Currency in China - Chinese Currency by J. Edkins.
Currency Principles are Known to the Chinese.
The principles which regulate currency in a country are the same in China as elsewhere.
The amount of copper, silver, or gold money bears a proportion to the amount of trade. Trade is increasing in China, as the annual reports of trade shew. Every purchase not being simple barter requires money or paper representing money. Without this a purchase cannot be made. When paper money is used there must be credit based on a reserve of silver or copper coins, and on the part of buyer and seller there must be honesty and loyalty in fulfilling obligations. Good silver and copper coins in sufficient quantity for the use of buyers are requisite for China at the present time. Paper representatives of money are needed to allow the gradual expansion of trade. The people will loyally meet commercial obligations if they are taught morality. It will be possible to make purchases if the government coins money sufficient in amount. Sales of goods to foreign buyers cause an influx of silver and so the volume of silver in circulation is increased. It is a constant duty of the government to make more copper money to maintain the balance between silver and copper. If the government mintsare sufficiently active the dollar and the tael will always change for the same number of copper cash. This even balance ought to be the aim of mint superintendents.
That currency principles are known to the Chinese may be seen in the works of native writers on the subject. The advantages of paper currency they discuss in- the following manner :
TEN BENEFITS IN THE USE OF PAPER CURRENCY.
1. Paper notes having a money value can be manufactured in each province. 2. Such notes can be sent to other provinces. 3. Paper notes are convenient to carry, being light. 4. They can be kept safely. 5. Paper notes do not depreciate in touch and quantity. There is an advantage over silver in this respect. 6. They do not need scales to weigh them. 7. The melter cannot surreptitiously abstract from the weight as is done with silver. 8. Notes are easily hidden from thieves. 9. The copper they represent can be used for other purposes. 10. Silver represented can be kept in the government treasury while paper money is circulated in its place.
These ten advantages of paper currency as stated by a Board of Revenue Vice-president of the Ming dynasty are criticised by Wang Liu of Soochow in 1831. He says that in regard to the ninth advantage it is defective, because copper cash continue in circulation along with cash notes, and ought to do so. To melt them is a crime.
The difficulties of maintaining official control over cash and cash notes are: 1. That copper cash are melted by coppersmiths. 2. Lead cash are made and circulated. 3. Foreign coins are introduced into the circulation. 4. The price of silver is in the hands of traders. 5. The issuers of the notes are private traders. On these five grounds Wang Liu recommended the government to issue the notes. The government, would in his opinion, have the power to abolish the five evils he noticed.
Wang Liu also states that silver ought not to be shut up in the treasury but circulated among the people for use in making various implements. He adds that (1) the great advantage of paper money is that it is unlimited in quantity and differs in this respect from gold, silver, and copper. In saying this he seems to forget that paper is not money at all unless there is gold, silver, or copper kept as a reserve. The reserve must be sufficient to prevent a disastrous run upon the bank. He praises the currency of the Chin dynasty, which used copper cash along with paper notes and condemns the Yuen dynasty currency, which at one time used only paper money. (2). The next advantage he mentions of treasury notes is that the control of the currency is retained by the government. This increases the esteem in which the government is held. (3). The use of government notes acts as a check on the introduction of foreign money, and China is held by foreigners in
higher regard. (4). Treasury notes in sufficient quantity prevent persons inclined to rebellion from pushing their plans. The rebels will return to loyalty if they find that the people are so well-to-do that the offer of bribes to rebel is not accepted. (5). Silver takes the forms of Yuen-pao silver, sycee silver, and dollars. In contrast with this variety, government notes are uniform. This is an advantage. (6). The use of treasury notes
allows of the collection of copper which can be made into cash, and the cash thus made are improved in purity. (7). Treasury notes being fixed in value, fraudulent traders cannot raise or lower their price. Here again the native author is mistaken. If he means that the credit of the government is commercially so good that purchasers of notes do not doubt their being valid for the amount stated, he is surely wrong in this. (8)-
The eighth advantage of government notes is that hoarded silver will be brought out of cellars when it is stored and used to buy notes. The circulation of this silver would certainly relieve the tightness of the market. (9). The ninth advantage of treasury notes will be that they can be made large and small in size. On the large ones the classic of filial piety can be engraved. On the smaller moral sentences from good authors can be engraved. The practice in reading thus promoted will be a real benefit to ignorant people, who will be
induced to learn to read. (10). The use of treasury notes will open the way for the removal of many abuses. These abuses belong to the grain tribute, the Yellow River, and the salt departments. Persons connected with the Likin do not venture to suggest changes or find fault with what is done, fearing the expenditure may not be met. If treasury notes are used the path of improvement will be plain. (1 1 ). The author thinks that the use of treasury notes will render appeals for special contributions unnecessary. Here error is caused by the author's belief that unlimited credit is inseparable from a government issue of notes. (12). The twelfth advantage is that taxes being light the government will be regarded as highly benevolent.
FIFTEEN DEFECTS OF PAPER CURRENCY.
The same author marks fifteen defects in the paper currency of the Sung, Chin, Yuen, and Ming dynasties. The abandonment of paper currency as insecure he thinks was because 1. The paper used was too thin and easily torn and otherwise injured. 2. The printing of the notes was rough and indistinct. 3. Statutory penalties and nothing more were stated on the notes. 4. There was not sufficient variety of value inscribed on the notes. 5. The Yuen dynasty notes of A.D. 1260 had values which were too small. They represented from two strings to ten cash. 6. The limit of two strings of 1,000 cash for each of these notes was too low for public convenience. 7. Notes nominally worih two strings cost only three or four cash to make them. They were too thin and the workmanship was not good. 8. Government officers gave out notes but refused to receive them. They made profit by the issue. 9. In changing old notes for new, a charge for stationery expenses was made of thirty cash on a string. 10. In using old notes there was loss on the part of the holder. 11. There were frequent changes in the system of tin- paper currency. The people on this account distrusted the notes. 12. The minting of new wish was discontinued. The cash in circulation became daily fewer in number. 13. Silver was used at the same time, mixed with the notes in business transactions. 14. The benefit
of profit realized was exclusively with the government. The people did not share in it. 15. Penalties against persons circulating counterfeit notes were announced, but there was no vigorous effort to prevent this evil.
Here follows a Chinese argument on the effect produced on currency by hoarding on the part of those who by so doing withdraw so much money from circulation. The man who hoards, injures his neighbour and also the government. The writer, who a hundred and twenty years ago discussed this question, was named Chu Lin-chih.
How the Rich may be induced not to Hoard Cash.
memorialist, to require those who hoard to pay taxes in cash or to open cash shops. If they refuse they ought to be punished. The fear of punishment is greater as an inducement on the minds of the rich than the desire to increase wealth. The advantage gained by this policy will be to check the hoarding of cash.
Currency in the Tang Dynasty.
A poll tax, mixed with land tax, was the chief factor in raising the revenue. The land was divided according to the number in a family, and one-fifth only was conveyed by inheritance. A mow was 240 pu and a k'ing [was 100 mow (15.13 acres). When a man was eighteen years of age he had 100 mow of land assigned to him. Twenty were transmitted from father to son (tyk |j| shih ye). The rest were for the family. Sick persons and aged men had forty mow. Widows, wives, and concubines had thirty mow. A man paid in taxes two
cwt. of millet, three of rice (that is, ^g" five hundred pints). In silk districts two pieces of silk were required of one kind and twenty feet of another, beside three taels raw silk and three catties hemp. Instead of silk he paid fourteen taels of silver in districts where there was no silk. The silk tribute being assumed at eighty feet of woven fabric, one tael of silver was equivalent to five feet. At present one foot buys two and a half taels. According to this shewing silver was worth in industrial fabrics twelve times what it is now. But richer fabrics are made in modern times, and probably it was not more than three times or five or six times what it is now. The woven silk of Shantung costs now one tael a foot. If we take that as a standard by which to judge of tbe value of silver twelve centuries ago, as stated in the Dynastic History, then silver is now five times cheaper than it was then. The difference is caused by the cheapening of silver throrigh improved machinery in silver mines and on account of its large importation at a low price from abroad.
In hemp districts twenty-four feet of the cloth made were required and three catties of raw hemp.
There was forced labour. Twenty days in a year were required or an equivalent in textile fabrics of three feet per day. In times of war requiring fifteen days' service, tax payers were exempted from the claim for textile fabrics. If twenty days were required, the grain tribute also was not a exacted. No man was required to give labour for more than fifty days.
In Canton province the tax was 120 catties of rice; second class, eighty catties; third class, sixty catties.
Aborigines paid one-half. Traders coming in to live paid ten cash or five. They were excused if poor. In a second year they gave as a tax two goats or one goat. If poor, three persons gave one goat between them.
Measures. Eight millet seeds are one
Ten fen are one inch,
Ten t'sun are one foot,
Ten feet are one chang,
1,200 seeds are one
Two yo are one
Ten ho are one pint,
Ten sheng are one ten,
Ten ten are one hu,
Weights. 100 seeds are one chn,
Sixteen chu are one tael
Sixteen taels are one catty,.
In the 11th ceutnry the Sung dynasty had a clothmeasure foot which is found to be 10 inches fths of an English foot. It is engraved in the Chain of Metal and Stone Inscriptions," volume 2, page 76. In the Chou dynasty of the time of Confucius the foot in the same work measures 7 inches |ths, or speaking roughly eight inches. The Han dynasty foot for cash manufacture is 91/8th English inches long. The foot at that time, about A.D. 150, was about three-fourths of the length of our English foot. A Han dynasty cash, then,
was 9/19ths of an English inch in width, nearly. Ten cash were usually made in a frame of a foot in length, and it was the current foot in each dynasty that regulated the width of the copper coin. The iron cash mould was, in some instances,foot in length, and contained spaces for ten cash. As a consequence ancient cash thns made were small; the foot being shorter than at present.
The international treaties determine the length of the foot to be 14.1 English inches. This is the tailor's foot. The carpenter's foot is about 12 inches long. The foot of the Board of Works is 12.25 inches, and this is used in measuringlaud.
Copper cash had been made and used in China since the time of Confucius, but paper currency really dates from the Tang dynasty. The government became settled, and there was a long time of peace. The caliphate at Bagdad was prosperous and foreign trade was encouraged. Trade increased under the caliphs and under the Tang emperors at about the same time. In Cliiua this led to an insufficiency of current money.
Tightness was followed by the adoption of paper representatives of gold, silver, and copper.
The Currency in the Yuen Dynasty.
The trade with the west during the Yuen dynasty, which lasted from A.D. 1200 to A.D. 1368, increased to a remarkable degree. Silver being very much needed, reached China in large quantities, and luxurious living became the fashion. The common Chinese abacus was introduced in China early in the Ming dynasty. This new form of manual arithmetic, as it may be called, was one of the results of the opening of the country. Its universal adoption in every village of so large a country shows the diligence of the people in prosecuting internal trade, and may be used as an illustration of the effect of the Mongolian conquest in opening up the country while the old counters were still in nse. The Tungus tribesmen of the Golden dynasty did something to promote trade, bnt not nearly so much as their successors the Mongols, because the Mongols also conquered Persia and Russia and possessed the southern provinces of China. Canton, Amoy, Hangchow, and Nauking were open to trade. The consequence was that a very considerable amount of silver came into China from Western countries, and the manufactures and arts of China made decided progress. It was during the Yuen dynasty that the mariner's compass, which the Chinese had in use at the beginning of the twelfth century, was employed on board all large vessels making long voyages. In Europe it is spoken of as made use of by Flavio Gioia, of Amalfi in Southern Italy, at the beginning of 14th century.
The question is an important one, what effect the great development of foreign and native trade had upon the money then in use.
By reference to the Grand Canal and river accounts as stated in the history of the Yuen dynasty the state of the currency at that time may be illustrated. In A.D. 1326 for example, 30,000 men were paid each day a tael in paper money and one pint of millet. The usual average at the present time is 4-10ths rice, 6-10ths copper money, or 3-fifths rice. The workmen on the Yellow River and Grand Canal, when paid in paper money, one tael would, according to this average, find it only worth to them one hundred cash. If so, then since silver was worth a thousand cash a tael, the paper had depreciated till it was worth in exchange only onetenth of its nominal value. Such was the consequence of the profuse use of paper money. This evil was, under the Ming sovereigns, after making trial of paper money for some years, corrected by the financiers of the time. They had followed the Yuen system too long. Advantage was taken of the silver which had come from abroad during the Yuen dynasty to return to special payments and a new currency era was commenced. Silver rose to its rightful position as the most suitable money when copper by its increased quantity became too bulky for convenience.
Another fact shonld be weighed here. The gold and silver which the Mongol emperors possessed was lavishly distributed in gifts to members of the imperial family, to successful soldiers, and to civil officers for useful service. In the year A.D. 1334 on one occasion, after a victory, a guardsman received gold 400 taels, silver 900 taels. His followers each received gold 200 taels, silver 700 taels. Ninety-six men received in all gold 2,400 taels, silver 5,600 taels ; gold waist bands, ninety-one; beside 1,300 pieces of silk.* The princes
engaged each- had 100 taels of gold, 500 taels of silver, one gold sash, and eighteen pieces of gold embroidery. This system continued for nearly a century. Paper money was given to the victims of drought and flood. The gold and silver reserve which alone could keep up the value of the notes, was ignorantly scattered with free hand. They should rather have kept it as a fund with which to quell rebellion. By such a policy the Mongols might have continued to rule China as long as the Manchus in recent times. In the Yuen dynasty, on account of the great success of the army, copper money was despised and paper took its place.
A minister replied to Kublai's question regarding copper money, whether it should be used or not,
" Your majesty rose to power in the cold region of the north. Paper money belongs to the dark element. China belongs to the light element, to which copper money is the more suitable. If your majesty use paper money your descendants will enjoy tranquillity" Kublai followed this advice. His grandson had copper cash
made for a short time as an experiment, but for the remainder of that dynasty, during another fifty years, paper money was in general use.
In the year 1276, when Knblai had been thirteen years emperor, South China was conquered by his army. The shoe of silver weighing fifty taels is called Yang-chou-yuen-pau, and it dates from this time. Large quantities of silver in small pieces were melted into shoes at Yang-chon, where the army encamped after the conquest. The general ordered a search for silver in the soldiers' baggage. The silver thus procured was presented to Knblai in shoes of the size mentioned. The Mongol emperors thought themselves far richer
than they were. They gave freely because they had a paper currency. The loss of the silver, given away so lavishly, reduced the value of paper money too rapidly for the dynasty to retain the confidence of the trading population. A government is strong as long as the currency is trusted.
The same passage ie the Chui-keng-lu says the new silver shoes were many of them changed for articles of traffic and found their way into commerce. The next year Kublai had more Yuen-pans made, weighing forty-nine taels. In the year A.D. 1278 shoes were made weighing forty-eight taels. In A.D. 1286 and 1287, after the conquest of the Liao-tung province, the silver obtained was used in this way. This is stated in the Chui-keng-lu, chapter 30.
Military successes rendered the government careless, and gave the Mongol sovereigns so much confidence in their future that economy was not practised, and a large depreciation of the paper currency was the result, paving the way for the downfall of the dynasty.
This want of economy was encouraged by the belief which Confucian flatterers of the Mongolian emperors impressed on them that heaven's decree made them universal sovereigns. Indeed the Gonfucianist statesmen of that time were convinced of it as a truth ; the Mongol armies being invincible in their opinion. Kublai, without leaving Peking, conquered China, Birma, and Manchuria, Genghis Khaii left him these conquests to make, and be made them with the greatest ease. It was at this time that Kublai's treasurers recommended him to use notes for copper cash. The copper cash notes were of the values 2,000 cash, 1,000 cash, 500, 300, 200, 100, 50 30, 20, 10, and 5 cash; so says the Chui-keng-ln, chapter 26, page 11. Such was the faith of the multitude in the strength of the government that notes of all these values were printed at the government presses, accepted by the people, and passed in the markets. But those who received these cash notes would soon fiud that the cash which the notes represented were difficult to obtain. The government ceased to coin copper cash. The consequent depreciation of the notes was very rapid.
The Currency during the Ming Dynasty.
When the Chinese drove out the Mongols, and Chu T'aitsu mounted the throne as first emperor of the Ming dynasty, A.D. 1368, the taxes were rearranged and an edict was issued that one-twentieth of the land should be planted with the mulberry, or with hemp or cotton. Eight taels of silver would be levied on one mow of hemp, four taels on one mow of cotton. The tax on mulberry tree laud would not be levied till four
years after the first planting. If mulberry trees were not planted, one piece of silk would be claimed ; if cotton or hemp were not sown, one piece of cotton or hemp-made cloth would be claimed. This was the beginning of these taxes, and it was the date when silver currency, properly speaking, commenced in China.
In the King-shi-wen-su-pien, chapter 24, Feng Kwei-fen says the nse of silver was not allowed till the middle of the Y Ming dynasty. Ku Yen-wu says the object of the prohibition was to check the advance of a new currency and favour the circulation of paper notes. Silver has its own value while paper has not. The popularity of silver was therefore inevitable. This accounts for the prohibitory edict.
The introduction of silver was the effect of foreign trade. The government at first opposed it because it caused a decline in the circulating value of paper notes, but trade proved too strong for the government successfully to resist the use of silver.
In the year A.D. 1376 there was an edict directing that in payment of taxes one tael silver should count as 1,000 cash in copper and as ten strings (kwan) in copper cash notes. Either of these three modes of payment would be accepted by the tax collector as an equivalent for one picul, which was then as now 100 catties, or Chinese pounds, of rice. For wheat the amount was less by one-fifth. One piece of cotton or grass cloth was valued at 6/10ths of a picul of rice and 7/10ths of a picul of wheat. Coarse hemp cloth was rated at 4/10ths of
a picul of rice and half a picul of wheat. In a large part of China millet is the food of the people, and in those parts they could pay taxes in millet Eight years later it was ordered that in Yunnan, gold, silver, cowrie shells, varnish, cinnabar, and quicksilver should each be allowed to form part of the autumn tax payment. The tribute of rice was the regular tribute, pen-se, and all substitutes for it, whether precious metal or any
articles of value were substitutionary tribute, che seh.
The ting, of the value of five taels, in the form of paper notes, corresponds to the fifty-tael notes of the Yuen dynasty.
The early Ming emperors retained the system of government notes as currency. They were one-tenth of their former value. In Knblai's time paper notes, known as ting, were of the nominal value of fifty taels of silver. They counted as five
taels in the time of the first Ming emperor. In A.D. 1397f the Board of Revenue proposed that one picnl of rice should be represented by one ting of notes. One tael of gold was the representative of ten piculs. One taei of silver was the representative of two piculs. One piece of thin silk was equivalent to 11/3th piculs. One piece of cotton cloth was worth one picul. One piece of grass cloth was of the value of seventy catties of rice. One catty of raw cotton was worth twenty catties of rice. The emperor said that this scale would be too hard on the poor people. The amount of rice was doubled. They need pay only 2,500 cash in notes instead of one picnl of rice. In other respects he accepted the proposal of the Board.
Gold was in the latter part of the 14th century only five times the price of silver, and an ounce of silver in the markets would buy three times as much rice as at the present time.
Under the Emperor Yung Lo, Cochin China was added to the empire. The aborigines of Hainan and the mountains of Canton were ordered to pay the same taxes as the Chinese. Thirty million piculs of grain and twenty million taels value of silver, in pieces of silk and notes, are mentioned at this time as the revenue in kind of the whole empire. It was a time of good harvests and general prosperity. But although the government laid up annually in the treasuries 300,000 taels of silver they would not allow this metal to be used in commerce by the people.
In the year 1436 a great change was inaugurated by sending the tribute of certain provinces in the form of silver to Peking. After much discussion, it was decided that four hundred weight of tribute rice or wheat should be represented by a tael of silver. The four million piculs due from the provinces Chekiang, Kiangsi, Hnkuang, Fnkien, Canton, and Kuangsi, were equivalent to one million taels. This silver was earned Gold Flower Silver. The soldiers received their grain, and it became a common thing to take silver at the rate here mentioned, instead of tribute grain to forward to Peking. This was about sixty years before European ships appeared at Canton, To this store of silver which entered the currency in the early part of the fifteenth century, would be added in the sixteenth century the silver brought by foreign trade. It was during the Hung Chih period, 1488 to 1506; that European ships first arrived at Canton.
When the land taxes are too heavy the country people leave their land and seek another home. This happened with the people of Soochow, Changchow, Huchow, and Kiahing. The Kwangsi treasurer, Chow Kan-siun, stated this to the Emperor Siueu Tsnng in A,D. 1426. He said that he had asked the old people why the farmers left their lauds. They all said the heavy land tax was the cause. The contribution was, about A.D. 1426, the twentieth part of a pfcul, at Kwuu-shan near Soochow. If rented, the tenant paid for each mow of land a picul of rice to the owner. Later it was sometimes confiscated, and the officers still claimed one picnl for each mow. If it be supposed that this was eight-tenths of the yield, it would be too heavy a burden for the tenant. If the government took the whole of the yield the tenant could only seek another home. The same official critic of taxes adds that about A.D, 1412 there was an inroad of sea water in Chekiaug
which devastated 90,000 mow of land. Still the old tax was expected from the land over which there had been this destructive inundation.
Soochow land is the most fertile in China.. It yields, for example, at present 420 catties of rice in the most productive parts. Some land in Chekiang yields two hundred or three hundred catties. There is not likely to be any difference in the quantity of rice produced in A.D. 1426 and now. At least this amount is mentioned in the Ming History (cb, 78, p, 3). I learn that 320 catties may be expected on a mow of good land in Kiahing
at present. This amount does not greatly differ from the amount said to have been produced 450 years ago. The price was, in July 1897, Taels 2.2.0. At that time it was Taels 0.2.5 for 100 catties. Silver is eight times as cheap as then if stated in the market price of rice. Silver, if exchanged with copper, was then cheaper by one-fourth than it is now. Then 1,000 copper cash were equivalent to a tael of silver. Now 1,240 cash (July, 1897 ) are exchanged for a tael. Judging by these facts silver is still too dear by 20$ or more, when compared with its relation to copper 450 years ago.
There was certainly a large amount of silver in the possession of the government early in the sixteenth century. It was greatly increased by the Mongol capture of cities. Private hoards of silver came into circulation at that time. For instance the Ch'ien-ch'ing-kung, formerly called the $ BJJ, one of the chief palace buildings, cost twenty million taels of silver to build it. Three thousand workmen were employed. In a year thirteen thousand piculs of rice or millet were paid in wages (Miug-shih 78, 12). The name in now j }j| g.
In the year 1380 the first Ming emperor directed the Board of Revenue to make a reduction in the tax on each mow of land of one-fifth. Seventy-five catties as far as to forty-four catties were thus reduced. Forty-three to thirty-six catties were reduced to thirty-five. The autumn yield of Soochow prefecture is stated at 2,746,000 piculs. In A.D. 1675 a picul of rice was valued at Taels 1.5.0 of silver. In A.D. 1524 a picul of rice was estimated at Taels 0.2.5. In A.D. 1575 the same was Taels 0.7.5. In A.D. 1666 the same was Taels 2.0.0. It was in July, 1897, Taels 2.5.0 nearly for 100 catties. In the year1666, while two taels was fixed as the amount to be paid instead of the rice it represented, it. is remarked that in fact nnshelled rice at that time was worth seven or eight-tenths of a tael in the market. If the emperor had insisted on silver the country farmer would have been obliged to sell nearly two and a half piculs to procure that amount of silver. The emperor directed that rice should be received.
In the year 1400 the second Ming emperor kindly ordered that in no case should more than one tow per*mow be levied on the farmer. His successor, Yang Lo, or Ch'eng Tsa, changed this rate and made the taxation heavy. The Ming emperors in levying the taxes were very exacting, interpreting according to the letter. But the consequence was that only half of the amount or six parts in ten was actually sent to Peking.
There was an inspection by the Board of Revenue. Seventenths of the amount due by the regulations was held to be a very good return.
The present dynasty has changed this system, but it is impossible to secure uniformity in the levy of taxes, on account of the uncertainty of harvests caused by drought and flood. In the Ming dynasty during the 15th century we read of one tael of silver being sent to Peking in place of a picul of rice, and in bad years seven mace, because the farmer would then be unable to offer so much grain to the tax gatherer. Soon seven mace became the rule (Ming-shih, 79, 4) The Soochow contribution changed for silver at the rate of one tael was 500,000 piculs in A D. 1492.
When the use of bank notes was drawing to an end, great efforts were made to preserve worn notes in a special treasury. In A. D. 1425 or thereabouts this ceased to be done. In the Yung Lo period there was a treasury for receiving worn notes in every city, A.D. 14U3 to 1425, and in the time of Hung Wu, 1363 to 1399, new ones were given for the old notes. In the year A.D. 1436 it is said that gold and silver were not received for grain ; but at iron foundries they were gladly accepted by the tax gatherer (Ming History 79, 10, 6). At the foundries gold and silver came to the iron masters from buyers of iron articles. It is easy to see here that what the people really liked best was metallic currency. The government forced the paper currency upon them against their wishes. It is said by the historian that if gold and silver came in instead of land and grain taxes hi kind they were sent to Nanking to be used in paying salaries to military officers.
In A.D. 1436 it was ordered that 1,000,000 piculs of grain should be paid for in silver and sent to Peking in that form. It would be, that is to say, Taels 1,000,000. About A.D. 1506 the eunuchs in charge of the silver treasury sent in a memorial stating that the palace expenses were great, and
that it would be well to give out silver. The Board of Revenue offered resistance, but they conld not check the influence of the eunuchs. The treasury store of silver had been, A.D. 1522, eight million taels. This sank soon through palace expenditure to a million and a quarter. This was the condition of the silver question in Peking just at the time when Europeans had begun to trade with China for silk, rhubarb, and porcelain, paying in silver or in Western goods at Canton and other ports.
In the year 1558 it was ordered that one million taels of silver should be given over for the use of the palace in addition to the emperor's special expenditure. This was the result of the influence of the enuuchs at the time. In addition there were 400,000 taels, the confiscated property of delinquent officials and penalties for offences against customs' regulations. The enuuchs grew bold. They would send despatches to the Board of Revenue for silver, and they did not take the trouble to say for what purpose or what amount of silver was required. This is stated in the history about 1567. To this the Board objected. They petitioned the emperor to check the eunuchs, but without success.
Shen Tsung came to the throne A.D. 1573. In his eighth year (Wan-li eight) the treasury was yearly receiving Taels 4,500,000 of silver. Ming History, 71), 10. This was taels 200,000 beyond the amount recognized as suitable in A.D. 1436. Soon after Taels 70,000 were added for feed of horses and for the treasuries of the Board of Revenue, that of the Imperial Banqueting Courtauduf the Imperial stud, which were nearly empty.
The Board of Works had a treasury for the produce of silver mines. The president of the Board paid workmen with this silver. The emperor rebuked him and ordered him to replace the amount so nsed by other silver. From this time all the silver of this treasury was applied to palace expenditure, The eunuchs at this time were court favourites. They were of low origin and without Confucian education. Their cleverness pleased the emperors and aided them in many ways. There was always a feud between them and the Coufucianist
class. They cast covetous looks on the silver that was now fast being a Ided through foreign trade and the working of mines to the stores accumulated by the Mongols in their wars.
The salt administration in the Ming dynasty is connected closely with the history of the currency. According to the method pursued at the close of the fourteenth century salt farmers manufactured salt within fixed territorial limits. Each salt certificate, or yin, represented 200 catties, and this was equivalent to one hundred catties of rice. It is singular that at present, November, 1900, thirty-eight copper cash will buy one catty of rice. In July, 1897, the price was twenty-five cash. In some places twenty-five cash will buy half a catty of salt, but salt is usually much cheaper than this. Thus at Canton salt and rice are nearly equal in price, because Canton is on the sea where salt is cheaply manufactured, whereas on the river at Hankow and beyond it in fresh-water districts the people suffer from a too heavy taxation of an article so necessary as common salt. I am told that at Nanking the price of rice and of salt is much the same per catty. Beyond this up the river westward, the expense of conveyance adds to the price of salt.
A certificate, yin; means 675 catties (Giles), and at Tientsin one large bag of salt carried by four, weighs 640 catties ; such bags are made of rush mat. In A.D. 1436 the Kiang-su salt was sold so far away as Kwei-chow. But a few years later, 1465, the salt of Pakhoi, on the Canton coast, was carried to the cities of Himan. At the same time the Kiang-si cities near Cauton province, made use of Canton salt.
In the period A.D. 1621 to 1628 ten-cash pieces were made in Peking; each weighed one tael. One thousand copper cash weighed 100 ounces or taels. The use of ten-cash pieces was regarded as a help in counting, and therefore a convenience to the people in all small transactions.
The use of money notes made of paper really began in the reign of Hieu Tsung, about A.D. 820. It was not till the Sung dynasty that the notes called chiao-tsz 3g -f began to be used in Szchwen. The aim was to relieve the people at a time when iron cash, a very heavy kind of money, were in use. About A.D. 1130 the notes called hui-tsz came into use in the southern empire, when Hangchow was the capital. From that time the use of paper notes continued in the northern empire, then known as the Golden Dynasty, and subsequently under the Mongols, who conquered China about A.D. 1260 and retained it for about a century.
Currency in the Present Dynasty.
The Manchu emperors adopted the currency of the Ming dynasty. During two centuries and a half they have continued to use silver by weight and copper in the form of cash. The chief features of the currency in the present dynasty will be found described in subsequent chapters on Chinese revenue and taxation.
In Peking large cash called Tang-shih-ch'ien began to be made in the reign of Hien Feng. They have continued in use ever since. A large portion of them are counterfeit. They are not in use more than a few miles outside the metropolis.
Fall of Silver.
In 1895, 1896, 1897 the values of the Mexican dollar, as stated in copper cash at Shanghai, were as now given. In Chinese daily newspapers the heading i-p'ai, price in clothing establishments, is the price of the Mexican dollar for the day.
1895, February 23, 930 ; April 23, 1,040 ; May 14, 1,030 ; September 1, 1,000; December 15, 970. Between July and December in that year the tael of silver fell from 3/ to 2/11. 1896, August 23, 940; September 14, 940; September 28, 930 ; October 27, 920 ; November 11, 920 ; December 7, 910.
1897, January 8, 900; February 27, 910; March 23, 920; April 19, 930; April 28, 930; May 24, 940; June; 20,950; July 2, 940; July 30, 950; September 1, 960, September 8, 950 ; September 21, 940; September 28, 930; October 12, 920; November 22, 910, February 1, 900; February 15,900; February 26, 910; March 14, 910; May 20, 950; June 16, 940.
In these years great changes took place in the relative value of gold and silver, especially through the adoption of gold currency by Japan. Yet the Mexican dollar kept its value as stated in copper cash through these years. It was 930 cash in February, 1895; 900 cash in February, 1897; 920 cash in April, 1898; 920 cash on October 14; 920 cash on November 29 ; 910 cash on April 13, 1900.
Fixed Ratio in India. British India is using silver at twenty-two to one. London and China Express, December 31, 1897. The same Journal states that in Netherlands India silver is current money at fifteen and a half to one. Borneo, Siarn, Malaysia, and China are on a silver basis, and if Singapore adopts a gold basis the trade with Siam will be lost to her.
The values of the Mexican dollar at Shanghai in the years 1898, 1899 were : January 2, 910; January 13, 900; February 1, 900 ; February 15, 900; February 26, 910; March 14, 910; April 6, 920; April 22, 920; April 25, 930; May 23, 940; May 28, 950; Jnne 16, 940; Jane 25, 930; July 30, 920; August 22, 910; October 14, 910 ; November 4, 920 ; November 26, 920.
In November, 1898, the Kiukiang price of a Mexican dollar was 890 cash. It was then, worth thirty cash less than at Shanghai. If dollars were brought from Kiukiang to Shanghai there would be a gain of three per cent if sold for cash. The reverse is also true. If cash were surreptitiously conveyed in. steamers from Shanghai to Kiukiaug they would purchase three per cent more Mexicans there than at Shanghai. It is to the advantage of unprincipled persons to smuggle dollars from Kinkians: to Shanghai and to smuggle copper cash from Shanghai to Kiukiang.
In the year 1899 on January 4 the Mexican dollar at Shanghai changed at 930 cash ; on January 5 it was 920. It continued at 920 till the 19th, when it fell to 910 and remained so till April 10th. On April 18th it was still 910, but on April 19 it was 920, and in May, 1899, it rose to 930 cash. On September 16 it was 940, and the tael of silver changed for 1,220 to 1,230 cash. Gold 36.3 taels. In August gold was between thirty-five and thirty-six times the price of silver. On December 28, 1899, the Mexican was 920 cash. The tael was 115 to 1,160 cash, gold 36.9.
Price of silver at Newchwang (September ( 16, 1899, Shen-pao). One tael 8,310 Eastern cash. The dollar changes for 5,700 cash in the Eastern currency. In this currency one thousand is 330, and 5,700 is the equivalent of 1,881 common cash.
Chinkiang, Chung-wai, January 10, 1900. Dragon tencent pieces, eighty cash. The cash shop men say they are lighter by about three taels in each hundred dollars. Probably the workmen who coin these ten-cent pieces are not to be trusted.
The fixed ratio required between metals tised as money may be that between gold and silver or that between silver aud copper. Sach a fixed ratio may be attainable or not. Whenever it is attainable the advantage to commerce is great.
China supplies facts on this complex question which are of importance. At the end of the year 1897 the Mexican dollar had been changed for 910 cash for about six weeks. Previous to this it had been 920 for about the same time. These numbers may be compared with those of previous years. On February 17, 1894, the dollar was worth 1,020 cash; on May 7, 1895, it was 1,040 ; on March 4th, 1896, it fell to 960; on July 15th it fell to 930 and continued at that value to October 27, when it fell to 920. On December 7, 1896, it fell to 910. That was still the ratio, October 14, 1898. The ratio remained the same during twenty-two months. In November, 1898, the Mexican rose to 920. In 1898 it was uniformly worth 910 cash down to April 13.
The real value of silver two centuries ago was about one hundred times the price of copper, and it was one-tenth of the value of the same weight of gold. Silver then is kept np in value by its use as money. In January, 1898, it was still 15 % above its real value. A Chinese liang of silver = 1/12 of an English pound weight, Troy, is worth 1,100 cash. A Chinese liang of gold is worth about 43,000 cash. In old times it would buy 10,000 cash only. It is the use of gold as money that causes it to realize so high a price. Should a time come when legislation ceases to favour gold or gives equal favour to gold and silver, it may be expected that gold will sink to twenty, fifteen, and ultimately to ten times the value of silver. That will be the result if the metals resume their old relation. In the Tang dynasty, A. D. 618 to 905, silver was, as currency, a hundred times the value of copper, while gold was a thousand times that value.
In the Sin-wen-pao of October 14th, 1898, the price of cash is stated to have fallen at Hankow, because silver was in demand. Copper cash fell to seven mace five caodareens, a much cheaper rate than has been known for several years. Many cash firms have lately closed business. After the recent fire only a few held their ground. They were afraid to issue notes, on account of the disasters in neighbour firms. Consequently they needed to give out silver, which at present is not sufficient in quantity to meet the demands of the market. The price of silver therefore rose and the value of cash fell. In the Shen-pao of October 24th, 1898, a letter from Peking states that silver was falling in value. Sung-kiang yin, the silver of Shanghai, was worth per tael, 10,400 large cash ; Mexicans, 7,600.
At Hankow, after the great fire in October, the value of silver per tael (98) was 1,370 cash. This is an increase of 100 on ordinary prices, and it is a cheering circumstance to all the poorer population.
In the Shen-pao of March 30th, 1899, at Tientsin a dollar changed for 768 ordinary cash, that is, 1,536 Tientsin cash. The cash known as cash were counted as 2,260 to the tael. About 15 % were counterfeit cash.
In the Shen-pao of September 10th, 1899, the dollar changed for 930 cash at Shanghai ; silver was 2s.77/8d.; gold was 36.6 times the value of silver. One tael of silver was changed for 1,210 to 1,220 cash. A Mexican dollar was worth in silver 7 mace 0.5 candareens.
In the Sin-wen, December 30th, 1899, dollar, 920 cash ; Tael, 1,170 to 1,160; Mexican Taels, 0.7.4.5; gold, 36.1 to 36.8. In the Chung-wai-pao of January 10th, 1900, dollar, 910 cash ; Tael, 1,150 to 1,160; Mexican silver value 73 tael cents .8875 ; Gold, 35.7 to 36.5 ; Tael of silver, 2s. 8fd. In the Sin-wen-pao of October 9th, 1900, the dollar is worth 940 cash ; Tael, 1,250 to 1,240. The Mexican is Taels 0.9.3.1 ; Gold, 33.7 to 34.2. Silver during the time when the Boxers were in the pay of the government, has risen in price through the demand caused by the flight of Peking and Tientsin officials. This is the cause of a rise in the copper cash price of a tael of silver from 1,150 to 1,250.
Japanese Finance. - When the gold standard was adopted in 1897 it was feared that the amount of silver yen presented for payment would be too great, and that the gold held by the treasury would not be sufficient to meet demands. In fact only eighteen million yen were presented from abroad and thirtyfour million in Japan. Total, fifty-two millions. Of this amount 27,600,000 were used for subsidiary coins and 47,000,000 were sold at Hongkong, Shanghai, Singapore and elsewhere. The loss incurred was 5,700,000 yen, but there was a profit on the subsidiary coinage of 5,790,000 yen, and the net result was a gain of 90,000 yen. The period 1867 to 1871 was the period of currency confusion. The mint was established at Osaka, and silver monometallism was adopted. In 1870 Marquis Ito advised the adoption of a gold standard. A paper currency was issued nominally redeemable in gold. The paper fell to a discount of eighty or ninety per cent in 1881. This was the period of inflated currency. The period from 1881 to 1885 was marked by financial adjustment. The interval from 1886 to 1897 was the period of preparation for the gold standard.