User:Donald Trung/Tongyuan (銅元)

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



Tongyuan (銅元 tóngyuán), or Tongban (銅板 tóngbǎn),

The co-existence of the traditional copper-alloy cash coins and the Tongyuan forms a landmark in Chinese monetary history, at it is perhaps the first time in Chinese monetary history that monies were largely taken at their legal tender (or nominal) value rather than their intrinsic metallic content. This value of exchange was made possible because of the uniformity of standard guaranteed by the new minting technologies used in the production of the Tongyuan as well as the limitation of coinage size that was endorsed by the government credibility.

Early provincial tongyuan
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 June 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 first of these provincial machine-struck copper-alloy coins had the inscription Guangxu Yuanbao (光緒元寶) and a weight of 7.46 grams. These early Cantonese milled coinage were inspired by copper coins from British Hong Kong. Due to the success of these Cantonese milled coins, the government of the province of Fujian started minting their own version of this coin in August of 1900.

From the year 1901 the provinces of Jiangsu, Hubei, Anhui, Zhejiang, Fengtian, Hunan, Beiyang Zhili, Sichuan, Jiangxi, Jilin, Shandong, Henan, Guangxi, and Yunnan had all begun to manufacture milled copper-alloy coins and distributed them nationwide. They became so became so popular that by the 31st year of the Guangxu Emperor (1906) they were being produced at 15 different bureaus in 12 provinces.

Traditionally copper-alloy cash coins would typically travel from the issuing mint to the adjacent area, and they would go from the higher level markets (where they were minted) to the more lower level markets where they tended to circulate.XUNYAN In general, cash coins were not very likely to travel great distances or across various regions. The same principles would apply to the newly minted machine-struck coinages which would have very regionalised circulations. During the initial years of their introduction the new milled coinages were perceived as being important and precious and were in high demand.

The Chinese provincial governments soon banned the outflow of the newly minted machine-struck copper-alloy coins. Later on as a growing number of provinces starting minting the new Tongyuan coins (around the years 1905 to 1910) and a new trend of competitive minting, which was sometimes accompanied by further depreciation, had started, and the Chinese provincial governments would ban the use of machine-struck coins that were minted by other provinces. This ban on outside milled coinages was done in order to protect its own seigniorage interest of the local government. Contrary to the conventional judgement that the regional mints during the Qing dynasty period were purely profit driven and that their policies added to the monetary chaos, both contemporary reports on the new machine-struck coinages, which were manufactured with steam power technology, and statistic exercises show that their introduction helped to ease rural monetary stringency.

The introduction of the milled Tongyuan coins helped to ease monetary stringency in the countryside, which was caused by a low supply of small denomination copper currency, without necessarily generating inflation. In contrast, the introduction of small machine-struck silver coins with relatively loe denominations did not have much of a positive effect on the Chinese rural economies at the time. Despite being much more popular on the market than the earlier Daqian, the new Tongyuan were not better at all. But where the Daqian had created a chaotic monetary system at the height of the Xianfeng inflation the Tongyuan were initially well received compared to the instant failure of the Daqian. According to Xun Yan of the London School of Economics and Political Science the success of the Tongyuan can be attributed to two different factors. The first factor was the fact that the production of small denomination copper-alloy coins instead of large silver coins correctly tackled the demands of the Chinese market, especially since the new Tongyuan currency was so debased that it brought the exchange rate between the copper-alloy wén and the silver tael back to its original level. The second factor that caused the Tongyuan to succeed where the Daqian failed was the fact that Daqian cash coins were cast and therefore very easy to counterfeit by anyone, while the Tongyuan coins were manufactured using steam power which made them much more difficult to make forgeries of.

Effect on the Chinese monetary system
In order for a token coinage to circulate on the market it has to fulfill four different features: first, the intrinsic value of the token based on its metal should be significantly less than its nominal value; second, private parties should not be legally allowed to produce the token coinage as it could lead to further debasements and overproduction; third, the government mint authority should issue a small and legally limited quantity of the token coinages, and fourth, the tokens had to be accepted by the government itself as legal tender (which may or may not be only up to a legally set maximum amount). The tongyuan would largely fulfill the first two of these criteria where the earlier Daqian had failed. Comparatively, by the end of the 19th century many European states had already introduced token coinages which fulfilled all these criteria.

The widespread use and circulation of the tongyuan market an epochal event in the monetary history of China as it was the first time that a token currency (i.e. highly debased) was both accepted and widely acknowledged in the Chinese market and accepted under otherwise normal circumstances (as token coinages were accepted in special circumstances, for example when a city when under siege). The imperial Chinese governments throughout history had gained a reputation of being an absolute power which had zero credibility to its people, which is why the Chinese people had always preferred to circulate money based on their intrinsic value rather than any stated nominal values as dictated by the imperial government. The tongyuan market the premiere of circulating money being seen as "credible" based on their denominations as opposed to their intrinsic value in China. The reason for this was likely due to the technology used to make the tongyuan which drastically increased the barrier for counterfeiters.

Furthermore, the fact that the Chinese public now accepted a token coinage to circulate on the market was the first step towards China adopting a monometallic standard as opposed to a bimetallic one. Many European states at this point had adopted the gold standard because the adoption of the token coinage had allowed them to switch to monometallism.

The government of the Qing dynasty never truly established a legal link between the tongyuan and the yinyuan (the machine-struck silver coinage), nor were the tongyuan ever backed by any financial institutions until as late as 1910.

Standardisation under the Qing
The government of the Qing dynasty established a modern coin factory at the Ministry of Revenue Mint (formerly the "Tianjin Silver Money General Mint") in Tianjin in the year 1903, the mint began to produce milled copper-alloy coins in 1905. At the same time, the government of the Qing dynasty ordered the entire country to produce the Da-Qing Tongbi (大清銅幣) coins to replace the former "Guangxu Yuanbao" and unified and standardised national currency system. The name "Da-Qing Tongbi" can be translated as "Copper currency of the Great Qing" and was used to indicate that this series was supposed to be the standard coinage of the entire empire as opposed to provincial coinages. The Qing dynasty had a bimetallic coinage system, and similar titles were also used for other standardised metal coinages such as the silver Da-Qing Yinbi (大清銀幣) and the gold Da-Qing Jinbi (大清金幣).

The government of the Qing dynasty hoped to regain control of its currency system in order to also get more control over its own internal affairs. In the year 1906, the Ministry of Revenue had issued the "Regulations on the Rectification Law" (整頓圜法章程), and had merged 24 mints around China into only 9.

The Da-Qing Tongbi coins were initially issued in the denominations of 2 wén, 5 wén, 10 wén, and 20 wén with each of these denominations being based on their nominal value in traditional cash coins. The government of the Qing dynasty had produced an excessive amount of 10 wén Da-Qing Tongbi coins. In the year 1909, the government of the Qing dynasty had ordered the mints to suspend the production of the 10 wén copper coins and produce a smaller denomination brass coin to ease the pressure of the 10 wén Da-Qing Tongbi coins, but only the provincial mints of Hubei, Jiangning, and Henan complied. The government of the Qing dynasty had issued a new law on currency known as the "Currency Regulations" (幣制則例) in the year 1910 to regulate and standardise the entire Chinese national currency system. The 1910 reforms stipulated that all provincial copper mints would be placed under supervision by the imperial government and imposed limited minting quota, and the new regulations officially linked the machine-struck copper coins with silver dollars (the regulations stated that 100 copper coins can be exchanged with 1 silver dollar, making them effectively one cent coins), the exchange between the copper and silver coinages would be ensured by banks. The newly introduced currency regulations were very detailed and carefully planned.

It is not known if the new legislation by the imperial government was motivated by a desire to take the seigniorage revenue from the hand of provincial governments, as the production of tongyuan was quite profitable for them. Despite this, the legislation could never be truly implemented as the Qing dynasty was overthrown and replaced by a republican government only a year after the new regulations were passed.

In the year 1911, the government of the Qing dynasty had issued the "Xuantong third year" series of copper-alloy coins, but these did not comply with the earlier set national regulations for coinages in China.

Republic of China


The first decade of the Republican period saw a prolonged period of civil war during the warlord era, this period saw all warlords (who were officially known as provincial governors) trying to increase their sources of fiscal revenue. One of the ways these warlords attempted to increase their revenue was by using the seigniorage revenue from copper coinage, and many warlords heavily depreciated the tongyuan for higher profits.

The famous economist Keynes once noted that the commodity currency was the "last barbarian relic" of the human society. But the transition into a fiat currency in China wasn't hampered by a distrusting public, but by greedy governments that abused the public's trust. While the tongyuan was once an innovation and an originally important step towards the monetary evolution of Chinese currency into a modern monetary system, the tongyuan turned to be another disappointment because regional governments sought to abuse the trust gained from the people to increase seigniorage revenues.

Standard reference templates

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 * May 2020.




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 * April 2020.










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Sources to use

 * http://www.transasiart.com/Numismatique/numismatique_chine/republique/hongxian/ncnrest001.htm