,in 1943,the Yu da Hua Group established the Wynn Bank,in which another secret code,"Qiangfeng",was established.The chairman of the board,Su Tai-yu,was the prime minister,and each branch office also had a branch office,it is used to buy and sell gold,US dollar bills,cotton gauze and tung oil.The operation activities of the code are recorded in their own dark account,in order to achieve the role of value preservation,capital increase and tax evasion,while absorbing a large number of deposits,as loans to the system of enterprises.A portion of the company’s funds hidden in the open account is also deposited into Wynn Bank through the hidden accounts of the factories and invested on behalf of Wynn Bank.Through the production and operation during the anti-japanese war,Yuhua developed into three factories,Dahua developed into two factories.However,the victory of the anti-japanese war failed to give "Yu da Hua"hope to continue to expand production,and under the pressure of the ever-increasing inflation and currency reform after the war,enterprises were forced to leave production and move towards the path of value-preserving operation,maximize the collection of funds for foreign exchange speculation,Hoarding and profiteering.As the funds through the dark account more and more large,"Yu Dahua" dark account also by the factory set up scattered dark account gradually formed a unified system of dark account.In 1948,the Secret Account of Wynn Hankou branch was reported to the Hankou Monetary Authority by manager Chen Nantu,which led to the closure of the Hankou branch.Shortly after the liberation of Wuhan,under the new regime,Yu Dahua made reference to the Government of the People’s Republic of China issued after the liberation of Shanghai,the“East China private money industry dark account consolidation and rectification measures,"in November 1949,the total abolition of dark account.At this point,the decade-long“Yu Dahua”dark curtain completely closed the curtain.During this period,the national government extracted the wartime economic policy,which aggravated the centrifugal tendency of the businessmen to the regime.The enterprises represented by Yudahua Textile Group,through the establishment of undercover accounts to evade control and taxes,hoarding and speculation,it is difficult to put resources into normal operations.Under the soaring prices,the normal production and sales activities of enterprises have been hit,in order to protect the value of assets and obtain excess profits,and instead put a lot of resources into black market trading and foreign exchange resale.Accordingly,the government’s wartime economic control policy has been gradually eroded.The secret account objectively preserves some of the national industrial strength,but destroys the accounting integrity of the book,corrupts the national morality.As a post-hair state,the national government’s wartime economic policy failed to play a good supporting role in the development of new industrial capital,which is undoubtedly a mistake in the process of economic modernization.