Railway Business Results Between the French Government and Yunnan Railway Company

Cambodia so they can exploit the most and do not want the colonies to develop, and deliberately seek to maintain this colonial regime forever.

* In the field of transportation

To clearly assess the impacts of transportation policy, we take a closer look at the type of construction investment of the French colonialists that had bank capital investment, which was the railway.

When talking about the development of transportation in Vietnam under the French, we cannot help but mention the railway system. It can be said that the development of railways was focused on by the French colonial government and capitalists with investment capital. To explain this issue, we need to clearly see the profound purposes that the French colonialists promoted the construction of railways in Vietnam.

The first purpose was to disperse the population and demonstrate the power of the French empire, and on the other hand, to help transport goods faster and cheaper.

In 1902, Edmond Blanchet, in his thesis on the Indochina Railway, wrote: “ History teaches us that: the uprisings of conquered peoples always arise in densely populated areas. Therefore, dispersing the population throughout the country, reducing the importance of large centers... is an action according to the policy of precaution...”

The second purpose is to build means to easily plunder resources and exploit the Vietnamese people.

Twenty-one years later, in 1923, former Governor General Albert Sarraut, in his memoirs on the colonial exploitation program, wrote even more clearly: “The railway must have the purpose of bringing to the ports and receiving there all the transported volume. It would be a waste of effort to grow things for export if it could not be transported… France can find in the colonies all the metals that French industry needs. But it is necessary to allow France to receive them, so it is necessary to build railways…” [133].

The third purpose, in building the railway, the French colonialists also mentioned taking advantage of this convenient and fast means of transportation to send troops to suppress the uprising armies of our people.

The fourth purpose, stated in the law of March 2, 1919, was that French heavy industry capitalists could freely sell railway equipment, locomotives, train cars, etc. at a very high price. French railway capital was supported by the Bank of Indochina for implementation, and the French empire lent money to the Indochina government for payment, so all of them earned a lot of interest, even simple interest, compound interest through the construction of the Indochina railway.

The ultimate goal was that the French colonialists intended to use the railway to prepare a springboard to attack China. This was a very important goal that the French colonialists had paid attention to since the beginning of their invasion of Cochinchina.

With all the above purposes, in 1898, Governor General Paul Doumer proposed a plan to build a railway for Indochina. However, it was not until 1898 that the railway construction began. From 1881 to 1885, France had completed the Saigon - My Tho railway. That is enough to show how far-sighted the French colonialists' plans were.

Not stopping there, the completion of the Phu Lang Thuong - Lang Son road cost a huge amount of public money. And an important thing here is that the colonial government spent money to build this railway not to serve travel or economic purposes but for military purposes to suppress the uprisings of our people. They used this road to march troops. However, their railway construction work was always attacked by our insurgents, especially the De Tham insurgents.

The Paul Doumer Program was established in 1898 to build a railway line across Indochina. The Governor General was enthusiastic and expected to complete it in a short period of time. However, for 55 years, from 1881 (when France built the Saigon - My Tho railway) to 1936 (phase 8 of the Da Nang - Nha Trang section), the railway line across Indochina was still not completed.

Talking about the railway exploitation aspect, we see that every year we earn a lot of profit. For example, in 1913 the profit was $1,127,000, in 1925 it was

1,819,000$, in 1929 it was 858,000$ [140; p.32]. Thus, the Indochina Government also made a profit in this business field.

However, the amount of interest that the government collected, more or less, flowed into the pockets of the Bank of Indochina as well as French capital, as shown in the table below.

Table 4.6. Railway business results between the French Government and the Yunnan Railway Company

Year

Indochina Government Street

business

Yunnan Railway Company Road

business

Total revenue ($)

Length (km)

Total revenue ($)

Length (km)

1913

1922

1930

1938

1,744,000

3,324,000

5,521,000

7,782,000

1,167

1,219

1,539

2,185

3,095,000

4,602,000

5,021,000

9,708,000

848

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Source: File No. 34046, Tonkin Governor's Office, National Information Center I, Hanoi and Bulletin éonomique de l'Indochine, February 1, 1915, p.112 ; Bulletin éonomique de l'Indochine (1936), pp.1082-1083 and Bulletin éonomique de l'Indochine (1939), p.682.

The table above shows that the route directly operated by the Indochina Government was getting longer and longer, and by 1938 it was even 2.5 times longer than the route managed by the Yunnan Railway Company. However, the revenue brought to the government was very small, so the annual budget had to compensate for the capital loss of the Trans-Indochina route. This compensation came from none other than the people's tax money.

On the contrary, the number of kilometers of the route directly operated by the Yunnan Railway Company has not changed over the years (total length is 848km, of which the Hai Phong - Lao Cai section is 383km long and the Lao Cai - Yunnan section is 465km long) but the revenue has increased every year. The reason for the increase in revenue, according to the French colonialists, is because half of this route goes through China, the other half goes through crowded areas and especially it goes through Hai Phong port, the largest port in Northern Vietnam. For that reason, the volume of imported and exported goods through this route is also very large, so it is understandable that the revenue always increases ( Refer to Chart 2: Revenue calculated by km of the railway route; Chart 3: Cost calculated by km of the railway route; Chart 4: Profit of the railway route).

It is clear that the Bank of Indochina was very clever in investing capital to exploit this route. The Hanoi branch of the Bank of Indochina was assigned to finance the construction sites in charge of public works along with the " transportation" of opium from Yunnan, since the opening of the Hai Phong - Yunnan railway. This is also the reason why the Yunnan railway company has always operated profitably and profit has increased rapidly since the route was put into operation.

However, to have ships serving the interests of the colonial government as well as the French bourgeoisie, so much blood of our people was shed. And like the farmers, the workers in the plantations and mines were also exploited by the French bourgeoisie for their wages and labor. Not only that, the consequences from the docks brought to the Vietnamese people were also not small such as alcoholism, gambling, drug addiction...

4.1.2. Positive impact

The Bank of Indochina was established and was allowed to issue money, especially paper money which was widely accepted and paid for, forming the habit of using money among the people, showing the success of the Bank of Indochina and the French Government, marking the beginning of paper money circulation not only during the French colonial period but also used until today (although when Ho Quy Ly ascended the throne in 1400, he issued and circulated paper money but it was not accepted by our people). So it can be said that, in the previous feudal dynasties of Vietnam, there was no paper money, but the type of money that was circulated and commonly used was only metal money.

When France invaded Vietnam to monopolize the Vietnamese economy, France had to control the circulation of money. To do that, the French had to have a command currency. Therefore, the Government assigned the Bank of Indochina the function of issuing money. This was the "unique" function of the Bank of Indochina. Besides copper coins, paper money was also issued and circulated by the bank. If during the Ho Dynasty, paper money was not accepted by our people, during the French period, paper money issued by the Bank of Indochina was accepted by our people and became the sole currency in Vietnam.

The unified currency has had a huge impact on the Vietnamese economy. Now all international exchanges and payments are based on the Indochinese currency. The convenience of this payment instrument has contributed to promoting production, exchange, and trading activities, and thanks to that, Vietnamese goods have gradually appeared on the international market.

Regarding foreign exchange activities, this is a new field in Vietnam at this time. However, through this activity, the Indochina Bank has contributed to helping the French Government regulate the economy of Vietnam in particular and Indochina in general. The Indochina Bank has done very well in controlling foreign exchange trading, an area that the State Bank of Vietnam still finds very difficult to manage today. Good control of exchange rates plays an important role in economic development, attracting foreign exchange capital investment from domestic and foreign enterprises into Vietnam. The Indochina Bank has been very successful in this field of activity and has helped the Government stabilize the currency, which has contributed to promoting the development of the Vietnamese economy to a certain extent.

Through foreign exchange, a modern business model appeared in Vietnam. Now domestic and foreign businesses can transfer and receive money quickly through banks. Marking the beginning of a modern business form. Partners can trust each other through bank guarantees.

The financial investment policy of the Bank of Indochina at that time had a significant impact on the Vietnamese economy. However, through the investment activities of the bank, Vietnam's foreign trade sector developed. Vietnamese goods were present in the international market. Marking the beginning of international trade activities of Vietnamese enterprises.

With the plantation business model (rice, rubber, tea, etc.), some machinery and means of production were also imported by French capital, initially introducing capitalist production relations into our country (although at that time France still maintained backward and outdated feudal production relations).

The birth of the railway has contributed to the development of the economy of Indochina in general and Vietnam in particular. Thanks to this means of transport, Vietnamese goods are increasingly present in the world market. Trading with other countries is therefore easier and faster. This has attracted increasing investment capital from French capital in Vietnam. The profits earned by French capital have also increased. Although the railway was born to serve the purpose of colonial exploitation, it also partly helped people travel more conveniently. Thereby contributing to the redistribution of population, attracting migrants to the cities to make a living (farmers moved to the cities to live and work in factories and became workers). Forming new urban areas. It can be said that the railway system has achieved great success. The amount of goods transported in 1913 was 450,000 tons, by 1939 it had increased to

1,168,000 tons. The number of passengers in kilometers increased more than twice in 1929 compared to 1913, while the length of the railway system increased by only a quarter (1/4), and this took place in areas with very low population density [20; p.464]. The Hanoi - Yunnan railway alone transported a large amount of commercial goods in the central areas and especially mainly goods transported from Vietnam to Yunnan ( See Appendix Table 2: Table of actual tonnage of commercial goods transported from 1918-1926) .

The fact that the Bank of Indochina used government capital or mobilized capital to directly invest and open businesses in most industries and economic sectors (as long as they were profitable), to take over and monopolize the market, has left many lessons for current managers and policy makers. Therefore, the State Bank of Vietnam has now, drawing on experience, strictly prohibited commercial banks from using mobilized capital to open companies and directly do business, as well as participating in investments outside the sector.

In summary: The activities of the Bank of Indochina contributed to the formation of the colonial economy. With its active operation, a new economic structure,

appeared for the first time: agriculture, industry, commerce, transportation and especially finance - banking (new industry). And to some extent, the Indochina Bank also contributed to promoting and developing the Vietnamese economy at that time.

4.2. Impact of the Bank of Indochina on Vietnamese society

4.2.1. Negative impacts

4.2.1.1 Credit activities, management of gold trading, precious metals and mortgages

* Credit activities

Since its establishment, the Bank of Indochina has sought to lend to Vietnamese farmers in order to monopolize commercial activities, while simultaneously stifling Indian and Chinese capitalists and Vietnamese landlords. In addition to economic purposes, seasonal lending also aimed to solve social problems. Assessing the seasonal lending policy, the Governor of Cochinchina affirmed: "Seasonal lending will eliminate usury, a serious social disease, and help the common prosperity of the country " [125]. However, the impact of the credit lending activities of the Bank of Indochina on the economic and social life of Vietnam is not entirely as bright as that.

The repayment period of principal and interest within 4 - 8 months that the bank set was entirely based on the rice growing season. This period did not take into account the market for agricultural products because after the harvest, the price of rice was very cheap so farmers would not be foolish enough to sell it immediately. In addition, borrowers did not only borrow money to invest in the harvest but also for other works such as land reclamation, irrigation, etc. In many cases, these were the things that really required large investment capital [124]. Therefore, the above loan period could hardly meet the requirements of the borrowers. However, the bank and the colonial government still maintained this loan period because it helped to rotate capital faster and reduce the risk and uncertainty in the lending process.

In name, it was a loan to help farmers have capital to increase production and the interest rate was lower than that of Chinese and Indian capitalists and Vietnamese landlords. However, in reality, farmers who wanted to borrow money from the Bank of Indochina had to apply.

The loan application and according to regulations, the application was considered valid when it had enough signatures of the local officials and had to be stamped by the commune. Those strict procedures made seasonal credit almost impossible to reach the farmers of Cochinchina. By 1876, the lending method was changed. Farmers who wanted to borrow had to borrow collectively, with the village as the unit and the local officials had to be responsible for urging the collective debt repayment. This created an opportunity for the local officials to embezzle a part of the loan amount, causing farmers to borrow less but have to pay more. Not only that, the short loan term often forced them to sell off their houses, fields and gardens to pay off overdue debts.

The above shows that the new credit policy is no less harsh than before. “…The gentle Annamese farmers thought that the era of wealth had come. (Because they thought that borrowing was not dangerous and that they had capital for production according to the propaganda of French capitalism - Nguyen Khac Dam note). In that deceptive illusion… countless assets were sunk with no way to recover them” [91; p.192].

Not only did the peasants have very little chance of benefiting from seasonal lending, even the colonial government only received a negligible amount of interest, although in theory this revenue was quite large. The reason was that the amount of outstanding debt guaranteed, guaranteed and responsible by the colonial government was increasing. Most of the budget revenue from this lending activity was used by the colonial government to cover the deficit from bad debts and the operation of the debt collection monitoring and management apparatus for the bank. However, because it had up to 20% of shares in the Indochina Bank, the government actively guaranteed the bank. Here, there was a combination of " government " and " authoritarian power " in exploiting and governing the colony.

When the Mutual Agricultural Credit Association (SICAM) model was established, the Indochina Bank also participated with a large proportion. The Indochina Bank forced the colonial government and the SICAM management board to ensure the timely repayment of capital and interest. Meanwhile, the Indochina Bank only had to sit in one place to invest capital and there would be a whole colonial and landlord apparatus to manage and collect on its behalf. Clearly, it was not true.

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