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Xianfeng era paper money

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Main articles: Da-Qing Baochao and Hubu Guanpiao § Xianfeng era
 
A Da-Qing Baochao banknote of 2000 wén in standard cash coins issued in 1859.

During most of the Manchu Qing dynasty, the monetary system largely relied mostly on copper-alloy cash coins (銅錢) denominated in wén (文) for small transactions and the general retail market and silver sycees (銀兩 or 銀錠) denominated in taels (兩) for larger transactions and the wholesale market.[1] The general exchange rates between these two currencies fluctuated based both on time and on the location they were traded in, however the official exchange course was set by the imperial government as 1000 wén of copper-alloy cash coins for 1 tael of silver. Prior to the year 1800, the exchange rates were actually closer to 700 or 800 wén for 1 tael, but by the 19th century this has increased to 1200 wén. By the second half of the 19th century the imperial government of the Qing decided to experiment with cash coins that had a denomination higher than 1 wén which were known as Daqian, (大錢, "large money") because of copper shortages, but as the shortages ran higher the government decided to reintroduce paper money.[2][3]

Under the reign of the Xianfeng Emperor the Da-Qing Baochao (大清寶鈔) was introduced. These were based on the earlier Da-Ming Baochao from the Ming dynasty in style and layout and denominated in Zhiqian (制錢, "Standard cash coins") which were the high quality cash coins issued by the two central government mints in Beijing. For this reason they were popularly nicknamed Qianpiao (錢票, "cash notes"). These banknotes were initially issued in the denominations 250 wén, 500 wén, 1,000 wén, 1,500 wén, and 2,000 wén but as the Chinese economy was suffering from inflation denominations of 5,000 wén, 10,000 wén, 50,000 wén and 100,000 wén were introduced.[4] The Da-Qing Baochao notes were imprinted with a statement that they were convertible into copper cash coins, however the statement also included the line that these banknotes could not be used for tax payment to the government.[3] In reality the Da-Qing Baochao were not redeemable at all.[5] Imperial China saw itself as being at the center of the universe and that all territory "Under the Heavens" (天下) and "Regions Within the Four Seas" (四海) were included within their domains, and for this reason the copper-alloy cash notes of this era bear the four characters "Tian xia tong xing" (天下通行) in their right border design, which translated into English means "to circulate under the heavens".[6]

The Da-Qing Baochao banknotes were supposed to enjoy circulation in all territories of the Qing dynasty. In order to facilitate this widespread adoption of the new paper currency, the Da-Qing Baochao banknotes were issued to the general public through semi-official banks known as the Yu banks,[a] Ch'ien banks, and T'ien bank groups; these semi-official banks served as the fiscal agents of the Ministry of Revenue.[4][7]

Strictly speaking, the Xianfeng era banknotes issued by the official banks did not fall under the monies issued by the Qing government.[8] However, the status and function of official banks was intertwined with that of the Daqian, Da-Qing Baochao, and Hubu Guanpiao, and the over-issue of banknotes by the official banks was probably the real reason for the Xianfeng inflation.[8] Because the official banks were neither directly controlled by the Ministry of Revenue or supervised by them, and the fact that their operations were semi-commercial (as in they were operated by private merchants), few records of official banknotes exist today.[8] Of the Tian, Qian, and Yu banks, the Qian banks were the oldest, as they were established in the year 1853 with four branch offices, the Qian banks were operated directly by the Ministry of Revenue for the purpose of salary payment of the bannermen.[8] The Tian Group of banks was originally the royal pawnshop operated by the Imperial Household Department of the Qing dynasty (Neiwufu) in the year 1841, in order to increase the private vault of the imperial household (which completely was separate from the imperial government vault).[8] The Tian Group was converted to official banks in the year 1854 in order to "facilitate" the Tian banks into the service of salary payment for government officials.[9][8] The Yu Group of banks was established in the year 1855, the Yu banks were semi-official banks and were operated by private merchants with imperial charter and would (very infrequently) receive deposits from the Ministry of Revenue.[8]

In reality however, these banking groups were both independent from the Chinese government and from each other and weren't under any form of imperial government supervision. There were five "Yu Banks" which were already existing Chinese private banks, while the Ch'ien and T'ien banks were large cash shops which received a government license to distribute the new paper currency.[4] The T'ien shops also fulfilled the purpose of being publicly funded pawnshops; they dealt in both pawned items and deposits. It is important to note that none of these institutions would survive the inflation, drowning in an ever increasing sea of Da-Qing Baochao cash notes.[4] By the year Xianfeng 11 (1861) these institutions had all closed as they went bankrupt. The fall of the T'ien shops was quickened by Chinese peasants who, with the inflation affecting the paper money running rampant, opted to speedily redeem their pawned items with the depreciated Da-Qing Baochao. This run on the T'ien shops practically doomed the Chinese pawnshop business overnight.[4]

The Tian, Qian, and Yu banks were all modeled on the private qianzhuang that were operating in Beijing at the time.[8] The Tian, Qian, and Yu banks offered money exchange services, accepted deposits, and issued their own banknotes denominated in "metropolitan cash" (Jingqian), hence they were known as Jingpiao (京票) or Jingqianpiao (京錢票).[8] Different banking groups would also deliver slightly different financial services and their funding situation also differed from each other.[8] The banknotes issued by the Tian, Qian, and Yu banks were initially fully convertible, which made them similar to the already circulating zhuangpiao.[8] Because of their similarities with the zhuangpiao, the official banknotes were both recognised and widely used in the market.[8]

The difference of the Tian, Qian, and Yu banks from private financial institutions was that they were responsible for changing government paper notes (mostly the Da-Qing Baochao cash notes) into real money (a combination of Daqian, iron cash coins, and official banknotes).[10][8] With the Tian, Qian, and Yu banks acting as intermediaries, the government issued paper notes of Ministry of Revenue became convertible:[8] they were linked to both the Daqian and a larger amount in unbacked official banknotes.[8]

During this era another type of banknote was also introduced known as the Yinpiao (銀票, "silver notes") or Yinchao (銀鈔, "silver notes") which were issued by the Ministry of Revenue and were commonly known as Hubu Guanpiao (戶部官票) for this fact.[11] These silver notes were issued in denominations of values 1 tael, 3 taels, 5 taels, 10 taels, and 50 taels. These banknotes had a guideline written in both Manchu and Mandarin Chinese declaring that they had to be discounted by 2% when they exchanged into Beijing market silver and when counted against the Kuping tael, the Yinpiao notes were discounted at 6 per cent.[3] The conversion rate between copper-alloy cash notes (錢鈔) and silver tael notes (官票) was 2 cash notes to 1 silver note, these banknotes exchangeable into copper cash coins and silver, but only in certain institutions in Beijing under the Ministry of Revenue.[5] The term Chaopiao (鈔票) was first used exclusively for paper notes issued by the imperial government, but later on was also used to refer to privately produced paper notes issued by private market banks and merchant companies.[3]

These banknotes were all introduced in the year 1854 and during the first few months after they were minted they started being distributed in the form of salary for both government officials and the military, however the imperial government itself did not accept them as a method of payment including for taxation, likewise many provincial governments also refused to accept the new paper currency. Later on these banknotes were slowly gaining acceptance throughout the Qing Empire. Consequentially due to their limited acceptability these paper notes were severely discounted in the private market sector, if accepted at all.[5] In the year 1855 a cash note of 1000 wén or a silver note of 1 tael were just accepted for 450 Beijing cash (Jingqian, 京錢) or 200-300 standard cash coins by the private market.[5] The market value of paper currency would consistently decrease as the imperial government kept printing both more of it and higher denominations, and by the year 1861 the government mandated paper money had overstayed their usefulness and consequently was completely abolished. During this year Yinchao had already disappeared from general circulation, and a 1,000 wén cash note had a market value of as little as 26 wén, or 52 wén at the most.[5]

During the period when the Da-Qing Baochao and Hubu Guanpiao series of banknotes were introduced, nine government banks in Beijing (of which four were newly established institutions) started issuing another type of cash note known as the Guanhao Qianpiao (官號錢票). These cash notes were backed by reserves kept in Daqian rather than standard cash coins. The Guanhao Qianpiao were modeled after privately produced banknotes known as the Sihao Qianpiao (私號錢票). These private cash notes would also continue to circulate alongside the new currencies.[12] Both the Guanhao Qianpiao and Sihao Qianpiao were based on the Jingqian accounting unit of cash coins as was used in Beijing. This meant that, for example, if one were to exchange 15,000 wén worth of Guanhao Qianpiao or Sihao Qianpiao cash notes in the year 1861, that person would only receive 7500 wén worth of physical coins (or 750 cash coins of 10 wén to be more precise). This practice was asymmetrical as government documents noted a string of cash coins as 1000 wén while paying out only 500 wén for these cash notes.[12] Both the Da-Qing Baochao cash notes and Hubu Guanpiao tael notes continued to be accepted in the practice of office selling and would continue to circulate in the provinces of China proper as non-interest bearing debentures until the years 1867–1868.[13]

As the government of the Qing dynasty saw that banknotes that were denominated in "metropolitan cash" could circulate well in the Chinese market, the Qing government, besides promoting government issued Da-Qing Baochao cash notes, also started to focus on the promotion of official banknotes with 3 major measures.[8] The first of these measures was by having the imperial government place large amounts of capital into the Qian and Tian banks and then encouraging them to produce more banknotes.[8] These newly produced Qian and Tian banknotes were then directly transferred to the Qing Treasury vault and were used to pay for imperial government expenditures.[8] The second measure undertaken to help promote official banknotes was by depositing money with the Yu banks, as these banks primarily dealt with exchanging Da-Qing Baochao cash notes for their own banknotes.[14][8] The third and final measure undertaken to help promote official banknotes was by establishing the Copper Donation Bureau, or juantongju (捐銅局) in Mandarin.[8] The Copper Donation Bureau was originally created to encourage the citizens of the Qing dynasty to donate their copper in exchange for titles and/or degrees, afterwards the Copper Donation Bureau became solely responsible for receiving all kinds of donations to the Qing government, such as the juanna (捐納) and the juanshu (捐輸).[15][8] With these donations, the Copper Donation Bureau had enough reserves to issue its own banknotes (which similar to the official banknotes) that were also put directly into the imperial government's Treasury to be used for its expenditures, where they were mostly used to pay for the bannermen's salaries.[8]

The total amount of banknotes issued by the Qian, Tian, and Yu banks is difficult to estimate because none of their bank account books have survived into the modern age.[8] However, the number of official banknotes that were printed specifically for use in expenditures of the government of the Qing dynasty can be found in the imperial treasury records.[16][17][8] The total number of official banknotes issued through government expenditure (from both the Qian and Tian Groups of official banks, and the Copper Donation Bureau) was the equivalent to 31,953,038 taels of silver.[8] As this rough estimate does not include the official banknotes that circulated in the private market through the money exchange services of these banks, and in particular the amount of banknotes issued by the Yu banks, the total quantity of official banknotes that circulated in the contemporary Chinese market was likely much higher.[8]

The reserves that the Qing government deposited into the Qian and Tian banks was not enough, government documents stated that the Qian banks received government endowments of 20,000 diào (吊) in Jingqian as initial capital directly from the imperial Chinese Treasury from the Ministry of Revenue.[8] The government documents do not specify how often they pumped money into the official banks, nor is it specified in which form of currency the payment to these banks was realised.[8] The imperial treasury records show that in the year 1853 a total number of 13,784 taels of silver was transferred from the government to the Qian and Tian banks "as their 20% reserve money".[8]

While the banknotes of the Qian, Tian, and Yu banks were denominated in "metropolitan cash" (Jingqian) or diào.[8] In the official government treasury accounts all figures for banknotes were kept with chuàn (串) as the main unit of account;[8] the figures for these official banknotes were converted by the official ratio between Jingqian and chuàn, which was 2,000:1 (this means that the official ratio between a diào and a chuàn is 2:1).[8] The reported total amount of official banknotes possessed by the imperial treasury was 63,906,076 chuàn, and was equivalent to 31,953,038 taels of silver at the official government set exchange rate between copper-alloy cash coins and silver in 1853.[8] The Chinese government records were deliberately kept vague to cover up the obvious fact that there was a shortage of capital.[8]

The reserves of the semi-private Yu banks seemed to be the weakest of all the official banks:[8] they had an initial capital reserve of about 10,000 chuàn, the Yu banks would later receive government deposits that were composed mainly of iron cash coins and lead cash coins.[8] Because of their low capital reserves the Yu banks experienced the worst case of the over-issuing paper money which caused the great demand to exchange Da-Qing Baochao cash notes against a limited reserve of mainly Daqian and Zhiqian.[8] After a number of bank runs, the Yu banks all folded in the year 1857, subsequently the Qian and Tian banks all folded due to bank runs in June of the year 1861.[8]

During the early Tongzhi era (同治, 1862–1874), the provincial governments of Henan and Sichuan completely stopped accepting paper money for tax payments and again began requiring tax payments exclusively in silver, yet the provincial government of Zhili continued to accept the paper notes for tax payments, at least in a certain proportion to silver, which was preferred.[5] The Xianfeng era paper currency was ultimately given up in the year 1868.[5]

Notes

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  1. ^ They were known by the first syllable of their names, hence they are known as "Yu banks" (宇).

References

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  1. ^ Debin Ma (January 2012). "Money and Monetary System in China in the 19th-20th Century: An Overview. (Working Papers No. 159/12)" (PDF). Department of Economic History, London School of Economics. Retrieved 26 January 2020.
  2. ^ Jerome Ch'ên (October 1958). "The Hsien-Fêng Inflation (Published online by Cambridge University Press: 24 December 2009)". SOAS University of London. Retrieved 28 July 2019.
  3. ^ a b c d Cite error: The named reference QingPaperMoney was invoked but never defined (see the help page).
  4. ^ a b c d e John E. Sandrock (1997). "IMPERIAL CHINESE CURRENCY OF THE TAI'PING REBELLION - Part II - CH'ING DYNASTY COPPER CASH NOTES by John E. Sandrock" (PDF). The Currency Collector. Retrieved 20 April 2019.
  5. ^ a b c d e f g Ulrich Theobald (10 May 2016). "Paper Money in Premodern China". Chinaknowledge. Retrieved 27 March 2019.
  6. ^ John E. Sandrock (1997). "THE FOREIGN BANKS IN CHINA, PART I - EARLY IMPERIAL ISSUES (1850-1900) by John E. Sandrock - The Opening of China to the Outside World" (PDF). The Currency Collector. Retrieved 1 April 2019.
  7. ^ Shanxi Provincial Academy of Social Sciences, ed., Shanxi piaohao shiliao (山西票号史料) (Taiyuan: Shanxi jingji chubanshe, 1992), pp. 36-39. (in Mandarin Chinese).
  8. ^ a b c d e f g h i j k l m n o p q r s t u v w x y z aa ab ac ad ae af ag ah ai aj ak al Xun Yan (March 2015). "In Search of Power and Credibility - Essays on Chinese Monetary History (1851-1845)" (PDF). Department of Economic History, London School of Economics and Political Science. Retrieved 8 February 2020. {{cite web}}: Cite has empty unknown parameter: |1= (help)
  9. ^ Memorial of Sushun, Director of the Board of Revenue [Day 3 Month10 XF10], the Beijing Financial Archive Division, Selected Archive in Modern Chinese Monetary History, Vol. I., pages 474-475.
  10. ^ Beijing Financial Archive Division, Selected Archive in Modern Chinese Monetary History, Vol. I., page 470.
  11. ^ John E. Sandrock (1997). "IMPERIAL CHINESE CURRENCY OF THE TAI'PING REBELLION - PART III - CH'ING DYNASTY SILVER TAEL NOTES by John E. Sandrock" (PDF). The Currency Collector. Retrieved 29 June 2019.
  12. ^ a b King 1965, p. 159.
  13. ^ Zhengce yanjiu (清代財政策与貨幣政策研究) (Wuhan: Wuhan da xue chu ban she, 2008), pp. 638–639. (in Mandarin Chinese).
  14. ^ Peng Xinwei, Public Finance and Economic Condition of the Late 19th Century China, page 93.
  15. ^ Ulrich Theobald (25 July 2017). "juanna 捐納, juanshu 捐輸, contributions". Chinaknowledge.de. Retrieved 28 March 2020.
  16. ^ Beijing Financial Archive Division, Selected Archive in Modern Chinese Monetary History, Vol. I., pages 219-221.
  17. ^ Kaske, "Silver, Copper, Rice and Debt: Monetary and Office Selling in China During the Taiping Rebellion". Pages 363-368.

Standard reference templates

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April 2020.
  • <ref name="">{{cite web|url= |title= .|date=|accessdate= April 2020|author= |publisher= |language=en}}</ref>
  • <ref name="Primaltrek">{{cite web|url= |title=.|date=16 November 2016|accessdate= April 2020|work= Gary Ashkenazy / גארי אשכנזי (Primaltrek – a journey through Chinese culture)|language=en}}</ref>
March 2020.
  • <ref name="">{{cite web|url= |title= .|date=|accessdate= March 2020|author= |publisher= |language=en}}</ref>
  • <ref name="Primaltrek">{{cite web|url= |title=.|date=16 November 2016|accessdate= March 2020|work= Gary Ashkenazy / גארי אשכנזי (Primaltrek – a journey through Chinese culture)|language=en}}</ref>
February 2020.
  • <ref name="">{{cite web|url= |title= .|date=|accessdate= February 2020|author= |publisher= |language=en}}</ref>
  • <ref name="Primaltrek">{{cite web|url= |title=.|date=16 November 2016|accessdate= February 2020|work= Gary Ashkenazy / גארי אשכנזי (Primaltrek – a journey through Chinese culture)|language=en}}</ref>
January 2020.
  • <ref name="">{{cite web|url= |title= .|date=|accessdate= January 2020|author= |publisher= |language=en}}</ref>
  • <ref name="Primaltrek">{{cite web|url= |title=.|date=16 November 2016|accessdate= January 2020|work= Gary Ashkenazy / גארי אשכנזי (Primaltrek – a journey through Chinese culture)|language=en}}</ref>
December 2019.
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To use

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  • <ref name="HoreshQing">{{cite web|url= https://link.springer.com/referenceworkentry/10.1007%2F978-981-10-0622-7_54-1|title= The Monetary System of China under the Qing Dynasty.|date=28 September 2018|accessdate=29 July 2019|author= [[Niv Horesh]]|publisher= [[Springer Nature|Springer Link]]|language=en}}</ref>
    • <ref name="HoreshQing"/>
  • <ref name="PrimalQing">{{cite web|url= http://primaltrek.com/chinesecoins.html#qing_dynasty_coins|title= Chinese coins – 中國錢幣 - Qing (Ch'ing) Dynasty (1644-1911)|date=16 November 2016|accessdate=30 June 2017|work= Gary Ashkenazy / גארי אשכנזי (Primaltrek – a journey through Chinese culture)|language=en}}</ref>
    • <ref name="PrimalQing"/>
  • <ref name="PrimaltrekKingOfQingDynastyCoins">{{cite web|url= http://primaltrek.com/blog/2013/01/08/the-king-of-qing-dynasty-coins/|title=The King of Qing Dynasty Coins.|date=8 January 2013|accessdate=8 January 2020|work= Gary Ashkenazy / גארי אשכנזי (Primaltrek – a journey through Chinese culture)|language=en}}</ref>
    • <ref name="PrimaltrekKingOfQingDynastyCoins"/>
  • <ref name="CambridgeInflation">{{cite web|url= https://www.cambridge.org/core/journals/bulletin-of-the-school-of-oriental-and-african-studies/article/hsienfeng-inflation/54A8F1ADDC871CC18F4DCFA828730DEB|title= The Hsien-Fêng Inflation (Published online by Cambridge University Press: 24 December 2009).|date=October 1958|accessdate=28 July 2019|author= Jerome Ch'ên|publisher= [[SOAS University of London]]|language=en}}</ref>
    • <ref name="CambridgeInflation"/>
  • <ref name="Brill2015">[https://www.academia.edu/28400259/_Silver_Copper_Rice_and_Debt_Monetary_Policy_and_Office_Selling_in_China_during_the_Taiping_Rebellion_in_Money_in_Asia_1200_1900_Small_Currencies_in_Social_and_Political_Contexts_ed._by_Jane_Kate_Leonard_and_Ulrich_Theobald_Leiden_Brill_2015_343-395 “Silver, Copper, Rice, and Debt: Monetary Policy and Office Selling in China during the Taiping Rebellion,” in Money in Asia (1200–1900): Small Currencies in Social and Political Contexts, ed.] by Jane Kate Leonard and Ulrich Theobald, [[Leiden]]: Brill, 2015, 343-395.</ref>
    • <ref name="Brill2015"/>
  • <ref name="LondonSchoolOfEconomicsDebinMa">{{cite web|url= http://eprints.lse.ac.uk/41940/1/WP159.pdf|title= Money and Monetary System in China in the 19th-20th Century: An Overview. (Working Papers No. 159/12)|date=January 2012|accessdate=26 January 2020|author= Debin Ma|publisher= Department of Economic History, [[London School of Economics]]|language=en}}</ref>
    • <ref name="LondonSchoolOfEconomicsDebinMa"/>
  • <ref name="LondonSchoolOfEconomicsXunYan">{{cite web|url= http://etheses.lse.ac.uk/3307/1/Yan_In_Search_of_Power.pdf|title= In Search of Power and Credibility - Essays on Chinese Monetary History (1851-1845).|date=March 2015|accessdate=8 February 2020|author= Xun Yan|publisher= Department of Economic History, [[London School of Economics|London School of Economics and Political Science]]||language=en}}</ref>
    • <ref name="LondonSchoolOfEconomicsXunYan"/>
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