User:Donald Trung/Guangxu coinage (光緒錢)

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



Background and situation
The two imperial mints in Beijing, the capital city, known as the Baoquan (Ministry of Revenue Mint) and Baoyuan (Ministry of Public Works Mint), were the two most important coin producing facilities in all of China. These mints enjoyed priority in terms of copper provision and they were responsible for almost half of the total Chinese mint output. The copper-alloy cash coins that were produced by the Baoquan and Baoyuan were first deposited in the imperial treasury before they would be used in Qing government expenditures. During the early Qing dynasty period the amount of copper in China was largely dependent on cheap imports from its neighbouring country of Japan. However, Chinese copper imports from Japan saw a sharp decline at the beginning of the 18th century, because of the restrictions Japan had placed on its copper exports to other countries, including Qing China. Fortunately for the government of the Qing dynasty, the Chinese had managed to secure a stable and large supply of copper from the province of Yunnan, because of this the mint output during the early 18th century to the early 19th century was maintained at an adequately high level. During the Tongzhi period there was no systematic production of Zhiqian in large quantities, this occurred after the general failure of the Daqian. From the year 1751 until the year 1850, the average output of the Chinese mints was around 1,178,923 strings annually. After the year 1860 the annual production of cash coins was reduced to only 217,249 strings, which was less than $1/undefined$ of the previous levels. In the years 1883, 1891, and 1892 the imperial mints produced no cash coins at all. During the Guangxu period the production of cash coins was shortly reinstated between the years 1896 and 1899 because of the high market demand for a small denomination copper coinage. Despite the renewed production, the mint output was only a quarter of the annual imperial mint production between the years 1751 and 1850. Provincial mint levels during the years were even lower, if production was going on at all. As the quantity of copper in circulation decreased the radio between it and silver caused a lot of deflation of goods priced in copper. According to contemporary Qing dynasty government reports mentioned that it became rampant that people would remove standard cash coins from circulation to melt them down and produce illegal counterfeit copper-alloy cash coins which had less copper than standard issues. By the end of the nineteenth century this situation became even more serious as the Qing regime suffered from enormous government deficits making the production of copper-alloy currency even more costly. Despite the ever growing demand for copper currency by the market, mint production for copper-alloy cash coins was practically fully suspended as the continued production was too costly for the government. As a result the prices of goods denominated in copper-alloy currency would continue to deflate.

Shortage of copper-alloy cash coins
During the late 19th century the Qing dynasty was facing a national shortage of copper-alloy cash coins, this shortage was caused by the government no longer producing more cash coins, while the large inflow of silver and global decline of the silver price made silver relatively cheap. As copper-alloy cash coins were small denomination coinages they could be used in both big and small transactions, while the more valuable silver coinages could exclusively be used in larger transactions. In general circulation petty coins render extra "liquidity services" than high denomination coinages, therefore the demand for low value coins is generally higher than for high value coins which have much higher denominations.

The costs endured by the government for manufacturing a coin is more or less the same, regardless of its denomination. This means that when taking into account the nominal value of the coin, the production of small denomination currencies is proportionally higher than the production of high denomination coinages. Comparably, the supply of low denomination coinages in the medieval European currency systems was also chronically too low, William Lowndes, the secretary to the Treasury of Great Britain summarised the monetary issues that they were facing during the early 18th century in the Kingdom of Great Britain with the statement "take care of the pence, and the pounds will take care of themselves". The lack of small change had always been a similar issue in the Chinese monetary system, as copper-alloy cash coins were the main means of exchange for the majority of the Chinese population for centuries. While copper-alloy cash coins were of lower denominations, they were not a form of subsidiary currency to silver on the market, as they were the principal means, or even the only medium of income and payment for many people.

While the silver coinages did help enlarge the total Chinese money stock and facilitate interregional long-distance trade, copper-alloy cash coins still appeared to be the fully functioning currency for most of the Chinese people. In most of rural China copper-alloy cash coins appeared to be there only acceptable form of currency, comparatively in the urban areas of China copper-alloy cash coins still remained the dominant means of exchange for almost all daily transactions. The wider usage of small denomination silver coinages and the increased interchangeability of copper-alloy and silver coinages would only took place at a very late stage of the Guangxu period.

The population growth that had occurred during this period was another factor that made the decreased price of silver and the deflation of the copper-alloy currency worse, as the supply of copper-alloy cash coins was insufficient for this growing population.

During the middle of the 1880s there was a shortage of cash coins in the Qing dynasty province of Guangdong, to remedy this Chinese bankers who were active in Vietnam at the time started buying up zinc Vietnamese cash coins to export to Guangdong. During the narrowly defined period ranging from around 1885 to about the 1890s a large quantities of zinc Vietnamese cash coins circulated in the Guangdong Province. However, like the then-scarce Chinese cash coins, the Vietnamese cash coins brought to Guangdong would be sold and exported to overseas Chinese communities in the United States for a profit causing the demand for small denomination cash coins to remain high. It wasn't until 1889 when the Guangzhou Mint started mass-producing high-quality machine-struck brass cash coins that the Vietnamese cash coins would disappear from circulation in Guangdong.

The Chinese abandonment of the Vietnamese zinc cash coins in Guangdong was both rapid and absolute and by the 1890s indigenous machine-struck cash coins made of brass had fully replaced them, as everyone (even those in Vietnam) always preferred the copper-alloy (including brass) cash coins to those made of zinc. Likewise, Chinese customers in the American state of California would have been similarly discriminating quickly ending the demand for zinc Vietnamese cash coins outside of Vietnam. This is also why Vietnamese cash coins are occasionally found in Chinese and overseas Chinese coin hoards dating to the 1880s and later (but never before as up until that point Vietnamese cash coins exclusively circulated in Vietnam). The Vietnamese cash coins found in Guangdong from this period (and among overseas Guangdongers) range from the Gia Long to the Tự Đức period.

The drastic decrease in the global price of silver and the increasing scarcity of copper-alloy coinages prompted many Chinese provinces to immediately ban the export of copper to other provinces in order to protect their money stock. This option was chosen by many local governments because it was the most straightforward method and it incurred no additional costs and involved much less bargaining with the central government than any other options. But these export bans also had the immediate side effect that interregional business was negatively affected and it caused more regional disequilibrium.

The provincial governments would soon realise that prohibiting internal exports would be a deficit to their local economies and the response would then alter in them reviving their old provincial mints in what is described as a "new wave of minting" with heavily debased copper-alloy cash coins, but this was seen as being too expensive to continue and was rapidly stopped. Afterwards they decided to mint their own silver subsidiary dollars and another type of locally produced heavily debased copper-alloy coinage.

The Chinese markets called for the introduction of subsidiary coinages, while the imperial government hoped to restore the traditional Chinese bimetallic monetary system through the production of heavily debased copper-alloy cash coins. Since the Xianfeng period the imperial government had been attempting to restore the production of cash coins to meet the market demands, but the internal instability within the political landscape of the Qing made this increasingly difficult. The Chinese became much more dependent on the import of copper (primarily from the Japanese) as the copper mines in the province of Yunnan was almost depleted by the 1887. The decision to choose to import copper rather than to locally mine it greatly increased the domestic price of copper, especially since the global price of silver was steadily declining and silver was being traded for copper. In the year 1888 the government of the Qing dynasty decided to officially reduce the weight of a 1 wén cash coin from 0.12 tael to only 0.10 tael, eleven years later in 1899 this was even further lowered to 0.08 tael.

Introduction of new coinages by provincial governments
For many decades the imperial court had debated a reform of the Chinese currency system are this point and their introduction should be viewed as a great departure from the old traditional monetary system of China making them a milestone in the history of Chinese currency. However, their introduction by the Guangdong government was the result of pure economic motivation on their part which can be attributed to a fear coming monetary chaos if the system wasn't reformed.

During the "new wave of provincial coinages" that occurred during the Guangxu period new coinages were introduced. This included a new form of silver subsidiary coins which were minted between the years 1890 and 1901 until they were replaced by the more centralised Da-Qing Yinbi (大清銀幣) series and new series of debased machine-struck copper-alloy coins with the inscription Guangxu Yuanbao which were minted from 1900 and would survive the fall of the Qing dynasty. The creation of these new coinages were both introduced by the provincial mint of Guangdong, the Guangzhou Mint. In the year 1889, the first Chinese silver mint was set up in the province of Guangdong under the slogan "get back the right to seigniorage" (which was implied to take the profits back from the providers of the foreign silver dollars which circulated in China at the time). It was notably equipped with brand new steam powered coin presses making it the first modern mint in China.

In the year 1890 the Guangzhou Mint started to mint the first Chinese produced silver dollars. The Guangzhou Mint issued silver coins in the denominations of 5, 10, 20, and 50 cents, as well as silver dragon dollars.

These were first silver coins ever officially minted by the Chinese state and was the first ever official recognition by the Chinese government that silver formed a part of its currency system, the introduction of these silver coins further suggested to the market that silver not only circulate in bullion. The new machine-struck Tongyuan were also the first modern non-cash coin copper coinage to be issued by a Chinese government for many dynasties and was meant to supplement it.

Because of their high value the silver subsidiary coinages could only partially replace copper-alloy cash coins and this was largely in urban areas and in terms of tax payment (which were collected in silver). The Tongyuan became more popular because of their lower value making them more useful for small daily transactions.

Because of the higher production costs associated with silver subsidiary coinages, that these would contain relatively less silver than the full silver dollars had. This was necessary because otherwise it would be too expensive for the government to produce the small denominations.

While the Chinese government and provincial governments intended for the silver subsidiary coins to supplement the fiscal liquidity the Chinese economy, which was already accustomed to using silver as a form of bullion as well as having different types o foreign silver dollars of varying fineness which were both continued allowed to circulate side by side with domestic silver coins, would view the new silver subsidiary coinages as bullion rather than based on their intrinsic value. Given that there were foreign silver dollars of very different qualities in the Chinese market, the Chinese market tended to treat these different dollars according to their intrinsic value and various kinds of ghost units (e.g.: Haikwan Tael, Kuping Tael) were widely adopted to measure the real value of silver coins and this would also influence how the new native silver dollars and their subsidiary coins. The silver subsidiary coins weren't accepted based on their nominal value and because of their lower silver content would also be discounted.

Author and economics researcher Xun Yan of the Department of Economic History, London School of Economics in their paper Money and Monetary System in China in the 19th–20th Century: An Overview noted that small silver coins were a common dilemma faced by monometallic currency systems in which one metal is used as the main currency and unit of account and is cast into coins of different denomination and varying content (or fineness), this is why fiduciary monies were often employed to solve this issue, as happened with the Chinese currency system. The convertibility of fiduciary monies to be successful must be guaranteed; and these tokens must also be manufactured in a method which is hard to counterfeit by the black market. The solution came in the form of small debased copper-alloy coins produced from 1900 onwards. And because these new copper-alloy subsidiary coins were of much lower value and were used in frequent daily exchanges, the private markets in China would accept these new coins at their nominal value, and generally did not bother to circulate them in accordance to their intrinsic value as was usual in Chinese history.

Decentralisation and fiscal troubles
In the aftermath of the Taiping Rebellion and a large number of other rebel and secret society uprisings during the Xianfeng period where the imperial government faced a series of domestic insurgences and had suffered a large number military defeats, the central government became more and more dependent on provincial and regional militaries, many of which were created in response to the troubles of the time. Because of this large dependency on regional military forces the imperial government gave much more political autonomy to the provinces and the latter half of the 19th century saw a wave of strong decentralisation in the Qing. As a consequence regional governors gained larger fiscal discretion over their territories.

During this period more enlightened Chinese politicians would push forward modernisation projects within the jurisdiction of their provinces. Following the defeat of the Qing against the superior more modernised Japanese military during the First Sino-Japanese War, the central Chinese government started to consent more frequently to the modernisation projects and experimentations as long as these stayed within the budgets of the provincial governments.

The First Sino-Japanese War was a major blow to the Manchu administration and shocked China both psychologically and economically, as after the war the Japanese had demanded an indemnity of 230,000,000 silver taels to be paid within only three years, which was higher than the income of the Qing at the time during the same period. By comparison the United Kingdom only demanded 19,440,000 silver taels (or 27,000,000 silver dollars) following their defeat after the Opium Wars. As Japan had always been technologically and economically less developed than China for most of its history this defeat was seen as much more humiliating than a defeat by a Western power, which further incentivised the Qing government to push for more modernisation including the modernisation of the production process of its coinage. This defeat further showed other countries the weakness of the Qing and following the Boxer Rebellion it now also had to pay large amounts of war indemnities to Western powers, this created an increasingly high tax burden on the provinces as the imperial government's ever-growing debts, debts which it attempted to repay by borrowing money from foreign banks with interest.

Because the heads of the provinces were appointed by the imperial government, the regional governors would attempt to show their loyalty by meeting these higher tax demands.

Revival of traditional mints and the introduction of new coinages
By the time of the Guangxu period provincial mints had been suspended for a long time and very little incentive existed for re-opening them until the copper crisis happened. During the latter half of the 1890s many new coinage mints were opened throughout China with steam powered coin presses and older provincial mints were upgraded. These new steam power mints were created to manufacture both traditional cash coins and silver dollars. These new steam powered mints included the Tientsin Arsenal in Tianjin, Zhili and the Imperial Naval Yard in northern China, and the Kiangnan Arsenal in Jiangnan, which were all established in the year 1896.

While creation of these new modern mints was encouraged by the imperial government, it was fully expected that the provincial governments would finance these mints, which proved to be a problem as they were losing money due to the high costs of both acquisition and manufacture. Despite the new copper-alloy cash coins being strongly debased compared to the ones which were made only decades before, the cost of manufacturing them was still much higher because of the situation. Because of this there remained very little incentive to continue producing cash coins, so their production was again quickly discontinued in favour of token coinages with higher nominal values.

Prior to the Xianfeng crisis provincial governments were only tasked with collecting taxes for the imperial government, these taxes mainly included the land tax and transit tax. However, following the Xianfeng crisis, the centralised fiscal system that was maintained by the Qing dynasty completely collapsed and regional governments would stop sending all of their revenue to the imperial government, now local government were only assigned a certain quota which they could negotiate with the imperial government. This further allowed for more innovation in both economic activities and local government policies.

The production of coinages to circulate became one of the higher priorities for provincial governors as they wanted to have more fiscal liquidity to help develop local markets. Furthermore, while in the old system provincial mints were a part of the central imperial mint system which produced copper-alloy cash coins according to a centrally planned minting quota and provincial mints used to receive a certain amount of copper which was allocated to them by the central government administration. In the new system provincial governments could keep the profits from the mints themselves. Initially regional leaders first tried minting silver coinages before they would try to produce copper coinages, as at the time silver coinage was seen as being obviously more profitable to produce if the market accepted the use of these new silver coins at their nominal value.

The provincial governors tried to use the seigniorage of provincial mints to generate more profits so they could implement their policies and would provide more resources to these local governments to fund some of their other projects. During this time a philosophy rose that thought that a more modernised currency system and sufficient fiscal liquidity could promote the development of the Chinese economy.

Provincial governors kept pushing for more autonomy to operate their own mints because of their profitability. During this period provincial governors had successfully rejected the demand of the imperial government to fully revive the casting of traditional copper-alloy cash coinages because of the high financial losses associated with their production. Provincial governors operated their mints with the idea that they should be profitable and often experimented with with renovations and modernisations.

The Guangzhou Mint operated by the provincial government of Guangdong was the first mint in China to use steam machine powered equipment and was responsible for the introduction of the first silver and machine-struck copper coinages ever produced by a Chinese government entity.

Prior to 1890 only imported foreign silver dollars circulated in China, as the Chinese government exclusively produced copper-alloy cash coins for the market. Guangdong was the first provincial government to make a profit by manufacturing their own silver coins which were similar to the foreign silver dollars.

After 1896 other provinces followed Guangdong's example and by 1900 every Chinese province operated at least one mint that produced silver coins.

Compared to the earlier system of silver ingots known as sycees the new silver coins were a very profitable business both for the government and for the Chinese people. As the sycees required weighing and at times even the testing of their silver content to be able to circulate, these new provincial silver coins were uniform and because of their standardised weights and silver contents they were well received by the market.

The provincial mints primarily minted low denomination silver coins of 10 and 20 cents, this was done because these were much more profitable to produce as they contained much less silver than larger denominations by proportion. For comparison fineness of most silver cents was around 0.800 silver while the finesse of a silver dragon dollar is often around 0.900 silver. During the first nine years of the operation of the Guangzhou Mint, 95% of its output was in the form of silver 10- and 20-cent coins.

Following the introduction of the new coins both Chinese merchants and foreigners welcomed them as an enhancement of the already existing currency systems of China and it was believed that these new coinages would compliment the scarce cash coins. A customs commissioner in Jiujiang, Jiangxi expressed in a report that he hoped that the introduction of more small silver subsidiary coinages could eventually replace and be responsible for "the gradual retirement from circulation of the cumbrous cash". An opinion shared by many government officials as they saw the small silver coins as filling in for the quickly disappearing cash coins.

The silver dragon dollars that were minted by the provincial mints of Guangdong, Hubei, and Jiangnan were similar both in weight and fineness to the foreign dollars which circulated in China at the time, while the silver dragon dollars that were produced at other provincial mints tended to both weigh less and contain less silver (usually between only 0.844 and 0.890).

Silver coinage
During the Guangxu period the Chinese government (first by provincial governments) started to produce silver coinage. The majority of these silver coins produced were smaller silver coins because of higher seigniorage. These small silver coins were much more likely to be the subject of wear and tear because of their lower value causing them to be used more often. In fact these small denomination coins often depreciated quickly and people were also quick adjust their value according to their silver content (intrinsic value) rather than their nominal value. The Chinese market didn't view the new silver subsidiary coins as a form of real subsidiary money, instead small silver coins would exclusively serve as an alternative means of payment as they were smaller than the much more valuable silver dollars and were more valuable than low value copper-alloy cash coins. This means that they only increased the liquidity of the silver sector, instead of relieving domestic monetary stringency as they were intended to do. The further enlargement of the Chinese silver sector would contribute even more to the already problematic phenomenon of silver being relatively cheap and the increasing scarcity of copper-alloy cash coins.

Numismatics and studies into the coinage
A lot of literature about the late Qing dynasty coinage criticised the provincial mints and it isn't uncommon for historians to criticise the profit hungry provincial governors. Common criticism of the monetary reforms of the Guangxu period is that the scattered modernisation process contributed to the already bad monetary fragmentation for many decades. It's common for the Chinese numismatic literature to criticise the fact that the qualities of these new Chinese coins that were introduced during the Guangxu period varied from greatly province to province across China, this was deliberately done with the prospect of competitive depreciation as they all sought to maximise profits. Furthermore, this greedy drive for profit by the provincial governments had tempted them to over-issue the new machine-struck which caused bad inflation.

It isn't uncommon for Chinese numismatic literature to overlook the many positive effects of the modernised Guangxu coinage, this is because the motivations or the ill-fated consequences of the provincial governments are often discussed in a negative light. A big source for these negative opinions stem from various contemporary and early Republican criticisms found in articles were written during the 1910s and 1920s. Of these works the negative views of Liang Qichao were the most influential. In more recent years, the literature written by the numismatist Ho Hon-wai has focused comprehensively on this issue, and has published a number of papers on it. The focus of the research done by Ho Hon-wai centres on the historical development of this monetary institution, which in particularly discusses the negative impacts attributed to the new (modernised) coinage.

Author Xun Yan of the Department of Economic History, London School of Economics in their paper Money and Monetary System in China in the 19th–20th Century: An Overview offered counter criticism against these negative critiques, Xun Yan argued that no political action, which includes the making of monetary policies, can ever be perceived as being purely benevolent in origin. Xun Yan claimed that rather it is political ideas and implementation of the opposite type that should feared, policies described as being "driven purely by ideology or passion, instead of being economically sound". Xun Yan noted that during the 19th century the traditional Chinese scholars who made the monetary policies of the time still had the idea that money was a public good for the people and that it should exclusively be provided to them by a benevolent state. The traditional Chinese scholars of the time believed this without realising that this unaffordable ideology had already made it in an earlier period (the Ming dynasty) made it impossible for the imperial Chinese government to provide sufficient money for market liquidity.

Xun Yan noted that the introduction of the modern Guangxu coinage by the provincial governments wasn't completely something that came out of nowhere, as the imperial court of the Qing dynasty had already discussed the adoption of modern steam powered technology, the introduction of convertible paper notes and banknotes backed by a modern banking system, the adoption of the gold standard with silver subsidiary coins, etc. - as early as 1875 during the late Tongzhi period and early Guangxu period.

Canton Mint spin-off project

 * User:Donald Trung/Guangzhou Mint.

Gallica

 * https://gallica.bnf.fr/ark:/12148/bpt6k5465994b/f3.image.r=Sap%C3%A8ques?rk=450646;0

Sources to use

 * https://books.google.nl/books?id=pE5eAAAAIBAJ&pg=PA6&dq=Coins+discovered+China&article_id=923,561789&hl=en&sa=X&ved=2ahUKEwjntvSX4r6AAxUSCuwKHRt3DNkQ6AF6BAgJEAM#v=onepage&q=Coins%20discovered%20China&f=false