Chang Chia-ao (1888-), banker, economist, and government official, was known as Chang Kia-ngau. In his long association with the Bank of China he contributed greatly to the development of modern practices in private banking. After 1935 he served the National Government in such capacities as minister of railways and minister of communications. A native of Paoshan hsien in Kiangsu province, Chang Kia-ngau was the younger brother of Carsun Chang (Chang Chia-sen, q.v.). He received his early education in the traditional Chinese classics from private tutors, including several distinguished scholars of the district. In 1901, he and his brother were admitted to the Institute of Modern Languages at Shanghai, where he studied French. In 1905 Chang Kia-ngau went to Peking, where* he studied for several months at the Higher Industrial School. He then went to Japan, where he enrolled at Keio University in Tokyo to study finance and economics. His brother studied at Waseda University. Devoted to his studies, he did not become involved in the anti- Manchu political activities which absorbed the attention of most of the Chinese students then in Japan.

After his graduation from Keio in 1909, Chang Kia-ngau returned to China. He served the Ch'ing government, in the newly established Board of Posts and Communications, the equivalent of the modern ministry of communications. As one of his duties, he edited the board's official gazette. Like his superior, Sheng Hsuan-huai (q.v.), the president of the board, Chang was concerned with the controversial issue of the nationalization of the railroads in 1911. When the Wuchang revolt broke out in October 1911, Chang Kia-ngau left the Peking government and returned to the south. Early in 1912 he worked in Chekiang as secretary to Chu Jui, the provincial governor. In April 1913, when the Parliament was opened at Peking, Chang was appointed chief secretary to the Senate. He soon relinquished that post, however, and began in 1913 his long and distinguished service with the Bank of China. His first post was as assistant manager of the Shanghai branch. He worked under the branch manager, Sung Han-chang (q.v.).

Chang first gained national prominence in May 1916 through his resistance to the order issued by Yuan Shih-k'ai to the Bank of China and the Bank of Communications, both semigovernmental banks with power of issue, to suspend the redemption of their notes. At that time the collapse of Yuan's regime was imminent. In the disturbed situation, there was a run on the two banks, which caused the suspension order. The Shanghai branch of the bank, however, was in a somewhat unusual position because it was located in the International Settlement. Its management had been based on sound banking principles, and it had built up a good public reputation. Chang thought that at such a juncture, the suspension of note redemption by the bank would destroy the reputation that he and his colleagues had worked assiduously to build. He decided to disregard the order from Peking and, instead, provided increased facilities for people presenting notes for redemption. This action brought immediate reprisal from Peking. An order for Chang's arrest was issued; an application was made to the foreign authorities controlling the settlement in Shanghai for his extradition. There was a great furor against Peking's action, as enlightened public opinion supported Chang's courageous action.

After the death of Yuan, Chang Kia-ngau's act of insubordination further enhanced his prestige and influence in the bank. In 1917 Chang was promoted to assistant general manager of the Bank of China and, accordingly, was transferred to the head office in Peking. In 1929 he was promoted to general manager and remained in that position until 1935. Before leaving Shanghai late in 1917, he had founded the Bankers Weekly, a magazine which began publication on 29 May 1917. Later, that publication was issued under the sponsorship of the Shanghai Bankers Association and was a most useful reference volume on Chinese banking and economic problems. It continued publication until 3 March 1950, nearly a year after the Chinese Communists had occupied Shanghai.

Chang Kia-ngau made substantial contributions to the organization of Chinese banking as a whole and to the general elevation of China's public finances. After the end of the First World War and in the early 1920's, his ability as a financier came to be recognized by the Chinese government and by international banking circles. In 1922 he was appointed to the national financial consultative commission, and in the following year he was named to the commission for the reorganization of national finances. The banking consortium which floated loans to China had ceased to operate during the war, and Japan had become the sole purveyor of loans to China. After the war, attempts to organize a new consortium by the major foreign powers failed because of China's growing distrust of Japan and mutual distrust among the powers themselves. In 1920 Thomas W. Lamont, partner of J. P. Morgan and Company of New York visited China and participated in the discussions with Chinese bankers, including Chang Kia-ngau, regarding foreign loans. It soon became evident that, because of the political disorganization of China, no foreign capital would be made available. It was then that a consensus was reached regarding the need to form a Chinese banking group to undertake the financing of government and industrial needs.

In his book, China's Struggle for Railroad Development (1943), Chang Kia-ngau recalled that "the Chinese banking group made a first experiment in railroad financing in 1922 by underwriting an issue of CNS6 million equipment bonds. In 1924 the group helped to finance the Lunghai Railway with the issue of a CNS10 million silver loan. These efforts to participate in railroad financing required no small degree of courage, and the results were accomplished in the absence of foreign cooperation at a time when China's own resources were limited. But we had at last come to realize that we had to depend more on ourselves." For the first time in the history of China's public finance, Chinese banks participated in national reconstruction by pooling their resources. The public thought that the Chinese banks had attained maturity and were as sound as foreign banks, which hitherto had dominated China's financial market. This new prestige helped to clear the path for the country's economic modernization during the decade from 1927 through 1937, in which financing by native banking institutions played a significant role. Following Chang Kia-ngau's promotion to the post of general manager, great advances were made by the Bank of China in the period from 1928 through 1935. From his study of banking methods, Chang knew that the lack of a sound accounting system greatly hampered the operation of Chinese banks. Accordingly, Western banking experts were invited from England to serve as advisers, and S. Y. Liu (Liu Kung-yun), a London-trained economic expert, was assigned to set up a completely modernized accounting system. Under Chang's management, steps were taken to improve the personnel of the bank by employing foreigntrained Chinese students of economics and banking and assigning them to responsible positions.

Also, the Bank of China was developing its facilities for the handling of foreign exchange and international banking. Foreign agents and correspondents were appointed, and branches were opened in overseas Chinese communities. Later, during the Sino-Japanese war, the Bank was able to discharge its duties as the bank of foreign exchange under wartime conditions. The Bank of China was also the first bank in China to maintain a full-fledged economic research department. Its research publications were accepted as being authoritative by economists and bankers. Chang Kia-ngau's active association with the Bank of China was interrupted in 1935, when the National Government, with the prominent financier H. H. K'ung as the new finance minister, decided on the reorganization of both the Bank of China and the Bank of Communications, particularly in their relationship to the Central Bank of China. The capital of the Bank of China was increased from CNS20 million to CN$40 million, with an increase in the ratio of government-owned shares. The bank, whose official character then became more pronounced, was to play an auxiliary role to the Central Bank of China. T. V. Soong (q.v.) became the head, displacing Chang Kia-ngau. The Bank of China then ceased to function as an independent institution, a position which Chang had diligently worked to create and strengthen over a period of two decades.

Chang proceeded, however, to build himself a new career. Chiang Kai-shek appointed him minister of railways in his new "cabinet of talents." Chang was also a member of the unofficial but influential Political Science Group of scholars and administrators. Chang Kia-ngau's appointment as minister of railways was designed not only to provide him with a new post after his devoted service to the Bank of China but also to take advantage of his interest in railway development, an interest shown in his younger days when he had served the Board of Posts and Communications under the Ch'ing government. While with the Bank of China, he had shown a keen interest in railroad financing—especially for construction on the Chekiang-Kiangsi Railway (1929) and on the Canton-Hankow Railway (1933). With the growing tension in Sino-Japanese relations and the threat of war, the need for new railroad construction became increasingly urgent, and Chang Kia-ngau was thought to be a suitable man to take charge.

Following a government review of national defense requirements, it was decided that a new railway should be developed to run from east to west crossing the Canton-Hankow railway. In January 1936 the ministry of railways issued bonds to the value of CN$27 million in order to finance the construction of the Chekiang- Kiangsi railway from Nanchang to Pinghsiang, there connecting with the Pinghsiang-Chuchow section. One month later, new railway bonds of CNS120 million were issued by the ministry to finance the construction of a line from Chuchow farther west to Kweiyang, to form the Hunan-Kweichow railway. Chang Kia-ngau conducted negotiations with German interests for supplies to be used in the Chekiang- Kiangsi and Hunan-Kweichow railways and with French interests for the construction of the Chungking-Chengtu railway in Szechwan. In the 18 months between his assumption of office in December 1935 and the outbreak of the Sino- Japanese war in the summer of 1937, Chang Kia-ngau succeeded in establishing foreign confidence in the Chinese railways, with the result that Chinese railway bonds rose in value. He was also successful in inducing Chinese banks to subscribe to railway construction bonds in the amount of CNS74.5 million.

After the outbreak of the Sino-Japanese war, the ministry of railways became part of the ministry of communications, and Chang Kia-ngau was named to head that ministry. During the next four years, he administered China's wartime communications and transport with outstanding efficiency in spite of difficulties imposed by enemy blockade and the loss of China's seaboard provinces. A remarkable achievement was the completion of the Hunan- Kweichow Railway, undertaken while a major war was raging. The 224 miles of this strategic railway were built in one year. Plans were made for extending the railroad to French Indo- China, but the Japanese threat to the province of Kwangsi in November 1939 rendered that impossible.

In 1942 Chang Kia-ngau resigned for reasons of health; he was succeeded by Tseng Yang-fu. Chang went to the United States on a government mission to study economic construction. His book, China's Strugglefor Railroad Development, was published in English in the United States in 1943. In his foreword, dated at Chungking in January 1943, Chang stated that he was still subject to official constraints when he wrote the manuscript and sent it off to America. The book reviews in detail the history of railroads and railroad financing in China, as well as appraising the prospects for postwar railroad development. It analyzes the significant possibilities of railroad development and may also have been designed to bring these potentialities to the attention of the financial world abroad.

When the war ended in 1945, Chang Kia-ngau returned to China. Even before his arrival there, the National Government had named him chairman of the Northeast (Manchuria) Economic Commission. In that position, he was charged with the massive task of restoring economic stability to that region after 14 years of enemy occupation. This situation had been complicated by the entry of the Chinese Communists into the area and by the obstacles created by the Soviet military forces which had moved into the area a few days before the Japanese surrender. Chang Kia-ngau, who was also chairman of the board of the Chinese Changchun Railway, recognized the immense difficulties of his mission. He and Chiang Ching-kuo (q.v.), the Nationalist foreign-affairs commissioner for the Northeast, had many frustrating sessions attempting to negotiate with the Soviet authorities. The Russians, however, did little to facilitate the efforts of the National Government's representatives in extending their control over the whole of Manchuria.

Meanwhile, the Chinese Communists had assigned Lin Piao (q.v.) and an experienced group of military and political men to Manchuria to mobilize armed resistance against the Nationalists. By the time that international pressure finally led to the withdrawal of the Russian military forces, the Chinese Communists had under the Soviet aegis established themselves at strategic points. Chang Kia-ngau, who was determined to make the best of an overwhelmingly difficult job, began some reconstruction work in the area south of Changchun. During the early stage after the Japanese surrender, he made some progress. Railway mileage in operation increased, as did telecommunications lines, and coal and electric power output. And a significant number of factories resumed production.

The military and political situation in the Northeast deteriorated rapidly, however, and affected economic conditions. The heavy burden of military expenses forced the Nationalist authorities to resort to a new note issue. A special Manchurian currency was placed in circulation, and the issue soon reached astronomical figures as the territory under effective Nationalist control shrank. By late 1946, the United States had abandoned its attempt to mediate in the conflict between the Nationalists and the Communists in China, and the civil war had flared into the open. As emphasis shifted from economic salvage to military action in Manchuria, Chang Kia-ngau could do no more. In March 1947 the National Government recalled him and appointed him governor of the Central Bank of China. He held that post for about a year until May 1948, when a new government was formed at Nanking with Wong Wen-hao (q.v.) as premier.

When the Communist military forces overran the mainland, Chang Kia-ngau went abroad. He spent three years as a professor in Australia, lecturing on the economic problems of the Far East. In 1953 Chang moved to the United States, where he taught for a time at Loyola University in Los Angeles. In 1958 his book entitled The Inflationary Spiral: The Experience in China, 1939-1950 was published. After his retirement he continued to live in California. In addition to his published writings, Chang Kia-ngau has also left an important human legacy in the group of Chinese economists, most of them now living in the United States, who began their careers in the economic research department of the Bank of China when Chang served as its general manager.