User:Donald Trung/Copper coinage of the Qing dynasty (2020 Xun Yan expansion)

This page serves as "the editing history" of the English Wikipedia article "Qing dynasty coinage" and is preserved for attribution.


 * https://en.m.wikipedia.org/wiki/Special:MobileDiff/952370202 ✅. --Donald Trung (talk) 22:25, 21 April 2020 (UTC).

Copper coinage
During the Qing dynasty period, the Chinese monetary system was a bimetallic system where both copper-alloy cash coins and silver circulated simultaneously. The copper-alloy currency during most of the Qing dynasty period consisted solely of cash coins with a denomination of 1 wén, which could be strung together into strings of 1,000 cash coins for larger payments. While strings officially consisted of 1,000 cash coins, normally it would contain only around 980 copper-alloy cash coins.

A standard piece of copper-alloy cash coin in the 18th century weighted 0.12 tael, containing between 50%-70 % of pure copper, and other metals in its alloy such as zinc and lead.

The copper coinage of the Qing dynasty was officially set at an exchange rate of 1000 wén (or cash coins) for one tael of silver, however actual market rate often changed from low as 700 wén for 1 tael of silver to as high as 1200 wén for a single tael of silver during the 19th century. The actual exchange rates were dependent on a variety of factors such as the quantity of the coinage on the market and quality of individual coins. Most government cast coinage entered the market through soldiers.

Because all copper-alloy cash coins of the Qing dynasty had both uniform shapes and weights, the denomination of the cash coins were not written down anywhere on the coins themselves, this was because for most of their history, a cash coin was always valued at 1 wén and payments were processed by counting the number of cash coins.

The government of the Qing dynasty monopolised the production of copper-alloy cash coins, which constituted less than 20% of the total money circulating in China at the time, as well as the mining of copper, while the government allowed for the market to determine the price of silver.

Because casting is a very simple process many private (illegal) mints started producing fake cash coins known as Sīzhùqián because government mints often couldn't meet the market's demand for money, as there barely was a difference in quality between "real" or Zhìqián  and "fake" coins, the sizhuqian were just as widely accepted by the general population as means of payment. Though barter had remained common during most of the Qing era, by the mid 19th century the Chinese market had evolved to be highly monetised. Due to the inflation caused by various military crises under the Xianfeng Emperor new larger denomination cash coins were issued, cash coins of 4 wén and higher being referred to as Dàqián.

The cash coins produced by the two imperial mints located in Beijing and the provincial and regional mints usually fulfilled different functions. The local mints mostly produced cash coins for the payment of the salaries of the Bannermen and the wages of workers on government construction projects. The imperial mints (known as the Baoyuan Mint and Baoquan Mint) situated in the capital city of Beijing were the two most important ones in operation during the Qing dynasty period: their output of copper-alloy cash coins sustained the demands of the market, not only in Beijing itself, but also in the part of northern China situated near the capital city.

The minting of copper-alloy cash coinage was decentralised due to the very high transaction cost of moving large amounts of metallic coins (and especially heavy copper-alloy cash coins that tended to have small values). Sometimes the production of copper coinage at provincial state mints was suspended but minting at the imperial mints in Beijing was always ensured by the Qing government.

By the late Qing dynasty it had become apparent that carrying strings of cash coins was inconvenient compared to modern currencies. In 1900, 8 shillings converted into 32.6587 kilograms of copper cash coins and it was noted that if one of the straw strings holding the coins would break that it would cost more picking those coins up in time than the value retrieved from those coins. This was one of the many different factors leading Chinese people to more readily accept the modernisation of the currency.

When comparing the contemporary Chinese monetary system of the Qing dynasty period with that of medieval Europe it shows that in both cases that the the chronic shortage of low-denomination coinages seems to be more an aspect of economic theory than actual history, as the gap that emerges between the legal tender (or nominal) value and the intrinsic metallic value will always be followed either by counterfeiting or by melting the currency down.

Purchasing power of cash coins during the Qing dynasty
At the time that Wu Jingzi's the Scholars was written in the 18th century 3 wén could buy a steamed bun, 4 wén could buy school food, 16 wén was enough for one bowl of noodles, and the annual tuition fee for school could be covered by 2,400 wén, but due to inflation the purchasing power of cash coins would decline in the next century.

Effects of the global devaluation of silver on cash coins
Traditionally, scholars of the monetary history of the Qing dynasty, and the Far East as a whole, have often debated whether or not the inflow or outflow of silver leads to an economic boom or an economic depression.

Proponents of the classic bimetallic system would suggest that having two metals would dampen the shocks that result from a shortage of either one of the metals used in the economy for doing transactions with and would therefore stabilise the currency system. Besides the movement and flow of physical silver, the price of silver also had an effect on trade and the general economy. Theoretically, "cheap silver" (a term used to denote the relatively low price of silver in international market) can be taken in a bimetallic system or a silver standard system as a sudden and exogenous currency devaluation, and this would then indicate favourable terms of trade for silver standard countries as the devaluation of silver would encourage exports as the price of goods have been reduced, thus making it more favourable for foreign merchants to purchase these goods. The economy and monetary situation of the Qing dynasty from the 1870s onwards seem to contradict this hypothesis. During the 1870s many countries around the world replaced the silver standard with the gold standard, causing old silver coinages to be demonetised lowering the price of silver on a global scale. The demonetisation of silver in many countries not only led to a drop in the price of silver, but also increased the volatility of its price, the unstable exchange also offset some of the benefit from silver depreciation. The new silver deposits discovered in the Rocky Mountains in the United States and Canada also contributed to the price drop. Countries like Japan, Nguyễn Vietnam, and British India all benefited from this price reduction, but Qing China did not enjoy the benefits as much as other countries. In fact the Qing dynasty, while enjoying greater exports, began to import more during this period leading to a trade deficit. In Chongqing alone the value of foreign merchandise had fallen off by over Hk.Tls 1,250,000 in just a sort period of time because of the global devaluing of silver.

During this period the general price of Chinese exports would increase because of the volatile silver price compared to both gold and copper, these increased prices further offset the depreciation benefit of the cheaper silver price. During this period most Chinese exports were in fact rural products whose prices were quoted in copper-alloy cash coins; the prices of these goods were then translated into silver at the point where they would be exported to other countries. A depreciation of the silver meant that the cheaper exchange rate between silver and copper-alloy cash coins would make these exports more expensive, despite the rural prices remaining relatively stable. The sudden and permanent decrease of the global price of silver had greatly destabilised the price relationship between copper and silver in China which was the basis for its bimetallic system, and therefore this depreciation challenged the entire monetary system of the Qing dynasty and would push it to be drastically changed.

During this period the rural Chinese hinterland began to develop more cash crops for export as more treaty ports were forced to open, and while formerly it were the coastal regions that had a more export-oriented economy, the Chinese hinterland started to focus more on export. Traditionally, Chinese farmers sold their produce to middlemen who would then sell the products in treaty ports, but the "cheap silver" had made it more expensive for the middlemen to purchase these goods and the farmers would be less likely to accept silver for their products the further away from commercial cities or from the well-developed financial facilities they were. The higher exchange rate between silver and copper-alloy cash coins favouring the latter caused deflation and made the business of the middlemen less profitable. The government also minted less copper-alloy cash coins during this period because of the high cost of minting them, which further contributed to the shortage of copper-alloy cash coins in the Chinese economy. While the trade impact of the global "cheap silver" was largely confined to the coastal areas, the monetary impact of "cheap silver" was felt nationwide. A drop in the price of silver had further aggravated the shortage of copper-alloy cash coinage: the imperial mints in Beijing then consequently suspended the production of copper-alloy cash coinage due to the increased cost of production; and the existing cash as "undervalued money" (Gresham's law) were then melted down for their intrinsic value. Additionally, the provision of cash coinage was a centralised decision which was also implemented by regional governments throughout China. Because of these factors the Chinese were not able to seize the opportunity to increase their exports due to the "cheap silver" as Japan, India, and Vietnam had. In fact, rather than being an opportunity for China, "cheap silver" presented itself as a challenge for China, especially for the Chinese bimetallic monetary system. Despite a large silver inflow to treaty ports and urban centres throughout China, the vast Chinese rural population was now suffering from a shortage of copper-alloy cash coins. Only when the Chinese copper coinage was adequately depreciated could the trade benefits presented by "cheap silver" be realised and benefit the economy of the Qing dynasty. This could only be realised by once again devaluing the copper coinage.

Effects of the scarcity of copper-alloy cash coins on the economic prospects of rural China during the late 19th century
Due to the prevalence of "cheap silver" (an enormous decrease of the global price of silver) the copper-alloy cash coin-based economy of China suffered deflation which discouraged the export of Chinese products. International trade was further discouraged because of the scarcity of copper-alloy cash coins in rural China during the late 19th century. This scarcity not only discouraged international trade, but also long-distance exchanges within China because of the deflationary pressure. Furthermore, this scarcity of small denomination copper-alloy cash coins in China was having a negative impact on daily transactions, especially in the inland rural areas where absolutely no business was done in silver and the local people had an inelastic demand for these coins. The rural Chinese workers tended to only receive their salaries in copper-alloy cash coins and would pay their taxes in silver using the official government set exchange rates between the two metal currencies. When the scarcity started causing deflation the rural workers would receive lower salaries, but the government kept maintaining a relatively high exchange rate between the two currencies.

According to reports published by provincial governors in the year 1896, the official exchange rate between copper-alloy cash coins and silver was 2200 wén for only 1 tael of silver; while at the time a tael of silver traded on the private market for 1600 wén to 1700 wén.

This imbalance further resulted in permanent changes in the prices of goods and services relative to the other metal. The money stock was also affected as the amount of silver coinages in circulation kept increasing, while the stock of copper-alloy cash coins was surely decreasing, leading to even greater deflation in copper-based markets.

As a result, the mints operated by the government of the Qing dynasty saw less motivation to produce more copper-alloy cash coins as they were now more expensive to make, as it now cost more silver to import sufficient amounts of copper for their production.

The imperial government would continue to try to maintain the official exchange rate between copper-alloy cash coins and silver, but this only made copper-alloy cash coins into an "undervalued currency" and further discouraged it from circulating as people would hoard the coins driving them out of the market, further increasing their relative scarcity to silver (as is described by Gresham's law). This severely negatively affected the economy of rural areas where copper-alloy cash coins circulated as the principal (if not only) currency and was used in high frequency for the daily transactions of most (if not all) people in these regions.

It has always been a challenge for the imperial Chinese government to debase the copper coinage to make its production more adorable. This was because debased coinages will be discounted on the market and always invite widespread counterfeiting. The solution to this problem was by introducing new machine-struck coinages that were produced by steam powered machines, this would make it more difficult for counterfeiters to produce fake coinages as the initial costs to purchase the machines needed for counterfeiting were very high and discouraged many would-be counterfeiters. The new technology allowed the Qing government to cast high-quality, standardised coins with machined edges. Therefore the new technology provided a for the government of the Qing dynasty a way to mint sufficient token coins at an affordable cost without inviting forgers to debase the new coinages even further.

While the new technology allowed the Qing government to mint sufficient amounts of copper-alloy coins at an affordable cost, the new technology wasn't implemented throughout China at the same time as some provinces would adopt the technology later. Initially the new machine-struck coinages were well received where they were introduced, which helped other provincial mints adopt the new technology faster.

Machine-struck cash coins and other milled coinages


Due to a shortage of copper at the end of the Qing dynasty, the mint of Guangzhou, Guangdong began striking round copper coins without square holes in 1900. Tóngyuán or Tóngbǎn  and they were struck in denominations of 1, 2, 5, 10, 20 and 30 wén. These struck coins were well received because of their higher quality compared to cast coins and their convenience in carriage, as well as their uniform weight and copper content compared to the less consistent alloys of cast Chinese coinage. As these coins were profitable to manufacture it did not take long before other provinces started making machine-struck cash coins too, and soon 20 bureaus were opened across China. As these coins became more common they eventually replaced the old cast coins as the main medium of exchange for small purchases among the Chinese people.

The new machine-struck coinage had a profound effect on the local economies where it was introduced. The new milled copper coinage greatly helped to ease the monetary stringency in rural areas and was beneficial for the economies of both the countryside and the merchant ports. However, despite the opportunities and benefits presented by the new technology, the lack of adequate institutional innovation that was required to keep the local governments of China's over-issue of the new machine-struck coins in check, their introduction would eventually lead to a chaotic situation later due to government mismanagement. One of the long-term effects of making the token money (money with higher nominal values than their intrinsic value) both widely circulated and accepted meant that it was easier later for China to transition from a bimetallic system to a monometallic one.

Counterfeit machine-struck coins
Not long after these new copper coins were introduced, black market counterfeit versions of the 10 wén appeared, illegal mints opened all over China and started producing more coins than the Qing government's set quotas allowed there to be circulating on the market. Both Chinese and foreigners soon started producing struck cash coins of inferior quality often with traces of the Korean 5 fun coins they were overstruck on, or with characters and symbols not found on official government issued coins. These coins were often minted by Korean businessmen and former Japanese Samurai looking to make a profit on exchanging the low value copper coins into silver dollars as a single silver dollar had the purchasing power of 1000 Korean fun. The majority of the counterfeit coins bear the inscription that they were minted in either Zhejiang province or Shandong province, but they circulated all over the coastal regions of China.

Iron cash coins


During the second month of the year 1854 the government of the Qing dynasty supplemented the already debased coinage system with iron cash coins. The intrinsic value of iron cash coins was substantially lower than that of even the copper-alloy Zhiqian and Daqian. The aim the government had with the introduction of iron cash coins was to provide small change for a market that highly demanded it, as the Chinese market was already flooded with large denomination cash coinage and the Zhiqian 1 wén cash coins) by this point had become a rarity.

The denominations of the newly introduced iron cash coins included 1 wén, 5 wén, and 10 wén. The intrinsic value of the 1 wén iron cash coin represented a debasement of 70% compared to the copper-alloy 1 wén Zhiqian. The market price of iron in 1854 was 40 wén (in Zhiqian) per catty. A catty of iron could be cast into 133 1 wén iron cash coins, or 66 5 wén iron cash coins (which would have a total nominal value of 330 wén), or 53 10 wén iron cash coins (which would have a total nominal value of 530 wén). Disregarding the cost of manufacturing the Chinese itself, a 1 wén iron cash coin indicated a debasement of 70%. Iron cash coins were easily produced with iron scrap, which on the market cost 15 wén per catty in 1854.

While initially iron cash coins were mainly minted by the Ministry of Revenue mint and Ministry of Public Works mint in Beijing, afterwards the government of the Qing dynasty established a specific iron cash coins mint, known as the iron cash office (鐵錢局). The iron cash office also stored the iron cash coins. While the actual production numbers of iron cash coins remains unclear because of the limited entries about them in the records maintained by the Qing treasury, Peng Xinwei estimated, based on information he had gathered from Qing government memorials, that there had been an average annual production of 1,808,160 strings of iron cash coins between the year 1854 and 1855 and an annual production of 1,360,920 strings of iron cash coins during the years 1856 until 1859.

In January of the year 1855 the province of Zhili started casting iron cash coins, a trial casting for a single year was to deliver 120,000 strings of standard cash coins to be brought to Beijing. This work was then carried out by one of the Chinese branch mints with 10 furnaces that was located just outside of the western suburbs of Baoding by the Lingyu Temple (靈雲宮). In May of the year 1857, the four existing copper furnaces of the main Zhili provincial mint in Baoding were altered to be iron cash coin furnaces and a new iron cash coin furnace added, while at the same time 10 new furnaces for the production of iron cash coins was added to the Zhili branch mint. The Zhili provincial mint had ceased the production of 10 wén iron cash coins in June 1857.

Iron cash coin mints were also planned to be opened in the cities of Tianjin, Zhengding, and Daming for the production of 1 wén iron cash coins, but only Zhengding had established a mint for iron cash coins which had 10 furnaces in operation. In July of the year 1859 there were a total of 35 furnaces for the production of iron cash coins in the cities of Baoding and Zhengding and at that time around 1,000,000 strings of iron cash coins had been cast at both mints. Because the Chinese people weren't using iron cash coins it was reported that 30 furnaces in Zhengding (which presumably also includes the furnaces of the Zhili provincial branch mint) were to be closed. In November 1859, the remaining 5 iron cash coin furnaces situated in Baoding were also closed.

The function of iron cash coins was similar to that of Daqian, as it was primarily used as a way to continue paying the salaries of bannermen and other government workers. According to Qing government memorials, large amounts of iron cash coins were used as a means to pay salaries between the years 1856 and 1857 due to a noted justification that "the Chinese public was craving for small change". By the year 1856 the iron 10 wén cash coins were so much depreciated that they were dropped out of general circulation. From this point onwards only iron 1 wén cash coins would remain in general circulation, however, it was common for shops to deny them as a form of payment and there was extensive counterfeiting of iron cash coins, which further lowered the public's trust in them.

Only a single entry in the Qing government archive mentions them from this point, as it is stated that in the year 1856 the government of the Qing dynasty had 431,515.849 strings of iron cash coins deposited in the imperial treasury vault. This entry may be seen as supplementary evidence to suggest that copper-alloy cash coinage had almost completely disappeared in or before this year. Iron cash coins would soon became valueless and the coinage was ultimately suspended in the year 1859.

Lead cash coins
It was reported in the records of the Qing dynasty that lead cash coins were minted for a brief period in the year 1854, although it seems that these lead cash coins were never actually introduced into the Chinese market and therefore did not circulate.

Zinc cash coins
In July 1854 a superintendent of the Ministry of Revenue mint reported that different metals like gold, silver, copper, iron, and zinc are alike when used and believed that if copper could be substituted for iron, iron could be substituted for zinc. The Ministry of Revenue mint initiated trial castings of zinc cash coins, but caused the mint staff to be anxious over the fact that zinc cash coinage is very brittle and easy to break. It was then decided to to make cash coins with an alloy of 80% (brittle) zinc and 20% (soft) lead, as these zinc-alloy cash coins would then be better to circulate and would be more acceptable for the people. It was then proposed to replace the monthly production of 2 mǎo (卯) of Zhiqian with the zinc-alloy cash coins because the Ministry of Revenue mint had zinc in store, which would immediately allow the mint to save 100,000 catty of copper.

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