O ccasion al Paper Series in I A sian Business H istory

Asian Business History Centre • History Department, The Umversity of Queensland

Occasional Paper No: 1 "Overcoming Risk: A Chinese Mining Company Düring the Decade"

^ssociate Professor Tim W right (Murdoch University) 3790 . 0 3 The Asian B usiness History Occasional Paper Series: no3 .1 4o. 1 Tim Wright, “Overcoming risk: A Chinese Mining s Company Düring the Nanjing Decade” s h -0.2 Ho Hon-wei, “Gambling Operations in Late Qing Guangdong”

*o.3 business David Faure, structure, “The politicalChinese SBourgeoisietatus and the Reconsidered: emergence of social dass”

The University of Queensland Social Sciences and Humanities Library

Asian Business History Monograph Series: Professor Han-sheng Chuan (trans. Erik Winberg), “ and the World System: Silver and Maritime Trade” PREFACE

The Asian Business History Centre was established in 1996 in recognition of scholarly growing interest in the business traditions of Asia. Its primary aim is to strengthen links with international research centres as well as with the business community in both Australia and Asia. Lecture series and conferences sponsored by the Centre provide a forum for our staff, students and international affiliates. The Centre supports an Occasional Paper series on Asian Business History and the Asian Business History Monograph series. Both series will be of particular relevance to the business and academic communities involved in or looking to expand their activities in Asia.

The Asian Business History Occasional Paper Series was established in 1998 to publish some of the papers presented at The University of Queensland Public Lecture Series on Asian Business History. A full list of lectures delivered follows this paper.

Occasional papers in Asian Business History are published for the purpose of academic discussion. Papers should be regarded as preliminary work in progress. Suggestions and comments should be addressed directly to the author.

Chi Kong Lai Editor and Director Asian Business History Centre The University of Queensland

i Overcoming Risk: A Chinese Mining Company During the Nanjing Decade

Tim Wright Murdoch University

China’s business environment has for most of the late nineteenth and twentieth centuries has been notoriously risky and unreliable. Over the same period, Chinese companies have often engaged in highly speculative and gambling form of management,1 and in many cases the gamble has not come off, resulting in high rates of failure and turn-over. Nevertheless management practices essentially reflected the objective environment; it is much more questionable whether there was anything fundamental in Chinese business practices which led to such a speculative orientation.2 When conditions were appropriate Chinese companies were able successfully to adopt “normal” patterns of capitalist business management, and in general both Western and Chinese scholarship is increasingly focussing on die successes of Chinese capitalism. This paper will examine these phenomena through an analysis of the history of one Chinese company during the period of the (1927-1937). If one was to look for a period of recent Chinese history when business might have gone beyond the “gambling” phase and entered a period of institutionalisation, the most likely candidate would be the 1927-1937 period. The partial reunification of the country and reforms in such previously problematic areas as currency all attempted to lessen the risks, and the element of gambling, in business ventures and to introduce a degree of predictability.3 It would however, be quite wrong to imagine that that process came anywhere near completion in the Nanjing decade and both political factors — the assertiveness of the Nationalist state, the Communist-dominated labour movement and the threat from Japan— and economic factors, predominantly the impact of the 1930s world depression created a hazardous environment for business operations.

l This case study examines the success of one Chinese business enterprise in dealing with these risks. That success was exemplified by the strong growth and profit record that continued throughout the period — in contrast both to the situation of coal mining in many other countries and to the general picture of economic decline or “bankruptcy” painted for the Nanjing decade. It argues that the most serious risks faced by this industry in the 1920s and 1930s were political, and that a great deal of the time and effort of the company concerned had to be invested in overcoming those political risks — in this context links to the state machine had always been important for Chinese companies (this is not to say that the situation was different elsewhere). However, although the company was aware of the possibility of rent-seeking, and attempted to gain what privileges it could, its main aims in establishing links with the state were defensive. Thus its greatest efforts were directed into “regular” attempts to reduce costs and compete in the marketplace. In none of this does the paper attempt to argue that Zhongxing was “typical”. As in any economy, there was a wide range of business responses to external risk, and of the degrees of success of such responses. Certainly many companies were less successful than Zhongxing in managing risk. But neither was Zhongxing unique: many other Chinese companies continued to grow and to make profits through the 1930s, and the macro figures confirm that any overall paradigm of failure is inappropriate.

Introduction: The Historiography of Modern Chinese Business

Over the past fifteen years or so there has been a dramatic change in the main frameworks for the study of Chinese business history; in the broadest sense, this change has been from an emphasis on failure to one on success. For most of the 1950s, 1960s and 1970s, business history studies were dominated in the West by modernization theory, and in China by Marxist/Maoist orthodoxy. Both frameworks focussed on the failures and backward nature of Chinese capitalist business in the late nineteenth and early twentieth centuries.

2 Modernization theory postulated a series of dichotomies between “traditional” and “modem” societies, and emphasised the degree to which pre-revolutionary China remained within the “traditional” paradigm. The classic work was Albert Feuerwerker’s brilliant study of the China Merchants Steamship Navigation Company in the late nineteenth century, which concluded that the Company’s operations ended in failure at least partly because of “traditional” characteristics such as nepotism, insecurity of merchants, and the overwhelming attraction of the bureaucratic career.4 While few studies of twentieth century Chinese business had the clarity and power of Feuerwerker’s conclusions, it is not difficult to find Western studies which stress business failure and inability to deal with external risks. A leading example is Marie Claire Bergère’s study of the cotton textile industry in the 1920s.5 While the Chinese agenda was different, the conclusions were surprisingly similar. The political imperative for the Communists was to show that capitalism was a dead end for China and the country could not modernise and industrialise without a socialist revolution. Thus emphasis was again laid on the stagnation and bankruptcy of the economy as a whole and the industrial sector in particular, and on the inability of Chinese capitalist business practices to meet the challenges of external risks in the form of threats from “imperialism” on the one hand, and the role of the state (“bureaucratic capitalism”) on the other. Classic expressions of this view include the early 1950s textbook by Meng Xianzhang,6 and the later orthodox compilation of lectures on modem Chinese economic history from Hubei University.7 From the 1970s several factors outside the field compelled a réévaluation. In the West, modernization theory was under criticism, but at the same time increased faith in the market system directed attention to the successes as well as the failures of China’s market economy in the pre-war period. In China, the initiation of the process of economic reform at the end of the decade involved the adoption of “capitalist” methods of economic management. Thus there was a greater interest in the pre-war capitalist experience as a possible

3 source of lessons for the present. At the same time, the imperative to justify the necessity and inevitability of the Communist revolution was lessened, though not removed entirely. In both China and the West, these deeper social forces were complemented by changes within the area of scholarship, as researchers compiled quantitative data on economic change in that period and concluded that the old picture of failure was not borne out by their figures. Leading die Western réévaluation of the performance of the economy as a whole has been the work of Thomas Rawski, whose 1989 work put the strongest case so far for growth over the whole economy and strong growth within industry.8 Among business studies, Sherman Cochran’s work on the Nanyang Brothers’ Tobacco Company stands out in giving much more positive evaluation of Chinese private business acumen in the early twentieth century.9 My own work both on the coal mining industry as a whole and on individual enterprises has contributed to the same réévaluation. Within China, too, scholars have reinterpreted both the overall quantitative picture and — even more clearly than their Western counterparts — changed their judgement of business practices.10 Leading the quantitative work on the economy as a whole have been the Academy of Social Sciences and the Nankai Institute of Economics. Their work has shown that the economy, especially the industrial sector, underwent continuous growth through most years the 1920s and 1930s, so that any conclusion of failure would be inappropriate.11 Chinese studies of business practices have likewise discarded the old stereotypes and now argue that prewar capitalists were eager to employ modem management methods and were successful in establishing systems to deal with external problems.12 This paper, therefore, by focussing on a successful company, contributes to this réévaluation, and points to the way that at least some Chinese companies did manage to succeed despite of the risks inherent in the environment.

4 Chinese Capitalism During the Nanjing Decade

The first section of this paper attempted a brief overview of the development of the historiography of modem Chinese business historiography. The history of the Nanjing decades revisits some of the general issues, while itself throwing up new and specific questions. Many scholars have suggested that, while Chinese business was relatively successful in the period of the 1910s and early 1920s, when the hand of government was relatively light, that success ended with the accession of the Guomindang government in 1927. Thus Marie-Claire Bergère defines the “golden age of the Chinese bourgeoisie” as ending in 1927, ushering in a period of decline.13 Mao Dun’s famous novel Twilight eloquently depicts Chinese business or capitalists as unable to cope with the business and political risks it faced. Squeezed between the power of foreign business on the one hand and the emerging workers’ movement on the other, the main protagonist is forced into bankruptcy.14 Mao Dun’s work has long represented an orthodoxy, certainly in China, about the failure of Chinese business in the 1930s: some growth may have taken place in the 1910s, but from the 1920s and even more in the 1930s, the capitalist sector declined into “bankruptcy”. Indeed it was, of course, written with precisely that purpose in mind. Four maj or external problems dominated the environment for Chinese business during the Nanjing decade, and exposed companies to a series of risks — three mainly in the political area, one in the business area. Those four problems were: increased assertiveness on the part of the state; the threat from Japan; problems with the labour movement and the Communist Party; and the impact of the world depression. One of the key ways in which the business environment changed around 1927 was, as identified by Bergère, the emergence of a much more assertive state. While comparisons with post 1949 China used to direct attention to the relative weakness of the Guomindang, the fact remains that the process of state building received a major new impetus from the Guomindang and as a result the Chinese state

5 during the Nanjing decade was both more assertive and more able to impose its will than had been central governments for at least a couple of decades. Many scholars have seen this state as aggressively promoting its own interests regardless of, and to some extent at the expense of, those of the capitalist sector. Douglas Paauw in a seminal early article put this view strongly,15 and it has, since been confirmed by the work of Parks Coble as well as that of Bergère herself.16 Chinese scholars in particular have conceptualised this issue as one of “bureaucratic capitalism” and the “four great families”, arguing that there was a strong tendency towards monopoly already exhibited in the 1930s and that increasingly the top state officials were getting their hands on private enterprises.17 Cochran interprets the decline of the Nanyang Brothers Tobacco Company in the 1930s in terms of the attempts by Song Ziwen to gain a controlling interest in the firm.18 Nevertheless, this view has not gone unchallenged. Those involved with the Nationalist government have argued that the government’s efforts to promote the economy were genuine, and did not represent an attempt at monopoly.19 This is also, of course, the predominant interpretation on .20 Even in China, the quantitative study from Nankai referred to earlier states unambiguously that by far the largest part of the economy in the 1930s was still privately owned, and any trends to state capitalism were still in the future.21 Another paper argues that the major Nationalist reforms, such as the nationalisation of the banks, were essentially measures to provide the necessary basis for capitalist expansion.22 In the present paper there is a further reason for caution, in that most of the studies that emphasise the increased role of the Nationalist State focus on Chinese business in Shanghai, which had been protected from the impact of the warlords but which found the new government much more able and willing to impose its policies in the city. Most coal mines were, however, in north China, where they had been very much exposed to the arbitrary exercise or warlord power, and to the disruption war and warlords brought. In that case,

6 the advent of stronger central government brought a welcome degree of greater stability, while the fact that its writ did not fully extend to the north lessened the threat it posed. “Imperialism”, in the form of the world economy and of foreign enterprise in China, had long been seen as the principal contradiction facing Chinese capitalism. Chinese companies were unable to compete with either imports or the products of foreign companies in China.23 But in the Nanjing decade this problem became intensified in the form of Japanese pressure on China. Japanese aggression in the North-east both had direct impacts on Chinese- owned companies in the area, with several coal mines, for example, being in practice confiscated.24 The loss of the Northeast also deprived many Chinese industries of key markets, and the flow-through effects of that loss were given by many observers equal prominence with trends in the world economy (and with the Yangzi floods of 1931) in causing the downturn in the Chinese economy during the 1930s. This interpretation, too, is open to some question. While there were no doubt some adverse effects, China’s perception of facing an overall threat to its national survival certainly coloured the observations of observers of the economic scene. As we shall see, the rapid industrialisation and rearmament of Japan also offered some opportunities to Chinese companies: most obviously it underlay the expansion of industry in the Northeast, but companies within China could also benefit. Clearly, however, in hindsight the threat from Japan eventually overwhelmed most of the Chinese economy. Less prominent, for obvious reasons, in Communist writings, but certainly of major concern at the time, was the disruption threatened by the workers movement and the need for Chinese capitalists to adopt measures to control it. The Nationalist period is generally seen as a relatively quiescent one as far as labour is concerned, with no Communist-inspired “high tides” of the sort that happened in 1922 and 1927. Nevertheless labour militancy was an issue of continuous concern for company managers, impelling them in some cases to make otherwise undesirable alliances with criminal

7 gangs.25 In addition, the situation in north China was again somewhat different. There in the mid 1920s warlord suppression had almost removed the threat of industrial activity in the region. There, unlike Shanghai, the arrival of the Nationalists, even after the purge of the Left Wing, was seen more as indicating a degree of liberation for organised labour. Finally, the 1930s was the period of the world depression. Although the effects of the world depression on China’s industry are very controversial, with Loren Brandt in particular arguing that China did not experience anything that could be called a depression,26 at the time it was seen as a major crisis. While it appears certain that overall industrial output continued to grow throughout the period usually identified as the peak of the depression in China (1933-1935), some indicators and some industries were hard hit. Among the major industries, silk was most severely hit, with a devastating decline both in rural and in urban production. More generally, while output continued to grow, profits plummeted: the cotton textile industry faced a crisis of liquidity in 1935, while in coal mining the profits of the main mines involved in the coastal market (especially the Sino-British Kailuan Mining Administration) deteriorated sharply.27 External pressures such as those outlined above have been the focus of most discussion of Chinese business in the 1930s. However, some scholars have gone on to argue that Chinese business, with backward and often corrupt business practices, was poorly equipped to deal with the risks, and in fact its own incapacity contributed to its weakness.

The Origins of the Zhongxing Coal Mining Company

From its origins, the Zhongxing Coal Mining Company exhibited a number of features which made it in some respects representative of private Chinese companies in its period, and which were later also to be seen in the 1930s.28 Zhongxing was originally established by followers of Li

8 Hongzhang, linking with local mining interests who had been active in the area for centuries.29 It was located in Yi xian in southern Shandong, close to the Grand Canal, and later to the Tianjin-Pukou railway. Its growth was slow in the late nineteenth century until it began its first period of expansion in the early twentieth century, led by Zhang Lianfen and using German technology and technicians.30 A major mining disaster and the death of its manager in the mid 1910s interrupted the growth, but the mine took advantage of the boom in the industry during and immediately after the first world war to post rapid output growth and record profits (see Chart 1 and Table 1). By the early 1920s it was the largest purely Chinese owned coal mining company in China and a major representative of national capital in North China. Throughout this period the company attempted to minimize political risk by maintaining strong links to the state machine. Its earliest manager was Dai Huazao, a close aide of Li Hongzhang, and indeed Li was central in the development of modem mining in Yi xian.31 At the very beginning of the twentieth century, the company was reestablished in the aftermath of the Struggle for Concessions by Zhang Lianfen, a senior official within the Province.32 Zhang provided close ties with the provincial bureaucracy, ties which were strengthened by the substantial stake owned by the former governor of Shandong, Zhou Fu.33 The importance of these ties was seen when the official sent to investigate complaints by a small mine against encroachment by Zhongxing turned out to be Zhou Xuexi, son of Zhou Fu.34 Changes in Chinese society and politics in the first half of the 1910s were reflected within the company, but the new management was also closely linked to the state machine: the former president became Chairman of the Board, While the leading role in running the company was taken by Zhu Qiqian, who also served as negotiator on the northern side in the 1919 peace talks.35 Many other warlords, the men who controlled the area in which Zhongxing operated and the railways which it used to ship its coal, also held shares in the company.36

9 Having said that, Zhongxing was not in the twentieth century a state-owned enterprise. It was clearly a private company in which individual officials or warlords held an interest. Indeed, Zhang Lianfen gained fame (or notoriety) when he was said to be the first official to resign his position in order to devote himself full-time to running a private company:37 he also advised the young Ye Jinggui to choose between an official career and one in business — to try to combine the two was to court disaster.38 As such Zhongxing became one of the private companies which most successfully adapted to the risks of China during the warlord period. Its output grew to a level where it was among the three largest private Chinese-owned coal producers, along with the Pingxiang mine in Jiangxi and the Zhongyuan mine in Henan; and in some years in the early 1920s Zhongxing was the largest producer. Moreover its profits were more healthy than either of those two mines. Table I shows a very healthy level of profits indeed in the early 1920s. However, in the late 1920s the company fell victim to two types of political risk, as its earlier successful strategy of risk management backfired, and Zhongxing was forced into closing the mine and virtually into bankruptcy. Firstly, the company fell victim to China’s political instability through the disruption of its railway transport links. For Zhongxing, as for the all coal mines, transport of their coal to market was absolutely crucial to their operations, and for most mines the railways were the most important mode of transport. However, the growing civil wars in China from the early 1920s and particularly from the mid 1920s led to a sharp decline of transport on Zhongxing’s key artery, the Tianjin-Pukou (Jin-Pu) line, and from 1927 transport more or less ceased entirely on that line.39 Thus the mine was unable to ship its coal to market, except for small amounts along the Grand Canal, which was itself in poor condition. Sales, and therefore profits, declined calamitously, and eventually forced the mine to close down its operations.40 Second, the company fell victim to the change in political

10 regime with the rise of the Nationalists. Earlier, Zhongxing had attempted to avoid the arbitrary warlord demands which plagued many mines by establishing close ties in its ownership and its management with the ruling warlord-politician group in north China. That worked well for the company while those warlords dominated the region. When a new political group — the Guomindang — came to prominence, however, these advantages turned into outright disadvantages, as the Guomindang moved to implement its anti- warlord platform. Zhongxing found it difficult to manage the new risk posed by the Nationalists. It was faced by Nationalist demands for contributions to military campaign funds; in this it had much in common with the Shanghai capitalists as analysed by Coble.41 The Company proved unable (in its own view) or unwilling (in the view of Jiang Jieshi and his supporters) to meet the demands, and in 1928, Jiang announced the confiscation of the mine and its take-over by a Party reorganization committee.42 Zhongxing’s Management of Political Risk

Thus the owners and managers of Zhongxing entered the Nanjing decade facing a critical political risk. But, after overcoming that crisis, managers had to face the other political risks outlined in an earlier section — continuing relations with the Guomindang government; relations with Japan; and the question of the labour movement. In the first case, the central strategy adopted by the company to overcome its problems was to attract into its management team people who could provide the necessary connections to the ruling group and thus promise a degree of political stability. In response to labour problems, Zhongxing followed a stick and carrot approach, attempting to coopt union leaders and establish a company- friendly enterprise union on the one hand, but calling in the police and military to crush overt dissent on the other. While relations with Japan were not a central issue for the company politically, by the eve if war they threatened to become so as pressure was mounting over the growing exports of coal to fuel the Japanese war machine.

11 Relations with the Nationalist Government

Throughout the Nanjing decade, its relations with the Nationalist Government was the main focus of political risk for Zhongxing. This was, of course, particularly so in the late 1920s in the aftermath of the mine’s closure by Nationalist troops. In order to meet this challenge, the company attempted to recruit people who could provide die necessary links with the new regime. In the Nanjing decade, these links were predominantly provided by members of the “ Financial Clique” which dominated the Shanghai banking sector and to a considerable extent the commercial and industrial world of China’s largest city. The central figure providing these linkages was Qian Yongming, at least to begin with the representative of Zhongxing’s creditor banks who became chief executive of the company in the 1930s.43 From a Zhejiang family, Qian (1885-1958) was bom in Shanghai and studied in Japan. In 1917 he started on a highly successful banking career as a protege of Cao Rulin in the Bank of Communications,44 of which he became manager in 1919. When regained control of the bank from Cao in 1925, Qian resigned, but later became deputy to Gu Yingfen, Minister of Finance. During the Nanjing decade, he served as both banker and government administrator: in 1928 he worked with Zhang Renjie in Zhejiang,45 and he was later a government-appointed director of the Bank of China,46 as well as a director of the Kincheng Banking Corporation,47 and many other commercial and banking enterprises.48 Qian was a prominent member of the Zhejiang Financial Clique, in which he was closely associated with Wu Dingchang, Minister of Industries in the mid 1930s; this group was in turn associated with the wider Political Study Clique, consisting of some of the more modem mid liberal elements in influential positions under the Guomindang.49 It was not only Zhongxing for which Qian acted as an intermediary with the ruling Jiang Jieshi group; he also performed a liaison role between Jiang and the leading Shanghai gangster, Du Yuesheng.50 After, apparently, some initial reluctance to take the job,

12 Qian was appointed chief executive of Zhongxing in 1929, and remained in the post until 1937.51 To an even greater extent than had earlier been the case with Zhu Qiqian, however, Qian retained outside interests, and indeed he can have been able to devote only a small part of his time to the Company’s affairs.52 This recruitment of bankers and the shift in orientation away from directors with links to the warlord government was already clear in the leadership group which emerged from a general meeting held in April 1928, when the mine was still closed down. That meeting elected the banker Tao Xiang53 as temporary chairman seven other men to run the Company’s affairs.54 Many of these seven had similar connections, though they mostly straddled the worlds of politics and commerce. Wang Yintai and Tang Zaichang were politicians with financial and industrial connections.55 Lin Xinggui was a lawyer and major creditor of the firm.56 Hu Yingchu was a shareholder in the Kincheng Banking Corporation and an official in the Ministry of Finance.57 Among the group, Zhou Xingtang was the most purely commercial figure, being head of the Hankou Chamber of Commerce in 1923, and a major figure in central Chinese banking, though originating in Zhejiang.58 Hu Bijiang, one of two back-up representatives, was the head of the China and South Sea Bank.59 The old guard still retained some presence: Li Shaoji, the son of , represented this group, and in fact he was to continue as prominent in several industrial enterprises in the 1930s.60 Hu Xilin, the veteran mine manager, is a similar case, though he does not seem to have had any political connections. Representing even more clearly the power of the Shanghai banking sector was the management team put in place from around 1929 which was to see the company through to the beginning of the war. Details of this team are given in Table 2. This shows that men from the world of banking replaced the warlords and politicians as the single most important group in the Company. Although Zhu Qiqian was “kicked upstairs” to become Chairman in 1929, he was succeeded by Ye Jinggui, the Chairman of the National Commercial Bank. Other key figures in the Company’s management with connections to

13 banking included Qian Yongming himself, Ye Zhuotang, Wang Yintai, Zhou Zuomin and Ren Fengbao. Li Shaoji, Zhang Xueliang, Zhang Zhongping and Zhu Qiqian remained of the old guard, but no longer did they command the influence within and outside the Company that they once had done. It was in their linkages to other figures or groups in society where the significance of most of these individuals lay. As suggested above, the Zhejiang connection remained an important one,61 with Ye Jinggui representing the main link between the Company’s old owners (he had married the daughter of one of the earlier leaders of the company, Zhu Zhongqi, as his second wife, and was a protege of Qing official and Zhongxing shareholder Zhao Ersun),62 and the new dominant group centred around the Zhejiang Financial Clique. That clique encompassed most of the key bankers and industrialists in Shanghai, centring around those originating in Ningbo.63 As such they were the centre of China’s new capitalist class which had emerged in the late 1910s and early 1920s.64 No sharp line, however, distinguished this group either from the old warlord-politician elite or from the new bureaucratic capitalists of the Guomindang. Thus both Qian Yongming and Zhou Zuomin had started their careers as proteges of Cao Rulin and the New Communications Clique, and continued to protect their old mentor even after his fall from power.65 Qian was also a fellow student of , who was also from Zhejiang and whose varied career included periods as Minister of Foreign Affairs and acting premier, as well as managing the Liuhegou Coal Mining Company.66 The two families later became connected by marriage.67 Perhaps of more immediate importance were the links the Zhejiang group had with Jiang Jieshi and his regime. Any view of Jiang’s regime as being in any simple way “based” on the Shanghai capitalists has been refuted by Parks Coble’s work, which stresses the contradictions between the two groups. But Qian Yongming in particular was close to Jiang: he had been urged by Wu Dingchang to approach Jiang’s group in 1926-27, and served as Vice-Minister of Finance for Jiang, being largely instrumental in the issue of the 2.5%

14 bond issue.68 Qian and the new mine manager Chen Jinghan also had close ties to .69 Ye Jinggui was also a close associate of Jiang Jieshi and of Song Ziwen,70 while die auditor Chen Jie also fell into Song’s group. All these connections were utilized to surmount the crisis in mid 1928, when Zhongxing was under order of confiscation by the new government. The Company successfully mobilized merchant and banker groups across the country to intervene on its behalf. It had itself held a general meeting of its shareholders in the Italian concession in Tianjin, when Zhang Zhongping reported on the negotiations with the government and the shareholders agreed to petition Jiang to return the company.71 But pressure from this source alone would have had little effect; much more important was the support of the Shanghai banks. On 2 September the Shanghai Bankers’ Association sent a telegram to Jiang requesting him to rescind the order: their arguments were based on the specific interests involved, with their members holding shares and bonds of the Company, and on the general need for business confidence for the success of the government’s investment programme.72 This telegram was backed up by a similar one from the Shanghai Chamber of Commerce, also supporting the Company’s version of their failure to raise the one million yuan.™ They were not to be denied: after negotiations in Shanghai between bank representatives and Song Ziwen, the order was rescinded on 21 September 1928, following the agreement of the chief representative of the Company, Li Shaoji, to pay the Ch$l million, a sum which was to be raised by the banks. This pressure worked not only to enable the re-opening of the mine, but also to blunt the attack on the warlord shareholders in the company. Thus, despite all the anti-warlord rhetoric, in the end the shares of only two warlords — one of whom was dead, the other long discredited — were confiscated. Early discussions had marked down the shares of Ni Sichong, , Zhang Huaizhi and Zhang Jingyao as definitely deserving confiscation, and raised the possibility of confiscating those of Wang Zhanyuan, Jin Yunpeng, Pan Fu and Zhu Qiqian.75 A joint report by the Ministries of Agriculture and

15 Mines and of die Interior in March 1929, however, recommended that to start with they should confiscate only the holdings of Ni Sichong and Zhang Jingyao.76 Zhang Jingyao, a minor warlord of the , had held only Ch$27,200 shares, though the family of Ni Sichong had rather larger holdings of Ch$235,700. Ni had died in 1920, but his family had substantial holdings in a number of north China mining and industrial enterprises,77 holding the controlling interest, for example, in the Lieshan mine, which was also confiscated.78 The process of confiscation was by no means simple, however, and dragged on for some time. Later in 1929, Ni’s son claimed that his family had sold all but Ch$20,000 shares in 1926,79 and two of the purchasers also wrote the Ministry in September 1932 claiming they had bought the shares in good faith from Ni’s family and arguing that they should not be confiscated.80 Even in the case of Zhang Jingyao, it appears that the family attempted to recover the shares in 1932.81 Throughout the 1930s, therefore, as shown in Table 3, Zhongxing retained many links with the old warlord system through its shareholders. For all its links with the government, however, no more in this period than in earlier ones did Zhongxing cease to be a private company. The confiscation of the shares carried with it the right to appoint one director, and Chen You, from the Ministry of Agriculture and Mines, was appointed in the late 1920s.82 However, the government seems to have little success in exerting any control over the company, and a secret report by Gu Lang in May 1931 claimed that Zhongxing failed to inform the Ministry of its intention to hold the 19th General Meeting or to report to the Ministry afterwards; that was a clear violation of the rights of a shareholder which held V23 of all shares.83 By the mid 1930s it was not clear which if any of the directors was the government’s nominee. Thus during the Nanjing decade, Zhongxing remained outside the control of the state; it probably remained as purely a private company as most in China, and indeed elsewhere.

16 Labour Relations

Labour problems were another aspect of the political risks faced by the company during the Nanjing decade, though in general they were kept under control. They were part of a much broader competition between the Nationalists and the communists for the allegiance of and control over the Chinese labour force. Labour management became an important problem to be overcome by the Company, especially in the early 1930s. Broadly the company at various times adopted one or more of three strategies: attempting to coopt union leaders and establish friendly unions; relying on local state power to crush militants; and buying off the workers with some wage rises. Underlying these was also the “divide and rule” strategy of dividing the workforce into two groups: the “internal workers”, hired and paid directly by the company, and generally comprising the more highly skilled segment of the workforce; and the “external workers”, hired and paid through contractors and providing most of the unskilled labour. Unlike in Shanghai, the Nanjing decade saw in north China and in the coal mining sector an increase in the risk posed by labour militancy. Not only the Communists but also the Nationalists saw it as their mission to introduce some labour organisation among the miners of north China. The struggle between the two parties over the allegiance of the workers introduced another focus of conflict into the situation. Not surprisingly, the main push for militancy came from the activities of the . Although the first signs of union activity had been seen in 1925,84 it was 1926 before the Party sent an organizer to attempt to “raise the consciousness” especially of the skilled workers; he succeeded in recruiting ten members to the Party and at the end of the year a union was established with fifty or so members.85 A non-Communist source describes the early union leaders as “very extreme”.86 Given the poor working and living condition of most, there was a ready response to the Communist message and, after a brief occupation of the area by Nationalist troops

17 in mid 1927, Zhongxing’s workers held a meeting and went on strike to press for sixteen demands, which covered most of the spectrum of issues over wages, conditions and union recognition. Management’s reaction to the strike (which was probably not very effective as the mine had shut down for other reasons) was largely along the lines of conciliation and cooptation. Thus they moved to establish a workers’ association to promote cooperation between labour and capital, and tried to get support from the Nationalists, who were tom between wanting to support the workers against the warlords who controlled Zhongxing, and a desire to limit the workers’ movement. In the end the workers accepted limited concessions from the Company in a situation where the Nationalist army retreated back to Xuzhou.87 Through the late 1920s and early 1930s, the company was involved in a three-way struggle to win the allegiance of the workers; as well as management, the Communist Party and the Nationalist party, from their reooccupation of the area in mid 1928, struggled to gain the support of the workers. The environment was not very favourable for worker organization, as the mine was closed, the Company confiscated, and the Nationalists’ “Reorganization Committee” indisposed to cater to the workers’ demands. The Communist Party sent a new representative, Zhang Fulin, to organize the workers around a demand for the restoration of work. For its party the Company attempted to undermine this union and set up a “yellow” union based on skilled workers, though this move seems to have been largely unsuccessful. The Nationalist representative and head of the “Reorganization Committee”, Yu Feipeng, however, arranged for a man called Zhou Xuechang to reorganize the union; Zhou, an “old hand in suppressing the workers’ movement” according to the 1959 history, arranged for the arrest of the Communists, and eventually for a Company-sponsored union, which did succeed in gaining some improvements in conditions.88 Cooptation was no easy answer, however, since, as indicated above, poor conditions did create a basis for radicalism among the workers. Demands for improved conditions, and for something to be

18 done about the widespread unemployment among the miners after the closure of the mine, dragged even the Nationalist organizers to the left. Thus it was only in December 1930 that a formal “yellow” union was finally established, after a number of organizers had been dismissed for being too radical.89 In the following year the workers mounted a go-slow in protest against the Company offer of a 9-10% pay rise, and in the end achieved a 15-16 % rise.90 Although the economic situation was unfavourable to labour organization in that demand for labour was low, and although the new authorities had at best an ambivalent attitude towards the workers, this period of union activity did succeed in substantially improving the wages and position of the workers. This was in the context of broader political changes, and was reflected in many other mines across north China. As Table 4 shows, wages of unskilled workers rose by around 60% between 1926 and 1931. These are only money wages, and no price series is available for Zaozhuang, but in north China as a whole wholesale prices rose by only 25 per cent over the same period. Other improvements in conditions included an increase in the amount of compensation paid on the death of a miner at work up to 1-2 years’ wages for a directly hired worker and Ch$200 for a contract worker.91 By the 1930s, mobilization of labour was becoming very much linked to another major political risk facing business, that is the threat from Japan.92 Zaozhuang there had been disputes between union and management over the workers’ desire to mount anti-Japanese demonstrations in September 1931 and January 1932.93 The Japanese attack on Shanghai not only provoked such disputes but also undermined the Company’s major market and forced it to cut back production and attempt to economize on labour costs; indeed a workers meeting over this issue was broken up by mine police.94 Nevertheless the workers contributed 6000 yuan to the cause of the armies resisting the Japanese attack on Shanghai.95 The workers’ nationalist outrage provided some basis for Communist Party organisation, though other aspects of the environment were less favourable. In 1931 a Communist Party meeting at Xuzhou agreed that political work at the mine was very

19 difficult, both because of the white terror, and because of the unfavourable economic environment. Two party members sent to Zaozhuang succeeded, however, in recruiting a further ten members plus twenty activists by spring 1932, and these people were to be key figures in the major strike that took place that year.96 The 1932 strike involved both nationalist issues and the question of the relative treatment of contract workers and those directly hired by the Company. This latter issue flared up in June when Zhongxing decided only to pay bonuses to directly hired workers, ignoring the contract workers. By 10 July most of the contract workers were out on strike. A meeting on 13 July was addressed by the local Communist leader, who demanded a 50% rise in wages, abolition of the contract labour system and an eight hour day, among other things.97 The level of the threat to the Company was probably indicated by the fact that it moved quickly to adopt a strategy of ruthless suppression. Management thus attempted to gain the support of the authorities, reporting (probably correctly) that Communist agitation was behind the strike. At a meeting on 19 July the Communist leader and several others were arrested; they were later executed in after having refused to betray the union. This move, together with Company efforts to recruit scab labour and buy off union leaders and the transfer of army units from Lincheng, resulted in the failure of the strike, and the secretary of the provincial governor successfully negotiated a return to work with only minor concessions on Zhongxing’s part.98 A later source attributed the disaster to the influence of Wang Ming’s leftist adventurist policies.99 The execution of its organizers at Jinan was a serious blow to the Communist Party, but it could not completely remove the basis for radical action among the workers. Thus at the end of the year four more men were sent to Zaozhuang, one of whom ran a small medicine shop there, and carried out general education. Repression at Xuzhou left Zaozhuang as the centre for activities in the region, and, despite the best efforts of the authorities, fifty or so workers were recruited into the Party.

20 Company and government efforts to counter Communist efforts by coopting the union movement and establishing a “yellow” union controlled by the Nationalists continued to run into problems, being tom to some extent between the demands of the workers and the policy of the government; there was also some contradiction between the provincial government and the national government representatives running the union.100 Further disputes, again over the contract system, took place in May 1933 and July 1934, though the Nationalists revoked the right to strike on grounds of national emergency.101 In 1933, worker militancy forced the union to support the demands of the workers.102 Unfortunately no detailed information is available to indicate whether this activity led to any overall deterioration of the cost structure of the mine through higher wage costs. Productivity in the form of output per worker shift rose rapidly in the 1930s, but in a situation where a large rise in wages had earlier taken place without any corresponding rise in productivity, where there was still basically a surplus of labour, and where demand and prices were depressed by the world depression, it is probably unlikely that the workers derived much benefit from it. A Communist union organiser recalling events later claimed that the action did lead to improved welfare facilities for contract workers.103

Dealings with Japan

While the threat from Japan probably played a less central role for Zhongxing than it did for other companies, Japanese expansionism did provide both opportunities and problems for the mine during the 1930s. It has already been shown above how the Japanese threat became a central theme for labour mobilisation, particularly after the occupation of the Northeast in 1931. But other aspects of Japan’s activities were also important. The attack on Shanghai in January 1932 led to a sharp and unexpected downturn in the industrial economy of the lower Yangzi and a consequent contraction in the demand for coal.104 Given that at

21 the same time gold currencies were falling steeply as against silver, the Shanghai coal market became ultra-competitive, and Zhongxing was forced sharply to reduce the price of coal. On the other hand, Japanese rearmament greatly strengthened the coal market in Japan in the mid 1930s, and created opportunities for Chinese mines to sell high grade coal in particular to Japan. Zhongxing’s sales in the Japanese market climbed steeply from around 50,000 tonnes in 1934 to an expected 320,000 in 1937; its success in Japan was the result of the high quality of its coal, and the Japanese market was one of the most profitable areas for the company.105 It did, however also expose the company to nationalist criticism. Thus on the very eve of the outbreak of the war, the Shanghai Coal Guild approached the Military Affairs Commission and Jiang Jieshi himself criticising both Zhongxing and the Kailuan Mining Administration for selling coal to Japanese heavy industry while at the same time trying to monopolise the Chinese market and raise prices there. They denounced the companies for their lack of patriotic awareness.106 Of course, after July 1937, the Japanese threat materialised in a massive way, as Japanese troops invaded north China and in 1938 occupied Zaozhuang, taking over the mine for operation under Japanese military control.

Management of Business Risk

Political problems on the whole dominated the business environment in China during the 1930s. Nevertheless, there were also significant problems from a business angle, mainly in the form of downward price pressures, which resulted both from factors specific to the coal industry and from general economic conditions in China. Within the coal industry, there was general excess capacity. This had been to some extent disguised in the 1920s, because of the inability of many mines in Hebei, Henan and Shanxi to get their coal to market. As, however, the railways recovered from the disruption of

22 the late 1920s, and coal from a number of mines which had invested heavily in productive capacity in the boom of the late 191 Os and early 1920s, came on to the market, supply began to exceed demand. With the growth of some new mining areas, particularly Huainan in Anhui (a major new government-owned mine) and Boshan in Shandong (where there was rapid expansion of output from medium sized and partly modernised mines), there was growing price competition in the main markets. More widely, the 1930s was the period of the world depression, which also had an impact in China, to some extent during 1929-1931 through the decline of the silk industry, but much more seriously in the years 1932-1935. During those years the impact of the depression, particularly through the rise in the value of silver and the consequent appreciation of the Chinese currency, was joined by the effects of the 1931 Yangzi floods and the Japanese attacks in the northeast and on Shanghai, to create a fragile commercial atmosphere and led to downward pressure on prices in the coal market. In many other countries, coal mining was among the worst “basket cases” of the depression. The terminal decline of the British and American coal industries, and the attempts to remedy that by increasing the role of government, is a well-known story.107 In India, too, coal mining entered a sharp, though temporary decline.108 Also in Japan, competitive pressures forced the industry into a serious rationalisation effort and into the formation of a cartel along the lines experienced in Europe.109 In China, however, the situation was less dire. On an industry-wide basis, the fact that industrial output continued to grow through the period meant that demand, while slowing down, did not experience the catastrophic falls that took place in other countries. In addition, the very recovery of the railway system, which caused problems in other respects, nevertheless allowed a return to relative normalcy in the 1930s and seemed a boon, despite die problems with demand. The effect of the depression on coal mining made itself felt firstly through currency fluctuations in 1932-1933— most notably the

23 collapse of the Japanese yen against China’s currency — which led to a sharp fall in the price of Japanese and Manchurian coal and thence to a switch in demand away from Chinese coal to Japanese coal. Although that switch was reversed by the imposition of a tariff in May 1933, the general industrial stagnation of the years 1932-1935 resulting mainly from the influence of the world depression but also from the Japanese attack on Shanghai in 1932 and the after-effects of the Yangzi floods, meant that total demand for coal was fairly static, increasing competition for a share of the market. These external factors led to severe downward pressure on Zhongxing’s prices through much of the 1930s. After setting their prices at a low level in 1928-1930 in order to try to regain customers, Zhongxing was able to benefit from the favourable exchange rates in 1930-1931. However, from 1932 the company was forced to follow other Chinese coals in 1932 by sharply cutting their prices from around Ch$22.5/ton of run-of-mine-coal in 1931 to Ch$14.4 in late 1 9 3 2 no por tjjg following three years, it would appear that prices remained at a similar level; in general coal prices rose in late 1936 and 1937, though we have no specific information for Zhongxing. Zhongxing therefore faced a series of business risks and uncertainties if it was to maintain and increase its sales than it had done in the early 1920s. Zhongxing’s response to this pressure on prices encompassed both supply and demand. The company introduced a major new programme of modernization after its reopening in 1929. This involved the hiring of a foreign engineer and the use of foreign equipment. The new engineer, a Herr Klicker, had earlier worked in the Jingxing and Zhengfeng mines in Hebei, and had considerable experience in China.111 There was strong opposition to his appointment as chief engineer from the rest of the staff, who both attacked his initial appointment,112 and later petitioned against him, accusing him of incompetence and favouritism.113 The management, however, backed him up, and he stayed on until the war, and indeed under the Japanese after 1937.114 Klicker introduced a far-reaching modernization programme, shifting the focus of output away from the company’s

24 semi-modemised mines and indeed away from its earliest modem pit. Apart from closing the traditional pits, Klicker also downgraded the older south pit, concentrating output on the new north pit, where capacity was increased from 1400 to 2000 tons/day.115 Finally, he embarked on the construction of a third modem pit with a capacity of over 2000 tons/day.116 Thus Zhongxing had by 1934 a total capacity of over 5000 tons/day, allowing it to raise its annual output in the mid 1930s to over 1.5 million tons. In addition, Klicker made Zhongxing into the most modem Chinese coal mine as far as its equipment was concerned. Most importantly, underground operations, especially haulage, were thoroughly electrified, so that electric tramways were used in all the main galleries, though mules, or even human power, were still used in some of the side galleries.117 Moreover, in some respects Zhongxing was technologically more progressive even than Kailuan, the largest and most modem pit in China proper, but under British domination. Zhongxing had long used the longwall system of mining in its main seams, and was now alone among prewar Chinese coal mines in experimenting with the use of mechanical coal cutters: it had two Flottmann chain coal cutters as well as using ball type shaking conveyors to serve the most modernized coal faces.118 Technological dependence on Europe continued in this period. Not only was the chief engineer German, but the main items of equipment were imported: the winding gear for the new pit came from Switzerland, and most of the electrical equipment from Siemens.119 China did not yet have an engineering industry sufficiently developed to manufacture such equipment, though Zhongxing was building up a considerable repair and manufacturing capacity itself, at least for the simpler machinery.120 While foreign engineers were hired to supervise technological modernization, however, it was the Chinese owners of the company who made the basic policy decisions. Moreover, under the chief engineer, the technical personnel were also Chinese, and Zhongxing had a reputation for insisting on competence in this area - a reputation rare among Chinese firms.121

25 This programme of technological modernization was successful in achieving a substantial fall in production costs and rise in labour productivity. Production costs had shown few signs of falling in the 1920s, and rose sharply in the late 1920s and early 1930s, partly as a result of under-utilization of capacity and partly as the result of a strong rise in wages. This high cost created an incentive for the modernization programme of the 1930s, the success of which very clearly emerges from Table 5. During the 1930s costs per ton fell by some 40%, output per worker shift rose by 30%; this record is all the more impressive considering the inevitable trend towards diminishing returns in an extractive industry. It is unlikely that many companies, if any at all, matched this record of technological progress in the 1930s, and its lower costs left Zhongxing in a stronger position to compete in the increasingly competitive lower Yangzi market. The other way in which Zhongxing was able to contain its costs was by improving its transport network. It did this partly by rent-seeking using its links to the government and railway administration. Qian Yongming used his ties to Song Ziwen and Chen Lifu to re-establish the Company's enjoyment of the lowest freight rates in China: the 1959 Company history calculated that, had Zhongxing had to follow the normal rates, annual transport costs in 1930 would have been around Ch$3.6 million, whereas actual costs were Ch$880,000. As most coal mines enjoyed some form of special contract, this very greatly exaggerates the benefits to Zhongxing, but nevertheless it did enjoy very cheap transport.122 Similarly, Qian used his ties to Song to defeat an attempt by the Huaian customs office to charge the Company 68.5c/ton special tax on its coal. Thus successive meetings of Zhongxing praised the contributions of Qian in their reports.123 Zhongxing not only took advantage of the recovery of the railway, but also undertook a major new investment initiative further to cut its transport costs. The economics of land and water transport meant that the greater die reliance of a company on the former, even if that was by rail, the higher its cost in the final market.124 Thus this initiative took the form of the opening of a new route to the sea which

26 reduced the length of railway transportation necessary. Zhongxing by no means abandoned its previous route down die railway to Pukou, and thence along the Yangzi to Shanghai; indeed it built a Ch$500,000 new depot there in 1934.125But die long rail haul, even with the exceptionally favourable terms Zhongxing enjoyed, remained expensive when most of Shanghai's coal travelled most of the way by water. Moreover traffic on the Tianjin-Pukou railway had not yet fully recovered from the civil wars, with a shortage of rolling stock restricting operations — in 1932 the Company actually signed a contract with the -Shenyang line for the lease of four whole trains, to be used solely to carry its coal.126 This shortage of capacity left the line in a weak position to question Zhongxing’s plans to expand in a different direction, even though it foresaw the loss of business. In this context Zhongxing began to investigate the possibility of using the new port of Lianyungang, which was being constructed at the terminus of th <$-Hai by the Netherlands Harbour Works of Amsterdam.127 In order to be able to make use of this port, which was much nearer the mine area than was Pukou, Zhongxing had its railway to Taierzhuang extended as far as Zhaodun where it joined the Long-Hai. This extension was constructed by the Long Hai with the aid of a 1 million yuan bond issue raised by Zhongxing and lent to the railway.128 Work progressed smoothly, and the line was finished in February 1935 and opened the next month,129 though soon afterwards it was closed for several months by severe floods.130 At Lianyungang, Zhongxing built its own wharfe, which it finished in 1936.131 Qian Yongming also set up the Company's own shipping line, and by 1935 it owned two ships and had another two on long-term loan.132 Although transport costs to Shanghai at least initially seem to have been reduced only by about 7% from Ch$3.20 to Ch$2.96/ton,133 the Company hoped that the economies of scale consequent on the increased use of Lianyungang would further reduce its costs. The opening of the railway link to and the construction of the port at Lianyungang showed yet again the vigour of Zhongxing in

27 cutting costs where possible, and thus in competing in the major national coal market in Shanghai. As a result of these cost cutting measures, the fragmentary figures which are available for the company's costs at the final market indicate that even at the lower prices Zhongxing was able to make a substantial profit on it sales: the cost to the company of selling coal in Shanghai seems to have been between Ch$10.5 and 11.5/ton, leaving around Ch$2.00 profit.134 These moves probably left the company in as good a position as its location allowed, and further efforts were directed not so much at cost cutting as to the regulation of prices and demand in the final market. In addition to these attempts on the supply side to reduce production and transport costs, Zhongxing also attempted to address the pressure on prices by participating in attempts to control the market. While such attempts were possibly the most important response to similar problems in other countries, they were less salient in China, both because the problems were less dire and because the level of institution-building by the state and by business was at a lower level. Nevertheless Zhongxing joined in both partial and national attempts to control the market. Thus Zhongxing came to an agreement with the KMA in 1934 to regulate sales in the Yangzi valley.135 This agreement was renewed for the next two years and indeed extended to south China and Japan in 1936. Although the KMA recognized the strong position of Zhongxing as a result of the superior quality of its coal, they hoped that the agreement would give some relief from the generally depressed coal prices.136 Even in this context personal as well as purely commercial connections were important: as KMA’s manager reported, “A most fortunate circumstance and a quite fortuitous one is that the Chinese Manager of the Chung Hsing [Zhongxing] Mining Company with whom MacFeat is negotiating happens to have been a student at Glasgow University at the same time as MacFeat”.137 When the government attempted to establish a national cartel in mid 1936, Zhongxing was again at the forefront of the moves.138 Qian Yongming and Zhongxing's secretary Tang Zaichang had visited Japan in 1935 to study the organization of the coal industry there, and

28 had come back very impressed by the cartel in operation there.139 The Minister of Industry, Wu Dingchang, was a close associate of the bankers who ran Zhongxing, and the scheme that emerged favoured the established mines such as Zhongxing and the KMA. This very fact predisposed the expanding mining areas of central Shandong and Anhui to refuse to join, with the result that at the end of the year Zhongxing joined with the KMA and the Jincheng Bank to form the Huazhong Coal Industry Company to attempt to control the Shanghai market. In spring 1937 the same parties joined with three other banks to form a national company to control coal sales. These moves had some initial success in undermining the position of the central Shandong mines in Shanghai and in attaining a rise in prices. This rise, however, came in the context of a general recovery of the market, which made regulation less necessary, at least in the short term. In the longer term powerful economic forces were working against the success of the venture, and it is unlikely that it would have had any lasting effect.

Conclusion

What lessons, therefore, does the history of the Zhongxing company offer for our understanding of the operation of Chinese business in the early twentieth century in general and during the Nanjing decade in particular? Of course we must state again here that there is no claim that Zhongxing was “typical”, but it can nonetheless function as a case study or example to test some of the more general propositions about the history of Chinese business. It shows that, given continuing industrial growth and therefore underlying demand, it was possible for well run and well situated companies in pre-war China to post highly successful results in terms of output growth and profits. It lends no support to the idea that China’s industrial sector in particular was “bankrupt” or “stagnant” during the 1920s and 1930s. Rather, as the title of this paper suggests, it contributes to that body of opinion which stresses the success of the economy in that period.

29 This history certainly points to the importance of developing good connections with the state authorities: such connections were indispensable in getting the mines reopened after their confiscation in 1928. Having said that, however, there is little hard evidence that the company was unable to operate as a private entity once it was reopened, or that it faced irresistible pressures to be integrated into the structure of Nationalist “bureaucratic capitalism”. Indeed the company was able to manage relatively well the political risks inherent in China’s political system and in the emergence of the labour movement. Neither it nor most other entities in China were able to cope with the effects of the materialisation of the Japanese menace from 1937. Finally, it shows that Chinese companies were able to adopt “regular” methods to deal with business risk. While Zhongxing was no more averse to a bit of rent-seeking than other companies throughout the world, its main responses to downward price pressures took the form of technological change and cost cutting on the one hand and attempts to manage the market on the other. In this it shows similarities rather than differences from its counterparts elsewhere in the world.

30 APPENDICES

CHART 1: OUTPUT AND SALES OF THE ZHONGXING COMPANY, 1899-1936

31 TABLE 1: PROFITS AND DIVIDENDS OF ZHONGXING COAL MINING COMPANY, 1913-1936

Year Profits (‘000 yuan) Profits Dividend or loss (-) a) b) as a % of Ch$/tonne revenue 1912 -55 1913 216 1.09 10% 1914 197 197 0.83 1915 -104 1916 310 0.89 1917 581 1.36 45% 1918 1947 1603 3.09-3.75 20% 1919 2622 2204 3.87-4.61 25% 1920 2903 2408 3.46-4.18 30% 1921 1805 2.70 1922 2785 2050 29.5 2.63-3.57 20% 1923 3633 2624 35.0 3.33-4.61 22% 1924 2128 2128 24.3 2.46 16% 1925 744 744 10.0 0.91 8% 1926 5 5 nil nil nil 1927 -1596 -1596 loss loss 1928 -1654 -1654 loss loss 1929 -1034 -1034 loss loss 1930 -270 -270 loss loss 1931 22 1566 nil 0.03-2.05 1932 1378 1655 13.1 1.41-1.69 10% 1933 1897 2153 15.0 1.69-2.24 1934 1970 2846 14.0 1.50-2.17 1935 1935 2161 13.6 1.51-1.69 12% 1936 4463 2.57

32 Sources:

Profits: a) series from Yan Zhongping, Zhongguo jindai jingji shi tongji ziliao xuanji (Collection of statistical materials on modem Chinese economic history) (Beijing: Kexue chuban she, 19SS), p. 1SS, which uses a company report for 1914 and the various General Statements of the Mining Industry for 1917- 1931,1933-1934; 1932 from Di si ci Shandong kuangye baogao, p. 127; the 1933 figure is taken from Zhang Huiruo, Di wu ci Shandong kuangye baogao (Fifth report on mining in Shandong) (Jinan, 1936), p. 326.

b) series taken from Zhong[guo] gong[chandang] Zaozhuang kuangwu ju weiyuanhui, with Shandong daxue lishi xi and Zhongguo kexue yuan Shandong fen yuan lishi yanjiu suo, Zaozhuang meikuang shi (History of the Zaozhuang mine) (Jinan: Shandong renmin chuban she, 1959) (hereafter ZMS), pp. 22, 30, 45.

Profits as a percentage of revenue: Zhang Huiruo, Di wu ci Shandong kuangye baogao, p. 326; Minami Manshu Tetsudd Kabushiki Kaisha, Chosabu, Ekiken tanden chasa shiryo (Research data on the Yi xian coal field) (hereafter ETCS) (Dalian, 1937), p. 34, using figures for profit as in those sources and column a).

Profit per ton: range using figures in a) and b) and output as shown in Table 1 .

Dividends: Xie Jiarong, Di er ci Zhongguo kuangye jiyao (General statement of the Chinese mining industry, no. 2) (Beijing: Nongshang bu dizhi diaocha suo, 1926), p. 37 (1918-1920); Hou Defeng, Di san ci Zhongguo kuangye jiyao (General statement of the Chinese mining industry, no. 3) (Beijing: Nonghsang bu dizhi diaocha suo, 1929), p. 98 (1913, 1922-1925); North China Herald, 30 June 1928 (1917); KYZB 254 (14 September 1933):211 (1932); ETCS, p. 101(1935).

33 TABLE 2: ZHONGXING CHIEF PERSONNEL, 1929-1936

Name Background Chairmen of the Board Zhu Qiqian (1929-1934) f t % politician* Ye Jinggui (1934 ) H H H hanker, close associate of Jiang Jieshi Chief Executive Qian Yongming ( 1929 ) $$ ,]< li)| hanker (Zhejiang clique)* Managing Directors Luo Yisheng/Luo F-aji i n ' ! - untraced Zhang Shuchcng/Zhang Wenfu % ') son of Zhang Yanmou*1 Li Shaoji (1931) Ye Jinggui (1931) H i m Zhuang Yikui iff H ÎÉ ( 1931 ) Directors Chen Jinghan Wifi'S? ex chief secretary of Shcnbao, associate of Jiang Jieshi1’ Hu Xilin (1931) veteran mine manager Li Shaoji $ £ ? £ son of Li Yuanhong8 SuTaiyu fà fk fe industrialist1* Wang Yintai politician, banker, lawyer1 Ye Zhuotang hanker (Zhejiang clique); associate of Jiang Jieshi’ Zhang Xueliang £4 warlord* Zhang Zhongping son of Zhang l.ianfen1 Zhou Jingtang untracedm Zhou Zuomin fifj IC banker, close connections with Nanjing" Zhu Qiqian see above Zhuang Rensong unt raced Auditors Chang Yaokui ^ 1®-^ ( 1931 ) Chen Jie Wi/i" Deputy Foreign Minister; friend of Song Ziwen" Ren Fenghao hanker1* Xu Jiean/ Xu Rongting untraced Zhou Y ican J§) III ( 1931 ) Deputy Managers Zhang Zhongping i1}' ^ see above Yuan Jing’an & §? ffj frimt Guizhou, sponsored by Zhu Qiqian*1 Mine Committee Li Shaoji 5?ÜÿlΣ see above Niu Shiyu !& (1931) Shen Shikui (}i t:ü(1931) Tang Zaizhang J££f ^ politician, financial connections' Zhang Wenfu Zhang You qr (1931) Secretary Tang Zaizhang J^j/b ^ 34 Sources:

Membership of Board: identical lists for 1934 and 1936 can be found in Zhang and Tan, Zhongxing meikuang, p. 153 and in KYZB 406 (14 November 1936):346. Entries marked (1931) and those which only appear in a government report written by Gu Lang in April 1931 and contained in No 2 archives 422 (5) 661.

Bibliographical information as follows: a See text b North China Herald, 18 June 1921; Zhang and Tan, 'Zhongxing meikuang’, p. 153; Chen, Gongye shi, p. 322; 'Ye Kuichu’, p. 73. c See text. d Zhang and Tan, 'Zhongxing meikuang’, p. 149; ZMS, p. 41. e Ibid. f See text. g Boorman, Biographical Dictionary, vol. 2, p. 346. h GCMJ, p. 196; Chen, Gongye shi, p. 448. He seems to have been connected with Zhou Xingtang, another Wuhan industrialist with a stake in Zhongxing. i GCMJ, p. 16; Chen, Gongye shi, p. 321; Fujita Masanori, Gendai Chugoku jimbutsu hyd (Tokyo, 1969), p. 129. j GCMJ, p. 363; Zhang and Tan, 'Zhongxing meikuang’, p. 153. k Boorman, Biographical Dictionary, vol. 1, pp. 61-68. 1 Zhang and Tan, 'Zhongxing meikuang’, p. 149. m But for Zhou Xintang, see text. Zhou Jingtang was probably a relative. n Boorman, Biographical Dictionary, vol. 1, pp. 427-428. o GCMJ, p. 257. p Nathan, Peking Politics, p. 250. q Zhang and Tan, 'Zhongxing meikuang’, p. 149. r Gaimusho, johobu, Gendai Shina jimmeikan, p. 88.

35 TABLE 3: MAJOR SHAREHOLDERS IN ZHONGXING IN 1928

Name Nominal value of holdings Background (yuan) Jinzai tang 75 (-.(MX) family corporation of Zhu family" Li Yuanhong 6(X),(XX) warlord and politician’ Zhang Zhongping fiji 450,(XX) son of Zhang Lianfen. founder of the company' Zhang Huaizhi ‘JFttSLS 236, KM) warlord, follower of Yuan ShikaiH Ni Sichong ffâgnîÀf1 235,700 warlord, Anhui clique' Zhang Xun 2 1(),X(X) warlord Zhuang Yunjiu 200,000 associate of Pan Fu and 1 engtian clique“ ZhuQiqian ÿ ï f f i f ï 101 ,(KX) olitician and bureaucrat' Zhao Frsun 94.600 Qing bureaucrat Xu Shizhang 90.ÎXX) railway bureaucrat, cousin of Xu Shichang1 Ren Fengbao ffiüL^ 7X,(XX) banker11 Lu Defang 50.(XX) son of warlord 1 at Yongxiang Tian Zhongyu [1] rfj I t 50,(XX) warlord, follower of Xu Shichang"1 Yuan Naikuan 40,(XX) cousin of " Wang Zhanyuan F.r1! f t 34,9

Sources: information on shareholding from Zhang, Di wu ci Shandong kuangyc haogao, pp. 162-163; clique attributions from Ch i Hsi-sheng, Warlord Politics in China, I9I6-I92H (Stanford: Stanford University Press, 1976), pp. 0 71.

36 Sources: information on shareholding from Zhang, Di wu ci Shandong kuangye baogao, pp. 162-163; clique attributions from Ch’i Hsi-sheng, Warlord Politics in China, 1916-1928 (Stanford: Stanford University Press, 1976), pp. 69-71.

Biographical information as follows: a Personal communication from Professor Tian Rukang of Fudan University, Shanghai. b Boorman, Biographical Dictionary, vol. 2, pp. 343-346; a different figure for investment is given in Li Shaofen, “Li Yuanhong shilue” (A brief history of Li Yuanhong), Tianjin wenshi ziliao xuangji 11 (July 1980): 139. Zhang Shuyong, “Li Yuanghong touzi jinrong shiye jingji qingkuang” (Li Yuanghong’s investments in finance and industry), in Quanguo zhengxie wenshi ziliao weiyuanhui et al eds., Minguo da zongtong Li Yuanhong (Li Yuanghong, President of the Republic) (Beijing: Zhongguo wenshi chuban she, 1991), p. 302 gives a figure of 540,000 yuan. c Yang Jialuo, Minguo mingren tujian (Illustrated Biographical Dictionary of Republican China (Nanjing, 1937), vol. 5, p. 56; Zhang and Tan, 'Zhongxing meikuang’, p. 149. d GCMJ, p. 226. e Fujita Masanori, Gendai Chugoku jimbutsu hyo (Biographical Tables of Modem China) (Tokyo, 1969), pp. 31-32; Ji, 'Ni Sichong zai Tianjin de touzi’, passim. f Boorman, Biographical Dictionary, vol. 1, p. 141. Zhang had died in 1923; presumably the shares were held by his family, g Qi Xiemin, “Wo suo zhidao de Pan Fu” (The Pan Fu Whom 1 Knew), Tianjin wenshi ziliao xuanji 23 (1983): 188. h See text. i Boorman, Biographical Dictionary, vol. 1, p. 141. j GCMJ, p. 168. k Negishi Tadashi, Chukaminkoku jitsugyd-meikan (Industrial Directory of the Republic of China (Tokyo, 1934), p. 16. 1 JDA Dl/3/1/1; Who’s Who in China, vol. 2, p. 582. m GCMJ, p. 288. n Ibid., p. 18. o H.G.W. Woodhead, ed., China Year Book, 1925, p. 1281; Wang held 50,000 yuan worth of shares according to Zhao Shixian,

37 ' Junfa Wang Zhanyuan jingying gonshangye gaikuang’ (Industrial and Commercial Activities of the Warlord Wang Zhanyuan), Tianjin wenshi ziliao xuanji 4 (October 1979): 167. p GCMJ, p. 319. q Ibid., p.231. r Boorman, Biographical Dictionary, vol. 1, pp. 382-384. s Gaimusho, Johobu, Gendai Chükaminkoku Manshn teikofcu jimmeikan (Biographical Dictionary of the Republic of China and the Empire of Manchuria) (Tokyo: Toa dobunkai, 1937), p. 213. t Boorman, Biographical Dictionary, vol. 4, pp. 31-32. u GCMJ, pp. 115-116.

TABLE 4: WAGES AT ZHONGXING, 1917-1931 (YUANÎMONTH)

Year Skilled Workers Unskilled Workers 1917 7.84 22.87 1918 7.98 22.21 1919 8.09 27.12 1920 7.64 27.79 1921 7.46 27.56 1922 7.70 28.00 1923 7.96 29.86 1924 7.97 30.23 1925 8.01 28.90 1926 7.90 27.50 1927 8.78 27.49 1928 9.42 31.39 1929 10.82 33.00 1930 11.53 29.37 1931 13.02 26.35

Source: Liu and Shi, “Gongren diaocha”, p. 65.

38 TABLE 5: COSTS AND PRODUCTIVITY AT ZHONGXING, 1930-1936

Year Production cost Output: yuan/tonne tonnes/worker 1930# 2.73 1931 2.46 0.618 1932 2.25 0.668 1933 2.30 0.705 1934 2.08 0.788 1935 1.95 0.926 1936* 1.64 1.021

#: January-Mav *: July (production cost )

Sources: ETCS, pp. 17-18; KYZB 98 (14 June 1930): 30; KYZB 104 (28 July 1930) 113-114; Zhang, Di wit ci Shandong kuangye baogao, p. 294. NOTES

1. See for example Kang Chao, The Development o f Cotton Textile Production in China (Cambridge Mass: East Asian Research Center, Harvard University, 1977), pp. 150-161; Marie-Claire Bergère, Capitalisme National et Impérialisme: La Crise des Filatures Chinoises en 1923 (Paris: Centre de Recherches et de Documentation sur la Chinese Contemporarine, École des Hautes Études en Sciences Sociales, 1980), pp. 41 -44; Peter Duus, “Zaibakô: Japanese Cotton Mills in China, 1895-1937", p. 95 in Peter Duus et al eds, The Japanese Informai Empire in China, 1895-1937 (Stanford: Stanford University Press, 1989). 2. See e.g. Albert Feuerwerker, The Chinese Economy, 1870-1949 (Ann Arbor: Center for Chinese Studies, University of Michigan, 1985), p. 118 where he points out that many features of Chinese management before the war were typical of the period of early industrialisation. 3. Thus Feuerwerkers study of Chee Hsin concludes that the company had little need for direct political patronage by the 1930s. See Albert Feuerwerker, “Industrial Enterprise in Twentieth-Century China: The Chee Hsin Cement Co.”, in Albert Feuerwerker, Rhoads Murphey and Mary C. Wright eds, Approaches to Modem Chinese History (Berkeley: University of California Press, 1967), p. 338. 4. Albert Feuerwerker, China’s Early Industrialization (Cambridge, Mass: Harvard University Press, 1958), pp. 244-245 et passim. 5. Bergère, Capitalisme National et Impérialisme. 6. Meng Xianzhang, Zhongguojindai jingjishijiaocheng (Textbook on modern Chinese economic history) (Shanghai: Zhonghuashuju, 1951), pp. 181-183. 7. Hubei daxue zhengzhi jingji xue jiaoyan shi, Zhongguojindai guomin jingji shi jiangyi (Lectures on the history of modem China’s national economy) (Beijing: Gaodeng jiaoyu chuban she, 1958), pp. 369-382. 8. Thomas G. Rawski, Economic Growth in Prewar China (Berkeley & Los Angeles: University of California Press, 1989). 9. Sherman Cochran, Big Business in China: Sino-Foreign Rivalry in the Cigarette Industry, 1890-1930(Cambridge, Mass: Harvard University Press, 1980). 10. For discussion of some of these reinterpretations and their background, see Tim Wright, “Introduction: Chinese Economic History in a Period of Change”, pp. 1-28 in Tim Wright ed, The Chinese Economy in the Early Twentieth Century: Recent Chinese Studies (Houndmills: Macmillan Press, 1992) and Tim Wright, “'The Spiritual Heritage of Chinese Capitalism’ - Recent Trends in the Historiography of Chinese Enterprise Management”, pp. 205-238 in Jon Unger, ed, "Using the Past to Serve the Present”: Politics and Historiography in Contemporary China (Armonk, NY and London : M.E. Sharpe and Allen and Unwin, 1993). 11. See Wang Yuru, “Lun liangci shijie dazhan zhi jian Zhongguo jingji de

40 fazhan”, Zhongguo jingji shi yanjiu (Studies in Chinese economic history) 1987.2 (May 1987): 97-110, translated as “Economic Development in China Between the Two World Wars (1920-1936)”, pp. 58-77 in Wright, The Chinese Economy in the Early Twentieth Century. 12. This interpretation can be found particularly in biographical treatments of leading Chinese business people. See for example Zhao Jing et al eds, Zhongguojindai minzu shiyejia dejingyingguanli sixiang (The management thought of modem China’s national industrialists) (Kunming: Yunnan renmin chuban she, 1988). In English see Xu Dingxin, “The 'Footprints’ of Chinese Entrepreneurs in Old Shanghai”, pp. 98-112 in Wright, The Chinese Economy in the Early Twentieth Century. 13. Marie-Claire Bergère, The Golden Age of the Chinese Bourgeoisie, 1911-1937, translated by Janet Lloyd (Cambridge: Cambridge University Press, 1989). Note that, despite the title, Berg(re argues (p. 273) that after 1927 the bourgeoisie declined with the reassertion of the power of the bureaucracy. 14. Mao Dun, Zi ye (Twilight) (Beijing: Renmin chuban she, 1983), translated as Midnight (Beijing: Foreign Languages Press, 1979). 15. Douglas Paauw, “The and Economic Stagnation, 1928-1937", Journal o fAsian Studies 4.2 (February 1957): 213-220. 16. Parks M. Coble, Jr, The Shanghai Capitalists and the Nationalist Government, 1927-1937(Cambridge, Mass: Harvard University Press, 1980). 17. Jiu Zhongguo de zibenzhuyi shengchan guanxi (Capitalist production relations in pre-Communist China) (Beijing: Renmin chuban she,1977), pp. 54-55; Huang Yifeng, Jiang Duo, Tang Chuansi and Xu Dingxin, Jiu Zhongguo minzu ziben jieji (National capitalists in pre-Communist China) (Nanjing): Jiangsu guji chuban she, 1990), pp. 404-413. See also Du Xuncheng, Minzu zibenzhuyiyujiu Zhongguo zhengfu 1840-1937 (National capital and the state in pre-Communist China) (Shanghai: Shanghai shehui kexueyuan chubanshe, 1991), pp. 256-264. 18. Cochran, Big Business, p. 197. 19. See for example Arthur Young, China ’s Nation Building Effort, 1927-1937: The Financial and Economic Record (Stanford: Stanford University Press, 1971 ), pp. 400-401 and Wu Yuan-li, “Industrial Development and Economic Policy”, in Paul K.T. Sih, ed., The Strenuous Decade: China ’s Nation-Building Efforts, 1927-1937 (Jamaica, NY: St John’s University Press, 1970), pp. 237-253. 20. See for example Ouyang Zhengzhai, Zhongguo xiandai jingji fazhan shi (Development of modem China’s economy) (Taibei: Shibao wenhua chuban qiye youxian gongsi, 1989), pp. 291-302,306-314. 21. Wang Yum, “Economic Development in China”, p. 75. 22. CiHongfei, “On the Consequences of the 1935 Currency Reform”, in Wright, The Chinese Economy, p. 205.

41 23. Hou Chi-ming, Foreign Investment and Economic Development in China, 1840-1937 (Cambridge, Mass: Harvard University Press, 1965), ch. 6. 24. See Tim Wright, Coal Mining in China’s Economy and Society, 1895-1937 (Cambridge: Cambridge University Press, 1984), p. 126. 25. Brian G. Martin, The Shanghai Green Gang: politics and organized crime, 1919-1937 (Berkeley: University of California Press, 1996); Elizabeth J. Perry, Shanghai on strike: the politics o f Chinese labor (Stanford: Stanford University Press, 1993). 26. Loren Brandt and Thomas J Sargent, “Interpreting new evidence about China and U.S. silver purchases”, Journal o f Monetary Economics 23 (January 1989): 3-34,46-47; Brandt’s arguments have won over an initially sceptical Ramon Myers, see “The World Depression and the Chinese Economy, 1930-6", pp. 253-278 in Ian Brown, ed, The Economies o f Africa and Asia in the Inter-war Depression (London: Routledge, 1989). 27. Wang Yuru, “Capital Formation and Operating Profits of the Kailuan Mining Administration (1903-1937)”, Modem Asian Studies 28.1 (February 1994): 110,125-126. 28. See Tim Wright, “A Mining Enterprise in Early Republican Chinese Society: The Chung-hsing Coal Mining Company”, in Chung-hua min-kuo ch u-ch 7 li-shih yen-t 'ao-hui lun-wen chi (Proceedings of the Conference on the Early History ofthe Republic of China, 1912-1927) (Taipei, 1984),pp. 531-563 for the earlier history of Zhongxing. 29. Yi xian zhi (Gazetteer ofYixian) (1905), 7:14; Wang Xi and Li Enhan eds, Kuangwu dang (Archives on mining) (Taibei: Academic Sinica, 1960), 2: 1356. 30. Wang and Li, Kuangwu dang, 2: 1355-1357 31. Yi xian zhi, 7:14-15; Su Renshan and Xue Wu, “'Yi xian Zhongxing kuangwu ju’ chuangban shimo” (The establishment of the Zhongxing mining bureau at Yi xian), Shandong shi zhi ziliao (Materials for the Shandong historical gazetteer) 1984.1 (no. 6): 175. 32. See for example the report by Zhang in Jingji bu dang’an (Archives of the Ministry of Economics), held at the Institute of Modem History, Academia Sinica, Nankang, Taiwan (hereafter JBD) Dl/2/3/5. 33. North China Herald, 30 December 1904. 34. Santoshdkqgyoshiry6 (Materials on mining in Shandong province), SMR, Kdgyobu komuka, comp (1914), p. 138. 35. Zhang Huiruo, Di wu ciShandong kuangye baogao (Fifth report on mining in Shandong) (Jinan, 1936), p. 281. 36. Wright, “A Mining Enterprise”, pp. 549-553. 37. Ding Wenjiang, “Zuijin wushi nian lai zhi kuangye” (Mining over the last fifty years), in Chen Zhen, Zhongguo jindai gongye shi, di yiji: Minzu ziben chuangban he jingying de gongye (Materials on the history of China’s modem industry, first collection: industries established and run by national capital) (Beijing: Sanlian shudian, 1957), p. 226.

42 38. “Y e Kuichu” (Y e Jinggui), Gongshangjingji shiliao congkan 3 (Materials on industry and commerce, no. 3) (Beijing: Wenshi ziliao chuban she, 1984), p. 70. 39. Yinhangyuekan (Banking monthly), 8.8 (August 1928): 85; Zheng Wanyan, Minguo shijiu nian Shandong kuangye baogao (Shandong mining report, 1930) (Jinan, 1931), p. 278. 40. Wright, “A Mining Enterprise”, p. 560. 41. Coble, Shanghai Capitalists, ch. 2. 42. Yinhang yuekan 8.7 (July 1928): 50; Kuangye zhoubao (Mining Weekly) (hereafter KYZB) 13 (28 August 1928): 225. 43. For Qian Yongming, see Howard L. Boorman, ed, Biographical Dictionary o f Republican China, 4 vols (New York: Columbia University Press, 1967-1971), vol. 1, pp 379-381; “Qian Xinzhi xiansheng xingzhuang” (Life of Qian Xinzhi [Qian Yongming]), in Guo shi guan, Guo shi guan xianzang Mingguo renwu zhuanji shiliao huibian (Collected biographies of personalities from the Republican China in the Guo shi guan), first collection (Taibei: Guo shi guan, 1988), pp. 593-602. 44. Madeleine Chi, “Bureaucratic Capitalists in Operation: Ts’ao Ju-lin and his New Communications Clique”, Journal o f Asian Studies 34.3 (May 1975): 682. 45. Boorman, Biographical Dictionary, vol. 1, pp. 379. 46. North China Herald, 17 April 1937. 47. Feng Gengguang, Zhongguo zhi chuxu yinhang shi (History of China’s savings banks) (Preface,1934), pp.160-161. 48. Other directorships held by Qian Yongming included Central Bank of China, Bank of Communications, Continental Bank, Chung Wai Bank, Sing Tai Bank, China State Bank, Chekiang Industrial Bank, Yien Yeh Commercial Bank, Hua Feng Spinning Co, Datong Coal Mining Company, Taishan Brick and Tile Company, and the Xinwenbao. See Zhonghua minguo ershiliunian quanguo yinhang nianjian (Chinese banking yearbook, 1937) (Shanghai: Zhongguo yinhang jingji yanjiu shi, 1937), B 2,15; D 19,66,98,161; E 34; F 40; Chen Zhen, Zhongguo jindai gongye shi, diyi ji, p. 320; Chen Zhen, Zhongguo jindai gongye shi, di erji: Diguozhvtyi dui Zhongguo gongkuang shiye de qinlue he longduan (Materials on the history of China’s modem industry, second collection: Imperialist invasion and monopoly of China’s industrial and mining enterprises) (Beijing: Sanlian shudian, 1958), p. 787; Who’s Who in China: Biographies o f Chinese Leaders (Shanghai: China Weekly Review, 1936), p. 50. 49. TienHung-mao, Government and Politics in Kuomintang China, 1927-1937 (Stanford: Stanford University Press 1972), p. 66. 50. Frederic Wakeman Jr, Policing Shanghai, 1927-1937 (Berkeley: University of California Press, 1995), p. 124. 51. KYZB 32 (14 January 1929): 519-520; KYZB 63 (28 October 1929): 316.

43 52. His role in the Company does not even rate a mention in Fang Peishou and Ding Yuchang, “Qian Xinzhi” (Qian Xinzhi [Qian Yongming]), Gongshang jingji shiliao congkan (Collected materials on the history of industry and commerce) 2 (December 1983): 51-56, though it is covered in a paragraph in Boorman, Biographical Dictionary, vol. 1, p. 380. 53. Gaimusho, johobu, Gendai Shina jimmeikan (Biographical dictionary of contemporary China) (Tokyo, 1924), pp. 111-112 54. Yinhangyuekan 8.6 (August 1928): 85-91. 55. Gaimusho, johobu, Gendai Chukaminkoko Manshukoku jimmeikan (Biographical dictionary of the Republic of China and Manchukuo) (Tokyo, 1932) (hereafter GCMJ), p. 16; Gaimusho, jdhdbu, Gendai Shinajimmeikan (Biographical dictionary of contemporary China), (Tokyo, 1928), p. 88. 56. Gaimusho, Gendai Shina jimmeikan, 1928, p. 358; Yinhang yuekan 8.8 (August 1928); 93. 57. Zhongguo renmin yinhang Shanghai shi fenhang jinrong yanjiu shi, Jincheng yinhang shiliao (Historical materials on the Kincheng Banking Corporation) (Shanghai: Renmin chuban she, 1983), p. 27. 58. GCMJ, p.159. 59. Yinhang yuekan 8.8 (August 1928): 96. 60. He was an auditor at Liuhegou and a director of the Nanyang Brothers Tobacco Company in the 1930s, see Chen Zhen, Zhongguojindaigongyeshi, di san ji: Qing zhengfu Beiyang zhengfu he Guomindang guanliao ziben chuangban he longduan de gongye (Materials on the history of China’s modem industry, third collection: Industries established and monopolised by the Qing and Beiyang governments and Guomindang bureaucratic capital) (Beijing: Renmin chuban she, 1962), p. 985; Nanyang xiongdai yancao gongsi shiliao (Historical materials on the Nanyang brothers tobacco company) (Shanghai: Renmin chuban she, 1958), p. 754. 61. Thus even among the old management team, several of the prominent ex-officials, notably Zhang Lianfen and Zhu Zhongqi, had been from Zhejiang. 62. “Ye Kuichu”, p. 69. 63. See Yamagami Kaneo, Sekkozaibatsu ron (On the Zhejiang financial clique) (Tokyo, 1938), passim. 64. See Coble, Shanghai Capitalists, ch. 1. 65. Boorman, Biographical Dictionary, vol. 1, pp. ; Chi, “Bureaucratic capitalists”, passim. 66. Boorman, Biographical Dictionary, vol .3, pp. 362-364. 67. Fang and Ding, “Qian Xinzhi”, p. 51. 68. Fang and Ding, “Qian Xinzhi”, p. 54. 69. Zhong[guo] gong[chandang] Zaozhuang kuangwu ju weiyuanhui, with Shandong daxue lishi xi and Zhongguo kexue yuan Shandong fen yuan lishi yanjiu suo, Zaozhuangmeikuangshi (History of the Zaozhuang mine) (Jinan: Shandong renmin chuban she, 1959) (hereafter ZMS), p. 43. I am very

44 grateful to my colleagues at the Institute of Economics at Nankai University for kindly supplying me with a copy of this work. 70. Zhang Shucheng and Tan Zaitang, “Zhongxing meikuang jingying shimo” (Story of the management of the Zhongxing mine), Tianjin wenshi ziliao (Historical materials on Tianjin) 24 (July 1983): 153. 71. KYZB 13 (28 August 1928): 224-225. 72. Yinhangyuekan 8.9 (September 1928): 37-38. 73. Yinhang yuekan 8.9 (September 1928): 38-40. 74. KYZB 17 (7 October 1928): 284; KYZB 19 (21 October 1928): 313; see also Shenbao, 26 September 1928, in Chen, Gongye shi, di san ji, p. 702. 75. Letter of January 1929 from the Ministry of Agriculture and Mines in JBD Dl/3/1/1. 76. Also in JBD Dl/3/1/1. 77. Ji Hua, “Ni Sichong zai Tianjin de touzi” (Ni Sichong’s investments in Tianjin), Jindai shi ziliao (Materials on modem history) 36 (August 1978): 156-162. 78. KYZB 221 (7 January 1933): 842. 79. Letter from Zhongxing in JBD Dl/3/1 /3. 80. JBD Dl/3/1/3. 81. Correspondence between Zhongxing and the Ministry of Industry in JBD Dl/3/1/3. 82. Zheng, Minguo shijiu nian Shandong kuangye baogao, p. 161. 83. See JBD Dl/3/1/3. 84. Liu Xinquan and Shi Yushou, “Shandong Zhongxing meikuang gongren diaocha” (An investigation of the miners at die Zhongxing coal mine, Shandong), Shehui kexue zazhi (Quarterly review of social sciences) 3.1 (March 1932): 77. 85. ZMS,p.77. 86. Liu and Shi, “Gongren diaocha”, p. 77. 87. ZMS,pp. 77-78. 88. ZMS,pp. 84-87. 89. Liu and Shi, “Gongren diaocha”, p. 77. 90. ZMS, pp. 91-92. 91. Liu and Shi, “Gongren diaocha”, p. 87. 92. Xue Shixiao, Zhongguo meikuang gongren yundong shi (History of the workers movement in Chinese coal mines) (Henan: Henan renmin chuban she, 1986), pp. 294-362. 93. ZMS, p. 94; KYZB 173 (7 January 1932): 68. 94. ZMS, pp. 95-96; KYZB 185 (7 April 1932): 258-259. 95. Xue, Zhongguo meikuang gongren yundong shi, p.302. 96. ZMS, pp. 93-94; Qiu Huanwen, Gongyun shi yi ye: yijiusaner nian Zaozhuang meikuang da bagongde huiyi (A page in the history of the labour movement: recollections of the 1932 strike at the Zaozhuang coal mine) (Beijing: Renmin chuban she, 1958), pp. 5-6.

45 97. Qiu, Gongyun shiyiye, p. 13. 98. ZMS, pp. 97-102; KYZB 200 (28 July 1932): 500-501; KYZB 201 (7 August 1932): 516; Qiu, Gongyun shi yi ye, pp. 14-15. 99. Xue, Zhongguo meikuang gongren yundong shi, pp. 305-306. 100. Qiu, Gongyun shi yi ye, p. 25. 101. ZMS, pp. 103-108; Xue, Zhongguo meikuang gongren yundong shi, pp. 627, 630. 102. Qiu, Gongyun shiyiye, p. 26. 103. Qiu, Gongyun shi yi ye, p. 26. 104. Zhonghangyuekan (Central Bank Monthly) 4.3 (March 1932): 124-125. 105. KYZB 297 (7 August 1934): 904 and 329 (7 April 1935): 257; Nichi-Man Shoji Kabushiki Kaisha, Hoku-Shi sekitankai no genkyd (The present situation of the North China coal industry) (1937), pp. 150-151. 106. See No. 2 Archives 422 (5) 129. 107. M.W. Kirby, “The Control of Competition in the British Coal Mining Industry in the Thirties”, Economic History Review 26.2 (November 1973): 273-84; Barry Supple, “The Political Economy of Demoralization: The State and the Coalmining Industry in America and Britain Between the Wars”, Economic History Review 41.4 (November 1988): 566-91. 108. Colin Simmons, “The Great Depression and Indian Industry: Changing Interpretations and Changing Perceptions”, Modem Asian Studies 21.3 (August 1987): 618. 109. Jin Sung Chung, “Juyo sangyo tochiho moto ni okeru sekitan dokusen soshiki no shijo tdchi seisaku” (Japanese coal cartels and the Major Industries Control Law, 1933-1936), Shakai keizai shigaku (Socio-Economic History) 59.4 (October/November 1993): 1-32. 110. KYZB, passim; Wu Bannong, “Rimei qingxiao zhong zhi guomei wenti” (Dumping of Japanese coal and the problems of Chinese coal), Shehui kexue zazhi 3.4 (December 1932): 527-528; Tezuka Masao, Jihen zen ni okeru Shina sekitan no seisan to ryudd{The production and distribution of coal in China before 1937) (Tokyo: Toa kenkyujo, 1940), p. 251. 111. KYZB 30 (8 January 1929): 488; Kuboyama Yuzd, Shina sekitan chosa hokokusho (Report on coal in China) (Tokyo, 1940), p. 348; Gu Lang, Zhongguo shi da kuangchang diaocha ji (Report of an investigation into the ten laragest mines in China) (Shanghai, 1916), 6:13 - the identification is not completely certain, as the Zhongxing references all use Chinese characters or kana rather than the original name. 112. KYZB 30 (8 January 1929): 488. 113. JBD Dl/2/7/3; Zheng, Minguo shijiunian Shandong kuangye baogao, pp. 321-325. 114. Minami Manshu Tetsudo Kabushiki Kaisha, Hoku-Shi keizai chdsajo, Chdko tankdrdddgaiyo chosa hokokusho (Report of an investigation of the labour situation at the Zhongxing mine) (Beijing, 1941), p. 31. 115. Hou Defeng and Cao Guoquan, “Sanshi nian lai Zhongguo zhi meikuang

46 shiye” (China’s coal mining industry over the past thirty years), in Zhongguo gongchengshi xuehui, Sanshi nian lai zhi Zhongguo gongcheng (China’s engineering over the past thirty years) (Nanjing, 1948), p. 8. 116. KYZB 217(7 December 1932): 787 117. KYZB 406(14 November 1936): 350-352. 118. Tezuka Masao, Shina jukoyo hattatsu shi (Development of China’s heavy industry) (Kyoto: Taigado, 1944), pp. 312-314. 119. Minami Manshü Tetsudo Kabushiki Kaisha, chdsabu, Ekiken tanden chosa shiryd (Research data on tibe Yi xian coal field) (hereafter ETCS) (Dalian, 1937), pp. 61,65 120. Minami Manshü Tetsudo Kabushiki Kaisha, Tenshin jimusho chdsaka, Kita Shina kdgyd kiyo (Situation of mining in north China) (Tianjin, 1936), p. 73. 121. The credit for technical success must reside mainly with the Chinese personnel. This success was uneven. By 1930, as its earlier technological imports had begun to become obsolete, the mines were exhibiting the signs of technological stagnation common to many Chinese companies: in 1930 a government report on Zhongxing”s equipment revealed that the south pit, which was now 20 years old, required restoration in several places, and used an obsolete form of cages. The 10-year-old north pit was still usable, though there were some problems underground. Mining and haulage methods underground could both be improved, and the pit be better ventilated, though there was little gas. 122. ZMS, p. 43. 123. ZMS, p. 44. 124. Wright, Coal Mining, ch. 5. 125. KYZB 254 (14 September 1933): 212. 126. KYZB 201 (7 August 1932): 521-522; Zhang, Di wu ci Shandong kuangye baogao, p. 327. 127. Naval Intelligence Division, China Proper (Geographical Handbook Series), 3 vols (n. p.: Naval Intelligence Division, 1944), vol. 3, pp. 383-386. 128. KYZB 354 (14 September 1933); 211-212. 129. KYZB 324 (28 February 193 5): 184. 130. Zhang, Di wu ci Shandong kuangye baogao, p. 328. 131. KYZB 403 (21 October 1936): 291. 132. ETCS, p. 157; Boorman, Biographical Dictionary, vol. 1, p. 380. 133. Hu, Zhongguo meikuang, p. 256; ETCS, p. 4. 134. Tezuka, Jihen zen n i okeru Shina sekitan no seisan to ryddó, p. 247; ETCS, p. 41. 135. Nathan Papers, Bodleian Library, Oxford, Nathan to Turner, 15 November 1933. 136. Nathan Papers, Nathan to Turner, 31 December 1935. 137. Nathan Papers, Nathan to Turner, 1 November 1933. 138. For the attempt to establish a cartel, see Tim Wright, “The Nationalist State and the Regulation of Chinese Industry During the Nanjing Decade:

47 Competition and Control in Coal Mining”, in David Pong and Edmund Fung, eds, Ideal and Reality: Essays in Social and Political Change in China, 1860-1949 (Boston: University Press of America, 1985), pp. 127-152; see also Jinchengyinhang, pp. 285-286. 139. SMR, chösabu, Shisen Hakusan Shokyü tanden chösa shiryö (Research data on the coalfields of Zichuan, Boshan and Zhangqiu) (Dalian, 1937), p. 581.

48 APPENDIX

♦15 August 1996 Dr David Faure, “The Chinese bourgeoisie Oxford University reconsidered: business structure, political status and the emergence of a social class”

16 August 1996 Dr Choi Chi-cheung, “Lineage and business in Hong Kong Univ of southeastern China: a case study of Science & Technology the Kintyelung company, 1850- 1990"

22 August 1996 Prof William Kirby, “Business, Law and Politics in the Harvard University Making of the Modem Chinese Corporation”

*28 August 1996 Prof Wang Yeh-chien, “Economic Depression in Early Academia Sinica 19th Century”

29 August 1996 Assoc Prof Tim Wright “Business Risk and Political Risk in the Chinese Coal Industry During the 1920s and 1930s: The Experience of the Zhongxing C o m p a n y ”

29 August 1996 Dr Po-Yin Chung “Siyi Merchants in Hong Kong and their insurance business in South China”

30 August 1996 Prof Robert Gardella, “Perspective and Problems in US Merchant Marine Chinese Accounting History in the A cad em y Twentieth Century”

5 S ep tem b er 1996 Prof Takeshi “H.K. Bank Branch System & Hamashita, Tokyo Overseas Chinese Business U niversity Networks, 19-20 Centuries”

*19 September Prof Ho Hon-wei “Gambling Operations in Late 1996 Academia Sinica Ch’ing Kwangtung”

10 October 1996 Prof K.C. Liu “Cultural Perspectives on Chinese Univ of California Business Development”

11 October 1996 P ro f M alco lm F alkus “Sino-Thai Business Group” Univ. of New England

25 October Assoc Prof Maria Tam “Yumcha in Hong Kong: 1996 Chinese Univ of Hong Constructed and Contested K ong Identities”

48 11 A p ril 1 9 9 7 Dr Constance Lever- “The Dragon and Rising Sun: Japanese Tracy, Flinders Univ. Corporations and Diaspora Chinese o f South Australia Capitalism: Who’s Winning Out”?

11 A p ril 1 9 9 7 Dr Christine Inglis, “The Economic Values and Perceptions U n iv . o f S y d n e y of Recent Chinese Immigrants to Australia: Implications for Development of Trade and Business Ties”

18 April 1997 Prof Peter Li, Univ. “Transplanted Cultural Thesis and o f S a sk a tc h e w a n , Blocked Mobility Thesis Reconsidered: C a n a d a Chinese Business and Investment in C a n a d a ”

31 July 1997 P r o f P h ilip K u h n “China in the History of Chinese Harvard University O v e r s e a s ”

11 A u g u s t 1 9 9 7 Dr Paul C.K. Kwong, “Science & State: Emergence of Modem City Univ. of Hong Ideologies in China, 1897-1997" K o n g

29 August 1997 Mr Clayton Bredt “M ing-Ch’ing Economic History: Research Possibilities”

12 September 1997 Dr Liew Leong, “The Chinese Economy in Transition: Griffith University From Plan to Market”

10 October 1997 Prof Carl Trocki, “Opium Farming in 19th Century Queensland S in g a p o r e ” University of T e c h n o lo g y

29 October 1997 Dr Mike Godley, “Historical Perspectives on Overseas History, Monash Chinese Business” U n iv e rsity

49 16 March 1998 Prof Sherman Cochran, “The Marketing of Medicine and the Cornell University Spread of Consumer Culture in Asia: Hu Wenhu’s Overseas Chinese Empire, 1900-1950"

1 May 1998 Assoc Prof Tuan Nuyen, “Chinese Philosophy and Western Philosophy, Univ of Capitalism” Queensland

8 May 1998 Prof Bin Wong, Univ of “The Asian Trading World: Between California Merchant and Agrarian Empires”

22 May 1998 Mr John Weik, History, “Technological Transformation of Univ. of Queensland Modem Japan”

29 May 1998 Prof Anthony Reid, “Surviving the Indonesian Crisis: The Research School of Pacific Chinese as 'essential outsiders’” and Asian Studies, Australian National University

29 May 1998 Assoc Prof yen Ching- “Ethnic Chinese Business Network in hwang, Univ of Adelaide East and Southeast Asia”

5 June 1998 Prof Wang Gungwu, Former “Overseas Chinese Trade, Business VC of Univ of Hong Kong Networks and Migration”

22 October 1998 Dr Jagdish Raj “Impact of British Rule on Indian Economy”

30 October 1998 Prof Chen Zhengping “The State of the Arts of Chinese CASS Economic History in the PRC”

* Available from the Asian Business History Centre

50 ASSOCIATE PROFESSOR TIM WRIGHT President of Chinese Studies Association of Australia. He is Executive Dean of Humanities at Murdoch University and a well-known Australian academic in the area of Chinese social and economic history. He has written a monograph on Chinese mining and edited a book on Republican Chinese economic history. He is also working on the impact of the great depression on the Chinese economy in the 1930s. Recently he edited Sow-sheng Leong’s book, Migration and Ethnicity in Chinese History, Stanford University Press, 1997. Currently he is coediting a book on Shanghai business with Chi-Kong Lai. Editor Chi-Kong Lai (History, The University of Queensland)

Associate Editor David Faure (Oxford University)

Assistant Editor Suzanne Lewis (History, The University of Queensland

Editorial Board Joseph Chai (Economics, The University of Queensland) Carl Trocki (Humanities, Queensland University of Technology) Andrea McElderry (History, University of Louisville) David Ip (Sociology, The University of Queensland) Albert Feuerwerker (History, University of Michigan) Marion Diamond (History, The University of Queensland) John Weik (History, The University of Queensland) Robert Gardella (Humanities, US Merchant Marine Academy) Tim Wright (Humanities, Murdoch University) Madeleine Zehn (History, Columbia University) Linsun Cheng (History, University of Massachusetts, Dartmouth) David Schak (Asian Studies, Griffith University) Robert Elson (Asian Studies, Griffith University) Wellington Chan (History, Occidental College) Robert Cribb (History, The University of Queensland)

October 1998 ISBN: 1864990430 Published by the Asian Business History Centre The University of Queensland