Abstract: During the period of 1912-1936, the domestic debt policy of the Republic of China appeared to be “path dependence”, and continuous defaults in the internal debts were found, therefore, three debt consolidations were carried out in 1921, 1932 and 1936. The schemes of the three debt consolidation cases are not just the same, on the whole, they have both rational and non rational sides. The rational side is revealed by such measures as stabilizing credit, taking back the rights and relieving the financial burden; the irrational side was looting the bondholders’ benefit, strengthening the control of commercial banks, and reinforcing the extracting ability to social resources. After these debt consolidations, the banking industry began gradually to keep away from government bonds and turn to support the development of the industry and commerce. The government’s credit was also loosing, finally the original “path dependence” was broken by external factors. These debt consolidation cases can provide lessons and reference to the solution of China’s current debt problems.

Key words: domestic public debt; internal debt consolidation; the period of the Republic of China