science

Shanghai rubber stock market crisis

Shanghai rubber stock market crisis is a science topic covered in the lgStudy science library. This page brings together a partial reference excerpt, illustrations, worked examples, real-world applications and a short study plan, so you can understand Shanghai rubber stock market crisis rather than just read about it. In short: Shanghai Rubber Stock Market Crisis (Chinese: 橡皮股票风潮) was an economic crisis caused by the bankers and stock-holders overstimulating the rubber stocks in Shanghai in 1910. This crisis led to a great number of bankruptcies of Chinese native banks in Tianjing, Guangzhou, etc.

Key takeaways

Shanghai rubber stock market crisis belongs to science; place it in that map before memorising details.
Learn the definition first, then one example that makes the definition concrete.
Connect Shanghai rubber stock market crisis to a quantity you can measure, compute or draw — that is where exam questions come from.
Reproduce the core statement of Shanghai rubber stock market crisis from memory before moving on to harder problems.

Reference excerpt

Shanghai Rubber Stock Market Crisis (Chinese: 橡皮股票风潮) was an economic crisis caused by the bankers and stock-holders overstimulating the rubber stocks in Shanghai in 1910. This crisis led to a great number of bankruptcies of Chinese native banks in Tianjing, Guangzhou, etc. Historically, this crisis, accomplished with the market crisis in the 1920s, brought massive destruction of market development in Shanghai.

Background In the late period of Qing dynasty (the earlier 20th century), the automobile industry was growing, accomplished with the product of rubber. In the United States, the export of rubber increased from $57 million in 1908 to $70 million in 1909. In Britain, the export of rubber grew from 840 thousands pounds in 1908 to 1.41 million pounds in 1909. This demand stimulated prices of the commodity. Under the highest needs of rubbers, many rubbers companies began to wage money from stock markets, which also happened in Shanghai . For example, Langkate, Perak, Kalumpong, Senawang, Tebong companies began to collect funds from stock market in the 1900s.

Process

Fundamentals-driven market Accomplished with the higher price of rubber in 1909, the related stock prices got a huge increase. Banks provided a series of convenient services of securities loans for the rubber stocks. First, the foreign banks announced to regulate mortgage discount at the level of 50%-80%; The Chinese native banks (钱庄) and Chinese Merchants Bank followed. To a certain extent, these financing activities inflamed the rubber stocks. Here are some stock prices (per share) in this peak period:

Langkate: 1080 Tael on March 2nd, 1910; 1300T on March 18th; 1675T on March 29th; then kept at the range between 1400 and 1500 Tael; Senawang: 630 Tael on February 25th, 1910; 750T on March 9th; 1200T on March 18th; 1325T on March 29th; 1425T on March 30th; 1550T on April 7th; 1600T on April 15th; 1650T on April 21st; 1675T on April 25th; 1625T on May 10th; 1400T on May 30th; 1300T on June 27th; 1300T on July 6th; 1375T on July 11th.

At that time, the P/B ratio of rubber prices in stock market got the peak as 10-20 times; also it was common to see the premium prices got increasing as eight to nine times.

High premium, stockholder and market speculation Accomplished with the higher stock prices and stimulation of financial organizations, new rubber stocks were issued into market. Since January 1910, more than 10 kinds of new rubber stocks existed in the market. These stocks were increasing with the frantic market; at the same time, the newspapers posted a huge number of advertisements, showing the nice management of rubbers companies and good relationships with banks such as HSBC, SCB, also announcing that the famous social activists had joined into the board of directors. By selling the stocks, these rubber companies also opened account at foreign banks in Shanghai. For example, the Chemor United Rubber Co. posted advertisement for funds at Deutsch-Asiatische Bank. Java Rubber Co. established account at Chartered Bank. Besides, Chinese native banks bogged down in this quagmire. Data shows the total of investments was 60 million Tael, in which the Chinese people held the 70%-80% of stocks. Some native banks not only lent money for investment, but also bought stocks by themselves. In addition, some banks also called loans from other banks. At the peak period, all kinds of people, including government officials, businessmen, and common employees joined into these investment activities.

… excerpt ends here. Continue reading the full article.

Worked examples

Example 1 — a first encounter with Shanghai rubber stock market crisis

Start with the simplest possible case. Write down what Shanghai rubber stock market crisis claims or describes in one sentence, then invent the smallest concrete situation in which that sentence is true. In science, the smallest case is usually a single object, a single equation or a single measurement. Check that every symbol or term in your sentence has a meaning in that case.

Example 2 — changing one variable

Take the situation from Example 1 and change exactly one quantity: double it, halve it, or set it to zero. Predict what should happen to Shanghai rubber stock market crisis before you calculate. Comparing your prediction with the result is the fastest way to find out whether you understand the idea or only the words.

Example 3 — an exam-style question

Typical questions about Shanghai rubber stock market crisis ask you to (a) state it precisely, (b) apply it to given data, and (c) explain a limitation. Practise writing all three answers in under five minutes; the third part is what separates a full-mark answer from an average one.

Applications of Shanghai rubber stock market crisis

In research: Shanghai rubber stock market crisis appears in science research whenever the underlying quantities have to be modelled precisely. Papers usually cite it as a starting assumption and then explore where it breaks down.
In technology and industry: Engineering practice reuses Shanghai rubber stock market crisis in design rules, simulations and safety margins. Knowing the idea lets you read a specification sheet and understand why the numbers look the way they do.
In the classroom: Shanghai rubber stock market crisis is common in secondary-school and first-year university syllabi. It links to neighbouring topics 1910 disasters in China, 1910 in China, 1911 disasters in China, so understanding it makes those chapters shorter.
In everyday life: Look for Shanghai rubber stock market crisis outside the textbook — in sport, cooking, traffic, electronics or the sky above you. An example you found yourself is remembered far longer than one you were given.

Ask Teacher Smith questions about this articleOpens your AI tutor with a question about “Shanghai rubber stock market crisis” →

Affiliate

Preply — study more efficiently by working with a personal tutor. 50% off.

How to study Shanghai rubber stock market crisis in 20 minutes

Read the reference excerpt below once, without taking notes.
Close the page and write down what Shanghai rubber stock market crisis means in your own words.
Compare your version with the excerpt and mark what you missed.
Work through the three examples above with pen and paper.
Explain Shanghai rubber stock market crisis out loud to somebody else — or to Teacher Smith in the lgStudy chat.

Frequently asked questions

What is Shanghai rubber stock market crisis in simple terms?

Why does Shanghai rubber stock market crisis matter?

Because it connects several science ideas at once: it gives you a definition you can apply, a quantity you can calculate, and a way to check whether a result is plausible.

How should I study Shanghai rubber stock market crisis?

Read the excerpt, restate it from memory, then work through the examples and applications listed on this page. The five-step study plan above takes about twenty minutes.

What does this page cover?

It gives you a compact reference excerpt plus original lgStudy explanations, examples, applications and study material on Shanghai rubber stock market crisis.