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No. 6: China's first modern bank
By Michelle Qiao

The beauty of the Bund lies in the harmony of its buildings constructed in different styles at different times. No. 6 is the Bund's largest 19th century building and the cradle of the first modern Chinese bank.

The four-story pale gray building looks like a Gothic-style mansion with a Romanesque colonnade at the entrance. The original wood and red-brick structure is seen in photographs dating back to 1886 and it may be older. The red brick was covered when it appeared too old-fashioned.

It was built as the headquarters for the powerful American traders Russell & Co, one of the earliest and most famous "Shanghailanders" on the Bund, trading in opium, tea, silk, porcelain and other items.

The building was designed by British architects Morrison & Gratton.

"Russell & Co was an adventurous American company with a taste for high-risk, huge-profit business. When the building was constructed, the business was already going down and a bankruptcy was announced in 1891," says architectural historian Qian Zonghao from Tongji University. Two years later a kitchen fire on the fourth floor burned the top two floors before it was distinguished by firefighters in the international settlement.

In books and archives No. 6 is widely called the China Commercial Bank Building because the first Chinese modern bank was established there in May 1897. In English it was originally called the Imperial Bank of China and was renamed in 1913.

Shanghai became China's financial center in the 1870s. According to Tang Zhenchang's "The History of Shanghai" (1989), Shanghai controlled 80 percent of the country's foreign trade money. In addition to dominant British banks, other countries were busy launching their Bund banking branches in the 1890s, such as Japan's Bank of Taiwan and France's Banque de L'Indo-Chine, both to be introduced later in this column.

A total of 17 Chinese banks mushroomed on the Bund from 1897 to 1911.

The China Commercial Bank (Imperial Bank of China) was founded by legendary Qing Dynasty (1644-1911) minister Sheng Xuanhuai, who famously advocated use of Western technology to save the country from destitution. Sheng was also famous as the founder of the China Merchants Steam Navigation Co and the Imperial Telegraphy Administration, also on the Bund.

Because China lacked international banking experience at the time, Sheng modeled the China Commercial Bank on the Western banking system, especially that of the Hong Kong and Shanghai Bank Corp. He adapted the HSBC system and even hired Englishman A.M. Maitland, a former HSBC employee, as manager.

Founded with capital of five million taels of silver, the bank received deposits from local financial enterprises and the private savings of wealthy Chinese officials.

It extended loans to Chinese factories such as Hua Sing Flour Factory and Long Zhang Paper Making Factory.

Starting in 1898 the bank issued bills that were printed in London in English and Chinese, bearing dragon patterns and the signature of the British manager.

"In 1903 several Japanese in Osaka forged notes of the bank, resulting in panic withdrawals and the bank was almost closed," says Xin Jianrong, an expert on Shanghai's financial history at the Shanghai Archive Bureau.

"Investigation showed that the criminals were several jobless Japanese, who believed it easier to duplicate notes of a Chinese bank rather than those issued by a foreign bank. They were caught with the help of HSBC, which had lent money to cope with the withdrawals and feared financial chaos. It was the first case of forged notes in China."

As China's first modern-style bank, the Imperial Bank also experienced serious management problems.

According to Ji Zhaojin's English-language "History of Modern Shanghai Banking" (2003), despite the organization of the bank, "both official and merchant," its business was not carried out on an equal footing between officials and merchants.

"Although the management system was Western in design, it constantly suffered traditional bureaucratic interference."

After the Revolution of 1911 ended the Qing Dynasty, the Imperial Bank of China was renamed the Commercial Bank of China.

The banking structure remained almost unchanged, but the decision-making power of the private shareholders increased while Qing officials disappeared. Sheng died in 1916.

"After the 1920s the bank was taken over by Shanghai gangster leader Du Yuesheng supported by Kuomintang leader Chiang Kai-shek," says expert Xin.

In 2006, the Gothic-style building that once housed China's first-attempt at modern finance was renovated into a sleek venue for fine dining and luxury shopping. The original interior was changed and no traces of the past remained.

"The walls were originally red brick, which along with some Gothic architraves, had all been covered by coatings during renovations," says Professor Qian Zonghao.

"But today we can still see that the designer from Morrison & Gratton had cudgeled brains to create a variety of different Gothic windows for different floors and the dormers, ranging from semi-circular arches, segmental arches, diminished arches and pointed arches."

This designer, with a fertile imagination, no doubt didn't know the 19th century building would survive until the 21st century having witnessed so many Bund stories inside and in front of the rainbow of Gothic arch windows.

Yesterday: The Commercial Bank of China Building

Today: No. 6 on the Bund. First floor under rennovation since Dolce and Gabbana flagship recently moved out. Upper two floors house Chinese and Japanese restaurants.

Built: Before 1886

Style: Gothic

Designer: Morrison & Gratton

Tips: The restaurants have great views. It's also interesting to read about legendary modernizer Sheng Xuanhuai and visit the neighboring building No. 9, China Merchants Steam Navigation, also founded by Sheng.

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