Chen Guangfu, once “China’s best banker” in the Republic of China, owned the first private commercial bank in China, and had a very important influence in China at that time, and was known as “China’s JP Morgan”. J.P. Morgan was the financial giant of Wall Street in the United States. Even the Chinese Communist Party has tried to bring it under its umbrella several times, how did Chen Guangfu choose to do so?
Became a great son of China’s banking industry
In 1909, Chen Guangfu graduated from the University of Pennsylvania and returned to China in the same year. Afterwards, he founded the Shanghai Commercial and Savings Bank (hereinafter referred to as “Shanghai Bank”), the China Travel Service, and the Baofeng Insurance Company, a joint venture with the British firm Swire Pacific. He held important positions such as director of the Central Bank of the Republic of China, executive director of the Bank of China, director of the Bank of Communications, director of the Trade Adjustment Committee and member of the National Government. Especially worth mentioning is that he founded the Shanghai Bank, which is a miracle in the history of modern Chinese finance.
The Shanghai Bank was founded by Chen Guangfu in 1915 with a capital of 70,000 to 80,000 yuan and a staff of seven. Chen Guangfu was the general manager, and he also worked as a salesman, deposit taker, factory runner, money lender, etc. He also held classes for the young bankers at night to teach them. The bank has always adhered to the purpose of “serving the community, customer first”, especially the principle of “one dollar can open an account”, and also committed to the modernization of the bank.
Under Chen Guangfu’s hard work, in just 20 years, Shanghai Bank leaped to become the largest private commercial bank in China, not only with dozens of branches nationwide, but also creating a number of “firsts” in the history of Chinese finance, which had a pivotal influence at that time. It was known as the “Morgan of China”.
Chen Guangfu’s success was due not only to Shanghai’s unique financial environment, but also to his personal boldness and outstanding professionalism. His pioneering initiatives such as “opening an account with one yuan” and “door-to-door service”, implementing collateralized lending of goods, reforming the stereotypes in currency circulation, and starting foreign exchange were all quite remarkable at that time.
During the war, he was appointed to go to the United States and worked with Hu Shih, the KMT ambassador to the United States, to facilitate the “Tung Oil Loan” from the U.S. government to China, which ensured the funding of the KMT’s war effort.
Refusal to participate in the peace talks and the delegation’s suspicion of the Chinese Communist Party
At the end of the war, the Communists launched a civil war that resulted in the defeat of the Kuomintang. In January 1949, Chiang Kai-shek announced his retirement and Li Zongren took over the presidency. As soon as Li Zongren came to power, he decided to make peace with the Chinese Communist Party, and one of his initiatives was to invite several influential celebrities in the country to form a “Shanghai People’s Peace Delegation” to Peking to “knock on the door”.
At that time, Li Zongren heard that the Chinese Communist Party was trying to establish contact with Chen Guangfu, hoping to grasp the economic construction ideas by talking with him, so Li Zongren will be displayed in the delegation candidates, and has twice sent representatives to Shanghai with a personal letter to meet Chen Guangfu, after being refused by Chen, Li Zongren also personally went to Shanghai to convince.
After repeated consideration, Chen Guangfu finally decided not to join this delegation. When asked why, he said that “the Reds declared that they were willing to receive the delegation if it wished to visit Beiping and was not prepared to discuss peace terms”, a statement he did not like. Zhang Shizhao, a member of the delegation, told him that the Communist Party wanted him very much to join the delegation. Chen Guangfu, on the other hand, thought: “The financial situation in Shanghai is so serious that the Communists want nothing more than to get ideas from me on how to make the Shanghai economy work successfully. …… My opinion is that (at this time) I can only rely on the assistance of the United States …… Since the Reds keep attacking ‘American imperialism’, I cannot imagine how I can talk to them …… between me and the Communists lacking the common ground to come together and have discussions.”
After the delegation moved on, Chen Guangfu again explained in his diary why he did not want to participate. On the one hand, he was dissuaded by his friends, and on the other hand, he was suspicious of the Communist Party. Also, he said, “I am not a young man, and my retirement plans have been in the works for a long time. I want to live a retirement life and realize my personal freedom. Although he disliked the KMT, he believed that he had at least enjoyed his personal freedom under the KMT, i.e., the right to refuse the government’s invitation to serve. Whether this freedom could be obtained under Communist rule, on the other hand, Chen Guangfu was not sure; in fact, he was filled with fear of the Chinese Communist Party. It was on the basis of this fear that he eventually chose to leave Shanghai for Hong Kong.
Declining the invitation of the Chinese Communist Party
After the Communist occupation of Shanghai, the Shanghai Bank was still in business, but it was clear that things were different, and the expansion of the power of its staff union took him by surprise. In Hong Kong, Chen Guangfu silently followed the changes on the mainland. Regarding the claims made by the staff union, he believed that they had gone beyond its pursuit of welfare and involved the management of the bank, which required a wealth of expertise. He criticized the staff unions for their half-understanding and self-righteousness, and criticized them for only knowing how to study Mao Zedong’s thought, while limiting themselves to learning some superficial skills about banking business, which “hinders the energy of the people in charge”.
In October 1949, the Chinese Communist Party sent someone to Hong Kong to invite Chen Guangfu and others to go north. He declined the invitation on the grounds that he was old and frail and needed medical treatment in Hong Kong, and in November, the CPC sent another invitation, which Chen Guangfu declined for the same reason. Later, a remittance operation handled by the Shanghai Bank caused him to fear the new regime and eventually deterred him from going north.
Chen Guangfu settled in Taiwan in 1954 and reestablished the Shanghai Commercial and Savings Bank in Taipei in 1965, serving as its chairman.
Conclusion
Chen Guangfu’s wise decision saved him from a disaster. His counterparts who believed in the Chinese Communist Party and stayed on the mainland were not only forced to nationalize their businesses during the “Urban Industrial and Commercial Reform Movement” launched by the Communist Party in 1952, but also lost their lives. Shanghai was the center of this tragic movement. Chen Guangfu should be grateful for his choice.
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