In the darkness of the early hours on December 2, 1948, men were seen with long poles carrying heavy boxes from the Bank of China across the Bund, and then loading them onto a customs vessel at the quay.
A British journalist by the name of George Vine was looking out of his window at the Peace Hotel in Shanghai witnessing the soldiers sealing off the Bund, while others were standing with loaded rifles at every corner.
What Vine saw (and subsequently reported to his paper in London) was the start of a critical episode of the country’s civil war: Chiang Kai-shek’s transfer of the country’s gold, silver, and foreign exchange from the mainland to Taiwan.
Over the next 12 months by sea and air, Chiang moved a treasure trove of millions of taels of gold. All this treasure became the reserves for the New Taiwan dollar, and made it possible for the island to recover from the war. High inflation and its astonishing economic success over the decades can all be attributed to the haul. Chiang Kai-shek once stated:
“When the Government moved to Taiwan, the situation would be unthinkable without the gold from Shanghai to make up for the financial and economic hardship. Of course, it would not bring the stability of today!.”
For Beijing, this has been an unforgivable theft of assets that belonged to the nation. However, for Kuomintang, this was a legitimate decision made by the national president to save it from falling into the hands of a rebel army, and the fact that without it, the Nationalist government would have not survived in Taiwan.
A book titled The Archives of Gold provides a rare insight into the heist. The author, Dr. Wu Sing-yung, is a professor of radiological sciences and medicine at the University of California, and is the son of the man who conceived the heist.
His father was Lieutenant General Wu Song-ching, who was the head of the finance and budget department of the KMT government. Chiang had entrusted him with moving the gold, and he held this position for 15 years from 1946 until a week before his death in 1991. Lucky for us, he kept a daily diary.
He had not divulged his involvement to his family or friends. It wasn’t until after his death, when his wife gave the diary to their son, did things come to light. As their son read the diary, it was soon discovered just how critical his father’s role was in saving the Nationalist government.
Dr. Wu wrote:
“The movement of gold was entirely controlled by one person, Chiang Kai-shek… Even the finance minister had no power to transfer it.
“Chiang conveyed his orders verbally, leaving no written record. Only he and my father knew about the movements.”
It is a widely held belief that China’s gold was used to establish the Taiwan we see today. It was just six months after the gold operation began that the new Taiwan dollar was launched. It had replaced the old Taiwan dollar at a ratio of 1 to 40,000.
It is estimated that 800,000 taels of gold (and US$10 million brought from Shanghai) provided the stability to a country that had suffered with hyperinflation since 1945. The remainder of the gold was used to resettle the 2 million soldiers and civilians who had fled from China.
The KMT have confirmed that 2.27 million taels of gold was taken to Taiwan; however, they dispute that this was used as the foundations of Taiwan. Chiang’s son, Chiang Ching-Kuo, later wrote:
“If we had not had this gold in the early period of moving the government to Taiwan, it is unimaginable what would have happened. How would we have the stability of today?”
One can only imagine, after the fall of Shanghai as the Communist army entered the vault of the Bank of China for the first time and found the vault empty, what they may have been thinking. The vault was at least the size of three basketball courts, according to the Shanghai local records.
Combining all of the Shanghai bank vaults, 6,180 ounces of gold was all that was left, a staggering 1 percent of the original treasury of gold.
With so much secrecy and the lack of written records, it is hard to know exactly how much treasure was shipped to Taiwan. Wu estimates the amount of gold taken in 1949 at 4 million taels. Whatever the figure, for Beijing, it was the theft of the century.
Translator: Yi Ming