China and the Far East
Modern Money
By the 1880s small silver 10- and 5-cent coins issued in the British colony of
Hong Kong were flooding into south China. The Hong Kong government had
been trying to encourage China to adopt the Hong Kong dollar as its national
coin since the 1860s, proposing several different designs and denominations.
Eventually, the Governor-General of Guangdong and Guangxi sought
imperial permission to mint silver dollars on Western machinery. The new Western
style mint (with machinery and personnel imported from Birmingham) opened
in Canton in 1889 to strike 5-, 10- and 20-cent pieces, half dollars and
dollars foreign denominations that brought yet more kinds of coin into the
marketplace. The silver coins were treated as bullion, and the copper cents (10-cash
pieces) as cash coins according to the current silver-copper price. An
unexpected turn of events was that by the 1900s the Chinese authorities in Canton
were selling their small silver coins at a discount, making it profitable to ship
them into Hong Kong. The Hong Kong mint in the meantime had sold its
machinery to the Japanese Osaka mint, and in the 1870s Japan issued its own silver dollars.
The influence of imported monetary systems in China increased as the
nineteenth century progressed, particularly in the south, revealing the inability of the
imperial government to counter foreign domination. It is perhaps no
coincidence that the south was also the stronghold of the nationalist republicans who overthrew the empire in 1911.
After the First Opium War (1840-42) foreign commercial banks were
established in Chinese cities, and many issued banknotes for use in China. Some,
such as the Hongkong & Shanghai Banking Corporation, issued silver dollar and
silver ounce banknotes; others, such as the Imperial Bank of Russia, issued notes
in foreign units. Eventually the Chinese government saw the need to issue their
own silver ounce and silver dollar denominated exchange notes and established
the Zhongguo tongshang yinhang (the Imperial Bank of China) in 1897. Provincial
official silver and coin offices also began to issue new-style silver dollar bills. In
addition to these notes, paper money was also issued privately by the old-style
credit institutions, such as money shops and pawn shops, which had been
issuing paper money for centuries, and by larger mercantile establishments as well
as governmental institutions such as the railway offices.
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