Jan 26 2017
Old aged Chinese all know the name of Hu Xueyan. Hu was a government supported business man at the end stage of Ching dynasty. He was regarded as the richest person in China at that time. It was so from the surface point of view, but actually he was not as rich as many people thought.
Who was Hu Xueyan? He was a junior staff of a small Chinese bank in Hangzhou. One day he lent bank’s money to his friend who needed money to go to capital for further examination to get a government high post. Of course he was fired by his employer.
Afterwards, Hangzhou was surrounded by rebel forces and food was scarce inside city. Hu Xueyan, with the help of his low class friends, smuggled rice to the city and he made huge profit. When rebellion was over, Hu established a small bank called Fukang in Hangzhou. Later he met a general Zuo Zongtang and Hu became a purchasing manager for Zuo’s army from which he made again big amount of money.
Then Hu Xueyan set up many branches all over big cities in China and Shanghai branch was the biggest one. He offered high interest to depositors, and as a consequence, he got big deposits from all walks of life. He used bank’s money to buy silk from farmers and sold at high prices to the market. At that time, he thought that if he could monopoly the business, he would then earn much high profit.
He started to use all bank’s deposits money to buy silk which were stored in the godown, waiting for the high price to sell. But, his competitors, seeing Hu Xueyan’s bank now short of cash, spreaded rumors that Hu’s bank was to be bankrupted. The result was that all depositors rushed to Fukang to withdraw their money, Fukang was forced to close their door and declared bankruptcy.