Canteen System Assistance Notes

In October, grain prices in the Northwest, Guanzhong and Southwest gradually climbed up due to intentional or unintentional indulgence. Soon, it filled the previous low prices caused by the large-scale evacuation and the bumper harvest, and began to gradually climb towards abnormally high prices.

The storm was brewing gradually and gradually expanded to areas beyond the Guanzhong Plain - the price difference between grain in Hanzhong, Ningxia and even Suiyuan areas and Guanzhong was enough to make up for the freight, and a directional flow of grain appeared. The national army in Henan Province, headed by Tang Keqin, increased its plundering efforts in Henan Province, where per capita output was low, and concentrated grain in Xiaowanzai R Luohe, where Tang's headquarters was located, waiting for an opportunity to sell it for profit; the grain-producing Sichuan and Chongqing areas also began to see the emergence of merchant gangs carrying grain. Relying on hired bodyguards and swordsmen, they broke through the difficulties and dangers of Jinniu Road and Micang Road, and transported the increasingly expensive rice to the Guanzhong area.

All of this was seen by the Rong family, an important economic player in the entire Guanzhong region.

The Rong family was a national capitalist family that was inseparable from the issue of food in Guanzhong, Hanzhong and even the southwest region. The Rong family's "Qingxin" and "Fuwu" flour mills once dominated the national industries that moved westward. Their "Mudanhe" Bingchuan brand flour was not only widely sold in the Guanzhong region, but also once opened up sales channels to the northwest, Sichuan and Chongqing regions, and was very popular, and even exported to the Southeast Asian market.

Even in this time and space, because the Eighth Route Army controls the export of grain, the Rong family's products are still very popular outside the border areas.

But at this moment, Li Guowei, the eldest son-in-law of the Rong family, was not feeling particularly relaxed. He felt like a glass kettle on an electric stove, sweating profusely, forced to sit on a scalding cushion. He was currently fidgeting at the grand opening ceremony of the "Grain Exchange" in Weinan City.

Dear fellow countrymen and industry leaders, I, Chu, declare that today is an important and joyful day for Weinan City! Today is the first day for our Endeavor Grain Exchange to meet my parents-in-law with pride and confidence!

Li Guowei sat in a royal armchair, listening to a certain Mr. Chu on the stage delivering a speech he had commissioned from some unremarkable gentleman. With his experience, he already knew that exchanges weren't particularly prestigious during the Republican era. In Tianjin and Shanghai, during the Qing dynasty and the recent forex boom, various stock exchanges were everywhere, like a blanket of fungi after a rainstorm.

For example, during the "Silver Exchange Crisis" in the Republic of China, there were four or five rubber exchanges trading silver on one street in Tianjin, which looked like a breakfast shop selling oil tea noodles. Today's so-called Fenjin Grain Exchange is most likely structured in the same way.

Li Guowei asked someone to investigate the "Boss Chu". He was just a landowner who owned over 1,000 mu of land and hundreds of mu of fertile land (referring to irrigated land).

A mechanical mill was built in the local area to produce flour.

It's just some coarse flour without even filtering out the bran - this kind of person is one of those old landlords who has moved away, and his business management level is just so-so.

"Our exchange provides centralized grain trading services for merchants interested in grain trading. Grain traders can use our underground grain storage for product delivery." The old landlord left the stage, replaced by a young man with a slicked-back hairspray, presumably his "strategist." "Boss Chu's reputation is legendary in Weinan, and everyone in the surrounding area can attest to it. You can trade with confidence..."

Reputation......

Li Guowei couldn't help but think of a "symposium" held by the Eighth Route Army in Haojing City about a week ago.

Mr. Ba's vigilance and conservatism regarding food are unusual among ordinary people.

As one of the first ethnic entrepreneurs to invest in the border areas, Li Guowei was one of the few who survived the Eighth Route Army's "investment review process." In the birthplace of "Northern Goods," he invested a portion of his capital and participated in the construction of the Eighth Route Army's Fushi Paper Mill as a non-controlling shareholder. He also invested in a workshop in the paper mill that produced industrial alcohol from waste materials to produce fuel alcohol needed in the border areas. In return,

The Eighth Route Army sent technical representatives to Li Guowei's flour mill and spinning mill.

Help them improve their production skills, increase production efficiency, and let him sell some of the "northern goods" with higher added value made by machinery.

To this end, he overcame all objections at the Rong family shareholders' meeting and used a portion of the profits to fulfill his promise to the Eighth Route Army - to promote the measures he had previously piloted in the Rong family's factories, such as abolishing the foreman wage system, building employee dormitories, canteens, and bathhouses, and to provide "labor protection masks" for employees of the textile mills and flour mills.

Therefore, when the Eighth Route Army held a food "symposium", Li Guowei quickly took his manager and drove to the meeting.

At the meeting, Eighth Route Army representative Ye displayed a stylish line chart showing the price trends of flour and rice in Guanzhong over the past six months, and pointed out the possibility of significant price fluctuations. At the meeting, the Eighth Route Army sincerely urged all attendees to prioritize the people's livelihood and refrain from engaging in inappropriate behavior during this time of national crisis.

The scene erupted in chaos. A wealthy businessman next to Li Guowei angrily told his female companion that the Eighth Route Army was definitely targeting businessmen and industrialists, allocating grain requisition quotas to distribute to the people and win their support. Sure enough, someone immediately raised their hand and asked if the Eighth Route Army was using moral coercion to force patriotic businessmen to sell at a loss.

Li Guowei looked at the business representatives who were actively refuting and arguing, and thought to himself. As one of the three major forces in the country, the Eighth Route Army had the power to beat the National Army and the Japanese Army.

It is also one of the only three forces in the country that controls bulk grain.

The image of presenting facts and reasoning, and being able to persuade without being overbearing, has truly been deeply rooted in people's hearts. If they were facing the "Big Four" of preserved fruits, or the Japanese or the Wang Puppet Government, this group of business representatives would definitely not dare to interrupt and cause trouble in this way.

After all, the reality of rising food prices is here, and the cost prices of flour mills and rice mills are also rising. It seems understandable that businessmen and industrialists abide by market rules.

The area controlled by the Eighth Route Army, except for the small area of ​​Ning Province,

The land is basically barren and the Loess Plateau, so they still have to regularly purchase large quantities of grain from the Kuomintang-controlled areas. If the grain prices really rise to an unbearable level, what will they do?

The Eighth Route Army must always take care of the lives of the people.

"Our boss, Mr. Chu, has a skilled militia protecting us. They can effectively guarantee the safety of the food stored by all traders," the man on the stage assured, patting his chest. "Even if there's a violent disturbance, we can guarantee the food will be safe. Everyone can trade with confidence. We're guaranteed..." He said, as if to hammer out iron.

Grain prices have been trending upward recently, and I think they'll continue to improve! People need food, and with the war on, food is always in short supply! The market outlook is quite optimistic, and investing now will definitely not result in losses!

"We Communists have the unwavering faith and confidence to safeguard the people's food security," said Ye, the Communist Party representative, firmly. "As long as conditions permit, we will do our utmost to prevent the people from starving..." He then changed his tone and continued:

Today's meeting is not intended to make you industrial representatives sell at a loss. We respect market rules, and you are free to sell your products, especially grain, at market prices. However, we hope that you industrialist friends will not forget the fundamental purpose of saving the country and serving the country through industry, and will not follow the trend of rush buying, hoarding goods, and speculating on grain prices.

"Otherwise, something unspeakable might happen."

The scenes in my memory overlapped with the scenes in reality. At the symposium a few days ago, at the opening ceremony of the current exchange, many business representatives, industrialists, and wealthy businessmen present applauded in agreement, with disdainful smiles and smiles from the heart: the disdain was a ridicule for the naive Eighth Route Army, and the smile from the heart was a desire for commercial profits.

Li Guowei suddenly seemed to understand something.

What did rising grain prices have to do with these wealthy merchants? They could certainly afford to eat. And the profit margins from rising grain prices could yield untold profits, far surpassing even mining and factory operations: high returns, short turnaround times, and even very low risk. Because if things didn't work out, the Eighth Route Army, who ultimately took care of the people's livelihoods, would always be there to take over.

The instinct from class took root in his heart and grew wildly. As long as he took this step, he could follow the trend, obey the market, do what he should do, earn high profits, realize capital appreciation, and expand the scale of the enterprise.

But if he did this, Li Guowei felt that he would be unqualified as a person - the Eighth Route Army representative also said that normal sales can be carried out and the market can be followed, as long as there is no hoarding or malicious speculation - if he really had to take away the food from the mouths of the vast majority of farmers at this time of national crisis, he could not convince himself no matter what.

The exchange representatives on the stage were voting, and the process was confusing: first they said "raise your hands if you agree", but no one responded; then they changed it to "raise your hands if you disagree", and no one responded either - so, this "Endeavor Grain Exchange" successfully obtained the unanimous approval of shareholders and opened for business smoothly.

Li Guowei took a deep breath, looked around at the cheerful and revelry crowd, and patted the manager beside him:

"Qu Guanying, let's go, let's get out of here."

Chapter 262 Accelerating the Throttle (⑴) Redstone Capital

Sometimes, it's a good idea to give the car a boost while it's heading towards hell.

Grain prices in the Guanzhong region surged, exceeding 30% of the 1938 benchmark. The upward trend showed no sign of slowing, continuing to climb even higher. For the central government, which had already formulated several "battle plans," this situation did not exceed expectations but rather unfolded precisely as planned—the landlords' classic greed, the fruit-producing rulers' unbridled plunder, and the national capitalists' honesty for money. While there were some "abnormal characters" like Li Guowei of the Rong family, the vast majority of those caught up in this grain crisis were acting out their class-specific scripts.

Therefore, after discussion at the Central Committee, Comrade Liu Helian decided to put the pedal to the metal on this chaotic situation. He firmly believed that in order to completely put an end to the practice of speculating on food and other daily necessities, instead of nipping it in the bud, it would be better to let the abscess worsen and rupture in advance and then perform surgery directly.

In other words, "If you want to destroy someone, you must drive him crazy."

The key to achieving this was to bring in some "water sources" from elsewhere to the already limited Guanzhong grain trading market, flooding this already limited area with capital beyond its capacity. Of course, the border regions wouldn't contribute, and Liu He couldn't even use the pound sterling vouchers from the China Resources system. To attract sufficient capital, he had to find a place with abundant floating capital and speculators, and too much money to go. This looked a lot like the Wall Street of later times, a place unlikely to exist in a war-torn country. But as luck would have it, there actually was a place in the country that met this need.

Magic City.

Contrary to many expectations, the supposedly fallen Magic City was still a thriving city—trade flourished, and life was "peaceful," seemingly unaffected by the chaotic war. Although much of the city had been occupied by the Japanese, the existence of the concessions kept capital activity thriving.

It can even be said that due to the influx of a large number of refugees and wealthy businessmen who fled, the economy of the Concession Magic City reached a high level of prosperity, with great development in industry, transportation and entertainment.

At this time, Shanghai was a undisputed domestic financial center, home to Asia's largest foreign exchange market and the world's second-largest futures and foreign exchange trading center. Indeed, its trading prospered, surpassing even New York, Paris, and Berlin, and trailing only Chicago. To the point where Japanese banks established branches in Shanghai, attracting numerous Japanese businesses, they exchanged increasingly scarce foreign exchange through underground markets to support domestic imports and exports. For this reason, before 1941, the Japanese military was even ordered to protect the normal operation of the concession's financial sector and not interfere.

Therefore, on the mudflats where the great river of the East meets the sea, this city known as "a great place for fireworks, a beach of willows", "Paris of the East at night" and "a paradise for world adventurers" can keep its lights on in a place where "hell lies outside the river". Naturally, it has also accumulated a large amount of floating capital with nowhere to go.

They are like sharks waiting for the smell of blood, eager to move to any profitable place.

"I want to ask you, do you know the Red Stone Company on Huangpu Beach Road?"

"I know, you know it! I know it! Their things, don't be too strong!"

One day in October 2013, it was as if a floodgate had been opened. In the streets and alleys of the Shanghai Concession, a company on Huangpu Beach Road suddenly became the topic of conversation among many Shanghai citizens after dinner. This British and American company called "Red Stone Capital" began to distribute some products with high returns in Shanghai, where hot money was rampant. The products had a very short cycle, stable repayment, and good credit.

Shanghai investors, having experienced the trust and exchange boom, didn't immediately flock in. Highly educated and well-qualified, they had experienced that devastating "trust and exchange crisis," where seemingly prosperous exchanges and trust companies collapsed in a single month. The spectacular collapse of 160 exchanges and eight trust companies in Shanghai during that period made those who survived the crisis nervous and uneasy, even when faced with such a "pie in the sky."

However, when some people inquired about it, they discovered that this "Red Stone Capital" was not like the previous trading companies that only focused on volume dumping and simply defrauding customers. It actually had many strict restrictions, which they said were to limit risks and prevent "our valuable customers from suffering losses."

First, if you want to join Redstone Capital and purchase its excellent "financial products," you must possess sufficient capital and financial resources to qualify as a "qualified investor"—their offerings are not open to the general public. If you're not wealthy enough, sorry, Redstone Capital refuses you entry.

Secondly, even if you meet the "qualified investor" criteria, you can't enter the market at will. You must have a letter of introduction from a senior member and be introduced by someone. To ensure that you are not one of those nasty speculators, you must also go through some review procedures and pay a trading deposit.

Finally, when you join the company, Redstone will also tell you more detailed information about all its products. It seems very formal, so there must be no problem!

What? In the southwest and northwest regions, grain prices have already increased by nearly 100%. Did Red Stone Company start planning long before the price increase?

What? Dozens of grain exchanges have been established in Shaanxi and Sichuan provinces, and the trade is so hot? And Red Stone Company has long participated in the establishment of these exchanges and holds a lot of shares in them, making money every day? What? Red Stone Company is now selling its shares? Oh, in order to expand investment, they are short of money! We are not short of money, we have so many foreign exchange silver dollars,

You can also invest money!

Oh! Red Stone also provides financial transaction channels across the Japanese-occupied areas, offering foreign exchange, silver dollar exchange, and commodity redemption services?

marvelous!

At that time, the Shanghai market was a completely free trading center, foreign exchange market, and a hotbed of speculation. The so-called laws of Guoju were themselves incomplete, completely allowing the existence of illegal banks to be tolerated. The seemingly legitimate Red Stone Company quickly gained a basic level of trust. The information brought to light by these "members" was extremely explosive.

The capitalists and speculators in Shanghai were all extremely shrewd profit-seeking creatures. They quickly used their own information channels to inquire about the situation in Guanzhong, Sichuan, Chongqing, and the Northwest. Given the lag in the flow of information at that time, by the time they found out, the rate of increase in food prices had increased by 120% every day.

Book that jerk! Come on!

For a time, countless wealthy speculators used their connections and found ways to join the Red Stone Company. The price of a letter of introduction was once hyped up to several hundred dollars, but it was still difficult to get one. More guys began to try to find other channels to invest their hot money in the grain market in the Guanzhong area.

At this time, Redstone Capital began to launch its own new products:

Don't you all want to participate in the grain trade in Guanzhong? It's so inconvenient to trade grain every time. Why not try the new grain futures coupons? Simply purchase a grain coupon, and at some point in the future, you can redeem it for a full amount of grain - of course, there will naturally be a discount if you buy future goods now.

Moreover, this voucher is bearer and can be traded!

Why does grain trading require real grain?

Why is it necessary to have real food for food trade?

Although Red Stone's members signed a confidentiality agreement prohibiting the disclosure of internal products and information, when will the capital players, faced with high profits, honestly abide by the rules? Futures are nothing new, but the emergence of this futuristic financial virtualization tactic has sent the entire Shanghai, and even the entire Guanzhong and Southwest regions, capital markets into a frenzy!

Yes, who cares whether this "food futures voucher" can actually correspond to real food?

With food prices rising, future food prices will undoubtedly be higher than today's. Therefore, the price of tradable "food coupons" that can be exchanged for food will naturally rise as well! Even if these food coupons cannot actually be exchanged for food in the future, wouldn't it be possible to transfer them to a third party, such as a downline member, before then?

Aren’t you still making money?

Moreover, the food prices in Guanzhong, Sichuan and Chongqing are still rising! Under the rapid attack of capital, the increase in the single digit can no longer limit the price of food. Take the listed price of wheat in Weinan, which changes three times a day, as an example. In early November 1939, its price had risen by more than 200% and was rapidly rushing towards 300%.

The landlords watched the total value of grain on their books continue to rise, the capitalists watched the food coupons in their hands continue to increase, and the food departments, military rear offices, military academies and even education departments in the preserved fruit sector quickly progressed from selling their own stored grain and military rations for profit to hoarding grain for sale, and even increased the proportion of plundering, inspected grain stores, artificially created local food shortages, and actively purchased "food coupons" to seek more profits.

After all, with food prices expected to continue to rise, whoever invests more capital is likely to earn more in the future. If things really don't work out, why not just sell it to someone else?

At this time in the market, no one cares whether the final "Eight Route Army Buyers" will take over the grains that have long deviated from their actual value. Everyone is trying to invest their capital in the grain speculation in Guanzhong and Sichuan and Chongqing regions, and expecting their profits to increase dramatically overnight and achieve the peak of their lives.

It's not that there aren't smart people who are concerned about the current situation, but their voices have long been suppressed by the instinct to make money. Furthermore, a large number of unqualified investors are being "blocked out" of the market, suffering from insufficient capital and unable to participate in this feast.

However, when it comes to interests, capital will always act according to the predetermined program.

In Fushi, in the border region's economic warfare command center, Accountant Chen finally received a piece of intelligence from the business community.

"Siming Bank and Guohuo Bank have entered the market, and leverage has been increased!"

Chapter 263: Accelerate (⑵) The Last Carnival

Futures, according to traditional understanding, are a standardized contract signed now and executed in the future. Its original intention was for demanders and suppliers to sign a contract for bulk commodities to lock in future transactions. Holders can hold the futures until maturity and then buy or sell the commodity at a predetermined price, thus avoiding risks.

This is a reasonable and very useful financial mechanism and tool. However, in a volatile market, the risk aversion effect obtained by holding futures until maturity is far less convenient and quick than directly reselling futures contracts to obtain capital gains.

Because, as long as there are genuine buyers and sellers of goods in the market, and the futures market itself is free, participants who have no demand for the goods themselves but simply want to profit from the spread will participate. They can speculate and trade freely, as long as they sell the futures contracts to those who truly need them before expiration to close their positions.

However, even so, futures trading is a reasonable operation in the modern financial market - but, by the time of the Republic of China, it was synonymous with speculation and fanaticism most of the time.

The Qing Dynasty's "rubber craze," Tianjin's "silver crisis," and Shanghai's "credit crisis." This series of economic turmoil, the first of which poured a cartload of mud on the Qing Dynasty's coffin, the second detonated a ton of explosives that undermined the value of the legal tender, and the third reduced Chiang Kai-shek to penniless ruin, leaving him, Dai Chuanxian, and Chen Zutao unable to even scrape together 15 yuan. These painful lessons taught all market participants how much speculative capital was lurking in this seemingly impoverished and backward ancient country.

So, did the regulators of the Republic of China learn their lesson and try hard to regulate this immature and chaotic market? Answer: No, they got into trouble of their own accord.

Siming Bank and China National Bank, two commercial banks from the Republic of China, aren't as well-known as the time-honored Bank of China and Bank of Communications. However, the people behind them are no strangers: the Kong family, known for their "Big Kong and Little Kong," and the Song family, known for their many important wives.

In 199 AD, when floods hit North China and grain production in Sichuan and Chongqing decreased, the Kong family instructed their subordinates, the Siming Bank and Yu Hede, to smuggle Vietnamese rice into China through the tax-free "refugee relief and Red Cross" channels, and sold the grain that was supposed to be distributed as relief on the black market at a high price, making a lot of money.

The Song family spearheaded the issuance of preserved fruit bonds starting in 29, a major financial backer of the Republic of China government, and the mastermind behind the infamous "Northern Four Banks Cotton Yarn Case" of 37. In that financial scandal, the Song family leveraged the power of the Military Control Commission and futures trading to fuel a wave of speculation, severely damaging the coffers of the "Political and Academic Faction," another major force in Republican politics. They not only profited but also defeated their political enemies.

Therefore, at this moment, the Kong and Song families not only control a large amount of Vietnamese rice floating on the sea, but also have their own banks, which can conduct legal fund operations.

Faced with the increasingly prosperous Guanzhong grain speculation, how could they resist?

Start?

Of course not!

As commercial banks, Siming and Guohuo Bank acted directly and aggressively: they offered a higher return than Redstone Capital, with no barriers to entry, welcoming everyone to participate. Furthermore, they offered an incredibly tempting offer: you want to invest in this grain trade, but don't have the money? No problem! Provide a little collateral, accept a higher interest rate, and we'll lend you the money!

So, where does the loan money come from?

Kong and Song, the happy enemies, naturally would not spend too much capital. Apart from their own operations, they quickly came up with a new idea with their full skills in market operations: just use the food coupons purchased through speculation, or even the loan itself, as collateral to borrow money from speculators.

In this way, debts that originally needed to wait for time to be repaid and assets that needed to wait for market changes to be sold can immediately become liquid cash, which can be used to continue investing and lending. How wonderful!

Moreover, when the rice from Vietnam arrives, the Kong family can slowly sell the stored rice at a higher price through Yu Hede, making a double profit!

The intervention of formal commercial banks dealt a heavy blow to the prosperous "Red Stone Company". The Xiangren Company, whose customer base was severely hit, was unable to compete with these local tyrants and could only gradually give up its customer base, stop there, and "exit in disgrace."

Hongshi collected almost 150% of the profits and a large amount of fees and ran away. The speculative demand of the hot money in Shanghai was then taken over by Siming and Guohuo Bank. They also had the ability to transfer funds from Shanghai to Guanzhong, and could directly dispatch the army and secret service departments of the Republic of China for assistance, which was more efficient.

According to 40 years of statistics, there are 30 billion French francs of hot money active in the Magic City. You can imagine how great their speculative demand is. Soon, in addition to the Siming and National Banks, which were one step ahead, Du Yuesheng, who was transferring funds to Wan Chai, rushed to join the speculation with his Commercial Bank. According to statistics from the future of this time and space, at least more than 10 billion yuan of hot money, through these three banks and the accumulated leverage, poured into the Guanzhong area.

Combined with the existing capital in the Guanzhong, Northwest, Sichuan and Chongqing regions, the funds entering the market have far exceeded the original market capacity of the Guanzhong region, and almost all of them are supported by the grain prices that have risen by 400%.

Even as virtualization and futures contracts that didn't correspond to actual grain became popular, the Guanzhong region's market gradually became unable to accommodate such a surge in capital. Consequently, the hot money that had entered Guanzhong began to exert a "spillover effect," seizing other grain-related assets for speculation.

In just over a dozen days, millet and sorghum in Shaanxi Province began to replicate the soaring prices of rice and wheat. As a result, the "Victory Discounted Bonds" sold by the Eighth Route Army also began to sell at a premium. This "local version of ETF" (open-end fund), priced based on the Eighth Route Army's corn, wheat and other grains, was able to raise more funds for the border region with a lower face value. The border region quickly recovered a lot of hard currency and distributed it to organizations across the country for funding.

By the way, even the paper-wrapped biscuits made by Factory Director Wang Zuomin began to increase in price. Being a good businessman, he secretly sold raw flour while producing biscuits and selling them as "substitute food", making a lot of money.

The entire Guanzhong region has become an ocean where capital flows freely.

New exchanges were established to buy and sell grain, and to speculate on grain futures that did not correspond to actual goods; new loans were secured with futures certificates, and new loans were used to purchase grain or futures certificates, artificially creating a food shortage... An almost perpetual cycle seemed to have been established, and the situation of perpetual increases in grain prices seemed unstoppable.

Of course, it's wartime now! Food is a scarce commodity. As a necessity, it's normal for the price to increase a little! Even if no one can afford it in the end, the Eighth Route Army will still have to buy it. After all, they will take care of human lives.