Evening star. [volume] (Washington, D.C.) 1854-1972, 1896-09-08

WHERE FIAT FAILED
Cinnamon Will Not Permit Initiation
Of the Currency.
VARIABLE VALUES And PRICES
Curiosities of the Financial System
of the CelestiaIs.
DEM NETTING COPPER
DEM NETTING PIPER

From the Real Chlprman." by Chester Holcombe
The government of China has, however,
not been wiser than it's western neighbors
in attempts in past centuries to manipulate
its currency. to give fictitious values to it's
coins. and in general to create a valuable
something out OF nothing. Centuries ago
ii tried the fiat money scheme, and is-
sued unlimited quantities of paper money.
Three hundred years before the first bank
note was issued in Europe-that is to say,
In A. ID. 136S-the people of China were
called upon to use paper money made theo-
retically valuable by the will of the empe-
rol. In absolute autocracy such a
scheme ought TO succeed, IL anywhere; yet
II went the way of all such schemes, and
now solitary specimen of the issue is to
be found In the British Museum, having
gained a value through age which il woald
never have obtained in any other way. The
numerous brilliant discoveries in moGern
finance, which are being exploited in so
many quarters, are vcritable ancient his
tory among the Chinese. Every one of
them has been tried, and every one has
failed. And the Chinese government has
long since proved by repeated experiment
that among It's people at least no promise
will pass current without a solid backing
of fact, and that no human power, whether
ii be imperial or common. can force any
article upon the people at higher valua-
uon than its current market price.
Financial Relics.
The foreign traveller or student in China
often stumbles upon the relics of these
financial experiments. sometimes % his
ami sement, and more often to the utter
confusion of his cash account. The ex-
periments most in evidence at the present
day have been made with the cash. AS has
been stated, in theory each piece should he
equivalent in value to one-thousandth of
ali ounce of silver. Reduction in the
amount OF copper contained in each Tiece
has invariably and Immediately affected
their current value. Today the average
value of the cash is eighteen hundred
pieces to an ounce of silver though the
rate fiuctuates from day to day, and each
large city or commercial center through
out the empire has its chamber of com
merce or board of trade which meets daily
and determines the exchangeable value CT
cash for silver for each Gays business.
Brilliant Operation.
One brilliant imperial financier, by a sin
gle stroke of his vermilon pencil. doubled
the amount of money current in his empire.
He decreed that each piece of cash should
be counted as two. The will of the august
sen of heaven was obcyed throughout the
greater portion of China, though in some
sections the people declined to lie parties to
any such nonsense; but wherever the
doubling process was accepted II was car
ried to a point beyond the anticipation of
the imperial mind. 1t required exactly
twice as many nominal pieces of cash TO
purchase an ounce OF silver as before In
travelling through the empire at the pres
ent time. one ignorant of this bit of history
may be perplexed by finding that az one
village he Will be offered, say. thirty-SiN
hundred cash for an ounce of silver. while
at the next, perhaps distant less than
dozen miles. he will be able to obtain only
eighteen hundred pieces for the same
amount of bullion. If he sells in each place
ard then counts his cash, he will lind that
he received exactly the same number of
actual pieces I'm each. In the one village
the imperial process of doubling had been
accepted, but the price of every article OF
merchandise had also been doubled leaving
the result of all monetary transactions alb
solutely unchanged. In the second village
the sober-minded. practical celestials had
quietly declined to lend their sanction to
an imperial absurdity.
Attempted Decentralization of Conner,
Another emperor. In time of financial
stringency, determined 10 ocin cash of iron
instead OF copper. These the people unani-
mously ard sturdily refused 10 accept at
any rate of exchange, and the soldiers TO
whom they were paid simply threw them
away. There are points outside the walls
OF Picking where peck of these souvenirs
of imperial folly may easily be gathered.
1hey lie there in the sand, yalueless even
as curiosites.
This attempt to substitute iron cash for
copper as left curious impression upon
the monetary system of certain parts OF
the empire-an impression which is worthy
of notice, since ii illustrates the fact that
in China the will of the people is the final
law, more commanding and decisive than
the dictum Of any emperor, and the other
fact that the oriental disposition is ac-
commodat'ng as well determined. In
the districts referred to a variable number
of cash is reckoned as a hundred In one
market town i found that seyenty-seyen
pieces were counted as a hundred; in an
other, eighty-five; in third seventy-two,
and in a fourth, only sixty-one. The ex-
PLANTATION of this strange and perpleNing
medley was very simple. When the iron
cash was issued the people had refused TO
accept them. Then followed a discussion
and ultimate compromise between the
people and the local authorities.
A Compromise.
The authorities had proposed that out OF
every hundred pieces fifty Of iron and fifty
of copper be included. This had been re-
fused. A dicker had followed, with the
final result that, while In not a single town
were any iron cash forced into circulation,
the people had consented to count seventy
seven pieces of copper cash as one hum