Chapter 12: "Austerity is the Answer"
The rule of Empress Shi Guìyīng was typified by the recovery that it started with, as the Holy Chinese Empire healed from the wounds of the Great Commission and the near constant chaos since the Great Panic of 1907. Under the guiding hand of the Imperial Consortium for National Revitalization, the cavalier spending that led to the sovereign default of 1920 was curtailed, and balanced budgets for the Imperial government were able to be regularly observed by 1932 onwards, while the Holy Treasure currency was now strictly backed by the gold standard. The price of this austerity was the rise of unemployment, poverty, and homelessness as government benefits dried up. In 1934, the insurance and pensions for soldiers established after the Tianjing General Strike of 1894 were ended to keep up the surplus.
Despite the retraction of the welfare state, these signs of fiscal prudence were rewarded by those who began to invest again in the Tianjing Banking Corporation, as well as other financial institutions that were able to thrive due to the Anti-Trust and Banking Fairness Decree. The rights to resources and transportation were slowly bought back from foreign governments during the 1930s, and the Western governments negotiated a debt forgiveness settlement for the Empire during the height of the 1937 Stock Market Crash, when most of their economies suddenly and unexpectedly collapsed.
The 1938 Treaty of Tianjing effectively restored Chinese territorial rights over Hong Kong, Macau, Shanghai and Beijing. The reasons for this were twofold. Firstly, many of the new governments in the West were left-industrialist, which sought to protect native jobs and industry by promoting the domestic market at the expense of the international one, and promoted a more idealistic, equitable view of international relations, perhaps to justify it. Secondly, there was fear that the Holy Chinese Empire would side with South Germany in the German War given the Tianjing-Vienna Defensive Pact. However, China abstained from the conflict on the grounds that South Germany invaded North Germany, and that it was only obliged to aid South Germany if it had been attacked.
However, trouble would soon be on the horizon. The new tariffs and import dues imposed on Chinese products by the left-industrialist governments of the West, as well as the loss of their capital due to the Crash, began to cause an economic contraction at home. The '39 Recession saw unemployment go from 7% to 23%, with many hungry and without jobs. Many banks busted, but the Tianjing Banking Corporation remained solvent, while the Imperial government refused to enact any reforms.
The Imperial Consortium released a white paper entitled “Austerity is the Answer” on June 2nd 1939. It described the downturn as to be expected given normal economic cycles, and that the Chinese government should keep to its gold standard and balanced budget in times of crisis. Empress Guìyīng addressed the people: “this small downturn will soon be ending, if only we can keep calm, and maintain the practices that have given us prosperity for over a decade.”
However, many began to criticize Empress Guìyīng as decadent, especially in contrast to Emperor Jūn, wearing extravagant clothes, heavy make-up, and after having cast out the poor when she came into power, holding extravagant banquets in the Imperial Palace. She was unfortunately tone-deaf to these class issues, frequently recommending her subjects to “make do with what they have” and “learn the art of self-sufficiency”. The shrunken Holy Imperial Army were also discontent, having most of the benefits of their duty wiped away in contrast with the Navy and the IDAF. Some believe this was intentional, as the Empress was keenly aware of how a massive ground army effected the regime change that put her into power.
Nonetheless, many of the laid off and unemployed HIA began to join the Loyalist Order, a paramilitary religious group devoted to the ideas of Emperor Jūn and with the goal of continuing the Great Commission, by purging the God Worshiping Society of Traditionalists and reestablishing the Wrath Executors. Their leader in this period was Wan Gāng, who was one of the teenagers recruited by the Wrath Executors over twenty years previous, which had been merely a nuisance in the prosperous late 20s and 30s.
Others began to follow Lai Min, the leader of the Revolutionary Socialist Front. The RSF differed with the now defunct Veterans' Socialist Party of China by its rejection of parliamentarian politics. They partially accepted that democracy was the incorrect way of running China, but they believed that a republic with a market controlled by a workers' government was the best possible path for the impoverished to escape their squalor. Their pamphlets took up the name of the Real Red Lantern publication of old.
Numerous assassination plots, hostage crises and bombings ensued by the Loyalist Order and the RSF as unemployment only continued to increase and the economic malaise was allowed to fester. Chairman Hu Xiao of the Association for Representative Government desperately put forth democracy as the only means to end the violence and solve the fiscal crisis. Chairman Hu quoted Chancellor Wing: “national harmony is only insured if we allow peaceful translations of power.”
Eventually, the Consortium acquiesced, but only after Li Zhun was nearly killed by a member of the Loyalist Order in November. On December 22nd 1939, Empress Guìyīng issued the Representative Government Decree at the Dongzhi Festival, which restored the 1884 Constitution of the Holy Chinese Empire and its amendments with new elections to be held in 1940, and amended it as follows, based on the ideas of legal scholar Tan Guìyīng:
“Amendment IX. Article II is repealed.
Amendment X. The position of Chancellor shall remain vacant permanently.
Amendment XI. The Imperial Congress shall consist of two houses: the People's House, which shall function according to the provisions of Article IV, and the Imperial Council, which shall replace the Imperial Consortium for National Revitalization. The various members of the Imperial Council will serve at the pleasure of the Empress or Emperor, with the powers formerly reserve for the Chancellor in Amendment I. The budget of the Imperial Council can be rejected by the People's House with a two-thirds vote.
Amendment XII. The leader of the People's House shall be the Prime Minister, who will be confirmed by at least a majority vote of the members of their house.
Amendment XIII. The Imperial Court shall have the power of judicial review.
Amendment XIV. Pingan Guo shall have voting Representatives elected to the People's House.
Amendment XV. The term of office for a Representative in the People's House shall be increased to five years.
Amendment XVI. The People's House shall have 662 seats.”
The Empress stated, “For the first time in thirty-two years, free elections shall be held in this Empire. We have matured considerably as a people, and I believe that we can face this challenge of democracy better than the previous generation with our greater gifts in prosperity. So let us welcome the new elections to be held next year, as People's Day becomes truly yours!”
Chapter 13: The Election of 1940
All of metropolitan China had a sort of jubilant carnival atmosphere despite the ongoing recession, as elections were to be held on July 7th 1940. Brewing underneath this was a nervousness that the prosperity that had been ushered in under the Empress, waning in the recession, would completely collapse with the onset of democracy.
The first party officially established was the New Order Association, led by Hu Xiao and named after the “The New Order for a New China” pamphlet series from thirteen years previous. NOA called for a continuation of the Consortium's policies with no revisions, and argued against spending.
The second was the Veterans' Socialist Party, founded by Long Juān, a former low-ranking soldier who never saw active combat but was nonetheless a prolific author. Long ardently toed a Reformed Marxist line, and struggled to distinguish themselves from the Revolutionary Socialist Front, which branded it the “Imperial Socialist Party” and connected it with the government-run Socialist Party founded in 1894 by Chancellor Yung Wing. The Veterans' Socialist Party called for an abandonment of the balanced budget in favor of more spending on government programs for the poor and needy, an increase of the marginal tax rate and corporate taxes, as well as the end to privatization. They also continued the now deceased Xu Yun's calls for progressive taxation, better working conditions, legal labor unions and prohibition of child labor.
There was also the Virtuous Party of Hou Boyi, who was a Traditionalist God Worshiper clergyman that nonetheless wanted to restore some of the Jūn Penal Code, calling for the re-criminalization of homosexuality, adultery, gambling and prostitution, while being tolerant of religious pluralism. Hou also argued that deficits should be kept down, but the Holy Imperial Army should be built up as a means to fight unemployment, who could then work on peacetime civilian projects, while their pensions and insurance would be restored. Finally, the Virtuous Party blamed the Consortium, of which Hu Xiao was a part, for the recession, and painted the Veterans' Socialist Party as equivalent to or the puppets of the Revolutionary Socialist Front.
The public was caught off guard however by the Manchurian Independence Party, founded by Huangfu Aiguo. Huangfu argued that Manchuria was dragged down by the rest of China, and that it could have been out of the recession if it had full range over its natural resources. He further argued that Manchuria had always been culturally separate from the rest of the nation, and that they had greater respect for Confucian traditions. Huangfu was able to make a pertinent emotional connection here as he was nearly executed as a part of the Great Commission for his beliefs.
The results of the July 7th 1940 elections are as follows:
275- Virtuous Party
152- New Order Association
136- Veterans' Socialist Party
59- Manchurian Independence Party
(332 Majority, 662 Total)
Hou Boyi reached out to Huangfu Aiguo to form a Virtuous-Manchurian Independence coalition government with a 334 seat majority. Hunagfu thus led his party to confirm Hou Boyi as the first Prime Minister of the Holy Chinese Empire. Hu Xiao, having expected a Popular Party-like landslide, was incredibly disappointed with the results and resigned from his positions with the New Order Association, the Association for Representative Government, and the Consortium.
Prime Minister Hou's most significant pieces of legislation were the Manchurian Basic Laws, the 1940 Penal Code, and the Military Expansion Act.
The Manchurian Basic Laws created the Manchurian Congress, which could pass laws and present the slate of candidates for the Empress to choose from in her gubernatorial and judicial appointment there. The Virtuous also sought to reduce and flatten taxes for Manchurians wherever possible from the Imperial government, but this was generally ruled unconstitutional by the Imperial Court as it didn't have the approval of the Imperial Council in the budget.
The two other landmark laws were promised in their platform, with the 1940 Penal Code in particular providing for life imprisonment for homosexuality, adultery, gambling and prostitution. The Military Expansion Act sought to drastically increase the numbers of the Holy Imperial Army, ostensibly in order to promote economic growth. However, there was an undertone of reasserting control over the Democratic State of Korea, which was essentially a Japanese satellite after twenty years in its sphere of influence.
The Imperial Council approved of increases in spending for the military, and millions of Holy Treasures suddenly stimulated economic activity after nearly two years of high unemployment and economic malaise. Nonetheless, the deficit was still kept low, and those who weren't a part of the military were unable to benefit from the Virtuous policies.
As unemployment declined and the HIA's numbers soared, Prime Minister Hou became incredibly popular, and he was something of a celebrity with photos of his likeness plastered about everywhere. His cult of personality eclipsed and surpassed that of Empress Shi Guìyīng, as well as the entire Shi family. The Imperial Congress had taken over the Holy Chinese Empire, and they had the army to back them up.
