Preface:
Continue with the previous article, about a real case of a tung oil comprador businessman in modern Chinese history. Many people are curious about the subsequent development. The editor sorted out the information overnight to get the exciting content of this article. In fact, capital development is nothing more than the process of accumulation, competition, monopoly, etc., and Yirui Commercial Bank is the same; with the support of Western capitalism, the accumulation of original capital was quickly completed, and in less than ten years, it monopolized the tung oil market in the middle and upper reaches of the Yangtze River ; in this process, Yirui adopted very clever competitive methods, and there is still something worth learning even if it is put to this day.
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Yirui Trading Company, after obtaining the financial support of the American Shimei Foreign Bank, quickly expanded rapidly in Sichuan, Hubei, Hunan and other tung oil production areas, establishing a semicolon integrating tung oil acquisition, refining, transportation and storage, and transporting about 20,000 tons of tung oil to the United States every year, accounting for about 50% of the US market. Since Yirui Trading Company took the lead in proposing the "purchase and commission" business method, all the procurement funds are under the responsibility of foreign banks, avoiding the drawback of commodity trading of taking up funds.
In the following years, with the support of funds, Yirui relied on flexible management to successively annex many private oil banks in the Yangtze River Basin, squeezed out the branches of the American foreign banks in Sichuan, and destroyed the Central Plains Company with the warlord Wang Lingji as the background. The tung oil business was spread throughout the middle and upper reaches of the Yangtze River; Yirui's assets also increased from the initial 8,000 yuan to more than 2 million yuan, nearly 300 times. We can use an example to see the status of Yirui Commercial Bank in the tung oil industry.
In order to facilitate the plunder of China's economic resources, foreign forces established an import and export chamber of commerce, which contained many foreign companies in charge and Chinese compradors who served them. Yirui's boss Li Rui is also a member of the circle. At that time, Amway Foreign Company purchased a batch of tung oil in Sichuan. Because the water level of the Yangtze River was too low, it could not be transported out. If it was purchased from Wuhan, the price would be too high and it would lose money. The most important thing was that it would violate the deadline and lead to breach of trust. Amway's head Mark asked Yirui Trading Company for help, and Li Rui immediately allocated 300 tons to solve his urgent needs. With the support of tung oil, Yirui immediately extended his hands to domestic trade, such as cotton yarn, foreign oil, transportation, etc. According to Yirui statistics, the turnover of domestic trade at that time was no longer inferior to that of tung oil business. In terms of monthly position allocation, the inflow and outflow of tung oil exports and domestic trade procurement could almost match. The merchants could adjust the exchange rate themselves without going through the bank, which stimulated exports and domestic trade (the profits of tung oil are high, and the exchange rate of can be lowered, thereby lowering the threshold in terms of prices and transactions. In other words, using exports to drive domestic trade). By around 1932 (Yirui Trading Company officially operated around 1928), cotton yarn alone made a profit of 500,000 in three years, and the profit was quite considerable. For this reason, the cotton yarn mill specially provided Yirui with 1,000 bags as turnover deposit (that is, use it at any time, without waiting).
Yirui Trading Company has attracted the attention of the US officials. In order to protect the immediate benefits of American businessmen, the Embassy in China also specially ordered the warships that it would protect Yirui's cargo ships and the semicolons along the coast at appropriate times, and provide military communication facilities in special times to ensure Yirui's connection with the US market, so that its transactions of tung oil and other commodities are at the forefront in terms of intelligence.
At that time, the economic invasion of China by Western countries was becoming increasingly deepening. In order to grasp the economic situation of China, the consulates in China regularly convened their own merchants to report on the situation. Tung oil, as an important raw material for industrial production, was their focus. At first, the report on tung oil was handled by the American Bank. Later, Yirui Commercial Bank squeezed it out, and the US Embassy asked Yirui to come and report it.
Yirui Business has been committed to obtaining more trust and protection, actively reporting industry data to the US Embassy, and even handing over all confidential information, such as "html Hankou Inventory Table at the end of June" and " Monthly Export Statistics Table ". The former is an industry secret, which is related to the future market trend, while the latter's statement comes even more strangely. The statement includes the export date, product name, export company, quantity, cargo ship number, destination, etc. It is obvious that this is an official data, and it is intriguing how it comes.(A reader reaction, in the previous article, I can't see which aspect of Yirui Trading Bank reflects the characteristics of the comprador bourgeoisie in the previous article. I believe these are enough to explain it)
As capital gradually grows, Yirui Trading Bank gradually forms a monopoly trend. As a representative of the national bourgeoisie in modern China, they did not slow down their pace of progress, nor did they ignore the potential survival danger. In order to develop for a long time, they took the following measures to consolidate the competitive advantages in the tung oil industry:
first, reduce costs, at that time, commodity transactions needed to borrow from banks, with interest of about three cents. There are two main items of Yirui loans. One is that it can be loaned without interest by Shimei Bank's letter of credit. This amount is dedicated to tung oil purchase; the other is the packaged loan (exported foreign exchange for the domestic fiat currency loan) given by the bank, which is used for the daily operations of the merchant. Calculated by three-point interest, if you borrow one million from a bank, you need to pay 360,000 interest (may be calculated monthly, not compound interest), which directly increases the cost.
In order to solve this problem, Yirui negotiated with Citibank , using Shimei Bank's light-vote letter of credit as a guarantee and at the cost of stable monthly foreign exchange exports, they were allowed to reduce their interest rates to five cents. At that time, Bank of America 's letter of credit has a very high value, and US dollar foreign exchange is a hot spot for major banks (Shanghai banks exchange their local currency for foreign exchange to increase their competitive advantage). Citibank saw that Yirui had nearly 20,000 tons of tung oil exported every month and the foreign exchange transaction volume was hundreds of thousands, so he happily accepted this condition.
Yirui Bank's move attracted the attention of Shanghai Bank (eye red foreign exchange). Chairman Chen Guangfu personally found Yirui's boss and asked to transfer part of the foreign exchange to Shanghai Bank. The advantage was that the interest rate for loan could be reduced to 7%5 , which was the lowest among Chinese banks at that time. In order to strengthen ties with the government, Yirui transferred some of his business to Shanghai Bank. By this calculation, if you borrow one million from each bank, Yirui Commercial Bank will save nearly 600,000 yuan in interest every year.
Second, set up semicolons in various places. Yirui has successively established oil banks in the main distribution centers of tung oil in Sichuan, Hunan and Hubei provinces, set up branches in Chongqing and Changde and , and set up money shops in Changsha; after obtaining a low-interest loan, it will immediately increase the purchase price to win customers and expand the supply of goods, and ensure that the United States' Shimei Foreign Company has sufficient spot sales, with source of goods and terminals, and business can be continuously flowing. By the time of 1937, before the full outbreak of anti-Japanese war , Yirui had set up his branch in Hong Kong and began to open up other international markets.
Third, expand oil storage and customer storage. At that time, an oil tanker could load three to five hundred tons, while Yirui's oil storage pool in Wanxian could store 3,000 tons. Such places are available in all tung oil production areas. Therefore, in addition to refining it itself, Yirui can also inventory and process it on behalf of customers. In addition to charging a part of the fee, as a holder of commodities, you can provide the market with a source of goods, control prices, and accelerate the flow of tung oil (just add to the customer later), which is very beneficial to the business development.
, fourth, kill the price and tung oil production peak is the cheapest time. In addition, oil tankers are inconvenient to enter and exit during the dry season of the Yangtze River, and it is also a low price period. Yirui can take the opportunity to stock up at a low price without having to bear the risk of occupying funds (the letter of credit is issued by Shimei Bank, and the interest-free loan is available), and then sell it at a high price in the coming year.
Fifth, the power to load ships is given priority. The competition for Yangtze River Shipping is very fierce, but imperialism has the privilege of priority navigation. Through the relationship between Shimei Bank, Yirui can hang the American flag and enable tung oil to be shipped out as quickly as possible. This privilege cooperates with Yirui's goods to checkout (at that time, other businesses settled on an annual or important holiday) attracted the attention of many transportation companies. Even if the cabins are tight, Yirui will not be able to find the ship. Some transportation companies are even willing to sign a secret agreement with Yirui to reduce transportation fees by themselves.
In addition, at that time, Mobil, the United States had a dedicated line to transport kerosene to Sichuan. In order to improve efficiency, they usually return to the empty capsule. After Yirui discovered it, it immediately persuaded them to pull Yirui's tung oil on the return trip, and the price was 30% cheaper than ordinary transportation. The export volume of nearly 30,000 tons per year can save a lot of transportation alone.
Yirui has been continuously compressing costs and building high walls. Others can't cross his cost line at all, so they firmly control the market. As of 1938, total assets had grown rapidly by 300 times, and his "master" Shimei Bank rose rapidly, and the stock price increased by 20 times. At that time, general comprador companies were only responsible for purchasing from the place of origin in business relations, and foreign investors were responsible for the other end. Although Yirui nominally used Shimei Bank's letter of credit to purchase, it seemed like an agency service, but in fact, they were responsible for procurement, production, transportation and customs declaration and export. In addition, they independently accounted for in US dollars and , it is not an exaggeration to say that Yirui is a private enterprise.
Yirui Trading Bank's development achievements in the past decade were seen by Shimei Bank. Smith, the head of Shimei Bank, was deeply happy for his support for Yirui. At the shareholder meeting every year, Yirui's performance made him show off; he accompanied Yirui's head throughout the journey when he went to the United States. On the one hand, it was out of personal relations, and on the other hand, he was afraid that other American banks would take advantage of the situation. If China's overall environment can continue to stabilize, Yirui Trading Bank, as a representative of the Chinese national bourgeoisie , would have been able to leave China; however, after the outbreak of the full-scale war of resistance in 1937, domestic trade plummeted, and then Shanghai fell, and export business also declined sharply. Later, it hoped to transfer land transportation through shipping and leaving Guangzhou through Changsha, but it was unsuccessful. Wuhan was lost in 1938, and Yirui's business fell into a state of suspension of production. Nearly 3,000 tons of oil stored in Chongqing could not be transported out. Later, half of it was transported out under the negotiations of the Americans, but most of it was burned out when the war was encountered on the way. The remaining ones were transferred to Changsha, but the Kuomintang seized strategic materials on the grounds that they were controlled by the state. The tung oil left in Chongqing and other places did not escape this fate.
After the victory of the Anti-Japanese War, although Yirui Trading Company was able to resume work briefly, the bureaucratic capitalism of was prevalent at that time. They colluded with imperialist consortiums to forcibly monopolize the tung oil industry and exclude local industries. Sichuan tung oil company, as a representative of local enterprises, did not escape the fate of bankruptcy.
After the outbreak of civil war , the currency depreciated too quickly, and all the early savings turned into blank paper. However, Yirui Commercial Bank has not stopped its operations and instead adopted the method of settlement by goods, that is, the fiat currency obtained after the tung oil is sold is immediately exchanged for goods, and the amount of goods shall be determined by the settlement, which has barely persisted for a while. Fortunately, the credit is good, and the bank supervision has given it a certain amount of easing, which has allowed it to survive the most difficult moment.
After the national liberation, the founder of Yirui Trading Company chose to stay. After socialist transformation, he gradually resumed production and operation in a public-private joint venture.
