K. P. Chen
Encyclopedia
K. P. Chen (b. 1880—d. July 1976) was a Shanghai
-based Chinese banker and State Councillor, was a great innovator
, as one of China
's most successful entrepreneurs in the twentieth century, and was particularly influential in the financial and business world of Shanghai
.
In fact, in "Banking in Modern China: Entrepreneurs, Professional Managers, and the Development of Chinese...", the author, Linsun Cheng says, "It is almost impossible to describe any significant innovation in the history of modern Chinese banks without mentioning K.P. Chen's name." This unassuming looking gent was the founder of the first modern Chinese savings bank, a travel agency, as well as the China Assurance Corporation Ltd. On Monday, Mar. 18, 1940, Time Magazine described him thus:
"Middle-aged Banker Chen (University of Pennsylvania
'09) looks so much like a Westerner's idea of a Chinese banker that wily and subtle-minded Americans
have difficulty in believing he is as simple and direct as he is. Of average height, moderately fat, bespectacled, careful, shy of the press, close-mouthed (in the Calvin Coolidge
rather than Sumner Welles
sense), he has no hobbies, makes no picturesque Oriental remarks, works 24 hours a day at the unglamorous business of cementing U.S.-Chinese trade relations, and considers Chinese repayment of U. S. loans his personal responsibility. His pride: that China has repaid $2,300,000 of her previous $25,000,000 loan, is now, because of U. S. needs for tung oil
and tin
, ahead of schedule."
The most important elements in his success were his American education and connections; his sense of professionalism (demonstrated by his opposition to official interference); his ability to compete and collaborate with foreign firms; his desire to innovate and explore various business strategies; his skill at obtaining community and professional support; and the unity of Chinese bankers.
province in China in 1880. He was born into a family with little education. He caught the attention of compradores of a foreign firm who decided to sponsor his education in America
. He graduated in 1909 with a BSc. degree from the Wharton School at the University of Pennsylvania
in Philadelphia.
After graduation, as part of the sponsorship agreement, he worked as an intern in an American bank for a year. He then returned to China where he joined the Nanyang Quanyehui (the Nanjing South Seas Exhibition, imperial China’s first attempt to join the great European powers in hosting an international exposition, which showcased to the world both China’s modernization and her cultural heritage).
He broke with tradition and moved the bank's headquarters from Jiangsu
to the banking capital of Shanghai
, made loans on credit of goods rather than personal credit and invited Western accountants to regularly audit the bank's balance books.
The bank established warehouses for its commodities lending operations, the first to do so in China
.
He did all this in just a year, after which he was forced to resign when he refused to disclose the names of the bank's customers to a local warlord.
, Zhuang Dezhi, founded The Shanghai Commercial and Savings Bank
, in Shanghai
in June 1915, and was appointed its General Manager. Comparatively, their initial capital was so small the bank became known as "the Little Shanghai Bank".
His guiding principle was “service to society, support for industry, and prosperity to enhance international trade” and he made sure that his staff must be very polite and patient with their clients, small depositors. In his address to his staff in Qingdao
branch, he emphasized that they must appreciate their customers business—whether for one or 100 Chinese dollars—must do their best to give their customers convenience, and must be friendly to businessmen. He said “the customer’s psychology always favors a busy place,” because the sight of a busy firm will make people trust it and claimed that the aim of The Shanghai Bank was to serve society and not just make a profit. So, even though some services would not be profitable, they still had to be offered. Chen Guangfu xiansheng lüezhuan (The short biography of Chen Guangfu, Taipei: Shanghai shangye chuxu yinhang, 1977, p. 31).
Innovation seems to have come naturally to K. P. Chen. It did not stop with the Kiangsu Bank. At The The Shanghai Bank
, contrary to what other banks were doing at the time, he concentrated on attracting deposits from the public instead of notes issuance.
K. P. Chen was the first to introduce "one dollar" accounts, encouraging savings among individual members of the greater public and took the lead in introducing many different types of savings programs.
The Shanghai Commercial and Savings Bank
's motto, very reflective of Chen's values, was "service to society, support for industry, and development of international trade."
In 1928 the The Shanghai Bank
handled over 6 million Yuan
in foreign exchange and became the number one private bank handling foreign exchange in China
. The Chartered Bank of India, Australia and China
became upset because of The Shanghai Bank
's efforts to promote their foreign exchange business, and decided to refuse The Shanghai Bank
's foreign exchange contracts. In retaliation K. P. Chen refused to accept contracts from the Chartered Bank
and made this known to the Shanghai
banking community through The Shanghai Bankers Association and The Shanghai Foreign Bankers Association, whom he rallied to his cause. Eventually the Chartered Bank
came to cooperate with the Shanghai Bank
through the mediation of a third party.
In 1931 he created a special trust department in the bank initially to rent out safety deposit boxes but later on including insurance and real estate operations among other things.
He traveled all over China
. In the 1930s K. P. Chen would go into the Chinese countryside and attempt to make small farmers "banking-conscious", as observed by a Chartered Bank
manager who accompanied Chen on one of his stints. "Don't go to Sinkiang
. It's a very hard trip—even dangerous. And when you come back, no one will believe what you find there." he once told a Time Inc.'s Nanking correspondent, Frederick Gruin.
he decided to establish a travel service department within his bank to compete with the foreign travel agencies.
Having made the necessary preparations he submitted a proposal to the Ministry of Communications under the Northern Warlords Government (1912–1927), asking for permission to establish a travel service department and to sell train tickets on a commission basis.
Whilst the proposal was vociferously opposed by the many foreigners occupying important positions in many Chinese railways build with foreign loans at the National Railway Through Transport Conference, it was finally adopted thanks to the support of General Director of Communications Ye Gongche and others, and on August 1, 1923, the Travel Service Department of the Shanghai Commercial, the first of its kind run by Chinese compatriots, was born in the Banks Building on Ningpo road. It operated on a trial basis and opened only to those from "polite society" instead of to the wider populace, providing a comparatively limited business scope.
Its official opening ceremony was held on June 1, 1927 and the Shanghai Commercial and Savings Bank
travel department was formally registered as the China Travel Service
. Unfortunately, the average daily turnover in the next few months was too low to cover costs. This embarrassing situation provoked a series of complaints from the board of directors and Chen was obliged to make a thorough reshuffle.
With a total investment of US$50,000, the travel agency was separated from its parent company and had to take on the whole responsibility for its profit and loss from then on. Chen Xiangtao, once an official from the Shanghai Public Communications Bureau was assigned the post of general manager. In April 1928, it changed its name to China Travel Service
(holdings) Co. Ltd. (abbreviated as CTS (holding)). The year 1931 was the heyday for the CTS, they won the right to deal in European train tickets for Chinese traveling overseas. In the same year CTS opened up more than 20 chain hostels around the country and its annual profits reached more than US$4 million.
The CTS halted its travel service during the War of Resistance against Japan (1937–45) but was unable to recover after the communist revolution in 1949. Along with the management of the Shanghai Commercial and Savings Bank
, the CTS evacuated to Taiwan, but was unable to resume operations. It declared bankruptcy in Taipei
in July 1954 and retreated from the arena, but its epoch-making contribution to the Chinese Tourism Industry is still dwelt upon with great relish.
The mainland assets of the CTS were seized by Communist authorities, and today its successor is one of the state-owned large-scale lead enterprises managed by the State-owned Assets Supervision and Administration Commission of the State Council
. The core business of CTS (holdings) includes travel, industry invests (steel and iron), the related real estate development and distribution trade.
who like he was, represented a new generation of modern bankers.
Half of his initial capital for the Shanghai Commercial and Savings Bank
came from Li's sources.
In 1916, both K. P. Chen and Li Ming stood up for Chang Kia-ngau
and accused the government of wrongfully issuing the order when Chang's Bank of China
's Shanghai office got into trouble for refusing to obey the governments order to suspend banknote remittance. After this incident, the Bank of China
was able to assert its independence from the Yuan Shih-k'ai regime in Peking and started nearly two decades of tremendous growth as China
's largest private bank.
K. P. Chen initially became close to Chang Kia-ngau
when he became a private financial consultant to the Bank of China
at the time between leaving the Kiangsu Provincial Bank and the founding of the Shanghai Commercial and Savings Bank
.
Probably because of his tiny initial capital, K. P. Chen received a long term interbank deposit of 50,000 Yuan from Chang
's Bank of China
as reserve capital encouraging close cooperation between the two banks. Chen and Chang shared a vision of using private capital to develop and modernize the country.
During World War II
, the Shanghai Commercial and Savings Bank
was devoted to consolidating the economy. In order to solve the financial problems, K. P. Chen represented the government of the Republic of China
and negotiated with U.S.A. for loans. Some agreements were made:
In 1938 when the Chinese Ambassador Wellington Koo
called on U. S. Secretary of the Treasury Henry Morgenthau
to seek financial aid, the U. S. Secretary told him it might be advisable for the Chinese Government
to send K. P. Chen (whom Morgenthau
had negotiated with in the past) to America to enquire after credit for the purchase of flour
and grain
goods.
In 1939 Finance Minister H.H. Kung, through K. P. Chen, endeavored to obtain assistance from the American Commercial Credit for the purchase of four airplanes, badly needed by the China National Aviation Corporation
. K. P. Chen also participated in concluding a contract at Detroit to purchase 1,000 trucks from General Motors
and Chrysler
for the Chinese government.
Reputation was important to him and he always made sure he kept his promises and by so doing, demonstrated integrity and ensured that China met its commitments.
Time Magazine on Monday, Apr. 6, 1942 reported that "Shy, determined Chinese financier K.P. Chen stuck a feather in his cap last week. From Chungking he wired Manhattan's Universal Trading Corp. to pay the final installment on a $22,000,000 Export-Import Bank loan smack on the tung-oil barrel head—nearly two years before the last installment on the loan was due." This showed U.S. Treasury officials that China could do business even when Japan controlled its coast. When he sought to borrow money from Washington
in 1938, democracy was not considered good security but tung oil, essential in high-grade paints and varnishes, was. To make this work he founded Universal Trading Corp. in Manhattan
to manage tung-oil sales, budgeting one-half of the proceeds to repay the debt. He also organized Foo Shing Trading Corp. in China
to gather and ship the oil.
K. P. Chen made outstanding contributions in stabilizing the monetary system and raising funds for war of resistance.
After the communist revolution in mainland China
, K.P. Chen followed the Kuomintang
-led government to Taiwan, though his Shanghai Commercial and Savings Bank
was unable to reestablish its headquarters until 1954. In 1964, the bank was allowed to resume operations. It was the only private bank from the mainland which was allowed to resume commercial operations after the retreat to Taiwan. In 1976, K.P. Chen was succeeded by Chu Ju-tang as chairman of the bank.
and her sister, Madame Sun Yat-sen
were caught in Hong Kong
when war erupted in Asia
. Amid a torrential downpour of bombs and artillery shells, K. P. Chen, Kung, and Madame Sun, were hustled into a plane, flown over the Japanese lines and set safely down, 200 miles inland. (From the Dec. 22, 1941 issue of TIME magazine).
, President of the National Government of the Republic of China
nominated K. P. Chen to membership of the then new state council.
He approved an annual budget of 12,000 tael
in silver and invited a former manager of the Deutsche-Asiatische Bank to lecture his staff on the theory and practice of foreign exchange.
He set up an educational fund to send senior managers to America
to continue their education and practice advanced banking skills there.
The bank had a global business network through its overseas representative offices managed by its senior managers.
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
-based Chinese banker and State Councillor, was a great innovator
Innovator
An innovator in a general sense, is a person or an organization who is one of the first to introduce into reality something better than before. That often opens up a new area for others and achieves an innovation.-History:...
, as one of China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's most successful entrepreneurs in the twentieth century, and was particularly influential in the financial and business world of Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
.
In fact, in "Banking in Modern China: Entrepreneurs, Professional Managers, and the Development of Chinese...", the author, Linsun Cheng says, "It is almost impossible to describe any significant innovation in the history of modern Chinese banks without mentioning K.P. Chen's name." This unassuming looking gent was the founder of the first modern Chinese savings bank, a travel agency, as well as the China Assurance Corporation Ltd. On Monday, Mar. 18, 1940, Time Magazine described him thus:
"Middle-aged Banker Chen (University of Pennsylvania
University of Pennsylvania
The University of Pennsylvania is a private, Ivy League university located in Philadelphia, Pennsylvania, United States. Penn is the fourth-oldest institution of higher education in the United States,Penn is the fourth-oldest using the founding dates claimed by each institution...
'09) looks so much like a Westerner's idea of a Chinese banker that wily and subtle-minded Americans
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
have difficulty in believing he is as simple and direct as he is. Of average height, moderately fat, bespectacled, careful, shy of the press, close-mouthed (in the Calvin Coolidge
Calvin Coolidge
John Calvin Coolidge, Jr. was the 30th President of the United States . A Republican lawyer from Vermont, Coolidge worked his way up the ladder of Massachusetts state politics, eventually becoming governor of that state...
rather than Sumner Welles
Sumner Welles
Benjamin Sumner Welles was an American government official and diplomat in the Foreign Service. He was a major foreign policy adviser to President Franklin D. Roosevelt and served as Under Secretary of State from 1937 to 1943, during FDR's presidency.-Early life:Benjamin Sumner Welles was born in...
sense), he has no hobbies, makes no picturesque Oriental remarks, works 24 hours a day at the unglamorous business of cementing U.S.-Chinese trade relations, and considers Chinese repayment of U. S. loans his personal responsibility. His pride: that China has repaid $2,300,000 of her previous $25,000,000 loan, is now, because of U. S. needs for tung oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
and tin
Tin
Tin is a chemical element with the symbol Sn and atomic number 50. It is a main group metal in group 14 of the periodic table. Tin shows chemical similarity to both neighboring group 14 elements, germanium and lead and has two possible oxidation states, +2 and the slightly more stable +4...
, ahead of schedule."
The most important elements in his success were his American education and connections; his sense of professionalism (demonstrated by his opposition to official interference); his ability to compete and collaborate with foreign firms; his desire to innovate and explore various business strategies; his skill at obtaining community and professional support; and the unity of Chinese bankers.
Early life
K. P. Chen was born in Dantu, JiangsuJiangsu
' is a province of the People's Republic of China, located along the east coast of the country. The name comes from jiang, short for the city of Jiangning , and su, for the city of Suzhou. The abbreviation for this province is "苏" , the second character of its name...
province in China in 1880. He was born into a family with little education. He caught the attention of compradores of a foreign firm who decided to sponsor his education in America
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. He graduated in 1909 with a BSc. degree from the Wharton School at the University of Pennsylvania
University of Pennsylvania
The University of Pennsylvania is a private, Ivy League university located in Philadelphia, Pennsylvania, United States. Penn is the fourth-oldest institution of higher education in the United States,Penn is the fourth-oldest using the founding dates claimed by each institution...
in Philadelphia.
After graduation, as part of the sponsorship agreement, he worked as an intern in an American bank for a year. He then returned to China where he joined the Nanyang Quanyehui (the Nanjing South Seas Exhibition, imperial China’s first attempt to join the great European powers in hosting an international exposition, which showcased to the world both China’s modernization and her cultural heritage).
The Jiangsu Bank
K. P. Chen began his China banking career in 1913, when he joined a provincial government bank, the Kiangsu Provincial Bank, as its General Manager. There, he introduced something new nearly every day, believing innovation necessary for success.He broke with tradition and moved the bank's headquarters from Jiangsu
Jiangsu
' is a province of the People's Republic of China, located along the east coast of the country. The name comes from jiang, short for the city of Jiangning , and su, for the city of Suzhou. The abbreviation for this province is "苏" , the second character of its name...
to the banking capital of Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
, made loans on credit of goods rather than personal credit and invited Western accountants to regularly audit the bank's balance books.
The bank established warehouses for its commodities lending operations, the first to do so in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
.
He did all this in just a year, after which he was forced to resign when he refused to disclose the names of the bank's customers to a local warlord.
The Shanghai Commercial & Savings Bank (The Shanghai Bank)
With 80,000 Yuan in initial capital, K. P. Chen, together with some others including President of the Chinese Red CrossRed Cross Society of the Republic of China
The Red Cross Society of the Republic of China is the national Red Cross Society of Taiwan . The Society is recognized by the International Committee of the Red Cross as a national committee...
, Zhuang Dezhi, founded The Shanghai Commercial and Savings Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
, in Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
in June 1915, and was appointed its General Manager. Comparatively, their initial capital was so small the bank became known as "the Little Shanghai Bank".
His guiding principle was “service to society, support for industry, and prosperity to enhance international trade” and he made sure that his staff must be very polite and patient with their clients, small depositors. In his address to his staff in Qingdao
Qingdao
' also known in the West by its postal map spelling Tsingtao, is a major city with a population of over 8.715 million in eastern Shandong province, Eastern China. Its built up area, made of 7 urban districts plus Jimo city, is home to about 4,346,000 inhabitants in 2010.It borders Yantai to the...
branch, he emphasized that they must appreciate their customers business—whether for one or 100 Chinese dollars—must do their best to give their customers convenience, and must be friendly to businessmen. He said “the customer’s psychology always favors a busy place,” because the sight of a busy firm will make people trust it and claimed that the aim of The Shanghai Bank was to serve society and not just make a profit. So, even though some services would not be profitable, they still had to be offered. Chen Guangfu xiansheng lüezhuan (The short biography of Chen Guangfu, Taipei: Shanghai shangye chuxu yinhang, 1977, p. 31).
Innovation seems to have come naturally to K. P. Chen. It did not stop with the Kiangsu Bank. At The The Shanghai Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
, contrary to what other banks were doing at the time, he concentrated on attracting deposits from the public instead of notes issuance.
K. P. Chen was the first to introduce "one dollar" accounts, encouraging savings among individual members of the greater public and took the lead in introducing many different types of savings programs.
The Shanghai Commercial and Savings Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
's motto, very reflective of Chen's values, was "service to society, support for industry, and development of international trade."
In 1928 the The Shanghai Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
handled over 6 million Yuan
Chinese yuan
The yuan is the base unit of a number of modern Chinese currencies. The yuan is the primary unit of account of the Renminbi.A yuán is also known colloquially as a kuài . One yuán is divided into 10 jiǎo or colloquially máo...
in foreign exchange and became the number one private bank handling foreign exchange in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. The Chartered Bank of India, Australia and China
Standard Chartered Bank
Standard Chartered PLC is a multinational financial services company headquartered in London, United Kingdom with operations in more than seventy countries...
became upset because of The Shanghai Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
's efforts to promote their foreign exchange business, and decided to refuse The Shanghai Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
's foreign exchange contracts. In retaliation K. P. Chen refused to accept contracts from the Chartered Bank
Standard Chartered Bank
Standard Chartered PLC is a multinational financial services company headquartered in London, United Kingdom with operations in more than seventy countries...
and made this known to the Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
banking community through The Shanghai Bankers Association and The Shanghai Foreign Bankers Association, whom he rallied to his cause. Eventually the Chartered Bank
Standard Chartered Bank
Standard Chartered PLC is a multinational financial services company headquartered in London, United Kingdom with operations in more than seventy countries...
came to cooperate with the Shanghai Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
through the mediation of a third party.
In 1931 he created a special trust department in the bank initially to rent out safety deposit boxes but later on including insurance and real estate operations among other things.
He traveled all over China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. In the 1930s K. P. Chen would go into the Chinese countryside and attempt to make small farmers "banking-conscious", as observed by a Chartered Bank
Standard Chartered Bank
Standard Chartered PLC is a multinational financial services company headquartered in London, United Kingdom with operations in more than seventy countries...
manager who accompanied Chen on one of his stints. "Don't go to Sinkiang
Xinjiang
Xinjiang is an autonomous region of the People's Republic of China. It is the largest Chinese administrative division and spans over 1.6 million km2...
. It's a very hard trip—even dangerous. And when you come back, no one will believe what you find there." he once told a Time Inc.'s Nanking correspondent, Frederick Gruin.
Travel Service Department of the Shanghai Commercial and Savings Bank
In 1923 K. P. Chen was treated badly when booking his passage at a British-run travel agency. On returning to ShanghaiShanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
he decided to establish a travel service department within his bank to compete with the foreign travel agencies.
Having made the necessary preparations he submitted a proposal to the Ministry of Communications under the Northern Warlords Government (1912–1927), asking for permission to establish a travel service department and to sell train tickets on a commission basis.
Whilst the proposal was vociferously opposed by the many foreigners occupying important positions in many Chinese railways build with foreign loans at the National Railway Through Transport Conference, it was finally adopted thanks to the support of General Director of Communications Ye Gongche and others, and on August 1, 1923, the Travel Service Department of the Shanghai Commercial, the first of its kind run by Chinese compatriots, was born in the Banks Building on Ningpo road. It operated on a trial basis and opened only to those from "polite society" instead of to the wider populace, providing a comparatively limited business scope.
Its official opening ceremony was held on June 1, 1927 and the Shanghai Commercial and Savings Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
travel department was formally registered as the China Travel Service
China Travel Service
The China Travel Service is the tourism and travel agency of the government of the People's Republic of China. It was established on November 19, 1949 tasked with marketing China to the rest of the world and to promote and develop its tourism economy. It is a subordinate agency to the National...
. Unfortunately, the average daily turnover in the next few months was too low to cover costs. This embarrassing situation provoked a series of complaints from the board of directors and Chen was obliged to make a thorough reshuffle.
With a total investment of US$50,000, the travel agency was separated from its parent company and had to take on the whole responsibility for its profit and loss from then on. Chen Xiangtao, once an official from the Shanghai Public Communications Bureau was assigned the post of general manager. In April 1928, it changed its name to China Travel Service
China Travel Service
The China Travel Service is the tourism and travel agency of the government of the People's Republic of China. It was established on November 19, 1949 tasked with marketing China to the rest of the world and to promote and develop its tourism economy. It is a subordinate agency to the National...
(holdings) Co. Ltd. (abbreviated as CTS (holding)). The year 1931 was the heyday for the CTS, they won the right to deal in European train tickets for Chinese traveling overseas. In the same year CTS opened up more than 20 chain hostels around the country and its annual profits reached more than US$4 million.
The CTS halted its travel service during the War of Resistance against Japan (1937–45) but was unable to recover after the communist revolution in 1949. Along with the management of the Shanghai Commercial and Savings Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
, the CTS evacuated to Taiwan, but was unable to resume operations. It declared bankruptcy in Taipei
Taipei
Taipei City is the capital of the Republic of China and the central city of the largest metropolitan area of Taiwan. Situated at the northern tip of the island, Taipei is located on the Tamsui River, and is about 25 km southwest of Keelung, its port on the Pacific Ocean...
in July 1954 and retreated from the arena, but its epoch-making contribution to the Chinese Tourism Industry is still dwelt upon with great relish.
The mainland assets of the CTS were seized by Communist authorities, and today its successor is one of the state-owned large-scale lead enterprises managed by the State-owned Assets Supervision and Administration Commission of the State Council
State-owned Assets Supervision and Administration Commission of the State Council
The State-owned Assets Supervision and Administration Commission of the State Council is a special commission of the People's Republic of China, directly under the State Council...
. The core business of CTS (holdings) includes travel, industry invests (steel and iron), the related real estate development and distribution trade.
The Three Musketeers
K. P. Chen cultivated close relationships with Li Ming (founder and CEO of Chekiang Industrial Bank and Chairman of the Shanghai Bankers Association), and Chang Kia-ngauZhang Jiaao
Chang Kia-ngau . Known almost exclusively as Chang Kia-ngau in the West, Zhang was born in 1889 in Baoshan District, near Shanghai. His grandfather was a Ch'ing dynasty official and his father a doctor, so he and his siblings enjoyed educational opportunities not available to most of their...
who like he was, represented a new generation of modern bankers.
Half of his initial capital for the Shanghai Commercial and Savings Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
came from Li's sources.
In 1916, both K. P. Chen and Li Ming stood up for Chang Kia-ngau
Zhang Jiaao
Chang Kia-ngau . Known almost exclusively as Chang Kia-ngau in the West, Zhang was born in 1889 in Baoshan District, near Shanghai. His grandfather was a Ch'ing dynasty official and his father a doctor, so he and his siblings enjoyed educational opportunities not available to most of their...
and accused the government of wrongfully issuing the order when Chang's Bank of China
Bank of China
Bank of China Limited is one of the big four state-owned commercial banks of the People's Republic of China. It was founded in 1912 by the Government of the Republic of China, to replace the Government Bank of Imperial China. It is the oldest bank in China...
's Shanghai office got into trouble for refusing to obey the governments order to suspend banknote remittance. After this incident, the Bank of China
Bank of China
Bank of China Limited is one of the big four state-owned commercial banks of the People's Republic of China. It was founded in 1912 by the Government of the Republic of China, to replace the Government Bank of Imperial China. It is the oldest bank in China...
was able to assert its independence from the Yuan Shih-k'ai regime in Peking and started nearly two decades of tremendous growth as China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
's largest private bank.
K. P. Chen initially became close to Chang Kia-ngau
Zhang Jiaao
Chang Kia-ngau . Known almost exclusively as Chang Kia-ngau in the West, Zhang was born in 1889 in Baoshan District, near Shanghai. His grandfather was a Ch'ing dynasty official and his father a doctor, so he and his siblings enjoyed educational opportunities not available to most of their...
when he became a private financial consultant to the Bank of China
Bank of China
Bank of China Limited is one of the big four state-owned commercial banks of the People's Republic of China. It was founded in 1912 by the Government of the Republic of China, to replace the Government Bank of Imperial China. It is the oldest bank in China...
at the time between leaving the Kiangsu Provincial Bank and the founding of the Shanghai Commercial and Savings Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
.
Probably because of his tiny initial capital, K. P. Chen received a long term interbank deposit of 50,000 Yuan from Chang
Zhang Jiaao
Chang Kia-ngau . Known almost exclusively as Chang Kia-ngau in the West, Zhang was born in 1889 in Baoshan District, near Shanghai. His grandfather was a Ch'ing dynasty official and his father a doctor, so he and his siblings enjoyed educational opportunities not available to most of their...
's Bank of China
Bank of China
Bank of China Limited is one of the big four state-owned commercial banks of the People's Republic of China. It was founded in 1912 by the Government of the Republic of China, to replace the Government Bank of Imperial China. It is the oldest bank in China...
as reserve capital encouraging close cooperation between the two banks. Chen and Chang shared a vision of using private capital to develop and modernize the country.
Liu Hongsheng, Insurance and The China Development Bank
In 1927 K. P. Chen teamed up with Liu Hongsheng (1888–1956) to establish an insurance company. Three years later Liu Hongsheng mortgaged his new eight-story group office building to K. P. Chen to raise the capital for launching The China Development Bank.China's Wartime Finance Advisor
K. P. Chen was head of China's Currency Stabilization Board.During World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, the Shanghai Commercial and Savings Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
was devoted to consolidating the economy. In order to solve the financial problems, K. P. Chen represented the government of the Republic of China
Republic of China
The Republic of China , commonly known as Taiwan , is a unitary sovereign state located in East Asia. Originally based in mainland China, the Republic of China currently governs the island of Taiwan , which forms over 99% of its current territory, as well as Penghu, Kinmen, Matsu and other minor...
and negotiated with U.S.A. for loans. Some agreements were made:
- 1936: US-China Gold-Silver Agreement
- 1938: $25,000,000 Export-Import Bank loan
- 1939: Tung Oil Loan Agreement
- 1940: Tien Tin Loan Agreement
In 1938 when the Chinese Ambassador Wellington Koo
Wellington Koo
Koo Vi Kyuin or Ku Wei-chün , often known by the Western name V.K. Wellington Koo, was a prominent diplomat under the Republic of China, representative to the Paris Peace Conference of 1919, Ambassador to France, Great Britain, and the United States; participant in founding the League of Nations...
called on U. S. Secretary of the Treasury Henry Morgenthau
Henry Morgenthau, Jr.
Henry Morgenthau, Jr. was the U.S. Secretary of the Treasury during the administration of Franklin D. Roosevelt. He played a major role in designing and financing the New Deal...
to seek financial aid, the U. S. Secretary told him it might be advisable for the Chinese Government
Government of the Republic of China
The Republic of China was formally established by Dr. Sun Yat-sen in 1912 in Nanjing under the Provisional Constitution of the Republic of China but this government was moved to Beijing in the same year and continued as the internationally recognized government of China until 1928. In the history...
to send K. P. Chen (whom Morgenthau
Morgenthau
Translates into German as 'Morning Dew'. Primarily a Jewish surname.Morgenthau may refer to:* Hans Joachim Morgenthau , German-born international relations theorist* Henry Morgenthau, Sr. , diplomat and businessman...
had negotiated with in the past) to America to enquire after credit for the purchase of flour
Flour
Flour is a powder which is made by grinding cereal grains, other seeds or roots . It is the main ingredient of bread, which is a staple food for many cultures, making the availability of adequate supplies of flour a major economic and political issue at various times throughout history...
and grain
GRAIN
GRAIN is a small international non-profit organisation that works to support small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems. Our support takes the form of independent research and analysis, networking at local, regional and...
goods.
In 1939 Finance Minister H.H. Kung, through K. P. Chen, endeavored to obtain assistance from the American Commercial Credit for the purchase of four airplanes, badly needed by the China National Aviation Corporation
China National Aviation Corporation
The China National Aviation Corporation , was a major airline in the Republic of China and is currently a state owned aviation holding company in the People's Republic of China, which owns a majority of Air China and Air Macau.-History:In 1929, it was established as China Airways by...
. K. P. Chen also participated in concluding a contract at Detroit to purchase 1,000 trucks from General Motors
General Motors
General Motors Company , commonly known as GM, formerly incorporated as General Motors Corporation, is an American multinational automotive corporation headquartered in Detroit, Michigan and the world's second-largest automaker in 2010...
and Chrysler
Chrysler
Chrysler Group LLC is a multinational automaker headquartered in Auburn Hills, Michigan, USA. Chrysler was first organized as the Chrysler Corporation in 1925....
for the Chinese government.
Reputation was important to him and he always made sure he kept his promises and by so doing, demonstrated integrity and ensured that China met its commitments.
Time Magazine on Monday, Apr. 6, 1942 reported that "Shy, determined Chinese financier K.P. Chen stuck a feather in his cap last week. From Chungking he wired Manhattan's Universal Trading Corp. to pay the final installment on a $22,000,000 Export-Import Bank loan smack on the tung-oil barrel head—nearly two years before the last installment on the loan was due." This showed U.S. Treasury officials that China could do business even when Japan controlled its coast. When he sought to borrow money from Washington
Washington, D.C.
Washington, D.C., formally the District of Columbia and commonly referred to as Washington, "the District", or simply D.C., is the capital of the United States. On July 16, 1790, the United States Congress approved the creation of a permanent national capital as permitted by the U.S. Constitution....
in 1938, democracy was not considered good security but tung oil, essential in high-grade paints and varnishes, was. To make this work he founded Universal Trading Corp. in Manhattan
Manhattan
Manhattan is the oldest and the most densely populated of the five boroughs of New York City. Located primarily on the island of Manhattan at the mouth of the Hudson River, the boundaries of the borough are identical to those of New York County, an original county of the state of New York...
to manage tung-oil sales, budgeting one-half of the proceeds to repay the debt. He also organized Foo Shing Trading Corp. in China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
to gather and ship the oil.
K. P. Chen made outstanding contributions in stabilizing the monetary system and raising funds for war of resistance.
After the communist revolution in mainland China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
, K.P. Chen followed the Kuomintang
Kuomintang
The Kuomintang of China , sometimes romanized as Guomindang via the Pinyin transcription system or GMD for short, and translated as the Chinese Nationalist Party is a founding and ruling political party of the Republic of China . Its guiding ideology is the Three Principles of the People, espoused...
-led government to Taiwan, though his Shanghai Commercial and Savings Bank
Shanghai Commercial and Savings Bank
The Shanghai Commercial and Savings Bank was established in Shanghai, mainland China in 1915, by Chen Guangfu, better known as K. P. Chen. Mr. The-Chin Chuang was elected the first chairman, and the founder, Mr. Chen, was the first president....
was unable to reestablish its headquarters until 1954. In 1964, the bank was allowed to resume operations. It was the only private bank from the mainland which was allowed to resume commercial operations after the retreat to Taiwan. In 1976, K.P. Chen was succeeded by Chu Ju-tang as chairman of the bank.
Close Shave
In December 1941, K. P. Chen together with Finance Minister and Vice Premier H.H. Kung, his wife Soong Ai-lingSoong Ai-ling
Soong Ai-ling , or Eling Soong , eldest of the Soong sisters, was the wife of H. H. Kung , who was the richest man in the early 20th century Republic of China. The first character of her given name is written as 靄 in some texts...
and her sister, Madame Sun Yat-sen
Sun Yat-sen
Sun Yat-sen was a Chinese doctor, revolutionary and political leader. As the foremost pioneer of Nationalist China, Sun is frequently referred to as the "Father of the Nation" , a view agreed upon by both the People's Republic of China and the Republic of China...
were caught in Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
when war erupted in Asia
Asia
Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...
. Amid a torrential downpour of bombs and artillery shells, K. P. Chen, Kung, and Madame Sun, were hustled into a plane, flown over the Japanese lines and set safely down, 200 miles inland. (From the Dec. 22, 1941 issue of TIME magazine).
Public Office
On April 17, 1947 Generalissimo Chiang Kai-shekChiang Kai-shek
Chiang Kai-shek was a political and military leader of 20th century China. He is known as Jiǎng Jièshí or Jiǎng Zhōngzhèng in Mandarin....
, President of the National Government of the Republic of China
Republic of China
The Republic of China , commonly known as Taiwan , is a unitary sovereign state located in East Asia. Originally based in mainland China, the Republic of China currently governs the island of Taiwan , which forms over 99% of its current territory, as well as Penghu, Kinmen, Matsu and other minor...
nominated K. P. Chen to membership of the then new state council.
Champion of Human Capital Development
K. P. Chen believed in the power of people and saw his investment in their development as an investment in the future profits of the bank.He approved an annual budget of 12,000 tael
Tael
Tael can refer to any one of several weight measures of the Far East. Most commonly, it refers to the Chinese tael, a part of the Chinese system of weights and currency....
in silver and invited a former manager of the Deutsche-Asiatische Bank to lecture his staff on the theory and practice of foreign exchange.
He set up an educational fund to send senior managers to America
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
to continue their education and practice advanced banking skills there.
The bank had a global business network through its overseas representative offices managed by its senior managers.
Other positions
- K. P. Chen, whose bank had been involved with the cotton industry since its early days, served as Chairman of the Cotton Control Commission or CCC. He was close to T.V. Soong, the Minister of Finance and Founder and Director of the National Economic Council, whose idea it was to make private entrepreneurs and capital a vital part of the CCC's nation-building efforts, and had long been involved in state-private projects sponsored by Soong.
- K. P. Chen was the dynamic chairman of the Universal Trading Corporation (UTC), a wholly owned subsidiary of China's Nationalist Government, formed for the purpose of promoting Sino-American foreign trade. Chen, a successful, self-made capitalist entrepreneur, believed that UTC could be the perfect vehicle for his stewardship of China’s postwar economic reconstruction. He also placed a premium on Sino-American cooperation and communication.
- K. P. Chen was Chairman of the China Committee of International Chamber of Commerce. He was also Chairman of China's Foreign Trade Commission.
- K. P. Chen was a signatory to the 1938 appeal for U. S. support by 10 Chinese Associations in ShanghaiShanghaiShanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...
following the occupation of ManchuriaManchuriaManchuria is a historical name given to a large geographic region in northeast Asia. Depending on the definition of its extent, Manchuria usually falls entirely within the People's Republic of China, or is sometimes divided between China and Russia. The region is commonly referred to as Northeast...
by JapanJapanJapan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
. (United States Department of State / Foreign relations of the United States diplomatic papers, 1932. The Far East Volume III (1932) -- The Far Eastern crisis: occupation of Manchuria by Japan and statement of policy by the United States, pp. 1–754)
- K. P. Chen was a major financier of industrial projects. Often working together with others, he set up various textile, metals and trading companies. He was a member of the board of Fan Xudong's Yongli Group of Companies.