# Twentieth Century Impressions of Hongkong, Shanghai, and other Treaty Ports of China/The Currency of China

THE CURRENCY OF CHINA.
CHINA can boast the most ancient financial system in the world. Currency in one form or another has existed in the country from prehistoric times. Records dating from about the year 1122 B.C. show that ninety years previously one of the rulers of the Chow dynasty passed an enactment for making copper pieces a medium of exchange according to their weight. Knife and spade money, so named from its resemblance to those implements, was in time superseded by round coins with a square hole in the middle, such as are in circulation to-day. Eventually the Chinese Government assumed the prerogative of "casting coins of regular shapes and sizes, and of constant weights" (British Museum Catalogue).
Some thirteen centuries ago, during the Tang dynasty, a standard bi-metallic system of silver and copper coinage was introduced—the ratio being 10 silver equal 1,000 copper, which continues in theory to this day. Token money was introduced only as recently as 1851-61, the coins varying in value from 5 to 1,000 cash. The last token coin issued was the copper cent, sometimes inscribed "100 to the dollar," but more often "representing 10 cash." They have now depreciated in value to 7 cash each, or about 124 to the dollar.
Chinese Note Issues.
There are no records to show when private issues of bank notes were first made amongst the Chinese. To-day there are innumerable firms who issue paper money which finds ready acceptance within the radius of the firms' reputation. Government notes appeared first during the Tang dynasty, about 806-821 A.D., the "bonds" being redeemable at the provincial capitals. These were followed by notes, serving the purposes of bills of exchange, issued at the commencement of the Sung dynasty. True paper money was introduced some years later in what is now the province of Szechwan, each note representing a thousand cash or one tael of pure silver. The issue was guaranteed by a number of wealthy houses, but, these becoming bankrupt, the Emperor annulled the notes and reserved to himself the right to issue bank-bills. By degrees banks were established in many provinces, but the notes issued by the banks of one province were not circulated in another. During the twelfth and early in the thirteenth centuries the country was flooded with notes, the natural consequence being a depreciation in their value. Then came the Mongol dynasty, and it is estimated that during the 108 years for which it endured notes to the value of 40,000,000 taels were issued on an average each year! The resultant evils of this depreciated paper currency, together with the incidence of heavy taxation, brought about the rebellion which overthrew the Mongol dynasty. Although the first Ming Emperor found himself face to face with grave financial difficulties, he succeeded in solving them and in placing the imperial finances on a sound basis. The circulating notes of the Ming Empire measured about 13½ inches by 8½ inches, and were printed on mulberry-bark paper. Among other information conveyed in the design was that "To counterfeit is death. The informant will receive 250 taels of silver, and, in addition, the entire property of the criminal." From the early years of the fifteenth down to the middle of the nineteenth centuries no Government notes were issued. In 1853 two kinds of notes — cash notes and silver notes — were forced into circulation by the Emperor Hienfung, who compelled the Stale officials to receive part of their salaries in this currency. The cash notes of this issue were of four denominations, namely—500, 1,000, 1,500, and 2,000 cash respectively; and the silver notes were for various values ranging from one tael to fifty. From 1862 there was no issue of Government paper until about 1902, when several of the provinces issued notes, the circulation of which, however, is almost entirely local.
Dollars and Subsidiary Coins.
Dollars of foreign manufacture have been in circulation in China since the beginning of the eighteenth century. The first of which there is any record is the Spanish carolus, or "pillar" dollar. Then came the Mexican dollar, which at once found favour, and has never been superseded. An American "trade dollar" was introduced in the seventies, but as it was a few grains heavier than the Mexican, the Chinese promptly consigned it to the crucible; while, later, the Japanese yen enjoyed a measure of popularity until it was placed on a gold basis.
Some years ago the Chinese Government, having tailed to mint cash at a profit, turned their attention to silver, and many millions of dollars, 900 fine, were issued; but these coins, having only a provincial guarantee, were accepted by weight, and not by count as were the Mexican dollars. Then 10-cent and 20-cent pieces were minted in silver, 800 fine, and these are now largely circulated at rates varying from 110 cents to 114 cents to the dollar.
The Tael.
Before the introduction of Mexican dollars, and of provincial dollars of the same value, silver was current in China only by weight, and it would be hard to find a better synonym for "complexity" than the word "tael," the generic term for that which is still the real silver unit of the country, whether of weight or value.
Of taels in weight there are two principal standards, the Kuping or Treasury tael and the Tsaoping or commercial tael, their relationship being usually that 100 Kuping taels equal 102 Tsaoping taels. The normal standard Kuping tael is 575 8 Troy grains of silver, 1,000 fine, i.e., chemically pure as shown by the crude methods of the touch-stone, or of crucible assaying, as practised in China. The Tsaoping tael is 565’65 grains of 999 fine.
Taels of value, or currency, are innumerable. Practically every commercial centre has its own local taels — sometimes a score in number — all accepted as current in the place, though one is usually recognised as a standard in dealing with other places, or in cases where no stipulation is made as to the exact tael to be used. It will, however, suffice to mention the three principal ones, viz., the Canton tael, the Shanghai or Convention tael, and the Haikwan or Customs tael. The first named has a standard weight of 579’85 grains, and, Canton having been the first place to import foreign silver, this tael is still exclusively used as a standard for all dealings in foreign bar silver, the basis being that 100 Troy ounces equal 82'781 taels. The Shanghai tael, the legitimate banking and trading currency of the commercial metropolis of China, equals 520'968 grains of 998 fine, or 519'926 grains of 1,000 fine. The Haikwan tael—579'197 grains, of 1,000 fine—is the currency in which duties are levied by the Imperial ​Maritime Customs, but it is a purely fictitious and non-existent currency. The practice is to pay all Customs obligations in local currency at a rate of conversion settled on the opening of each Customs office. Thus in Shanghai 111·40 Shanghai taels are usually taken as equal to 100 Haikwan taels, and a merchant would give his cheque in payment of Customs duties on that basis. In discharging its foreign obligations the Imperial Government reckons the equivalence of the several currencies as follows:—100 Haikwan (Customs) taels equal 101·642335 Kuping (Treasury) taels, equal 109·6 Shanghai taels. Although these and other rates of conversion are practically fixed, there is absolutely no fixed standard by which the exact value of any tael can be determined, for in some instances the fineness or quality of the silver is fictitious, and its acceptance is maintained only by the prestige of the large trade interests of the particular centre to which it applies.
Sycee.
The actual form in which silver passes from hand to hand is that known as sycee. Bullion is imported in the form of bar silver, and converted into oval ingots, called "shoes" on account of their resemblance to a Chinese shoe. These sycee ingots vary in weight from 49 to 54 taels, the average being about 50 taels; while for fractional currency obovoid lumps weighing two or three taels are employed. The shoes are stamped with the name of the melting station and of the workmen who made them, and their weight and fineness are determined with sufficient accuracy for all local purposes at weighing stations established by the Bankers' Guilds at the principal centres.
Currency Reform.
The question of currency has long engaged the attention of the Chinese Government, the principal foreign powers, and financiers and merchants having commercial relations with the Empire. Under the Mackay Treaty of 1902 China promised "to take the necessary steps to provide for a uniform national coinage which shall be legal tender in payment of all duties, taxes, and other obligations throughout the Empire by British as well as Chinese subjects."
The position at the present moment is admirably summarised in a paper contributed by Mr. H. B. Morse to the "Journal of the North China Branch of the Royal Asiatic Society." In this Mr. Morse says: "The currency in China is at the top a weight pure and simple, and at the bottom a coin which stands on its own feet, and neither receives support from, nor absolutely gives it to, any other unit in the series. At the top is the tael (call it the 'ounce,' and it will be better realised), in which payments are made in precisely the same way that delivery is taken of a lot of silver bars. Then comes the dollar, which, though a coin, is nowhere legal tender, and of which the specimens from the Chinese mints are inscribed, not generally 'dollar' or 'yuen,' but merely '72-hundredths of a tael.' Though so inscribed, dollars are nowhere fixed in terms of taels of silver, but are quoted at rates which vary from day to day according to the demand and supply, fluctuating within a range of 6 or more per cent. Then come subsidiary coins, fractional to the dollar, but subject to a fluctuating rate of exchange such that the dollar may this year change for 110 cents and next year for 95 cents in small coin. Next comes the copper cent, inscribed at the mints of some provinces as worth 'one-hundredth of a dollar,' and of others as worth 'ten cash,' but never treated as correlated to the dollar; whether considered in its relation to the dollar or to the cash, it is a token coin worth intrinsically less than half its nominal value. Last comes the copper cash, the currency of the people, with a present-day value of the ten-thousandth part of a pound sterling."