T. V. Soong was born in Shanghai, China in 1894.
T. V. Soong was born in Shanghai, China in 1894.
Song studied at St. John's University in Shanghai and at Harvard, obtaining a B.A. in Economics in 1915. After graduate studies at Columbia, he returned in 1918 to work at Hanyeping Coal and Iron Works Ltd.
In 1923, recommended by his sister Qingling, he joined Sun Yat-sen's government in Guangzhou becoming the Central Bank's president in 1924, and was later appointed director of commerce, then finance minister. He re-formed Guangdong's taxation, simplified the taxes, abolished the antiquated "X seized revenue controlled by warlords, organized tax corps to Gypass corrupt rural collectors, and set up tax offices all over Guangdong. He used the revenue to finance the Northern Expedition of 1926, and applied the experience to Wuhan, setting up the Central Bank there, restructuring debts, and raising new taxes.
To win Song Ziwen over to Nanjing, Jiang Jieshi declared support for his centralization effort. However, Song resented Jiang, believing he threatened civilian control of the army. To him, Wuhan carried Sun's revolutionary banner. His position gradually changed, and in July 1927, he delivered Jiang's letter to his sister Qingling in Wuhan and declined to be Wuhan's finance minister. He left for Japan after Jiang and there consented to his proposal to his sister Meiling. Jiang made him finance minister in 1928.
Song financed Jiang's antiwarlord expeditions by issuing bonds, raising taxes，and bank credits. After unification in 1928, Song unified the currency abolishing silver, centralized taxes, recovered tariff autonomy, reformed the salt tax, and amid the global recession, balanced the budget in 1932. In the Manchurian Incident of 1931, he protested to the League of Nations about Japanese invasion. In 1932, he dispatched his Salt Protection Brigade to defend Shanghai and organized a conference at the Shanghai General Chamber of Commerce against civil war much to Jiang’s dislike. In 1933, he persuaded Zhang Xueliang to defend Rehe. To obtain aid, Song went on a tour to the West, obtaining a cotton and wheat loan of U.S.$50 million from the United States. He set up the National Economic Council in October 1933, but resigned as finance minister due to resentment of Jiang's compromise with Japan in the Tanggu truce, concluded during his absence. His insistence on authorizing all expenses by the budgeting committee also contributed to his replacement by Kong.
Previously, to restrain Jiang’s mounting military expenditure, Song had introduced budgeting, but Jiang suggested issuing bonds and raising debts to fight Communists. Song stayed in the National Economic Council, and established the China Development Finance Corporation, which soon reaped profits with foreign investment in railroad building and mining. In 1935, he headed the Bank of China, supporting Kong's currency reform. Song s businesses extended from banking to textile, tobacco, shipping, and through the Bank of China, to other areas，creating a form of bureaucratic capitalism. The semi-governmental China Cotton Company he headed became a large commodity trading firm. He negotiated support from the United States and Britain, but continued to complain about Jiang's conciliation toward Japan. However, in the 1936 Xi-an Incident，Song negotiated for Jiang’s release，accepting Communist demands to purge anti-Communist elements and forge a GMD-CCP alliance. In 1937, during Kong’s overseas visit he formed in Shanghai a united office of the four major banks which Kong took over when he returned to China. Meanwhile, Song became chairman of a national salvation bond promotion association. Representing diverse political interests, the members included Sun Ke, Song Qingling, Du Yuesheng, and Chen Lifu. When Shanghai fell to Japan, Song went to Hong Kong and negotiated for British aid. Unity was again displayed in the China Defense League formed in 1938, with Song Ziwen as president and Qingling as chair，and Western friends and leftists like Liao Chengzhi as members. In 1941, he resigned, fearing the league had become the scene of political struggles.
In June 1940, Song visited the West. Relentless in his bargains, he obtained sizable loans from the United States and Britain. Jiang appointed him foreign minister in December 1941, following U.S. entry into the Pacific theater. Song stayed on in the United States to forge alliance with the allies, participated in the formation of the United Nations and requested more aid. He also helped Jiang to get rid of General Joseph Stilwell, U.S. adviser to China. After Kong fell from power, Song became acting premier in December 1944 and premier in May 1945. Favoring reconciliation with the Communists through General George Marshall, he conducted talks with Zhou Enlai, but was reproached by Jiang.
He faced the double challenge of wartime diplomacy and economic rehabilitation. Twice he visited Moscow to negotiate Soviet entry into the China theater and obtained recognition of China's sovereignty in Manchuria; but failing to prevent the secession of Outer Mongolia, he resigned as foreign minister in July 1945. With gold from the United States to support the fabi (Chinese dollar) he was optimistic about economic rehabilitation and the combat of inflation. His devotion to the redemption of resources from the puppet government and Japan alienated him from GMD factions intent to reap profits from them. In 1945, he announced plans for rehabilitation offering civilian enterprises technical support, rebuilding the transportation network, and increasing energy supply. Realism soon overcame
his optimism. On New Year’s Day 1946, he admitted that poor law and order, destruction of the transportation network, and idle factories were causing prices to surge. He blamed this on the huge military expenditure during the long drawn-out war, the previous printing press approach to inflation, poor harvests, and the struggle against the Communists. However, the real difficulty was Jiang5s anti-Communist campaigns which left a deficit of 200% of the budget and huge borrowings. Otherwise, he could have achieved a balanced budget for 1946, as tax increases, especially on luxuries, and proceeds from selling the puppet regime s property, almost doubled the projected income.
Song opened the foreign exchange market, fixing the rate between the fabi and U.S. dollar. However, adverse confidence caused by the civil war resulted in the frantic purchase of government reserves. Soon, he had to readjust the exchange rate and restrict imports. A worse mistake was his policy to sell gold reserves. In the last years of the war, banks had accepted savings in gold. To control inflation, he resorted to selling gold, but rapid rises in black market prices drained government reserves. By February 1947, Song stopped selling gold, causing black market prices to soar and the fabi to plummet, triggering runaway inflation. Attacked by the Central Committee clique and the Gexin group, he resigned as premier in March.
To dispel rumors that he had amassed fortunes by illegal means, Song donated his shares in the China Development Finance Corporation, amounting to 5,000 billion fabi, to the state. In 1948, he returned as governor of Guangdong, hoping to build it as an anti-Communist base. He boosted the police as a force against “bandits，” enforced conscription，and reformed taxes. However, in January 1949, he resigned when the government faced imminent defeat. At Jiang's request, he made an inspection tour of Taiwan and offered advice on reinforcing it as an anti-Communist stronghold.
He lived in the United States after 1949, but visited Taiwan in 1963. His policy of fusing government and private enterprises amounted to a resumption of Li Hongzhang's bureaucratic capitalism, characterized by monopolies, but which failed to develop the agrarian sector.