Historical Studies (Chinese Edition)

No.5, 2018

 

The Dispute between Japanese Colonial Cliques over Policies for the Currency Standard in Northeast China (1906-1933) (Abstract)

 

Yan Hongzhong and Xu Chen

 

Japan’s prewar colonial penetration and economic aggression in northeast China was accompanied by monetary and financial struggles and rivalry. From the time when the Japanese colonial forces entered the Northeast, currency policy was torn between adoption of the gold or the silver standard. The perennial disputes and confrontation among Japanese cliques on this issue meant that the Japanese government hesitated over the Northeast currency policy for a long time. After the Russo-Japanese War, Japan had initially planned to use the Yokohama Specie Bank’s silver-backed notes to gain a dominant position in Northeast currency, but this was resisted by the Kanto Government and the Manchurian Railway Company. Japan’s strategy then changed to promoting the gold standard through the Bank of Korea’s gold-backed note issue, which it tried to impose on the Dalian Exchange, but this policy also failed. When, around the time of the establishment of the puppet Manchukuo regime, the dispute on the currency standard was revived, the silver standard retained the upper hand. The paper currency of the puppet Manchukuo Central Bank was still silver-based and unredeemable. It was only after the signing of the Japan-Manchukuo Exchange Equivalence Agreement that the bank’s note issue formally abandoned the silver standard and was incorporated into the yen monetary system. With the outbreak of the total war of Japanese aggression against China, a series of puppet government-issued “Lianyin notes,” “Mengjiang notes” and “Central Reserve Bank notes” came out in rapid succession, in yet another instance of the Japanese yen’s riding roughshod over China’s financial system.