No. 88.
Mr. Holcombe to Mr. Evarts.

No. 11.]

Sir: Referring to Mr. Seward’s dispatch, No. 43, of March 6, last, informing you that he had prepared a memorandum upon Chinese currency, and had requested the vice-consul-general to transmit six copies of it to the Department, and in which he stated that the German minister was also preparing a paper upon the same topic, I now have the honor to hand to you two copies of M. von Brandt’s memorandum. For your convenience in comparison, I also attach another copy of Mr. Seward’s paper.

And I also beg leave to call your attention to the inclosed letter of the Shanghai Chamber of Commerce, in which they express their high appreciation of the ability with which our minister has treated the subject under consideration.

I have, &c.,

[Inclosure 1 in No 311.]

Mr. Stahel to Mr. Seward.

I have the honor to inclose herewith copy of a letter from the Shanghai Chamber of Commerce in reply to my dispatch No. 11,402, concerning copies of your excellency’s memorandum on the currency of China.

I am, &c.,

[Inclosure to inclosure 1 in No. 11.]

Chamber of Commerce to Mr. Stahel.

I have the honor to acknowledge the receipt of your letter of 6th instant, inclosing four copies of a memorandum on the currency of China by his excellency the United States minister at Peking.

The members of the committee have perused the documents with much interest, and the possession of so valuable a record of information, and so clear a statement of the question, will prove most useful to the chamber in considering the subject of which his excellency treats.

The committee regrets to be forced to the conviction, by the result of recent endeavors to induce the Chinese Government to place the currency of the country on a more satisfactory basis, that there is no present prospect of progress in the matter; but it will, nevertheless, not cease to engage the attention of the chamber, in the hopes that means may ultimately be found of persuading the government to recognize and perform what in western countries is considered the ordinary duty of the state.

I have to request that you will be kind enough to convey to Mr. Seward the thanks of the chamber for his excellency’s communication.

I have, &c.,

[Page 133]
[Inclosure 2 in No. 11.]


It is well known that the Chinese Government do not issue coins of silver or gold, and that the pieces called by them “ch’ien,” by the English “cash,” and the French “sapeque,” from the Portuguese “sapeca,” which are made of copper variously alloyed, are the only ones in use among them. They are circular, and have square holes at the center which are used for stringing them together. They are cast and not minted.

The places and mode of casting cash are regulated by imperial statutes. Models are given out by the board of revenue at Peking. The standard weight is one mace (ch’ien) each, and the value, by government standard, is the one thousandth part of a tael of silver of the treasury scale. (Staunton’s Penal Code, sec. 118.) The casting of cash is under the control of the provincial governors subject to the orders of the board of revenue, and theoretically care is taken that the issues shall be so managed that the supply shall be sufficient to meet the demands of the people, and not so great as to cause their depreciation relatively to silver.

A coin, if it can be called such, which is cast and not minted, as a matter of course will be counterfeited. One made of a metal so base as copper, with alloys of a still baser sort, Avill be peculiarly liable to be counterfeited on the one hand and debased on the other. In this connection the following remarks, taken-from the Commercial Guide of Dr. Williams, will be found pertinent:

“Within the last few years the government have taken strong measures to suppress the private manufacture of cash, but in vain. The capacity of the governors is strongly exemplified in its gross adulteration since the time of Kianghsi, about 150 years ago. It is debased in the coarsest manner with iron dust and sand, and presents a gritty appearance to the eye. In the reign of Taokwang (1821–’51) it became so bad that it would not remunerate forgers to counterfeit it. In the reign of Hsienfung (1851–’61) iron cash and paper notes were substituted for the copper cash.”

The currency of Peking gives special evidence of the irregularities which have marked its history. By a curious fiction every piece of cash is called two. Without being able to trace out the cause of this, I have supposed that when the cash in use at a given period had been debased in value about one-half an effort was made to correct matters by issuing coin of standard merit, and ordering that each piece of the new issue should be taken as equal to two pieces of the old. The new issue in time became debased and confused with the old, until there was no recourse for the people but to call one cash two, irrespective of the issue.

Still later copper tokens of ten, twenty, &c., cash were issued, and these are now in circulation. They were never, however, of standard value. In 1869 one ten-cash piece was worth about three of the single cash pieces of varying issues which were in circulation, and 525 of them were required to purchase a tael of silver. As each piece represented ten cash, and as every piece of cash was doubled by the custom already referred to, 10,500 nominal cash were equal to a tael. Their value has decreased relatively to silver since then, and at times 18,000 nominal cash are required to purchase a tael. The paper tiao, of the city, represents 1,000 nominal cash, while in theory a tiao or string of cash should be equal to a tael.

In 1853–’54 an effort was made to force the iron cash spoken of above upon the people of the city, but it signally failed. “It was thrown away about the walls and by-ways, no one even thinking it worth the trouble of picking up.”

It would seem, indeed, that the capital city and the north of China generally have suffered more from irregular practices affecting the currency than the more southern districts. It is said that many iron cash are in circulation in Chihli, Shansi, and Shensi, and that an effort has been made in each considerable town to preserve a standard of value by counting more or less of the actual cash as equal to a tiao, so that the custom of the place must be known before the person who has bought articles to any given value can tell how many actual pieces of money he is to pay for them

At the ports open to foreign trade and in the southern provinces generally the actual cash are counted and so passed for the purposes of a currency, but their intrinsic value varies, not only as between the ports, but at the several ports. From statements made by the consuls of the United States to the legation, in the year 1873, I have derived the following results as the value of the average cash of each port, relatively to the haikwan or customs tael:

Taels. Cash.
At Newchwang 1= 1,909
At Shanghai 1= 1,800
At Chinkiang 1= 1,960
At Ningpo 1= 1,868
At Foochow 1= 1,605
At Amoy 1= 1,736
At Swatow 1= 1,668

[Page 134]

Assuming these figures to be approximately correct, a range of relative values amounting to nearly 20 per cent, is shown.

Mr. Kingsmill, writing at Shanghai about ten years ago, said:

“Taking carefully picked cash, coined before 1820, such as are known in the market as Hankow picked, the average weight is rather less than 1.00 ch’ien. Slightly below this is what is known as Chinkiang cash, weighing from .940 to .943. Far below either is the ordinary currency in Shanghai. Taking a sample rather above than below what is known as fair quality, we will probably find it composed as follows:

Fair to good (in numbers) 500
Japanese and foreign 300
Debased of last two Emperors 200

“The average weight is about ch’ien .780 only.”

The same writer shows that at Hankow, under circumstances which created special demand, cash varied in value relatively to silver, as follows:

Cash. Taels.
1863 1,000= 0.750
1864 1,000= 0.795
1865 1,000= 0.805
1866 1,000= 0.785
1867 1,000= 0.650

The tael quotations given show the averages of the years, but in 1865 the price ran up so high that 88½ tael cents were required to buy 1,000 cash, a range of relative value, as compared with the price stated for 1867, of more than 33⅓ per cent.

Mr. Wylie, of Shanghai, states that the cash of the seventeenth century were made of copper, zinc, lead, and tin, in the following proportions:

Copper 50.00
Zinc 41.50
Lead 6.50
Tin 2.00

Mr. Kingsmill, following these figures, estimates the cost of making 1,000 cash, weighing 1 ch’ien each, as follows:

Copper, at 15 taels per picul 0.46875
Zinc, at 5.20 taels per picul 0.12453
Lead, at 5 taels per picul 0.62031
Tin, at 15 taels per picul 0.02250
Say Shanghai taels 0.063609

Assuming 6 per cent, to be sufficient to defray the cost of coinage (casting), we arrive at about taels 0.675 as the price at which the Chinese Government could issue such cash. At the standard of 1,000 cash to the tael, the profit of the government would amount to more than 30 per cent.

We find, therefore, these facts existing:

That cash vary greatly in weight and fineness.
That their value, as compared with silver, is not constant.
That they are not worth, when issued of standard weight and fineness, more than 70 per cent, of their nominal value.

As a permanent standard of value, then, the copper coinage of this empire is unsatisfactory in the extreme. It is nevertheless the currency which is used in all the ordinary transactions of the people. The laborer receives his wages in it. The farmer calculates in it the outturn of his crops. The small consumers and small producers, whose aggregate demands and supplies make up the; great markets, find in it an index of the rise and fall of price. It can be shown even that at given times copper cash appear to have a more stable purchasing power than silver, and an argument raised to sustain the proposition which has been advanced over and over again, that it forms “the virtual monetary unit.”

In passing, it may be remarked that the evils of an unstable currency are not now felt for the first time. It is said that in the Sung dynasty (960 to 1127 A. D.) cash were made “so small that they were called geese-eyes, and so thin that they would swim upon the water,” and every one has read what Marco Polo wrote of the vast issues of paper money by the Mongols, who reigned between 1280 and 1368 A. D. They found “rag money” in the land which they had conquered, and while extending issues here, carried the practice into Persia, where paper of the sort is still called by the Chinese name, “Ch’aou.” It has been stated that they abused the power to make money to such an [Page 135] extent that the discontent of the people, due to this cause, did more than anything else to bring about their downfall.

When we turn from this statement of the unsatisfactory character of the copper currency to deal with the facts in regard to the use of silver, we meet again with much that is singular and confusing.

At the foreign customs duties are demanded according to the Haikwan scale, and payments at the ports named below made in local taels are received at the following rates:

Newchwang 100 Haikwan taels = 108.50 local taels.
Tienstin 100 Haikwan taels = 105.00 local taels.
Chefoo 100 Haikwan taels = 104.40 local taels.
Hankow 100 Haikwan taels = 108.75 local taels.
Kiukiang 100 Haikwan taels = 106.31 local taels.
Chinkiang 100 Haikwan taels = 104.21 local taels.
Shanghai 100 Haikwan taels = 111.40 local taels.
Ningpo 100 Haikwan taels = 111.40 Shanghai scale taels.

South of Ningpo, duties are generally paid in dollars. So nearly as I have been able to learn, local taels are valued, relatively to the Haikwan standard, as follows:

Amoy 100 Haikwan taels = 110.00 local taels.
Tamsui 100 Haikwan taels = 110.00 local taels.
Taiwan 100 Haikwan taels = 111.37 local taels.
Swatow 100 Haikwan taels = 110.00 local taels.

At Foochow two local taels are used, one by foreign, the other by native, merchants. One hundred Haikwan taels are equal to 100.50 of the former and 101.45 of the latter.

At several, if not all, the ports, there are other taels known besides the Haikwan and the local commercial taels. One of these is called the “Kuping” or treasury tael. It is not constant, however, with the Haikwan tael, as will be seen from the following table:

Tientsin 100 Haikwan taels = 103.40 Kuping taels.
Hankow 100 Haikwan taels = 101.01 Kuping taels.
Shanghai 100 Haikwan taels = 101.65 Kuping taels.
Foochow 100 Haikwan taels = 101.14 Kuping taels.

In a dispatch addressed by Prince Kung on the 9th of April, 1877, to the foreign minister at Peking, he said: “All payments to and from the provinces are made in Kuping taels of pure silver.”

The table shows that the Haikwan tael is better than the Kuping, and the provincial officers doubtless get the benefit of the difference.

It is suggestive of the lax ideas of currency and administration generally prevailing in China that at one port foreigners of one nationality pay their dues at the customs at a rate different from that exacted of other foreigners, and that at several ports different rates are exacted of natives from those demanded from foreigners.

At Peking, Dr. Williams found five scales used for weighing silver, the tael of each weighing respectively 548, 541, 552, 539, and 579 grains.

But while there seems to be and is much confusion, matters are not so bad as they appear. It is a fact that the weight of the Kuping tael has been very constant for the last 200 years. The cattv of this scale has been quoted at Peking, as follows:

In 1580, by Le compte 596.044
In 1769, by Clerc 596.800
In 1822, by Timkowski 595.345
In 1841, by Kupffner 595.135

It is also reported as follows:

At Shanghai, in 1857, by Wylie 598.976
At Shanghai, in 1857, by Wylie 596.800

The same thing seems to be true in regard to the scale used at Canton for weighing silver, as will be seen from the following authorities:

In 1710, William 601.104
In 1779, Collas 601.328
In 1710, Milburn 601.190
In 1828, Thompson 600.658
In 1845, Rondot 600.432
In 1847, Carvalho 601.112
In 1857, Rondot 600.432*

[Page 136]

In view of the constancy for long periods of the scales indicated, it may very well he supposed that the Chinese throughout the empire are acquainted with a standard scale, the Kuping, for instance, and that the variation of local taels from the standard is clearly defined and understood.

The actual scales or balances used by the Chinese are more or less well made. Those oftenest seen in shops, &c., have a brass beam suspended from a standard, and two brass basins, carried by brass chains. It cannot be supposed that they are very sensitive and accurate. Others of a finer sort are made in the same way, the beam being of ebony or ivory, and the basins of brass, suspended by silken cords. Others are fashioned like our steelyards. These all would be condemned, of course, in assay offices or mints in Europe or America.

Chinese assays of silver are equally defective. The process at Peking appears to be a simple one, in which the borate of soda is used with or without lead, according to the proportion of alloy. At Shanghai, niter and lead are used with white sand, and at the last moment of the melting process a piece of white oxide of arsenic is thrown in to give splendor to the metal. Cupellation and the use of acids are not known.

The trade-dollar was declared by the assay of 1873 to be .8961 fine, instead of .900. While this is a wider deviation than is allowed by the mints of Europe or America for “toleration” or “remedy,” it is so close that I have suspected that it was based on the well-known standard of the coin. In the same year I endeavored to have an assay made at Shanghai, but found many unnecessary difficulties raised. At the assay of the Hong-Kong dollar, the result obtained was a fineness of 8944. An allowance was then made of 5/1000 for silver remaining incorporated with the lead, and the dollar declared to be 900 fine. This assay was made in the presence of the assayer of the Hong-Kong mint, who exhibited also the foreign process of assaying. It is reported that the Chinese were highly interested in the skillfulness displayed in the process.

After the assay of the Hong-Kong dollar a proclamation was issued, declaring that 111.1.1 taels, weight of that coinage should be held equal to 100 Haikwan taels, and after the assay of the trade-dollar, it was in the same way declared that 111.9 taels’ weight of the American coin should be held equal to 100 taels; a proportion not justified by the actual fineness of the coin nor by the fineness declared by the assay. I am informed, however, that 108 taels’ weight of dollars are frequently accepted as equal to 100 taels Haikwan.*

Chinese assaying establishments are called kungkoo. They are not found in all the cities of the empire nor even in many of the most important. Mr. Billequin, professor of chemistry in the Imperial College of this city, is of the opinion that very little silver is refined here. In a report of the United States consul at Newchwang, made in 1870, he states that “There is no kungkoo; any one who chooses may fabricate ingots of silver, and the only check upon such persons is their fear to lose their reputation for honesty.”

The commissioner of customs at Chefoo reported in the same year that “serious inconvenience, delay, and losses have resulted to foreign merchants from the quantity of inferior sycee in circulation. To remedy this a kungkoo has been established, but the country buyers refuse to recognize it, and suspension of business with the interior has resulted.” In 1865 the commissioner at Hankow wrote: “In the early days of this port the demand for sycee was so sudden and extensive, that Shanghai was unable to supply standard sycee in sufficient quantities. It thus arose that sycee of an inferior [Page 137] quality was transmitted to this port, and on its being found that adulterated silver was accepted as equivalent to standard, the practice, Originally exceptional, became the rule, and sycee, depreciated to the extent of two, three, or even four mace per shoe, was regularly manufactured for the Hankow market. About two years ago an attempt was made to establish a kungkoo or assay office, which was unsuccessful, and the failure was followed by an enormous increase in the depreciation of silver. It was not, however, until the present month that an assay office, duly recognized by the Chinese and the consular authorities, was opened.”

In the absence of assay offices the Chinese rely upon the touch. Le Compte, writing in 1790, says, what is equally true at this day: “They are so expert in guessing at the goodness of any piece of silver by looking on it only that they are seldom mistaken, especially if it be melted after the manner practised by them. They know the goodness in three ways: by the color, by small holes which are made melting, and by the small circles which the air makes on the surface of the metal when it cools. If the color be white, the holes small and deep; if the circles be many, and those close and very fine, especially toward the center of the piece, then the silver is pure; but the more it differs from these three indications so much the more alloy it has”.

While it appears that uncertainties arising from the multiplicity of standards, the imperfect construction of scales, and the defective means of testing the quality of silver must prove a great source of annoyance to those who have occasion to use the metal, in one way and another fairly accurate results seem to be reached. This is the case at least as between the open ports. There is of course frequent occasion to remit bullion from the northern and riverine ports to Shanghai. I am informed that such remittances almost invariably result according to the expectations of shippers.

It follows from what has been said that however defective may be the test of silver and of the scales by which it is weighed, no such failures attend its use for purposes of a currency as have been experienced in the case of the copper currency already described.

That silver is the real standard of value is well-understood by the Chinese. We have seen that a cash is supposed to be the one thousandth part of a tael of silver. This is the declaration of the government and indicates the view taken by it. But cash pass among the people for just so much as they consider them worth, having regard to their intrinsic value, and their convenience as a medium of exchange. The government recognizing its failure to keep the coin up to standard, have accepted the action of the people and receive cash in payments of taxes only at the exchange current among them. The dues collected at the foreign customs are in silver, and remittances from the provinces to the capital are in silver or in banker’s bills calling for silver. The penal code provides that soldiers and citizens shall not use in their houses any utensils of copper, saving such as are permitted by the law, and that any excess shall be given over to the government at a stated price in silver. Importations of copper from Yunnan are similarly not to cost more than a stated price in silver.

What has been said will indicate the position of cash and silver in the Chinese currency. It remains to speak of gold.

It cannot be doubted that the latter forms a part of the currency, but this is true only to a limited extent. It is more properly a merchandise which is bought and sold in the market.

The tendency throughout Asia is to place a lower relative value upon gold than prevails in Europe and America. In China this tendency has been a normal one, and not the result of legislation, for in one sense gold and silver are equally articles of commerce; that is to say, neither has been coined. The case has been different in Japan, gold and silver having been long coined there. At the date of Commodore Perry’s treaty, gold, judged by the face value of coins in circulation, was worth only five times as much as silver. It is understood that the government received the whole production of the mines, and as no considerable import or export of the precious metals was allowed, it was able to establish their relative value by decree.

Quotations of these metals in China and Japan must be received with the reservation that one cannot be sure how far pure gold has been weighed against pure silver. I think that as a rule the gold is purer than the silver.

Rondot gives the following table:

Years. City. Gold. Silver.
1285 1 10
1375 1 4
1779 Peking 1 17½
1810 Canton 1 10
1821 Peking 1 21
1844 Canton 1 17
1845 do 1 16

[Page 138]

These quotations are so widely and irregularly at variance that their accuracy may he greatly questioned. It is the general fact, however, which is in point, and regarding this the two following quotations are’ sufficient.

Le Compte, writing in 1690, says: “Europeans make a good market of gold, because in China a pound of it bears but the same proportion to a pound of silver as one to ten, whereas among us it is one to fifteen.” Sir George Staunton, writing a century later, made the following statement: “In general, the value of silver has borne a much greater proportion to that of gold in China than in Europe, excepting when an extraordinary demand for the latter by foreign merchants has increased the rate of it.”

I have been at some pains to collect statistics of the relative values of the metals for recent years. The general result shows that while the markets have been sensitive to the European demand, there have been some wide fluctuations. The lowest quotation in the last 30 years is 1 to 12.8 (at Shanghai in 1855); the highest is 1 to 17.5 (at Peking in August, 1876).

There is here an exchange for the purchase and sale of gold at which the price is determined for the day. Whether similar exchanges may be found in other cities I do not know. I imagine, however, that there is relatively more gold in circulation at Peking than at other leading points, for the reason that a great deal of trade with Mongolia, Central Asia, and Siberia centers here bringing in that metal, and that persons of the official class coming here for greater or less periods, find it more convenient to carry than silver. There is a constant flow of gold in commerce from the northern ports to Shanghai and the south, but the quantity of it so moved is not great.

Paper obligations of one kind and another take an important place in the currency of the empire. None of this, so far as I know, is issued or sanctioned by the government, and all issues which are intended for currency purposes are to be classed as “shinplaster” paper, as the American term is. Probably, however, 75 per cent. of the smaller business of Peking is transacted with such paper. In some cities, as at Shanghai for instance, it is never seen. Foochow has long enjoyed prominence in the use of paper money, and it is likely that the practice followed here and in that city will be found to exist in many others. One author says: “Banknotes, payable to bearer, are in use throughout the empire, and are issued by the great houses of business, and accepted in all the principal towns.” At Shanghai, by tar the greater part of the merchandise purchased by Chinese from foreigners is paid for by orders drawn by the native bankers on themselves, and having usually ten days to run. Bills of exchange drawn by bankers in one city upon those in others are greatly used. At times a considerable part of the revenue transmitted to Peking from other parts of the empire has been sent up in this way.

It may be assumed, I think, that paper in its different forms takes the place of silver and cash in the transaction of business generally to a very considerable extent, and that, this result is largely due to the facts that cash are inconvenient to handle, and that; the use of silver is attended with difficulties not met with where a coinage system exists.

The failure of the Chinese to coin precious metals is due to a variety of reasons. Du Halde says quaintly: “It is easy to judge that there would be many debasers of money in China if silver was coined, since the small pieces of copper are so often counterfeited.” Dr. Williams says: “Silver and gold coin were both used in China, at different periods of her ancient history, but never have been issued by the present or any modern dynasty. A consciousness of their inability to maintain the standard alloy and weight throughout their vast domain and a knowledge of the facility with which the coins could be counterfeited combined with their ignorance of the advantages of a gold and silver currency, and a disposition to meddle with the coinage, explains why the Manchus have never attempted to circulate silver coins.” Issues of silver, moreover, could be made only at or near the intrinsic value of the metal used. Upon such issues the government could make but small profit, while, as we have seen, the profit upon issues of cash is very great.

It cannot be supposed, however, that the Chinese are different from other people in their need for and their capacity to appreciate a currency convenient in form and based on value. The Mexican dollar is much used at Shanghai, and it is always at a premium. Two years ago it ran up in a few months from 72.5 to 82.4 per cent. of the local tael, a range of ten per cent, nearly, in the relative value of silver conveniently coined and silver as bullion. Twenty years ago the Carolus dollar came to be at par with the tael. At Canton dollars, although passed by weight, are generally, as we have seen, at a small premium over bullion. In this city they pass freely, but at a slight discount. At Tientsin, as I am informed, they have sometimes been in such demand that it would pay to import them from Shanghai. Experience shows, as I believe, that if the supply of foreign dollars were constant and sufficient, they would come to be the money of account at all the open ports.

In making this statement I am aware that it involves the proposition that the government would have no serious difficulty in establishing a mint, and in putting out coins of determined value. They would need only to offer such money to their people [Page 139] to have it accepted. It would not be necessary to declare it legal tender, but, on the contrary, better that this should not be done, saving in inspect of customs dues. At first, doubtless, it would be regarded with suspicion, as anything is in China which is strange. The readiness of the government to receive it would commend it greatly to the people, and their freedom to receive or to reject it would dispel doubt. The absence of legal-tender laws would prevent any movement to debase the coin, for so soon as debased the people would discover and reject it. Well-executed coins would be so difficult to counterfeit as to prevent danger of this kind. In point of fact, all the reasons would exist for the acceptance of such coins which have induced the acceptance so widely of certain foreign coins, and many more beside.

That great opposition to the establishment of a mint must be expected, is manifest. Foreign bankers appear to prefer to have the currency in its present irregular and uncertain condition, doubtless because they make a profit from it. How much more native bankers and money-changers, and receivers of the revenue and disbursing officers will strive to uphold the existing system may be readily imagined.

It is well known, however, that the Chinese central authorities and some of their leading provincial officers are alive to the evils of the present system, and disposed to introduce remedies, and it may be predicted with safety that a coinage system will be adopted within a near period. I do not say within five or ten years, or attempt to anticipate the date. It is coming to be a felt want, and such wants create their remedy.

It is evident that no step short of the establishment of a mint can effect a radical improvement of the currency. Gold and silver must be coined in order to be convenient for use, and such coins must be authoritatively issued, in order to be accepted without hesitation or doubt. The object to be kept in view, then, is the establishment of a mint and nothing less.

It may be possible, however, to correct some of the evils of the existing currency. I think that we are fairly entitled to ask—

That the government shall declare in what tael the customs and other dues payable by foreigners are to be discharged. It appears from Prince Kung’s dispatch that the action of provincial officers in demanding such payments by a higher scale than the Kuping is a departure from the established rule of the government in regard to the receipt and disbursement of the public moneys.
The standard tael having been decided upon, its exact equivalent in grains troy and grammes should be declared. Looking to the inferiority of native scales, there can be no certainty in passing bullion until this has been done.
The purity of the silver of the standard tael should also be declared. There is no such thing in China, or elsewhere for that matter, as silver 1,000 fine, and it is necessary to have a standard purity declared, not only in order to effect certainty in passing bullion, but also in determining the equivalent values of the foreign coins in circulation.
The values of local taels relatively to the standard tael should be restated and declared.
The values of foreign coins should be restated and declared.

It is not necessary, as I think, to enter upon an extended argument-to show that the steps mentioned above are of much importance, or to explain why silver only is spoken of. All that has preceded in this paper indicates that silver is the real standard of value in China, that much uncertainty exists in its use, and that, if effort is to be made to improve matters without a radical departure from the existing system, the suggestions made are perhaps those which, if carried out, would offer the best results.

It is not necessary, either, to point out the treaty stipulations which would justify the effort to effect such an improvement of the currency. When foreign nations agreed with China for the payment of duties upon merchandise imported and exported by their people, it is not to be supposed that they imagined that the unit of the currency was an unknown quantity, or that they can be satisfied to have a situation continue which does not give uniform results.

It is desirable, of course, to proceed toward the accomplishment of reforms in this country, or in any other, within existing lines of administration. Perhaps a leading merit of the suggestions advanced lies in the fact that it would not be necessary to bring any new instrument of administration into use. It would be quite possible for this government to direct its provincial officers to take steps in concert with the foreign customs establishment to bring about all the reforms indicated.

There can be no doubt, moreover, that steps so taken would prove an advance toward the ultimate object. They would expose more clearly the faults of the existing system, and they would break down in some measure the interests which are upholding it. All considerations, then, those of the immediate interests of commerce, and those which look to the ultimate and complete reformation of the currency to the advantage of all, to that of the native indeed far more than to the foreigner, indicate that it will be wise to prosecute this business, with all appropriate earnestness.


  1. This scale is probably the Kuping,but I am not able at the moment to verify the point.
  2. The inspector-general of customs has given me a memorandum on the weight and fineness of the Haikwan tael. According to this, it should weigh 1 oz. 4 dwts. 3.84 grains troy, say 589.84 grains, or 37.578 grammes, The Haikwan catty would be therefore 601.248 grammes, or something more than the Canton and Kuping catties. An assay of the trade-dollar was made at Canton in 1873. The assayers declared that 100 trade-dollars weighed 72.68 taels by the Haikwan standard. At an early assay 100 Hong-Kong dollars were declared to weigh 71.92 taels. The actual weight of the trade-dollar is 420 grains, that of the Hong-Kong dollar 416 grains. The tael, at these rates, would be 577.875 and 578.402 grains, and the catty 599.216 and 599.766 grammes.

    Haikwan silver is supposed to be perfectly pure. Foreign dollars are accepted by the Haikwan standard only with an allowance which gives a result in pure silver. It is not likely that, in estimating the value of silver otherwise current, the proportion of alloy is arrived at and reported with equal care. In point of fact, as might be expected, Haikwan silver is not up to the assumed standard. On the 19th of June, 1876, thirty-five ingots of Canton silver, said to be of the Haikwan standard, were assayed at the Osaka mint. Thirteen of these proved to be .9820 fine, seventeen .9855, two .9860, and three .9845. On the 13th, fourteen shoes were assayed, resulting as follows: Two .9865, eight .9860, two .9855, and two .9850. It thus appears that Haikwan silver contains really about 1½ per cent. of base metal, and that 109.5 taels’ weight about of dollars 900 fine should be held equal to 100 taels of Haikwan silver. An officer formerly connected with the Canton customs informs me that the bullion received there is cast into 10 taels ingots for transmission to the capital, and that these ingots are of about 98 touch.