China Upside Down: Currency, Society, and Ideologies, 1808-1856 0674022688, 9780674022683

Table of contents :
China Upside Down: Currency, Society, and Ideologies, 1808–1856
Acknowledgments
Contents
Tables, Maps, and Figures
Abbreviations and Dynasties
Explanatory Notes
China Upside Down: Currency, Society, and Ideologies, 1808–1856
Introduction
Currency and China
The Rise and Differentiation of Statecraft Thought
From High Qing to Late Qing: Global Erosion
Part I: Global Links: Silver and the World
1. A Vulnerable Empire
The Copper Coin System
Silver Use from the Sixteenth to the Early Nineteenth Centuries
Silver Supply from the Sixteenth to the Eighteenth Centuries
Conclusion
2. Opium: The Culprit?
Time, Space, and the Quantity of Silver Outflow
Silver and Opium in China’s Balance of Payments
Chinese Tea and Silk Exports, 1850–86
The Global Decrease in Silver and China
Conclusion
3. Disturbance of the Social Order
Interregional Dimensions
The Intraregional Rural-Urban Dimensions
The Crisis of the Qing State
Conclusion
Part II: Cultural Resources for Economic Debates
4. Monetary Debates and Policies
Wang Liu’s Proposals
General Responses to Wang Liu’s Book
Wang Liu’s Dialogue with Bao Shichen and Chen Shan
Criticism from Wei Yuan and Xu Mei
Further Monetary Discourse
Monetary Policies Taken
Conclusion
5. Chinese Inspiration and Western Comparison
Negligible Foreign Intellectual Influence
A Flexible Tradition of Economic Ideology
Western Comparisons
Conclusion
Part III: The Competition Among Intellectual Models
6 The Social Theories of the Two Statecraft Groups
Perceptions of Human Nature
Concepts of the State
State Versus Heaven or the Sages
State Power Versus Market Force
Commerce, Trade, and Consumption
Private Property
Historical Change
Conclusion
7. Classical Studies, Writing Styles, and Statecraft Thought
Statecraft Scholars’ Practical Interests
Intellectual Inclination
Conclusion
8. The Temporary Victory of the Accommodationist Stance
Acceptance of Accommodationist Economic Proposals
Interventionist Policies in the Self-Strengthening Period
Changes in Intellectual Currents
The Currency Crisis and the Accommodationist Inclination
The Late Nineteenth- Century Crisis and the Interventionist Bent
Conclusion
Conclusion
The Seriousness of the Silver Outflow
The World Economy and China’s Dynastic Decline
Statecraft Thought and Social Realities
“Aborted Capitalism?”
Reference Matter
Bibliography
Index

Citation preview

Z China Upside Down Currency, Society, and Ideologies, 1808–1856

Harvard East Asian Monographs 270

Z China Upside Down Currency, Society, and Ideologies, 1808–1856

Man-houng Lin

Published by the Harvard University Asia Center and distributed by Harvard University Press Cambridge (Massachusetts) and London 2006

© 2006 by the President and Fellows of Harvard College Printed in the United States of America The Harvard University Asia Center publishes a monograph series and, in coordination with the Fairbank Center for East Asian Research, the Korea Institute, the Reischauer Institute of Japanese Studies, and other faculties and institutes, administers research projects designed to further scholarly understanding of China, Japan, Vietnam, Korea, and other Asian countries. The Center also sponsors projects addressing multidisciplinary and regional issues in Asia. Library of Congress Cataloging-in-Publication Data Lin, Manhong. China upside down : currency, society, and ideologies, 1808-1856 / Man-houng Lin. p. cm. -- (Harvard East Asian monographs ; 270) Includes bibliographical references and index. isbn-13: 978-0-674-02268-3 (cl : alk. paper) isbn-10: 0-674-02268-8 (cl : alk. paper) 1. Silver--China. 2. China--Commerce--History--19th century. 3. China--Economic policy-1644-1912. 4. China--Politics and government--1644-1912. 5. China--Civilization--1644-1912. 6. China--History--Qing dynasty, 1644-1912. 7. China--Social conditions. I. Title. II. Series. hg307.c6l56 2006 332.4 '95109034--dc22 2006014177 Index by the author Printed on acid-free paper Last figure below indicates year of this printing 15141312111009080706

To Professor Philip A. Kuhn and to my husband, Liang Chi-yuan, and daughter, Liang Hung

Z Acknowledgments

In 1842, in a mountainous district in China’s Hubei province, a rebellion led by a low-ranking member of the scholar-elite, Zhong Renjie 㟥Хᙜ, took place. The rebels burned the walls of the district seat and killed the magistrate. They were angry because the silver used for calculating the tribute grain taxes had unexpectedly become more expensive, and Zhong’s followers simply could not pay as much as the magistrate asked. These rebels would not have anticipated that they influenced a scholar from Taiwan to undertake an odyssey, which has lasted for about two and a half decades from 1982 to 2006 to explore the world conditions that gave rise to this silver crisis and how scholar-officials in Zhong’s time perceived the issue. The documents concerning Zhong Renjie were read at Harvard under Professor Philip A. Kuhn’s guidance in an American intellectual climate trying to understand China from its own social structure and social thought. Similarly, the reading of official documents about eighteenthcentury grain prices in another of Professor Kuhn’s classes also raised the question of traditional Chinese scholar-officials’ attitudes toward the extent the state could or should step into economic affairs. This study of China’s early nineteenth-century silver crisis began with this kind of intellectual exploration and then proceeded to look at the economic realities. On the intellectual side, Professor Liu Kwang-Ching’s expertise on statecraft thought and Professor Ramon Myers’s interest in traditional China’s political-economic ideas formed the basis for further collection of materials and studies by Chinese economists. PRC economists’ perspectives on China’s traditional economic thought were based on

viii

Acknowledgments

frameworks very different from my own historical training. They expected to explore the theoretical insights on capital, profit, and value of Chinese traditional scholars to contribute to the study of modern economics. My approach, however, was to understand what shaped traditional Chinese scholars’ thought. Accordingly, I read the early nineteenth-century Chinese scholar-officials’ collected works kept in the Harvard-Yenching Library, Fu Sinian Library, the archives of Taipei’s Palace Museum, and the collected materials published in the PRC. Professor Richard Musgrave’s class on the social theories hidden in economic discussions in Harvard’s Department of Economics was an intellectual inspiration for deciphering these materials. Professor Benjamin Elman’s studies on the New Text school drove me to think hard about the relation between this group and statecraft thought. A name list of scholars specializing in the Tongcheng writing style kept by the Harvard-Yenching Library and a brief mention by the Japanese scholar Eguchi Hisao made me deliberate further about the relation between classical studies, writing style, and economic discussions. The economic aspects of the early nineteenth-century silver crisis were not much investigated until 1988, when I spent two and half years finishing another project called “Native Opium and Late Qing China,” which I started before I went to Harvard. In 1988, I was suddenly shocked to find that the presumption that opium caused the early nineteenth-century silver crisis was not fully warranted, since in the late nineteenth century China imported more opium and yet silver flowed back into China. Pierre Vilar’s book Gold and Silver in World History, archival research at the Widener Library in the British Parliamentary Papers, research at the Palace Museum archives, and in the Littauer Library on China’s place in the East Asian monetary system forced me to consider the global scope of silver in China during the nineteenth century. The connections between changing economic realities and changing ideas repeatedly reminded me of the holistic views of Professor Kuhn for China, Professor Steve Ozment for Europe, and Professor Albert Craig for Japan on the transition from the premodern to the modern period. The present volume, based on my research mainly at Harvard and the Academia Sinica, was finalized as a Harvard dissertation submitted in 1989 with Professors Kuhn and Peter Bol as readers.

Acknowledgments

ix

My participation in international conferences, publication in several journals, personal consultations, and visiting professorships in Japan aided revisions to the original dissertation in the following years. During the decade in which I revised this work on the silver crisis, I was also working on a project called “Empires and Networks: Taiwanese Merchants as Intermediaries, 1860–1961.” The final presentation of the silver outflow figures in this book serves as an example of how scholars worldwide and my other projects helped in the revision of this book. The London customs reports for India’s import of silver from China for 1814–56 were more complete than the figures I obtained in the Widener Library. The London records were obtained at Hong Kong University under the advice of Professor Hamashita Takeshi, whom I met in Xiamen, Leuven, and Beijing in 1990. Because the London customs records used British pounds as units, I did not make much use of this material until 2004, when Professor Mark Metzler underscored its complete nature. I met Mark at the World History Congress at Seoul in 2002, where I read a paper on Taiwan’s commercial networks. For the use of the London records, I searched for conversion rates worldwide. It was a Ph.D. student at Oxford University, Mr. Wang Hsien-chun, who finally obtained this conversion rate for me. My visit to Yamaguchi University in 2000 after Professor Kishi Toshihiko invited me to lecture at Shimane University on Taiwan’s commercial networks revealed crucial materials for explaining the Indian background of China’s silver outflow. The conferences in which parts of earlier drafts of this book were presented or that provided access to related information include the International Economic History Congress (Leuven, 1990; Milan, 1994); the World and Modern China (Beijing, 1990, 2000); Maritime Customs History (Xiamen, 1990); Maritime Studies (Pondicherry, 1991); Culture, Religion, and China’s Economic Development (Berkeley, 1992); Population History of East Asia (Chiba, 1993); East Asian Economic Thought (Beijing, 1993); Asian Open Forum (Matsue, 1998); the Annual Meeting of the Association for Asian Studies (Boston, 1999); Maritime China and Overseas Chinese Communities in Transition, 1750–1850 (Singapore, 1999); World History Congress (Seoul, 2002); the annual meeting of the Association of the Sea of Japan (Sapporo, 2003); the Econo-

x

Acknowledgments

metric Study of Chinese Economic History (Beijing, 2004); Ports and Hinterlands (Shanghai, 2004); Financial Institutions and Modern China (Shanghai, 2004); Formation of East Asian Capitalism (Seoul, 2004), and Beyond Market and Hierarchies (Tokyo, 2006). Visiting professorships at Waseda University (September 2000–March 2001) and Kyoto University (August 2003–January 2004), as well as an invitation from University of California, Davis, to give a talk in the Professor Liu Kwang-Ching Lecture Series in May 2004 also helped in the revision of this book. Journals in which parts of earlier drafts of this book were published include Late Imperial China and American Asian Review. Conference volumes published after the Leuven, Pondicherry, and Singapore conferences containing studies related to this book are listed in the bibliography. Participating in conferences, publishing articles in journals, personal consultations, and submitting this manuscript for publication brought forth help from various scholars and libraries outside Taiwan. I am grateful to Professors A Feng, Matsuura Akira, Kuroda Akinobu, W. E. Cheong, Chen Laixing, Chen Shiqi, Helen Dunstan, Dennis O. Flynn, Feng Xiaocai, Arturo Giráldez, Naoto Kagotani, Sayako Kanda, Sugihara Kaoru, Rebecca Karl, Hori Kazuo, Barry Keenan, James Lee, Jane Leonard, Thomas A. Metzger, Kishimoto Mio, Susan Mann, Susan Naquin, George B. Souza, Frederic Wakeman, John Watt, Ye Shichang, Ye Tan, Wen-hsin Yeh, Margherita Zanasi, and several anonymous readers. I am also grateful to the following libraries and archives: Fudan University Library, Xiamen University Library, Zhongshan University Library, Beijing Library, the First Historical Archives in Beijing, and Seoul University Library. My training in Taiwan on the socioeconomic history of modern China prior to my study at Harvard was crucial for this study. Professor Yeh-chien Wang, my teacher in National Taiwan Normal University’s Ph.D. program, acquainted me with his and his mentor Quan Hansheng’s (1912–2001) contributions in the field of Chinese monetary studies. Another famous monetary historian in Taiwan, Chao-nan Chen, suggested that I read the monetary opinions of Friedrich August von Hayek (1899– 1992) and his group. My first book, finished as part of National Taiwan University’s M.A. program in 1976, dealt with the opening of treaty ports

Acknowledgments

xi

and late Qing Taiwan and started to use maritime customs publications under the inspiration of Professor Ts’ui-jung Liu. I am grateful to the Institute of Modern History of Academia Sinica, where I am a research fellow, for enabling me to concentrate on this work. The facilities and environment at Academia Sinica greatly facilitated this study. Its social science and humanities libraries efficiently solved various academic inquiries, as did the libraries of National Taiwan University, National Taiwan Normal University, and the National Library. My senior colleague in this institute, Professor Lu Baoqian, taught me much about the Tongcheng literary school and New Text classical studies. My previous publication of parts of this book in ten Chinese articles benefited from numerous anonymous readers. Colleagues, including Professors Peter Zarrow and Paul Katz, helped greatly in my finalization of this work. Dr. Pan Guangzhe and Dr. Micah Muscolin rendered help in final proofreading. Professor Okazaki KŇji corrected my Japanese romanization, and Ms. Wei Xiumei helped with dating some of the figures for the Qing period. My joint appointment as a professor at National Taiwan Normal University also provided me the opportunity to discuss this study with students over a period of about fifteen years. Some of the students’ related publications also benefited this book. Although greatly interested in Western historical studies since my student days at National Taiwan University, I was reluctant to go abroad during the years in which Taiwan suffered a number of diplomatic setbacks. Only through the continual encouragement of Professors Lee Kuo-Chih and Chang Peng-yuan and my selection by Vice Minister of Education Li Mo for the Harvard Club Scholarship (1980–81) were my studies at Harvard and my later global and holistic perspectives of history made possible. The Harvard-Yenching Institute’s doctoral scholarship supported me from July 1981 to December 1983 and from February 1988 to January 1989. The ROC National Science Council also provided a research grant from February 1987 to January 1988 and from 1990 to 1992. A Chiang Ching-kuo Foundation grant helped the finalization of this book. All these grants and some aid from Academia Sinica made possible the help from my assistants, Wang Jingfei, Li Daoji, Fei Yuyuan, and

xii

Acknowledgments

Huang Xiuchun, who were very efficient in helping me gather sources and in solving computer problems. Ms. Yuri Kuwahara’s responsible editing work for the thesis version, and the efforts of Ms. EIlise DeVido, Mr. Antonio C. Tavares, and Ms. Victoria Scott on later versions, also helped improve my English prose. My obsession with using a wide variety of historical sources to write about large-scale historical structures and processes has been a great burden to my family. I would like to extend my deepest gratitude to my parents and siblings. This book started when my daughter, Liang Hung, was one year old and has now ended when she is twenty-five and able to comment on it. A lot of time spent on this book should have been hers. My husband, Liang Chi-yuan, is a very rare husband who always appreciates the academic dedication of his wife, and I am also grateful for his occasional comments from the perspective of an economist. My adviser at Harvard, Professor Kuhn, supervised my work once every week for half a year before its submission as a dissertation, and since 1990 he has always been on the other end of the e-mail to share with me his shrewd grasp of history. To these three people, who most directly shared my joys and sorrows of writing, I dedicate this book. Numerous other kindnesses are acknowledged in the notes. While responsibility for the faults in this book remains mine, I hope all the kindnesses I have received have to some extent helped our understanding of the question, “What shaped China’s transition from the High Qing to its modern fate?” M-h.L.

Z Contents

Tables, Maps, and Figures

xv

Abbreviations and Dynasties

xix

Explanatory Notes Introduction

xxiii 1

Currency and China2/The Rise and Differentiation of Statecraft Thought14/ From High Qing to Late Qing: Global Erosion23

Part I Global Links: Silver and the World 1 A Vulnerable Empire

29

The Copper Coin System30/Silver Use from the Sixteenth to the Early Nineteenth Centuries39/Silver Supply from the Sixteenth to the Eighteenth Centuries57/ Conclusion68

2 Opium: The Culprit?

72

Time, Space, and the Quantity of Silver Outflow74/Silver and Opium in China’s Balance of Payments87/Chinese Tea and Silk Exports, 1850–8696/The Global Decrease in Silver and China107/Conclusion113

3 Disturbance of the Social Order Interregional Dimensions117/The Intraregional Rural-Urban Dimensions124/ The Crisis of the Qing State133/Conclusion141

115

xiv

Contents Part II Cultural Resources for Economic Debates

4 Monetary Debates and Policies

147

Wang Liu’s Proposals149/General Responses to Wang Liu’s Book152/Wang Liu’s Dialogue with Bao Shichen and Chen Shan154/Criticism from Wei Yuan and Xu Mei159/Further Monetary Discourse164/ Monetary Policies Taken 172/Conclusion178

5 Chinese Inspiration and Western Comparison

180

Negligible Foreign Intellectual Influence 181/ A Flexible Tradition of Economic Ideology183/Western Comparisons189/Conclusion197

Part III The Competition Among Intellectual Models 6 The Social Theories of the Two Statecraft Groups

203

Perceptions of Human Nature206/Concepts of the State209/State Versus Heaven or the Sages211/State Power Versus Market Force213/Commerce, Trade, and Consumption215/Private Property218/Historical Change221/ Conclusion226

7 Classical Studies, Writing Styles, and Statecraft Thought

228

Statecraft Scholars’ Practical Interests229/Intellectual Inclination239/ Conclusion257

8 The Temporary Victory of the Accommodationist Stance

261

Acceptance of Accommodationist Economic Proposals262/Interventionist Policies in the Self-Strengthening Period265/Changes in Intellectual Currents270/The Currency Crisis and the Accommodationist Inclination272/The Late NineteenthCentury Crisis and the Interventionist Bent278/Conclusion281

Conclusion

285

The Seriousness of the Silver Outflow285/The World Economy and China’s Dynastic Decline287/Statecraft Thought and Social Realities297/ “Aborted Capitalism?”308

Reference Matter Bibliography

315

Index

347

Z Tables, Maps, and Figures

Tables 1.1

Copper coins cast by the Beijing mints, 1644–1806

32

1.2

The amount of copper coins cast in the Qianlong reign

33

1.3

Estimated imports of silver from Nagasaki, 1601–1840

63

1.4

Export values of tea and silk from China to England through the East India Company, 1760–1833

65

1.5

Chinese junks sailing to Manila, 1570–1760

67

2.1

Trade balance between China and India, 1814–56

76

2.2

Trade balance between China and Britain, including India, 1818–26

79

Trade balance between China and England, excluding India, 1818–57

80

2.4

Trade balance between China and United States, 1814–50

82

2.5

Annual silver outflows for early nineteenth-century China, 1814–56

84

Silver–copper coin ratios (SCCR) in the Qing dynasty, 1644–1911

86

2.7

Opium imported into China, 1799–1916

89

2.8

Value of opium imported annually between 1868 and 1906

95

2.9

Estimates of total silver flows in and out of Qing China

95

2.3

2.6

2.10 Quantity of tea exported from China, 1825–86

98

2.11 Quantity of raw silk exported from China, 1825–86

99

xvi

Tables, Maps, and Figures

2.12 Value of tea exported from China, 1825–86

100

2.13 Value of raw silk exported from China, 1825–86

103

2.14 Value of opium imports, 1825–86

104

2.15 Comparison of exports of tea and silk and imports of opium, 1825–86

105

2.16 World production of gold and silver, 1741–1910

110

3.1

Silver appreciation reports for various localities, 1824–54

121

3.2

Silver–copper coin ratios, selected locations, 1808–1860

123

4.1

Decrease or stoppage of copper coinage in the provincial mints, 1822–47

175

6.1

Scholars of the two statecraft schools

205

8.1

Land and commerical tax revenues, selected years, 1776–1911

280

Contrasts between the intellectual groups

303

C.1

Maps 1.1

Silver routes in the sixteenth century

60

2.1

Trade routes for imported opium, 1840

91

Figures E1

Silver ingots of 50 liang

xxvii

E2

Spanish and Mexican silver dollars

xxvii

E3

Japanese silver

xxviii

E4

Copper coins of the Jiaqing-Daoguang reigns

xxviii

I.1

Silver–copper coin ratios in the Qing dynasty

3

1.1

Bamboo currency used in south China

36

1.2

Paper note convertible to silver

37

1.3

Paper note convertible to copper coins

38

1.4

Silver ingot used to make a contribution

42

Tables, Maps, and Figures

xvii

1.5

Silver ingot used for taxation

42

1.6

Silver ingot for the Canton Customs

42

1.7

Silver ingot kept in the prefect’s office

42

1.8

Silver ingot kept in the magistrate’s office

42

1.9

“Barbarian coin,” 1675

45

1.10 “Buddha head” coin, 1786 1.11

“Barbarian coin,” 1676

45 45

1.12 “Buddha head” coin, 1804

45

1.13 Silver ingot cast near to Mongolia

49

1.14 Daoguang ingot, 1839

50

1.15 Silver ingot of 3–5 liang (obverse)

51

1.16 Silver ingot of 3–5 liang (reverse)

51

1.17 Silver ingots smaller than 3–5 liang

51

1.18 Ingots shaped like slender silk

52

1.19 Pul coin of Xinjiang

53

1.20 Pul coin of Xinjiang

53

1.21 Silver coin of Tibet

54

1.22 Silver coin of Tibet

54

1.23 Bank shops of Jiangsu

55

1.24 Bank shop in Shanghai

56

2.1

Opium imported into China, 1800–1911

88

2.2

Quantity of tea exported from China, 1825–86

97

2.3

Quantity of silk exported from China, 1825–86

97

2.4

Value of tea exported from China, 1825–86

101

2.5

Value of silk exported from China, 1825–86

101

xviii

Tables, Maps, and Figures

2.6

Value of opium imports, 1825–86

2.7

Annual world silver production, 1493–1900

111

4.1

Wang Liu’s lament for the lack of monetary sovereignty

150

4.2

Cover of Xu Mei’s Discussion on Paper Notes

161

4.3

The Xianfeng emperor and the depleted coffers

177

6.1

Discussions on human nature for statecraft scholars

204

7.1

Lin Zexu

230

7.2

Feng Guifen

231

7.3

Bao Shichen

231

7.4

Liang Zhangju

232

7.5

Wei Yuan

233

7.6

Yinghe

235

7.7

Chen Shan

240

7.8

Li Zhaoluo

240

7.9

Academic genealogy of scholars

242

102

7.10 Yao Nai

244

7.11 Xu Lian

254

7.12 Ruan Yuan

254

7.13 Chen Yongguang

256

8.1

Silver coins cast by the Qing government from 1890 to 1911

269

8.2

Ancient-style prose in early nineteenth century

271

8.3

Silver–copper coin ratios in the Qing dynasty, 1814–56

274

8.4

Quantity of opium imports into China, 1814–56

275

8.5

Total silver outflows from China, 1814–56

275

8.6

Temporal distributions of monetary proposals, 1814–54

276

Z Abbreviations and Dynasties

The abbreviations used in the notes are listed below. For complete citations of the works cited in this list, see the Bibliography, pp. 315–45. BPP

British Parliamentary Papers

CBYWSM

Chouban yiwu shimo (The complete account of the management of barbarian affairs)

CBZD

Changbian zongdang (Chronologically arranged records of archives)

DG

Daoguang 㕿‫( ؗ‬1821–50)

DHL

Shierchao Donghualu (Donghua records for the twelve reigns)

DXTGZY

Dao-Xian-Tong-Guang sichao zouyi (Official reports of the Daoguang, Xianfeng, Tongzhi, and Guangxu reigns)

GZD

Gongzhong dang (The Palace archives)

GX

Guangxu ‫( ⛝ؗ‬1875–1908)

HCDXTGZY

Huangchao Dao-Xian-Tong-Guang zouyi (Collected memorials of the reigns of the Daoguang, Xianfeng, Tongzhi, and Guangxu reigns)

HCJSWB

Huangchao jingshi wenbian (Collected writings on statecraft of the reigning dynasty)

HCJSWXB

Huangchao jingshi wen xubian (A sequel to the collected writings on statecraft of the reigning dynasty)

xx

Abbreviations and Measures

HCZDLZ

Huangchao zhengdian leizuan (Categorized statutes of the reigning dynasty)

JDZGSLCK

Jindai Zhongguo shiliao congkan (Series on modern China’s historical materials)

JDZGSLCKXB Jindai Zhongguo shiliao congkan xubian (Sequel series on modern China’s historical materials) JJD

Junji dang (The record book of the Grand Council)

JQ

Jiaqing ঒ᇗ (1796–1820)

KX

Kangxi ࿀ḉ (1662–1722)

QCWXTK

Qingchao wenxian tongkao (Collected documents of the Qing dynasty)

QDQHS

Qinding Da Qing huidian shili (Examples of the statutes of the great Qing dynasty)

QDZJCK

Qindai zhuanji congkan (Collected biographies of the Qing dynasty)

QFD

Qianfa dang (The monetary archives)

QL

Qianlong Ϲ㩁 (1736–95)

QSG

Qingshi gao (Draft of the history of the Qing dynasty)

SGD

Shiguan dang (Archives for the office of the Qing history)

SL

Da Qing lichao shilu (The veritable records of various Qing reigns)

SYD

Shangyu dang (fangben) (Archives of imperial edicts)

TZ

Tongzhi ࠂᩆ (1862–74)

WJD

Waiji dang (Archives of reports by Inner Court officials turned over to the Outer Court)

XF

Xianfeng ࢐㉛ (1851–61)

YZ

Yongzheng 㩸ᤵ (1723–35)

YFD

Yifu dang (Copies of official reports sent to the Six Boards for comment)

ZB

Zhuanbao (Packages of biographies)

ZG

Zhuangao (Biography drafts)

Abbreviations and Dynasties ZJHSZL

xxi

Zhongguo jindai huobishi ziliao (Materials on the history of currency in modern China), vol. 1

Dynasties Shang Zhou (The Western Zhou (Lu kingdom (Spring and Autumn Era (The Warring States Era Qin Han (The Former Han (The Latter Han Xin (Wang Mang) Wei Jin Northern Wei Liu Song Qi Liang Sui Tang Liao Song (Northern Song (Southern Song Jurchen Jin Yuan Ming Qing

1523?–1027? bce 1134–256 bce 1027–771 bce) 722–481 bce) 770–403 bce) 403–221 bce) 248–206 bce 206 bce–220 ce 206 bce–25 ce) 25–220 ce) 9–23 220–65 266–420 386–527 421–81 479–501 503–549 581–618 618–907 907–1125 960–1279 960–1126) 1127–1279) 1115–1234 1279–1367 1368–1644 1644–1911

Z Explanatory Notes

1. Silver and copper coins were the main currencies of eighteenth- and nineteenth-century China. Silver was used in Qing China in the form of silver ingots (yinliang 㜯‫ )خ‬and silver dollars (yinyuan 㜯ؑ). Both silver ingots and silver dollars were measured in units called liang, qian (0.1 of 1 liang), and fen (0.1 of 1 qian). The casting of silver ingots began in the Yuan dynasty; around 1838, as Lin Zexu ᙽ‫ۉ‬ၞ (1785–1850), governor and high commissioner pointed out, a medium-income family needed 0.1 liang for daily expenses.1 Silver ingots used by the Board of Revenue or the financial commissioner in each province—i.e., the treasury liang (kupingyin ྵ྇㜯)—weighed about 37.3 grams. A comparison made in the Republican period of silver ingots used in various places of China revealed that the weight of 1 liang varied between 33.99 and 37.50 grams, and that the quality varied between 0.979 and 0.9872 (Fig. E1). It was noted in 1863 that in China the variation in the weight or quality of silver ingots was less than that found in measures of capacity.3 The silver dollars mentioned in this book include Spanish dollars and Mexican dollars (Fig. E2) before and after Mexico’s independence from Spanish rule. Because both were around 27 grams in weight and 90 percent silver in content,4 they are called “silver dollars” to facilitate intertemporal ————— 1. Tan Bi’an, “Zhongguo jindai huobi de biandong,” p. 190; Lin Zexu, Lin Wenzhonggong zhengshu, yiji, 5.11b. 2. Wei Jianyou, Zhongguo jindai huobishi, p. 36. The places include Beijing, Tianjin, Zhangjiakou, Hankow, Zhifu, Niuzhuang, Mukden, Chichihar, and Jilin. 3. Williams, The Chinese Commercial Guide, p. 275. 4 . Zhang Huixin, Zhongguo huobi shihua, p. 29. Also, as determined by Numismatist Zhang, Japanese silver dollars and silver dollars cast by Yuan Shikai used in early

xxiv

Explanatory Notes

quantitative comparisons. Throughout this book, the dollar sign ($) denotes silver dollars. One liang of silver was about 1.43 silver dollars. 5 One custom liang (Haikwan tael ᫡㦸‫)خ‬, a unit of account, is calculated as 1.114 treasury liang. It was equivalent to 1.45 silver dollars from around 1860 to 1887, and about 1.52 silver dollars between 1887 and 1895.6 The Mexican silver dollar, as a stateless currency, was an important currency in British North America and the United States until the early nineteenth century.7 The U.S. silver dollars used in calculating the balance of payments between China and the United States in this book are considered the same as the Spanish or the Mexican dollars. For calculation of the China-Britain balance of payments, the British pound is calculated as equal to 4 silver dollars, based on the early nineteenthcentury conventional rate.8 For calculating Japanese silver exported to China, 1 kan ㊟ of Japanese silver weight is approximately equal to 3.75 kilograms (Fig. E3);9 1 kilogram is calculated as 25.098 liang.10 The copper coin (zhiqian ‫ڻ‬㞨) was a round coin with a square hole in the middle and had a face value of 1 wen (Fig. E4). One thousand wen were often tied together on one string and called 1 chuan or 1 guan. According to early Qing regulations, 12,880 strings were further tied as 1 mao. Mao originally denoted the total time period for casting copper coins within ————— twentieth-century China have similar weight and content as the Spanish or Mexican silver dollars. This shows the rough unity of weight and content of various silver dollars. 5. Yu Jieqiong, Zhongguo yinhuo shuchuru, p. 25, calculates 1 liang as 1.45 silver dollars. 6. See Man-houng Lin, Cha tang zhangnao, p. 41, for the exchange rate between the customs liang and the silver dollars and other international currencies of this period based on the Chinese Maritime Customs publications. 7. Pers. comm. from Mark Metzler, March 7, 2004. 8. The page after the table of contents in Morse, Chronicles of the East India Company, provides the conventional equivalents for the currencies. The Spanish dollar was indexed from 1619 to 1814 at 5 shillings per dollar. Since a pound contains 20 shillings, 1 pound is equivalent to 4 dollars. From 1815, salaries and other fixed charges at Canton were paid at the rate of £100 = $416.67. Bills on the East India Company in London were issued at rates ranging from 4s.10d. to 6s. per dollar, for bills payable in 365 days. Since 1 shilling contains 12 pence, 4s.10d. is 0.24 pounds; 6 shillings is 0.3 pounds. That is to say, a one-dollar bill (payable after a year) is equivalent to 0.24–0.3 pounds. Or, the other way around, a one-pound bill is equivalent to 3.33–4.17 dollars. Hence I am taking £1 = $4 for purposes of calculation. 9. Nihonshi yŇgo daijiten henshş iinkai, Nihonshi yŇgo daijiten, 1: 176. 10. Quan, “Ming zhongye hou Zhong-Ri jian de siyin maoyi,” p. 644.

Explanatory Notes

xxv

one year.11 Using traditional Chinese methods for minting, copper had to be mixed with zinc (baiqian ↦㜗), lead (heiqian 䀕㜗), or tin to form an alloy to cast copper coin. Copper constituted 50–80 percent of the alloy, following various regulations of the Qing emperors.12 As tin made up little of these mixtures, the Chinese terms tongqian 㜲㞨 is translated as copper coin rather than bronze coin. 2. The official reports to the emperor provide first-hand information about the monetary issues this study describes. The communication system between officials and the emperor in Qing China was comparable to the British parliamentary paper system in routine and detail. Archives of these communiqués are located in both Taipei and Beijing. These official reports came mostly from provincial officials; many also came from censors and court officials of every sort. The official reports kept in Taipei’s National Palace Museum archives used in this study include QFD, GZD, SYD, JJD, WJD, YFD, and CBZD. 13 The JJD kept in Beijing and used in this study were originally kept in the Ming-Qing Archival Institute and published as ZJHSZL.14 Published Qing official records were also investigated. They include SL, CBYWSM, and others. 3. In addition to the collected works of individual scholar-officials, which were mostly categorized in Zhang Shunhui’s An Annotated Catalogue of the Collected Works of the Qing Literati (Qingren wenji bielu) or collected in the Chengwen Press’s JDZGSLCK and JDZGSLCKXB, HCJSWB (compiled by He Changling), HCJSWXB (compiled by Sheng ————— 11. ZJHSZL, p. 74. 12. Yang Duanliu, Qingdai huobi jinrong shigao, pp. 16–17. Zhang Jiaxiang, Zhonghua bizhishi, p. 94, explains: “At the very beginning of the Qing dynasty, there were no precise regulations for the content of the copper coin. Regulations began in 1684, stating that the copper coin had to contain 60 percent copper and 40 percent zinc or lead. In 1727, this changed to 50 percent for both copper and zinc or lead. In the Qianlong period, the copper coin was supposed to contain 50 percent copper, 41.5 percent zinc, 6.5 percent lead, and 2 percent tin. In the Jiaqing period, this was changed to 52 percent copper, 41.5 percent zinc, and 6.5 percent lead.” 13. For the nature of various kinds of official reports, see Bartlett, “Qing Palace Memorials”; and Zhuang Jifa, Gugong dang’an shuyao. 14. The editor’s note for ZJHSZL states that, other than the routine remarks at the beginning or end of each official report, all the official reports had been kept intact in this collection.

xxvi

Explanatory Notes

Kang), and DXTGZY (compiled by Wang Yunwu) all contain Qing scholar-officials’ early nineteenth-century political and economic discussions. Many sources were used in tracing the backgrounds of approximately fifty scholar-officials of this time. They include ZG and ZB, biographical archives for the compilation of the state history of the Qing reign collected in Taipei’s National Palace Museum, and all related biographies of scholar-officials available in QDZJCK. 4. Maritime Customs publications were crucial for this study, as well as for my background study relating the world economy and China. Because a branch of the Taiping army took Shanghai in 1853, the administration of Chinese Customs at Shanghai was entrusted to the British, American, and French consuls at the treaty ports. Because the consulates were considered to be more efficient, and international pressure was exerted to enhance the convenience of the internationals’ trade with China, Chinese Customs as a whole were handed to the internationals for supervision after 1858. From then on, Maritime Customs publications in English were published every year and every decade for each treaty port and for China as a whole, or for particular subjects related to China’s external trade.15 5. This book uses the Hanyu pinyin system for romanizing Chinese. Names are given in the Chinese style of family name followed by personal name. In the case of citations to authors who have published in English, their preferred romanizations of their names are followed— thus, for example, the work of Zheng Youkuei (in Hanyu pinyin romanization) will be consistently listed under Yu-kwei Cheng. The order of surname and given name for their English work will follow the Western order. The pinyin system is also used for place-names, except for several familiar ones for which the standard international postal spellings have been retained. 6. The term “imperial state” is generally shortened to “state.”

————— 15. For descriptions of these publications, see Liang-lin Hsiao, China’s Foreign Trade Statistics, pp. 3–7; and Yu-kwei Cheng, “Woguo haiguan maoyi tongji.”

Fig. E1 Silver ingots of 50 liang. The 50 liang silver ingots, yuanbao ؑ඾, were recast mostly by merchants from imported silver dollars or smaller ingots following the weight regulations of the Qing government (sources: unless otherwise indicated, all images of silver ingots, silver coins, paper notes, and pul coins were supplied by Mr. Zhang Huixin).

Fig. E2 Spanish and Mexican silver dollars. Silver coins cast in Mexico under Spanish rule before 1823 were often called benyang ᘪ᪊ or fotou ҝ㭵 (Buddha heads) in Chinese. Because the British government banned the use of British coins to purchase Chinese products, these Spanish coins were used instead. Silver coins that the Mexican government cast after 1823 were often called yingyang 㽼᪊ in Chinese because at the bottom of these coins was cast an eagle standing on cactus biting a snake, the national logo of the Republic of Mexico. On the top was a glittering soft hat with “liberty” woven on it (source: Zhang Huixin, Zhongguo huobi shihua, p. 29).

Fig. E3 Japanese silver. This Japanese silver dollar taken from the Ikuno silver mine ₟㚴㜯บ museum in a mountainous area near Kobe is a particular refined silver made in the Tokugawa period by using the ash-blowing method. The ash-blowing technology, sometimes translated as cupellation method (haifuki ho ᵁࠬᩝ) first added lead to silver ore and blew hot air into the mixture to melt them together. Then the mixture of lead and silver was put on a bed of hardened ashes made from animal bones and pine needles. The mixture oxidized when blown with hot air, and the oxides of lead were absorbed into the ashes while the silver remained on top. This method enabled Japan to refine silver on site and increased production enormously. This lead-using silver mining technology was different from the Latin American method, which used mercury amalgam.

Fig. E4 Copper coins of the Jiaqing-Daoguang reigns. The surface of a copper coin was cast with the characters tongbao 㕗඾ (meaning “currency”) along with the imperial reign name. On the back, the copper coins were marked with Manchu script indicating the mint of origin. Chinese coins had a square hole in the center. They lacked the figures or animals and other decorative motifs used on Western coins. (source: Okudaira Masahiro, TŇa senshi, 13: 48–49).

Fig. E4 Copper coins of the Jiaqing-Daoguang reigns, cont.

Z China Upside Down Currency, Society, and Ideologies, 1808–1856

Z Introduction

Andre Gunder Frank’s ReORIENT and Kenneth Pomeranz’s The Great Divergence have stimulated interest in the role of China’s demand for silver in shaping the Western dominance of the modern world. This book discusses how the interaction of this demand and the early nineteenthcentury Latin American independence movements, as well as other changes in the world economy, has transformed China from the High Qing to its modern fate. A meteorological theory says a butterfly flapping its wings in Beijing can change atmospheric patterns over the Atlantic Ocean.1 The Latin American independence movement and global economic changes, events much greater than anything a butterfly can produce, had similarly distant impacts—they almost caused the collapse of the Qing empire. As we shall see, during the first stage of this dynastic crisis, traditional ideas favoring plural centers of power became more popular than they ever had been. As the crisis developed, however, statist ideas came to the fore. Even though the Qing survived with the resumption of the influx of Latin American silver, its status relative to Japan in the East Asian order faltered. The statist inclination, although at times moderated to some degree in the modern period, is still vigorous in China today. These changes—Qing China’s near-collapse, some development toward its eclipse by Japan in the East Asian order, and shifting notions of the proper relationship between state and market and between state and society—led to what this book describes as “China Upside Down.” ————— 1. Lienhard, “The Butterfly Effect.”

2

Introduction

Currency and China monetarily upside down What turned China upside down were changes in the world economy that resulted in continuing and drastic silver price increases in the early nineteenth century. Between 1808 and 1856, silver appreciated relative to copper coins ( yingui qianjian 㜯㊥㞨㋋) approximately two-and-a-halffold. This trend, hereafter referred to as “the silver–copper coin crisis,” was described in 1837 as “it leaves the sovereign’s sword held by other people” (taie daochi ஷ㨊ԥጇ).2 Contemporaries emphasized that the use of silver had left “the state and people economically controlled by the merchants” (tianxia zhi zhi liquanzhe zai shanggu shijing ஶΰϢ‫ڱڻ‬ ᣵ⢧੖ࣾ㊸༱Ћ; a remark made in 1845).3 And, one observer categorized this crisis in 1846 as “the overturning of the state’s power to control the economy” (liquan daozhi ‫ڱ‬ᣵԥ⠬).4 In most modern countries, the state issues all currency. In late imperial China, the private sector supplied the silver ingots or silver dollars used for tax payments and large-scale or interprovincial transactions, and the state provided copper coins, which for the most part were exchanged in local retail trade. The approximately 250 percent increase in the price of the currency supplied by the market relative to that minted by the state in early nineteenth-century China is what contemporaries felt as “upside down.” Silver from abroad was used in China in the form of both silver ingots and silver dollars, with one silver dollar valued at about 70 percent of one liang of silver ingots.5 Based on available information, Fig. I.1 ————— 2. Bao Shichen, An Wu sizhong, 26: 10b. 3. HCJSWXB, juan 58, huzheng 30, qianbi, shang.51b (Wu Jiabin, “Nishang yinqian bingyong yi ” ). 4. Cheng Yi, Qiuzaiwozhai wenchun, 2.19b. 5. Qing scholar-officials mentioned speculation in the exchange of silver ingots for foreign silver dollars of lower quality. Actually, the fineness of foreign silver dollars was not as low as some Qing scholars claimed, and the price that its lower weight usually commanded did not inflate its value (Man-houng Lin, “Zhongguo de baiyin wailiu,” pp. 37–41.)

Introduction

3

Fig. I.1 Silver–copper coin ratios in the Qing dynasty (wen/liang) (sources: for 1644–1722, see Yang Duanliu, Qingdai huobi jinrong shigao, pp. 182–83; for 1723–1806, see Chao-nan Chen, Yongzheng Qianlong nianjian de yinqian bijia biandong, p. 12; for 1807–50, see Yan Zhongping, Zhongguo jindai jing jishi tongji ziliao xuanji, p. 37; for 1853–1911, see Luo Shouxiang, Jianwei xianzhi, jing ji, hou: 28a–b). Note: For more qualitative observations on the national trend in the exchange rate between silver and copper coins in the early nineteenth century, see Man-houng Lin, “Jia-Dao qianjian xianxiang chansheng yuanyin,” pp. 361–62, which finds trends similar to those shown here. See Chapter 3 for a more detailed discussion of the regional distribution of this crisis.

shows the price trend for silver ingots relative to copper coins (wen) during the Qing. The official exchange rate was 700 wen per liang of silver in 1645, when the Qing dynasty began to mint copper coins. But the official rate soon changed to 1,000 in 1647.6 The market price was 100–200 wen below the official rate for most of the early Qing period (1647–1764). In the late Qianlong and early Jiaqing periods (from 1765 to 1797), it increased to around the official rate, but between 1798 and 1807, it dropped again to the rate prevailing in 1647–1764. Yet, from 1808 onward, it ————— 6. QDQHS, 220: 10.

4

Introduction

moved above the official rate. It took about thirty years (1808–38) to increase 600 wen from 1,040 to 1,637 and about another decade (1839–49) to increase another 600 wen to 2,355. The rate gradually decreased from 2,230 in 1850 to 2,100 in 1855. Then it dropped drastically, from 1,800 wen in 1856 to 1,200–1,500 wen for the remaining years of the dynasty.7

copper coins from the state and silver from the market Copper coins had a lower value relative to silver of the same weight. At the exchange rate of 1,000 wen of copper coins to 1 liang of silver, the weight of the copper coins was around 120 times that of silver of the same value.8 In comparison with contemporary Western countries and Tokugawa Japan, early nineteenth-century China used more copper coins to meet the needs of the prevailing petty mode of production.9 Over the course of the eighteenth century, China’s population and land under cultivation had doubled. Yet most agricultural and handicraft products continued to be produced and exchanged in small-scale operations.10 ————— 7. The late Qing scholar Wei Yuan provided a good overview of the silver–copper coin ratio in Chinese history; see Shengwu ji, 14: 41. In the Han dynasty, 1 liang of silver was worth 125 wen of copper coin. In the Jurchen Jin dynasty, it could be exchanged for as much as 2,000 wen. In the early Ming dynasty, its value dropped to between 600 and 1,000 wen. In 1643, the exchange rate for 1 liang fluctuated between 1,600 and 2,300 wen. Zheng Yongchang’s recent study Mingmo Qingchu de yingui qianjian xianxiang (pp. 1–115) shows that the silver-copper ratio was between 1,000 and 1,333 from 1618 to 1634, and around 2,000 after 1638; in 1642, the rate was 2,500; in 1644, 3,333; and in 1645, 2,857 wen. 8. Copper coins cast by the official mints in 1830 weighed 0.12 liang for each wen (ZJHSZL, p. 89), so that every thousand wen weighed 120 liang, which was 120 times of one liang. With the exchange rate between silver and copper coins fluctuating, Fujian governor Zheng Zhuchen said in 1846 that silver was lighter and more convenient for carriage than copper coin by 130–40 times (ZJHSZL, p.159). 9. Detailed in Man-houng Lin, “Equal Wealth with Status Differentiation.” Adam Smith also noted, “The northern nations who established themselves upon the ruins of the Roman empire, seem to have had silver money from the first beginning of their settlements, and not to have known either gold or copper coins for several ages thereafter. . . . Copper is not at present a legal tender, except in the change of the small silver coins” (The Wealth of Nations, book I, chapter 5, p. 39). 10. Myers and Wang, “Economic Development, 1644–1800”; Zelin, “The Structure of the Chinese Economy During the Qing Period.”

Introduction

5

The copper coins used for these small-scale exchanges were cast by the state and circulated to the market through public expenditures, including military wages. The state used 80–90 percent of the silver it received in tax payments to pay officials and some military units as well as to fund its water conservancy efforts on the Yellow River.11 Copper coins had to be used for other public expenditures. The Qing government had two Beijing mints, supervised by the Board of Revenue and the Board of Works, and several provincial mints supervised by the financial commissioner of the province where the mints were located (Fig. E.4). During the Shunzhi, Kangxi, Yongzheng, and Qianlong reigns (1644–1795), the number of provincial mints fluctuated from two to twenty-three. 12 During the Jiaqing and Daoguang reigns, eighteen provincial mints were located in Shaanxi, Shanxi, Hubei, Jiangxi, Zhejiang, Fujian, Yunnan, Jiangsu, Hunan, Guangdong, Guangxi, Sichuan, Guizhou, Nanjing, and Zhili—that is, in most of the eighteen provinces of China proper—as well as at Ili and Aksu in Xinjiang and Dali in Yunnan.13 From 1644 on, coins cast by the Beijing mint under the supervision of the Board of Revenue, which were called baoquanju ඾ᩓ෱, were mixed with silver to pay soldiers, and coins cast by the Beijing mint under the supervision of the Board of Works, called baoyuanju ඾ᯀ෱, were used for all public works around Beijing.14 Coins produced by the provincial mints funded soldiers’ and subordinate officials’ salaries, public works, transportation fees, and officials’ allowances at the provincial level.15 ————— 11. Miao Zi, Miao Wuliegong yiji, 15b–16a. About 3 to 5 million liang was spent on Yellow River conservation (ibid., 1.20b; ZJHSZL, p. 174), and about 30 million liang was spent on official salaries and military pay. Military pay for 1847 and 1848 was 16.82 million liang per year; another 1.2 million liang was added in years with an intercalary month (Wang Qingyun, Shiqu yuji, 2.39a). 12. Information provided by Mr. Zheng Yongchang. 13. Wei Jianyou, Zhongguo jindai huobishi, p. 50. 14. SGD, shihuozhi, qianfa, jing juguzhu 1, pp. 3–4. 15. Wang Qingyun, Siqu yuji, 5.10a: “From 1655 copper coins issued by the Qing state were circulated to the market by paying them as soldiers’ salaries.” Xu Peishen pointed out: “The capital established the two mints of the Board of Revenue and the Board of Works. The provinces also set up mints to cast copper coin. Their mintage was meant to pay a portion of the soldiers’ salaries” (ZJHSZL, p. 95; SYD, DG 10.10.27). For other

6

Introduction

However, even though the currency provided by the state was copper coin, from 1661 on, the Qing dynasty mandated the use of silver to supplement the bulky copper coins for long-distance and large-scale transactions.16 Some of this silver came from publicly or privately run mines in Yunnan and neighboring regions, but most of it was obtained from exporting Chinese goods such as tea, silk, and other products. Other than paying taxes in silver, merchants selling these products needed to purchase goods on the domestic market with copper coins, which they obtained by exchanging silver at bank shops (qianzhuang 㞨 ⭪).17 The bank shops were hence places that stocked silver.

silver as currency Immanuel Wallerstein believes that the silver entering early modern Western Europe was used as money, whereas in Asia aristocrats used silver for ornaments and other forms of hoarding.18 This generalization may apply better to Indiathan to China. In China silver was certainly hoarded, but it was also used as a currency. Scholars tend to cite the Single Whip taxation policy, which consolidated taxes previously collected in labor or in kind into taxes in silver during the second half of the sixteenth century as a major factor in late imperial China’s widespread use of silver.19 Actually, even after this important policy change, copper coins still exceeded silver as a medium of intraprovincial large-scale commercial exchange for some time. By the late eighteenth century, however, silver prevailed in almost all provinces for large-scale exchanges. Scholars have used the concepts of “command economy,” “market economy,” and “customary economy” to characterize eighteenthcentury China’s economy.20 Aside from the customary economy (which ————— aspects of copper coin usage, see HCJSWXB, 58 huzheng, qianbi shang.48b–50a (Wu Jiabin, “Nishang yinqian bingyong yi”). 16. QCWXTK, juan 13, 1: kao 4967. 17. Tan Bi’an, “Zhongguo jindai huobi de biandong,” p. 204. 18. Prakash, “Silver Influx and Prices,” p. 5, cites Wallerstein’s remark. 19. Liang Fang-chung, The Single-Whip Method of Taxation in China. Tribute grain from the lower Yangtze area to Beijing was still levied in kind even after this policy had been adopted. 20. Myers and Wang, “Economic Development, 1644–1800.”

Introduction

7

does not use money, as is the case with unpaid housewives’ work even today), the monetary system of early nineteenth-century China should be considered more a market than a command economy. The fact that silver had become the monetary basis for fiscal transactions and large-scale exchanges can be seen in the 1837 summary of Bao Shichen ݆κ⨓ (1775–1855), a provincial degree holder, a private secretary for a provincial official, and a local magistrate: “All the land taxes, miscellaneous taxes, salaries, and contributions ( juanshu ፅ㒟) are paid in silver. Eighty to ninety percent of contracts among the general populace are calculated in silver. If copper coin is used, it is converted from silver according to the market rate.”21 This had not been the case in China in the early and mid-eighteenth century, when copper coins were used for large-scale local transactions. 22 Furthermore, in the United States during the period 1820–39, specie constituted only 13.25 percent of the money supply; 23 and by 1936, the share of silver and copper coins in China’s money supply had dropped to about 16 percent from around 65 percent in 1910.24 Even though silver was much used as money in early nineteenthcentury China, supply-side economists would say that money is only a veil and that production is the key economic determinant. This “money is a veil” metaphor derives from the managed monetary system employed by modern societies. A managed system measures how many goods and services are likely to circulate in the society and issues an amount of money sufficient to facilitate their exchange. In the 1930s, for example, when China had a managed monetary system, silver outflow due to the American Silver Purchasing Act was offset by modern banks’ issuance of more money to sustain economic growth.25 In the early nineteenth century, however, China did not yet have such a system. In early nineteenth-century China, private banks issued convertible paper notes. One grand secretary remarked in 1851 that silver paper notes (yinpiao 㜯⏄) and copper-coin paper notes (qianpiao 㞨⏄) were ————— 21. Bao Shichen, An Wu sizhong, 26: 11a. 22. ZJHSZL, pp. 8–9. 23. Calculated from Temin, The Jacksonian Economy, p. 71. 24. Thomas Rawski, Economic Growth in Prewar China, pp. 156–58. 25. Ibid., pp. 168–79.

8

Introduction

generally supposed to be convertible in bank shops affiliated with the bank shops that originally issued them (see Figs. 1.2–3) 26 These notes differed from the unsecured loans that commercial banks provided to stimulate the economy in the 1930s. The early nineteenth-century notes were backed by either silver or copper coins; since not all the notes would be cashed at once, they could ease the scarcity of money during this period to an extent. When in 1838 the governor-general of Sichuan raised the issue of abolishing paper notes denominated in copper coins, the governors of Hubei, Hunan, and Shanxi opposed the idea since paper notes supplemented the money supply in their jurisdictions. Without these notes, the money supply would have become even tighter than it was.27 This observation implies that the paper notes issued by private banks were insufficient to ease the money scarcity problem in the early nineteenth century. Since both paper notes and silver in early nineteenth-century China were supplied by merchants rather than by the state, and especially since most silver came from abroad, the situation differed from that under a modern central banking system, in which a state controls the money supply within its national boundaries.

the relation between silver and copper coins In one respect, the relation between silver and copper coins was like that between quarters and the hundred-dollar bill in the American currency system. An exchange worth US$100 would involve too much inconvenience if transacted in quarters. Hence, quarters and hundreddollar bills circulate side by side, as did copper coins and silver in Qing China, for both small- and large-scale exchanges. The difference is that the American government has fixed the exchange rate between quarters and hundred-dollar bills. In early nineteenth-century China, the market determined the exchange rate between silver and copper coins, and the rate fluctuated.

————— 26. GZD, XF.1.11.13; ZJHSZL, pp. 138–39. 27. ZJHSZL, pp. 128–29, 135–36.

Introduction

9

The influence of the market on the exchange rate was particularly strong in the early nineteenth century. From 1690 to 1738, some official control over exchange rate fluctuations had been exercised. Official brokers were established in 1722 to stabilize the silver–copper coin exchange, but this system was abolished in 1738.28 As Ding Lüheng Ϊฐჲ (1770–1832), a magistrate in Shandong during the Daoguang reign, observed around 1818, “It is merchants [who own silver] who set the market exchange rate for silver and copper coins.”29 The exchange rate between silver and copper coins was set in much the same fashion as those of various international currencies today, which are supposed to be determined by the supply and demand of the respective currencies. If British firms wish to invest in the United States, they need U.S. dollars to buy factories and pay workers, and this demand will cause an appreciation in U.S. dollars relative to the pound. If the British government does not want the pound to decline in value, then the Bank of England can sell U.S. dollars from its foreign reserves. Similarly, when the price of silver rose in early nineteenth-century China, the Qing government could, theoretically, have supplied more silver to the market. In reality, however, the amount of silver in the Qing government’s coffers was decreasing. In 1838, Huang Juezi 䀋ṱ⬟ (1793–1853), vice minister of the Board of Punishment, bemoaned the fact that even though the Daoguang emperor (r. 1821– 50) was much more frugal than his father and grandfather, his coffers were being depleted.30 The government treasury had 78 million

————— 28. HCJSWXB, juan 58 huzheng 30, qianbi, shang.46b (Wu Jiabin, “Nishang yinqian bingyong yi”). 29. HCJSWXB, juan 58, huzheng 30, qianbi, shang.17a (Ding Lüheng, “Qianbi yi”). Although this essay is undated, the contents suggest that it was written when silver prices were a problem, although not yet a serious problem. The exchange rate for silver and copper coin observed by Ding was 1,250 wen for 1 liang (his text said 8 qian of silver was exchanged for 1,000 wen). This was the exchange rate in 1818 (see Fig. I.1). Ding’s chronological biography by Wu Yu dates this essay on monetary issues prior to his winning of the gongsheng degree in the Jiaqing period (Miao Quansun, Xu beizhuan ji, 76.20a). Therefore, I infer that Ding’s essay was written around 1818. 30. CBYWSM, 2.4b.

10

Introduction

silver liang ($111.54 million) at the end of the Qianlong reign (1736–95);31 this had shrunk to 8 million silver liang ($11.44 million) by the end of the Daoguang reign.32 Earlier the Qing government had tended to reduce the copper coin supply so as to lower the price of silver relative to copper coins when the price of silver was high. During the silver–copper coin crisis, the government followed the same policy. 33 But, this decrease in the amount of copper coinage in circulation was caused by two principal factors. First, the money used to pay for copper coinage was silver, which was now more highly valued. Second, it cost more silver to mint copper coins than the silver for which those cast coins could be exchanged in the marketplace. By 1846, the cost of casting copper coins had increased to three to four times the profit that could be earned from doing so.34 Even with the supply of copper coins reduced, however, the price of silver in terms of copper coins kept escalating. The silver appreciation hurt even very low-income people. Silver and copper coins were used for different levels of transactions. This meant that individuals held different currencies or different combinations of these two currencies. If the copper coin earners—such as peasants who remained in their local areas most of the time—had used copper coins exclusively, their real incomes would not have been affected by variations in the exchange rate. The problem was that they had to use silver on many occasions. In addition to paying taxes in terms of silver, these holders of copper coins sometimes had to buy household necessities (salt, clothes, cooking implements, ritual paper, coffins, and the like) produced in distant markets. These commodities could be bought with copper coins in the local market, but their real prices were affected by the silver-copper coin conversion ratio, because merchants generally purchased these products from distant places with silver.35 A merchant from Chongqing who wanted to buy silk cloth from Shanghai had to ————— 31. Momose, “ShinchŇ no iminzoku,” p. 50. 32. Jones and Kuhn, “Dynastic Decline,” p. 146. 33. Man-houng Lin (“Jia-Dao qianjian xianxiang chansheng yuanyin,” p. 395) estimates about a 15.3 percent decrease from 1824 to 1850 in the casting of copper coins. 34. YFD, DG 26.10.14. 35. Man-houng Lin, “Duiwai huilü,” p. 156; idem, “Kouan maoyi,” p. 896.

Introduction

11

exchange copper coins for silver at the bank shops in Chongqing to cover the long-distance transaction between Chongqing and Shanghai. When a peasant near Chongqing needed silk cloth for his daughter’s wedding, he purchased it at a nearby market with copper coins. However, the price of silk cloth depended on the price of silver. During the silver–copper coin crisis, peasants were less able to buy silk cloth since the merchants had to raise the number of copper coins charged for the same length of material. The peasant producer of silk for the Shanghai market did not profit from the increase in silk prices in Chongqing since the increase was used to cover the additional transaction costs between Chongqing and Shanghai, which were paid in the appreciating silver. But when the price of silk denominated in copper coins was raised in Chongqing, peasants in Sichuan purchased less of it and the market for the silk produced by peasants near Shanghai shrunk. The pegging of taxes to silver was the most critical factor affecting the budgets of ordinary people. The tax could be paid either in silver or in copper coins calculated with the market exchange rate.36 Given the high transportation costs of copper coins, local officials converted taxes paid in copper coins into silver at the bank shops and forwarded taxes in silver to the provincial financial commissioner, who passed the payments on to the Board of Revenue in silver as well. Whether the peasant obtained silver himself or relied on the local magistrate to exchange copper coins, he was subject to the market silver price.

————— 36. Although, according to the statute of 1744, people were supposed to wrap up the appropriate amount of silver for their taxes and place it by themselves into tax boxes (zifeng tougui ⨙ළኯᣋ), in actual practice there were some variations. Because the silver paid by commoners inevitably varied in fineness and weight, and because most commoners earned their incomes in copper coin, it was beneficial to both officials and commoners to pay taxes in copper coins, which local officials would then change into silver and forward to the higher-level government office. See Chao-nan Chen, Yongzheng Qianlong nianjian de yinqian bijia biandong, p. 68. Ding Lüheng said, “The regulation of the state ( guojia) requires the people to pay the land tax according to the quota and wrap silver to put into the tax box” (HCJSWXB, juan 58, huzheng, qianbi, shang.17a [Ding Lüheng, “Qianbi yi”]).

12

Introduction

silver appreciation and dynastic decline In the early Qing dynasty, when the market rates between silver and copper coins were below the official rate and the tax was levied at the official rate, local officials had one or two hundred wen of surplus for each liang of tax to use for local administrative expenses. Between 1808 and 1856, when the market rate was much higher than the official rate, since officials still had to exchange copper coins for silver at the market rate before forwarding it to superior levels of government, they could not help but levy taxes at the market rate. When the people could not afford such an increase, the state had less revenue for its local administrative expenses. Because of silver’s appreciation relative to copper coins, the government not only had lower revenues but also had to spend more money for the same amount of purchases. This was due to the fact that for the most part public expenditures, like that for the copper coinage, were paid in silver. Although the government used the copper coins cast by its own mints to pay some of its bills, some coins had to be exchanged in the bank shops at the appreciating silver price relative to copper coins for expenditures calculated in silver.37 This is why one contemporary said, around 1818, “The state’s revenues and expenditures fluctuated with the silver-copper exchange ratio that the bank shop merchants gave.”38 The state was further impaired by the increasing disparity between the market and the official value of silver. In the early nineteenth century, the exchange rate used for paying taxes or public expenditures was the increased market rate, although soldiers’ salaries were still converted from silver in the payroll into copper coins at the official rate.39 As the price of silver relative to copper increased, soldiers’ real income shrank. ————— 37. Bao Shichen (An Wu sizhong, 26: 15a–17a) pointed out that the government’s purchase of silver with copper coins and the selling of silver by the recipient allowed the bank shops to double their profits. 38. HCJSWXB, juan 58, huzheng 30, qianbi, shang.17a (Ding Lüheng, “Qianbi yi ” ). 39. GZD, DG 22.2.25 (Governor-General Yutai and Governor of Hubei Zao Bingyan): the Huguang governor-general’s official report of 1842 stated: “Soldiers’ pay for each battalion of Bannermen and the Green Standard are issued at 1,000 wen for each liang.”

Introduction

13

Besides the greater fiscal deficit, hardship for soldiers was a primary impact of the market on the state. Paying taxes at the appreciated market rate of silver further increased peoples’ grievances with officials. As Zeng Guofan (1811–72), the famous general who helped pacify the Taiping Rebellion, remarked in 1852, “Since the rise in silver prices in Jiangxi and Huguang [Hunan and Hubei], . . . people have had greater difficulties paying taxes, and officials have become crueler in pressing for payment. Sometimes, when someone cannot pay the tax, the rich members of his family are locked up and forced to pay it instead. Even relatives and neighbors are jailed or sent to court.”40 At the same time, as one description from late 1840 notes: “Since the beginning of human history, there has never been a people as arrogant and unwillingly to comply with imperial orders as that of today. . . . This is a time in which servants pay no heed to their masters and grandsons beat their grandfathers.”41 People’s grievances with officials and the sheer uncertainty of the silver-copper exchange rate ignited social unrest. As remarked in 1850, “Commoners are so ignorant of what is happening, they cannot help but despair when they observe the exchange rate of silver relative to copper coins increasing every year. The disturbances that occurred in Fenghua ௌ‫ ݓ‬in Zhejiang and in other places can largely be attributed to this problem.”42 Other than the bloody unrest, psychological unrest prevailed among people and officials. People felt that the silver–copper coin crisis had “caused life to become more and more unbearable”;43 officials also agonized over the situation. An official report of 1838 commented: “If silver prices were to increase for another few years, how could taxes be paid and forwarded? If there were some mishap, how could it be financially managed? . . . When such ideas occur to me, I always toss and turn and cannot fall asleep.”44 At the same time, contemporary elites felt the change in social values and that money was increasingly becoming an object of worship. One ————— 40. Zeng, Zeng Guofan quanji, pp. 29–30, XF 1.12.18. Zeng was the vice minister of the Board of Punishment under the Xianfeng emperor at this time. 41. Gong, Gong Zizhen quanji, 1: 341. 42. Feng Guifen, Xianzhitang gao, 11.34a. 43. Zeng, Zeng Guofan quanji, pp. 29–30, XF 1.12.18. 44. CBYWSM, 2.4–6.

14

Introduction

observer noted that in Beijing during the 1830s, everyone was eager to make money and anything could be obtained with money.45 The Gazetteer of the God of Money (Qianshen zhi 㞨⎻႕), a book describing the retribution that followed the death of a hunger for money was published in 1825, nearly two centuries after it was written. 46 A more extreme complaint was that the period witnessed the accumulation of the evils of all of China’s amoral periods in the past.47 Even the Vietnamese ruler observed in 1845 that the Qing empire was in imminent danger of falling: There is nothing worthy of attention in the Qing regime’s administration. Yesterday, I read their Beijing Gazette. It is reported that the Qing’s coffers are almost empty after paying so much silver to England. Morality has been fading so much that even official positions and lawsuits can be recklessly purchased with money. Robbery, hailstorms, and natural calamities have been frequent. I am thinking that these phenomena prefigure the fall of this dynasty.48

The outbreak of Taiping Rebellion in 1850, which was caused in part by the silver problem, somewhat confirmed this suspicion.

The Rise and Differentiation of Statecraft Thought The silver crises and the social disturbances in this period led to a resurgence in statecraft thought and an eagerness among scholar-officials to express themselves on public affairs. In comparison with other periods of the Qing, censors were most vocal at this time.49 It has been noted that scholar-officials in the Qianlong and Jiaqing periods (1796– 1820) liked to print anthologies of their poems, whereas those of the ————— 45. Shen Yao, Luofanlou wenji, fan 8.18a; fan 10.4a. Shen Yao (1798–1840) was a scholar who specialized in geography and worked in Beijing for six years in the 1830s to help the high official Xu Song ၞᙪ (1781–1848) compile a geographical treatise. 46. In the Jin dynasty (266–420), Lu Bao 㷒⿓ wrote a book entitled Discourse on the God of Money (Qianshen lun 㞨⎻ㄚ), which harshly criticized growing materialism. By the end of the Ming dynasty, Li Shixiong ᙅκḂ (1602–84) had expanded this book into Gazetteer of the God of Money; see Li Shixiong, Qianshen zhi, prefaces by Huang and Liu. 47. Ibid., fan 8.20b. 48. Dai Nam Thuc Luc, 46: 7 (1845.5). 49. See Tang Jihe, “Qingdai kedao zhi cheng ji,” p. 524.

Introduction

15

Daoguang reign liked to print official writings.50 This substantiates the general view of a rise in the early nineteenth century of statecraft thought, which attempted to influence both society and the state. Statecraft thought, a basic concern of Confucianism, has waxed and waned throughout Chinese history. The Former Han (206 BCE–25 CE) witnessed its vigorous development, the Song dynasty (960–1279) also had its advocates, and it was energetically promoted to confront political and social crises during the Ming-Qing transition of the seventeenth century. The ascendancy of the Evidential Research movement in the eighteenth century, a period of intellectual control in the Qing dynasty, overshadowed statecraft thinking, but early nineteenth-century China brought a resurgence of statecraft thought.51 Scholar-officials’ awareness of the importance of monetary issues were reinforced with the exacerbation of the silver–copper coin crisis. They often referred to the Zhou Institutions section of the Book of Documents, which ranked food and money as the top priorities of the government’s eight administrations.52 In 1815–16 and again in 1823, for example, the scholar Gong Zizhen 䂱⨙ᾶ (1792–1841), a metropolitan degree holder and a secretary of the Board of Rites under the Grand Secretariat, wrote, “In the concerns of rulers, food should rank higher than money.”53 In his writings of 1836 and 1838, he emphasized both food and money.54 At the end of a letter written in 1838 to Commissioner Lin Zexu on dealing with the opium issue at Canton, Gong sug————— 50. Shen Yao, Luofanlou wenji, fan 8.17a. 51. Feng Tianyu, “Dao-Xian jian jingshi shixue”; Chang Hao, “Song Ming yilai Rujia jingshi sixiang shishi.” 52. HCJSWXB, juan 58, huzheng 30, qianbi, shang.16a (Ding Lüheng, “Qianbi yi ” ); Miao Zi, Miao Wuliegong yiji, 1.22a; HCJSWXB, juan 58, huzheng 30, qianbi, shang.51b (Wu Jiabin, “Nishang yinqian bingyong yi”); HCJSWXB, juan 58, huzheng, qianbi, shang.64a (Zhou Tenghu, “Zhu yinqian shuo”). The eight administrations of the Zhou Institutions (Zhouguan bazheng ࡐ൴‫د‬ᓈ) are food (shi 㯵); public finance (huo ㊜); religious worship (si ⎢); public works (sikong ߴ⑿); education (situ ߴၠ); law (sikou ߴ඙); courtesy in dealing with vassals (bin ㊾); and military affairs (shi དྷ); see Qu Wanli, Shangshu jinzhu jinyi, p. 77. 53. Gong, Gong Zizhen quanji, 1: 8, 50. 54. Ibid., 1: 169, 197. “Food and money” is an abbreviated translation for shihuo 㯵㊜; a more complete translation would be “food, goods, and money”; see Ye Shichang, Zhongguo huobi shilun, p. 33.

16

Introduction

gested that Lin place the stabilization of the silver price across the country at the head of the government’s goals.55 Early nineteenth-century statecraft thought has often been seen as monolithic. However, there were disagreements and debates among statecraft scholars over the early nineteenth-century silver–copper coin crisis. According to Hu Jichuang, a Chinese economist who has written the most detailed history of Chinese economic ideas, “Although monetary debates had taken place before in Chinese history, none were comparable in terms of complexity of content with those of the early nineteenth century. The publication of monographs on money in such debates was also historically unprecedented.”56 Much as the Great Depression of the 1930s stimulated the work of major economic theorists in the West, the monetary problems of early nineteenth-century China gave rise to an unprecedented amount of discourse about state-market relationships centering on the silver–copper coin crisis. In addition to these monographs on money, scholar-officials’ views can be found in many collections of statecraft writings ( jingshi wenbian ⚰κᓾ⛫), their own collected works (wenji ᓾ㩱), and their official and often confidential reports to the emperor, which were preserved in the Palace archives. Twentieth-century Chinese economists, such as Hu Jichuang (1962), Ye Shichang (1963), Peng Xinwei (1958), Zhao Jing and Yi Menghong (1980), and Hou Houji and Wu Qijing (1982), have already introduced parts of this debate. In general, they have dismissed these discussions as not contributing much to the concepts of value, profit, and capital in modern economic theory.57 From the historical point of view, however, ————— 55. Gong, Gong Zizhen quanji, 1: 171. 56. Hu Jichuang, Zhongguo jing ji sixiangshi, 3: 607. 57. Hu Jichuang’s overall evaluation of this monetary debate is: “Although many participated in this debate for more than ten years, it is pointless to introduce the details here. On the one hand, some of these opinions were mere nonsense, while most of them echoed earlier ideas; they need not be repeated here. On the other hand, they sometimes had some interesting points, but they dealt with concrete problems without theoretical significance” (Hu Jichuang, Zhongguo jingji sixiangshi jianbian, p. 436). Peng Xinwei, who has written the most complete monetary history of China, dismissed these debates with the words: “They displayed little originality” (Peng Xinwei, Zhongguo huobishi, p. 907). Hou Houji and Wu Qijing, the authors of the most substantive history of modern Chinese economic thought, summarized, “Ultimately, they [scholar-officials of the early nineteenth century] still used traditional concepts to ponder the questions.

Introduction

17

these debates display a vivid competition of ideas in the face of the tremendous challenge to the state posed by market forces. The anxiety over the role of the state in the monetary or economic sphere during the early nineteenth century was even greater than that revealed in the Salt and Iron Discourse of 81 BCE during the Former Han dynasty.58 These debates reveal clear dividing lines among statecraft scholars, but precisely how to categorize them remains a problem. Ye Shichang (1963) divided them into “cartalists,” who advocated the use of tokens, such as paper, issued by the state as money, and “metallists,” who favored the use of precious metals as money; Ye was extremely critical of the cartalists. This category derives from the study of Western economic history, which moved from silver and gold standards to inconvertible paper currency. This category does not apply to the Chinese case since copper coins were so much in use. Neither “metallist” nor “cartalist” fits advocates for copper coins with face value equal to intrinsic value, and copper is not a precious metal. The distinction between cartalism and metallism is also inadequate to characterize a suggestion to use jade and seashells, as well as the idea to cast silver dollars, proposed by Wei Yuan (1794–1857), a metropolitan degree holder, private secretary, magistrate, and prefect.59 Unlike Ye Shichang, who preferred the metallists, I deem that both views have merits. The cartalist view resembles the managed monetary system found in present-day industrial societies, which lets the state decide how much money a society should have. Conversely, the metallist view has much in common with the monetary arrangements preferred by followers of Friedrich Hayek, who worry that the state tends to issue more money than an economy needs, thereby inflating paper money in relation to goods and services and violating people’s property rights. These economists admire historical periods with less inflation and a monetary system based on a precious metal.60 As these simple ————— They did not yet have modern capitalist economic concepts such as value, profit, and capital” (Hou Houji and Wu Qijing, Zhongguo jindai jingji sixiang shi gao, 1: 41). 58. He Lingxu, Xi Han zhengzhi sixiang lunji, pp. 249–359. 59. The terms “cartalist” and “metallist” are also used in von Glahn, Fountain of Fortune, p. 296. 60. Economists of this camp held a conference in 1980 and published their conference papers as Currency Competition and Monetary Union, edited by Pascal Salin. It is from

18

Introduction

comparisons show, both China and the West have had various strands of ideas about state and economy related to monetary issues. Modern western economics is based on the notion of individuals’ rational choice, yet, as Douglass C. North has pointed out, “problems in political economy, economic development, economic history, for example, all require an understanding of the mental models and ideologies that have guided choices.”61 For North, “ideology” means “mental models shared by groups of individuals that provide both an interpretation of the environment and a prescription as to how that environment should be ordered.”62 This book is a group study of the mental models and ideologies behind early nineteenth-century Chinese scholars’ perceptions of relations between the state and the economy. An important contrast also exists between the historical approach applied in this study and that of PRC economists. Hu Jichuang (1962), for example, applies contemporary standards to criticize Wei Yuan’s preference for ancient forms of money invented by the sages, such as jade and shells.63 Yet from a historical point of view, this is an application of Wei Yuan’s New Text philosophy, which tried to use natural things or the wisdom of the sages to limit monarchical power. Hu Jichuang’s use of contemporary economic theory as a standard for Chinese thought is also illustrated by his criticism of Gong Zizhen’s application of the Gongyang ‫ذ‬⡃ interpretation of the classics to political and economic discussions: “His lack of obvious achievement in economic theory was also due to his being used to ‘the great implications of subtle remarks’ (weiyan dayi ၸ や வ ⡛ ) of the Gongyang school. Among all the academic fields of thought that he covered, economic thought was an ‘uneven hunting ground for abstract thinking.’ Riding the stupid cart horse of Gongyang learning, he did not have much success in hunting.”64 But Gong Zizhen’s simultaneous concern ————— this book that their ideas have been drawn; see pp. 8, 14, 31, 42, 43, 47, 51, 53, 70, 77, 127, 279. 61. Denzau and North, “Shared Mental Models,” pp. 29–30. My study of North’s works was much guided by Ramon Myers in 2002. 62. Alston et al., Empirical Studies in Institutional Change, p. 348. 63. Hu Jichuang, Zhongguo jing ji sixiangshi, 3: 679. 64. Ibid., 3: 659. Scholars of the Gongyang school tried to use The Gongyang Commentary written in the Chinese characters used in Han dynasty, the so-called New Text,

Introduction

19

with political-economic issues and New Text philosophical studies based on the Gongyang interpretation of the ancient classics can be compared to Adam Smith’s (1723–90) writings, which included not only An Inquiry into the Nature and Causes of the Wealth of Nations but also The Theory of Moral Sentiments. Earlier scholars were not as professionalized as modern economists. Consequently, the relation between early nineteenth-century Chinese scholars’ various academic interests and their economic ideologies is an important area of investigation for this study. The selection of a particular literary style for writing essays was one of their interests. The publication in 1820 of a manual on writing ancient-style prose compiled in 1779 indicates a concomitant surge of interest in ancient-style prose and statecraft thinking in the Daoguang period. 65 Scholars concerned with the most serious social problem of their time, the silver–copper coin crisis, also had an interest in communicating their ideas to society. The ancient-style prose sought to resurrect the more understandable writing style of the Qin (248–206 BCE) and Han (206 BCE–220 CE) dynasties, rather than the more convoluted and rhetorical writing style used in the Six Dynasties era (220–589). Moreover, like the statecraft scholars’ debate over the silver-copper coin crisis, the ancient-style prose movement split into two distinct branches in the Daoguang period. The Yanghu branch, which was more critical of the authority of the eight masters of the Tang (618–907) and Song dynasties,66 was more popular than the Tongcheng branch, which revered previous masters. New Text scholars such as Wei Yuan and Gong Zizhen who questioned the absolute power of rulers happened to be affiliated with the Yanghu branch. ————— rather than the Chinese characters used in Confucius’s time, to interpret The Spring and Autumn Annals, supposedly written or compiled by Confucius. 65. The manual is Yao Nai’s హ䁆 (1731–1815) Categorized Anthology of Prose in the Ancient Style (Guwen cilei zuan ߢᓾ㓿㮔❡). For its publication date, see Hummel, Eminent Chinese of the Ch’ing Period, p. 900; and Anhui renmin chubanshe, Tongchengpai yanjiu lunwenji, p. 85. 66. The eight masters were Han Yu 㬳ᆅ (768–824) and Liu Zongyuan ᛇ൳ؑ (772–819) of the Tang dynasty, and Su Shi ⵪㑱 (1019–83), Su Xun ⵪᪬ (1009–66), Su Che ⵪㒮 (1039–1112), Zeng Gong ᘉ㬅 (1019–83), Wang Anshi ᾄ൫⊵ (1021–86), and Ouyang Xiu ᤨ㨻ԏ (1007–72) of the Song dynasty.

20

Introduction

“Ideology is inextricably interwoven with moral and ethical judgments about the fairness of the world the individual perceives,” as North has observed.67 In contrast to earlier studies on statecraft thought emphasizing its ideas for governing society, recent analyses have pointed out that the term jingshi ⚰κ, often translated as “statecraft,” implies moral cultivation as well, and that these two aspects were expected to reinforce each other. 68 A simultaneous exploration of early nineteenthcentury scholars’ thinking on human nature, the relationship between the public and the private, history, and the silver–copper coin crisis offers insights into their ideologies. The licentiate Wang Liu ᾄ㟰 (1786– 1843), for example, suggested that Zhu Xi’s ᘮḠ (1130–1200) teachings on ordering the family be printed on paper notes issued by the Board of Revenue in order to convey them to the public. Ye Shichang (1963) deems this wild thinking, but I think that this idea shows Wang Liu’s deep yearning for the state to engage in social teaching. Other studies have assumed that unworldly philosophies are irrelevant to practical opinions; in contrast, this study is based on the notion that convictions and more practical pursuits are intertwined. Previous studies of nineteenth-century statecraft thought have also tended to list only a few scholars’ proposals. With the increased access to palace archives and the publication of the collected works of more literati, the materials for a “group study” are now available. Before categorizing scholar-officials into groups based on their views of political-economic relations, however, we need to appreciate the complexity of each scholar’s thought. Wang Anshi ᾄ൫⊵ (1021–86) of the Song dynasty, for example, is usually described as a state interventionist, but he also urged the decentralization of the tea monopoly. 69 Grouping early nineteenth-century scholar-officials requires that we place them within a spectrum of opinions. Wang Liu, whom I characterize as an extreme interventionist for his proposal that the state issue inconvertible paper notes to replace silver and private banknotes, suggested that the paper notes issued by the Board of Revenue be circulated through ————— 67. North, Structure and Change in Economic History, p. 49. 68. Feng Tianyu, “Dao-Xian jian jingshi shixue”; Chang Hao, “Song Ming yilai Rujia jingshi sixiang shishi.” 69. Hymes and Schirokauer, Ordering the World, p. 19n26.

Introduction

21

private bank shops. Wei Yuan, who argued that the state should mint silver dollars, proposed that the face value of the coins be equal to their intrinsic value and not be used to increase the state’s revenues or to replace currencies provided by the merchants. Hence, he could be categorized in the less interventionist group. Some studies of Chinese scholarship in the late eighteenth and early nineteenth centuries have emphasized the embeddedness of ideas within social realities, particularly power struggles.70 Indeed, in grouping early nineteenth-century statecraft scholars based on their attitudes toward the silver–copper coin crisis, political links can be important; for example, former opponents of Heshen ࡫ᾮ (1750–99), the powerful late eighteenth-century grand secretary under the Qianlong emperor, played a role in positions on the silver-copper coin crisis. Yet even statecraft scholars within the same political clique competed among themselves to explain and resolve the crisis. Intellectual inclination sometimes accounts for their different perceptions and proposals better than political affiliation. But these academic interests and political-economic ideologies fluctuated in popularity throughout the nineteenth century. The noninterventionist approach was favored from the 1820s to 1850 and then was eclipsed by the interventionist approach in the period 1850–87. As expressed in the concept of isomorphism discussed in the preface to Kuhn’s Rebellion and Its Enemies in Late Imperial China and in his “Origins of the Taiping Vision,” ideologies and social realities are intertwined. This study will also explore the relationships between fluctuations in intellectual trends and social realities. Among the social realities, the Taiping Rebellion and foreign invasions from 1850 to 1887 promoted an interventionist approach. As Emile Durkheim noted, “State power tends to be reinforced at a time when public security is threatened.”71 But, the establishment of academies to support interventionist ideologies required money. Further————— 70. For example, Benjamin Elman’s Classicism, Politics, and Kinship discusses the rise of the study of the New Text classics in the eighteenth century and its relation to checking the political power of Heshen, and James M. Polachek’s Inner Opium War examines the rise of the political clique trying to check Manchu officials such as Muzhanga. 71. Durkheim, Suicide: A Study of Sociology, p. 402.

22

Introduction

more, after the fiscal surplus of the Qianlong reign had been much reduced by the silver–copper coin crisis, the Qing dynasty was unable to sustain its armies and bureaucracy just three years after the Taiping Rebellion broke up. How the Tongzhi Restoration was financed remains a question for this book to tackle. Scholars of modern Chinese history tend to think that the outflow of silver from China continued unabated throughout the late Qing. This study will argue to the contrary that the influx of silver between 1856 and 1887 provided extra commercial revenues for the Qing regime that allowed it to reinforce its rule. Previous studies of the silver– copper coin crisis have not raised the question why the crisis was exacerbated from 1820 to 1850 and then stopped in the early 1850s. This study will show that the drastic decrease in the global supply of silver from 1820 to 1850 and its fast growth in the period 1850–87 were closely related to the silver–copper coin crisis in early nineteenth-century China and its sudden disappearance in the early 1850s. When silver doubled in value relative to the copper coins, state power was much threatened, and a strand of ideas that perceived multiple centers of power re-emerged as a dominant thought of Chinese history for the first time in 1,600 years. Early nineteenth-century observers perceived the silver–copper coin crisis as a more direct threat than the flow of silver out of the country.72 Previous studies of the crisis have underscored its connection with the silver drain caused by opium imports. This study finds that opium imports doubled as silver flowed back into China from 1856 to 1887. Global silver supplies are more relevant than opium imports in accounting for the shift in China’s international balance of payments from deficit to surplus around 1856. Most previous studies of silver drain have relied on the British East India Company’s records, which end in 1833. This study uses the records of the London maritime ————— 72. In 1820, when Bao first spoke of the silver outflow problem, he pointed to issues surrounding the silver–copper coin crisis (Bao Shichen, An Wu sizhong, 26: 5a). An 1829 imperial edict indicated that opium imports and the exchange of silver ingots for silver dollars were causing the silver outflow; the emperor was most concerned with the problem of “the rise of silver prices in recent years” (Lin Zexu, Lin wenzhonggong zhengshu, jiaji, Jiangsu zougao, 6.18b–19b).

Introduction

23

customs and other organizations to show that the silver outflow worsened from 1833 to 1850, which explains the growing silver–copper coin crisis at the same time. The global silver supply, which was much influenced by Latin American independence movements, did not recover enough to supply India and China with silver until the early 1850s.

From High Qing to Late Qing: Global Erosion The connection between the fate of Chinese dynasties and silver leads to the arguments of William S. Atwell and Frederic Wakeman connecting the fall of the Ming dynasty (1368–1644) to the seventeenth-century decrease in the silver supply in the Western world.73 Some scholars are skeptical of this thesis because China imported silver from Japan before the fall of the Ming empire in 1644 and because China’s real silver scarcity occurred only after the Qing regime adopted a ban on maritime trade between 1655 and 1683.74 Nonetheless, Atwell’s and Wakeman’s arguments have inspired me to consider the global aspects of the fortunes of the Qing state in the early nineteenth century. This question is particularly worth exploring because Japan began retaining its silver mainly for its own use from the early Qing period on; the consequent change in China’s relations with the world economy is a subject worthy of more attention. Because of the connection between the world market and China centering on silver, I use the idea of “global erosion” rather than the notion of an “imperialist rupture” posited by Mao Zedong to analyze these changes. Discussing this period in 1939, Mao traced the historical rupture to the imperialist suppression of China’s incipient capitalism.75 I use the ————— 73. Atwell, “International Bullion Flows”; Wakeman, “China and the SeventeenthCentury Crisis.” 74. Moloughney and Xia, “Silver and the Fall of the Ming”; Zheng Yongchang, Mingmo Qingchu de yingui qianjian xianxiang; and von Glahn, Fountain of Fortune. 75. Feuerwerker, History in Communist China, p. 229: “As China’s feudal society developed its commodity economy and so carried within itself the embryo of capitalism, China would of herself have developed slowly into a capitalist society if there had been no influence of foreign capitalism.” And, p. 234: “The history of imperialist aggression upon China, of imperialist opposition to China’s independence and to her development of capitalism, constitutes precisely the history of modern China.”

24

Introduction

term “erosion,” with its nuances of both continuity and discontinuity, to replace the term “rupture” which implies more discontinuity than continuity. And rather than the term “imperialist,” which has connotations of blame, I use “global,” which permits a more neutral analysis. Recent American discussions of China’s eighteenth-century prosperity through its participation in the world economy,76 although considerably more sophisticated than Mao Zedong’s premise that China’s incipient capitalism was aborted, still do not explain developments in China after its eighteenth-century economic boom. The recent historiographical stress on the study of eighteenth- and twentieth-century China has somewhat dimmed the transitional role played by the nineteenth century. David Bello’s study of opium prohibition from 1729 to 1850 touches upon the nineteenth century77 and insightfully stresses the silver drain as the background for the opium bans. But his underscoring of eighteenth-century China’s doubling of its territory and population and the centralization of extra revenues such as meltage fees as reasons for the inefficacy of opium prohibition neglects the fact that the early nineteenth-century silver drain seriously damaged the efficacy of imperial control. This study approaches the great issue of China’s transition from the high Qing to the modern period from the crucial but as yet not fully adumbrated silver issue. Silver was particularly important to China in comparison to other East Asian countries of the time. The other East Asian countries did not need Latin American silver as much as China, and the threat posed to China by the global silver shortage was crucial in its fall from leader of East Asian order to a subordinate position, especially relative to Japan. However, the various policy proposals for responding to this unprecedented currency crisis and their derivation from traditional ideas suggest that China has rich cultural alternatives to develop its future. The present work applies the French Annales school’s “total history” approach to the study of the currency issue. This approach views economic, social, political, and cultural phenomena as closely interconnected. Thus, it integrates the various social sciences rather than focus————— 76. See Manning et al., “Asia and Europe.” 77. Bello, Opium and the Limits of Empire.

Introduction

25

ing on economics alone to understand economic phenomenon. Followers of this school are also inclined to conduct global rather than national analyses, and they often use chronological narratives and make historical comparisons to enhance their readers’ vision of the world.78 A holistic view requires that previous studies on related topics in social, institutional, intellectual, and economic history be covered, although no amount of research could exhaust all the relevant literature or discuss every detail. The notion of “erosion” further complicates the picture. According to Michel Foucault: “Establishing discontinuities is not an easy task even for history in general. And, it is certainly even less so for the history of thought.”79 To depict the ups and downs of intellectual trends and political regimes, not to mention changes in the supply and demand of currency in a society that lacked sophisticated statistics, entails a tremendous amount of qualitative and quantitative analysis of both the imperial archives and works by literati. Z This book is divided into three parts. Part I, “Global Links: Silver and the World,” explores China’s silver ties. The three chapters in this part discuss early nineteenth-century China’s dependence on silver from the world market, the relationship between the silver outflow and opium imports, and the effects of the silver scarcity and the resultant drastic silver–copper coin crisis on the state and society. Chapters 4 and 5, which constitute Part II, “Cultural Resources for Economic Debate,” discuss how scholar-officials cited historical precedents to comprehend the crisis and propose solutions, the monetary policies that were adopted, and compare their approaches to state power vis-à-vis the market with similar Western ideas. Chapters 6, 7, and 8, in Part III, “The Competition Among Intellectual Models,” deal with the moral reasoning behind political-economic thinking, the embedding of these ways of thinking in other lines of thought, and the fluctuations of intellectual currents. Finally, the Conclusion draws out the implications of this study for our understanding of the world economy and early nineteenth-century China’s dynastic decline, the relationships between statecraft thought and social reality, and the “aborted capitalism” thesis. This ————— 78. Toninelli, “Europe Vs. North America,” esp. pp. 6, 10, 17. 79. Foucault, The Order of Things, p. 50.

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discussion hopes to shed new light on old but important issues such as the origins of the Opium War and the Taiping Rebellion, the Qing state’s recovery in the Tongzhi Restoration, the divergence between China and Japan in modern times, the rise of New Text studies in early nineteenth-century China and their disappearance around 1850–87, and Chinese traditions of state-market relations in terms of both ideas and social realities at the moment of China’s great encounter with the West.

pa rt i Global Links: Silver and the World

From about 1775 on, silver was used as the medium for calculating prices in Qing China much more thoroughly than theretofore and on a nationwide scale. The Qing empire enjoyed much less monetary sovereignty than most other countries, including its contemporary East Asian neighbors, since the market, particularly the international market, rather than the state determined silver supplies and prices. During this period, China could no longer obtain silver from Japan, Annam, or Burma and came to rely almost totally on Latin American silver. The influx of silver from Latin America after about 1775 provided a convenient new form of currency. The closer connection with Latin America meant that China’s net silver outflow in the early nineteenth century was caused not only by opium imports but also by the smaller supply of silver available on the world market. If the early nineteenth century had been like the late nineteenth century, when increased silver supplies from a favorable world market accompanied increased opium imports, then a Sino-British war might have arisen because of the clash of cultures, but the Opium War might not have occurred. As a result of the silver outflow, silver appreciated relative to copper coins. The state’s revenues decreased because fewer people could afford to pay taxes calculated in the appreciating silver. This in turn made it more difficult for the state to deal with the problems caused by the silver–copper coin crisis. The Taiping Rebellion, which was caused in part by this crisis, failed because the net silver inflows of the 1850s– 80s saved the Qing regime from collapse. From 1775 until the early and midnineteenth century, dynastic fortunes became tied more tightly to the world economy than they had been during the Ming.

chapter 1 A Vulnerable Empire

The famous “NaitŇ thesis,” set forth in the 1930s, claimed that the Qing represented the peak of autocratic rule in China, which had grown from the Song on.1 Recent Western studies of the Qing empire have emphasized its greater centralization of power in comparison to the Ming empire, as seen in the Qing’s conquest of Central Asia, which almost doubled China’s territory, and in the establishment of the Grand Council, which strengthened the court’s administrative control.2 Recent studies of eighteenth-century China’s monetary system have also stressed the reinforcement of the copper coin system, particularly the use of copper coins rather than silver for some large-scale transactions, as a reflection of centralization.3 This study will show that this reinforcement did not extend beyond the 1770s, as the minting of copper coins decreased from then on. Even before the 1770s, the Qing permitted the use of private copper coins, including those from previous dynasties and from other countries, and did not substitute copper for silver in interprovincial transactions. Furthermore, silver prevailed in both tax payments and ————— 1. Hisayuki Miyakawa, “The NaitŇ Hypothesis.” 2. Rawski, “Recent Scholarly Trends in Ming-Qing History,” p. 115. Xinjiang became Qing territory in 1759, and the Qing solidified its rule over Tibet in 1793. The Grand Council was founded in 1729 to administer military resources for a campaign in Xinjiang; by 1737, its supervisory power had gradually expanded to encompass all aspects of administration, due to its proximity to the emperor. Even the confidential reports of various provincial officials to the emperor were channeled through this new institution. 3. On the greater use of copper in the eighteenth century, see Vogel, “Central Chinese Monetary Policy”; Kuroda, Chşka teikoku, chaps. 1–3; Adachi, “Shindai zenki”; and Kishimoto, Shindai Chşgoku no bukka to keizai, pp. 353–63.

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common transactions from about 1775 on, as its use extended to larger areas and became empirewide in the early nineteenth century. When silver was required for forwarding taxes to superior administrative levels, the government had to deal with bank shops. Even though the government regulated the forms of silver for tax payment, the merchants who ran the bank shops were its suppliers or processors, and the silver ultimately came from foreign trade conducted by merchants. Scholars have debated whether China became interdependent with the world economy through its use of silver after 1600.4 One scholar even dates this integration to 1500.5 This study will show that although China began importing American silver in the sixteenth century, given the availability of Asian silver, it was not until about 1775 that Latin America became China’s almost sole supplier of silver. With this change, China’s monetary sovereignty became thoroughly intertwined with the larger world economy. In 1863, S. Wells Williams (1812–84), the clergyman-printer from New York who published the Chinese Repository in Canton, characterized “the absence of a national coinage in the precious metals among so commercial a people as the Chinese” as a “singular . . . exception to the general usage, even of Asiatic nations.”6 The present study depicts the demand and supply of China for silver relative to copper coins around between 1500 and 1850. Thus it will show how China’s currency system was unusually dependant on the world economy, when compared with the economies of other countries, including those in Asia.

The Copper Coin System The tradition of casting copper coins predates the imperial era in China. In remote antiquity, the barter system was used in daily exchanges, but shells were used as money as early as the Shang dynasty (1523?–1027? bce). By the Western Zhou dynasty (1027–771 bce), copper money in the shape of shells was being cast. In the Warring States Era (403–221 ————— 4. Wakeman, “China and the Seventeenth-Century Crisis,” p. 1. This article mentions that Fernand Braudel reached a negative conclusion and Immanuel Wallerstein a positive one on the question. 5. Frank, ReORIENT, p. 52. 6. Williams, The Chinese Commercial Guide, p. 265.

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bce), money was made of precious metals, such as bronze, in the form of miniature production tools such as knives, shovels, and spinning wheels. By the late Warring States period, the spinning-wheel-shaped money had been transformed into round copper coins with a square hole in the center. Throughout most of recorded history, the world has had two main styles of coinage: the occidental system, derived from the Greeks, and the oriental system, which originated in China. Occidental coins, cast mainly in gold or silver, were decorated with birds, animals, plants, and human figures, and they had no holes (see Fig. E4). Oriental coins, mainly of copper or iron, were decorated with written characters rather than images and had square holes in the center (see Fig. E4).7 For the next two to three thousand years, the Chinese governments continued to cast copper coins.8 The enduring and prevalent use of copper coins reflected the needs of a predominately small-scale commercial exchange system. And although the lowest-level administrative units, the xian (district), are usually thought to have represented the furthest reach of imperial control, through these copper coins imperial rule penetrated even more deeply into local markets. The Qing dynasty continued imperial China’s long tradition of providing copper coins for local use.

early qing official mintage If we look at Tables 1.1 and 1.2, we can see the trends in early Qing mintage. The annual output of copper coins cast by the Beijing mints increased in the early and mid-Qianlong periods (1742–72), with the mintage of 1772 about 1.9 times that of 1741. The output of the two Beijing mints peaked in 1756–65 and gradually decreased in 1786–95 toward the level of 1746–55. Coinage then decreased to about 60 percent of this peak in the late Qianlong and early Jiaqing periods (1794–1806). The output of the provincial mints of the Qianlong reign peaked in 1766–75. For the Qianlong reign as a whole (1736–95), the Beijing mints cast around 48 percent of the copper coins and the provincial mints 52 percent; the provincial mints in southwest China accounted for 59 percent of total provincial mintage. ————— 7. Peng Xinwei, Zhongguo huobishi, p. 539. 8. Ibid., pp. 22–25, 47, 67–92.

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Table 1.1 Copper Coins Cast by the Beijing Mints, 1644–1806 (Unit: mao) ____________________________________________________________________ Year(s) Board of Revenue Board of Works ____________________________________________________________________ 1644–84 30 30 1685–1722 40 40 1723–35 40 40 1736–41 41 41 1742–43 61 61 1744 71 71 1745 88 88 1746–50 61 61 1751–55 71 71 1756–59 71 81 1760 72.5 81 1761–62 76 81 1763–72 76 71 1773–93 75 70 1794 65 30 1795–98 30 30 1799 47 45 1800–1803 63 61 1804–1805 47 47 1806 48 48 ____________________________________________________________________ notes: 1644 was the first year in which copper coins were minted by the Qing. In 1685–1741, there was an increase of 3 mao during some years with an intercalary month; in some years, the total was reduced to 36 mao. In 1723–35, there was an increase of 1 mao in some years. I take 40 as average of 1685–1735. Between 1742 and 1806, there was an increase of 4 mao in some years with an intercalary month, and in other years 0.5 or 1 or 1.5 mao was added; here this is averaged by adding 1 mao to the yearly total of mao originally claimed to have been minted for the period 1736–1806. For several entries, only the mintage of the Board of Revenue was recorded; in such cases, the Board of Works’ mao output is considered the same as the Board of Revenue. The number of strings of copper coins in one mao changed in early Qing period. 12,880 was the regulated number of strings for the Board of Revenue from the beginning of the dynasty, which was changed to 12,480 strings in the Qianlong reign. From 1711 onward, the string number of each mao of copper coins cast by the Board of Work was half that of the Board of Revenue, i.e., one mao cast by the Board of Revenue had 12,480 strings, that by the Board of Work, 6,240 strings. The number of strings for each provincial mints varied. sources: QFD, 1644: juan 1; 1684: juan 3; 1723: juan 7; 1742: juan 11; 1756, 1762: juan 14; 1773: juan 16, juan 18; 1794: juan 18; 1799, 1800, 1804: juan 19.

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Table 1.2 The Amount of Copper Coins Cast in the Qianlong Reign (Unit: 1,000 strings or 1,000,000 wen) ____________________________________________________________________ Provincial mints ________________________________________ SouthTwo North Central South west Subtotal Beijing Total China China China China (1+4)= mints (5+6)= Years (1) (2) (3) (4) (5) (6) (7) ____________________________________________________________________ 1736–45 32 134 1,016 5,779 6,961 9,865 16,826 1746–55 1,189 1,477 2,927 8,028 13,621 12,355 25,976 14,161 36,398 22,237 1756–65 1,967 3,140 3,889 13,241 1766–75 1,563 2,240 3,384 10,186 17,373 13,859 31,232 1776–85 1,533 1,692 3,117 7,049 13,391 13,728 27,119 1786–95 1,427 1,028 2,891 4,827 10,173 12,542 22,715 total 7,711 9,711 17,224 49,110 83,756 76,510 160,266 ____________________________________________________________________ note: This table was compiled with the help of Mr. Zheng Yongchang. sources: SGD, Shihuozhi, Qianfa (Palace Museum, Taipei); Neige Han wen tiben: huke huobilei (First Historical Archives, Beijing)

circulation of private copper coins or coin tokens In addition to newly minted official coins, privately held coins cast by previous dynasties and coins cast by private mints or by foreign governments, as well as private paper notes denominated in copper coins, were also in general circulation. Each dynasty’s openness toward the coins of previous dynasties reveals traditional China’s lack of a sense of monetary sovereignty. An official discussion in 1685 illustrates this situation. The governor of Fujian proposed that coins minted by previous dynasties, which were commonly used in Fujian, be outlawed, and the Board of Revenue agreed. The Kangxi emperor asked the grand secretaries to discuss this issue. Grand Secretary Xu Qianxue ၞϹൟ (1631–94) pointed to the laissezfaire tradition of China. From ancient times on, with the exception of the Sui dynasty (581–618) and some reigns of the Ming dynasty, which collected all old coins and melted them down, no dynasty had prohibited the use of the coins of previous dynasties and allowed only its own coinage. Rather, both old and new coins had circulated simultaneously.

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Moreover, official coins continued to exist alongside privately cast ones. The Kangxi emperor accepted Xu’s view. All prohibitions against the mixed use of old and new coins were lifted, and officials who had neglected to enforce the bans were pardoned.9 In 1757, an imperial edict of the Qianlong emperor stated, “If all coins of previous dynasties were to be banned, it would open up opportunities for clerks to take advantage of the people.”10 People not only used coins of previous reigns, they also cast coins. One characteristic of the Chinese monetary tradition from the third century bce on was the prevalence of private mintage of copper coins.11 The handmade molds and casting technology in use in China from around the third or fourth century bce until the introduction of casting machines from the West in the modern period facilitated private mintage.12 The confessions of beggars who cast coins privately in Beijing in 1835 show how easy the process was: “We used mud to carve the mold for the coins. Then we bought broken utensils and furniture. We melted the utensils and cast the lead-copper coins.”13 Since the technology and capital were easily obtained, China had a long tradition of private mintage of copper coins. 14 After the seventeenth century, apart from the Ming-Qing transition, when private mintage prevailed, in the Yongzheng period (1723–35) there were reports of the adulteration of copper coins with lead and other metals in Zhejiang and Jiangsu. In the late Qianlong period, about 1775–95, private coins also prevailed. An imperial edict of 1796 mentioned, “In recent years each province has had an abundance of private mintage.”15 And in the early and mid-Qianlong reign, when official copper coinage increased, private casting was also tolerated to ease the currency scarcity.16 The private minting of copper coins was illegal in the early nineteenth century, but the practice extended from the Beijing mints to lo————— 9. Wang Qingyun, Shiqu yuji, 3.12b–13b. 10. Wei Jianyou, Zhongguo jindai huobishi, pp. 11–12. 11. Hozumi, “The Characteristics of the History of Chinese Money,” pp. 26–29. 12. Chao-nan Chen, Yongzheng Qianlong nianjian de yinqian bijiao biandong, p. 66. 13. JJD, DG 14.5.3 (Qi-ying). 14. Hozumi, “The Characteristics of the History of Chinese Money,” pp. 26–29. 15. SL, 10: 4, JQ 1.10.3 (An imperial edict to the grand councilors). 16. Zheng Yongchang, “Qingdai Qianlong nianjian de siqian liutong,” p. 18.

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cal areas. Accusations of unauthorized production in the Beijing mints were made in 1809, 1839, 1846, and 1850.17 Counterfeiting occurred in various provinces between 1820 and 1853. 18 Some counterfeiting took place on a small scale. The beggars quoted above cast only about five strings and sold the coins piecemeal to bank shops. A sesame-oil vendor and his six associates sold 110 strings to their acquaintances. Migrants in mountainous areas, especially in Yunnan, Guizhou, Sichuan, and Hubei, operated on a much larger scale. 19 Guizhou, which produced lead, and Hubei, where lead was accumulated, had significantly more counterfeiting. 20 Counterfeiting was also common in Guangxi, which was connected by water with Yunnan and Guizhou.21 The southwest was already a center of private mintage in the late Qianlong period. An official report noted in 1796 that private coins had long been produced in Yunnan and Guizhou and a much larger store of these coins was available there than in other provinces.22 Another official report from 1796 singled out Hankou as an area where private coins from Sichuan, Yunnan, and Guizhou accumulated.23 One grand secretary observed in 1799 that from Shizhu ⊵⋡ in Sichuan eastward to Guizhou and Hubei, copper and timber were readily available and that innumerable paupers were making a living casting copper coins in the mountains. In this area, smugglers used boats to transport salt, copper coins, saltpeter, and lead. 24 Both the official provincial mints and the unofficial, private mints thrived in southwest China because of the availability of minerals for making copper coins. Moreover, because China’s foreign trade, unlike that of Tokugawa Japan, was not strictly controlled by the government, in the early nineteenth century Japanese and Vietnamese copper coins entered the ————— 17. Sasaki, “Ahen sensŇ izen no tsşka mondai,” pp. 105–7; SL, 10: 4, JQ 1.10.3. 18. ZJHSZL, pp. 96–99. 19. GZD, JQ 13.8.6 (Yunnan Governor Yong-bao); SL, 209.6a, JQ 14.4.4 (Censor He Xuelin). 20 . GZD, DG 18.12.21 (He Changling); SYD, DG 14.12.7 (Eerjing’e); JJD, DG 13.11.27 (Eerjing’e); SL, 261.14a, DG 14.12.7 (Eerjing’e). 21. JJD, DG 14.3.6. 22. CBZD, JQ 1.1.22. 23. GZD, JQ 1.1.8. 24. Shen Yao, Luofanlou wenji, fan 5, hou ji 2.1a.

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Fig. 1.1 Bamboo currency used together with metal currencies in south China during the nineteenth century (source: Hankook yeunhang, Han nuneuro boneun woori hwapye, sekye hwapye, p. 30).

country. The Japanese coins were those cast in the Kan’ei භ᧞ era (1624–43). The Vietnamese copper coins were cast during the Canhhunh ᖩ⨱ (1740–86), Quangtrung ‫ؗ‬ό (1787–92), Canhthinh ᖩ⇥ (1793–1801), and Gialong ঒㩁 (1802–19) reigns. All official reports relating to Japanese copper coins pointed out their occasional appearancein Zhejiang, brought by the vessels back from Japan.25 Vietnamese copper coins were confined to three ports in Fujian and Guangdong provinces, namely, Chaozhou, Zhangzhou, and Quanzhou, which had close trade ties with Southeast Asia.26 People also used paper notes issued by merchants. It was not until very late in the Qianlong reign that bank shops started to issue paper notes. 27 Bao Shichen recalled that in 1791 his maternal grandfather brought back some bamboo sticks from Huizhou approximately one Chinese foot in length that represented more than 1,000 wen and were ————— 25. ZJHSZL, pp. 13, 19–21; Yamawaki, Nagasaki no TŇjin bŇeki, pp. 192–93. 26. SYD, DG 9.2.25 (Li Hongbin); Huang Juezi and Xu Naiji, Huang Juezi, Xu Naiji zoushu, 13: 103–4, Zonghe mingshi shu, DG 20.3.27. 27. Sasaki, “Ahen sensŇ izen no tsşka mondai,” pp. 109–10.

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Fig. 1.2 Paper note convertible to silver. This paper note issued in the Guangxu reign shows its earlier form with calligraphy. The Duan zhizai ᥲ㋐䁶, which issued this note, was a bank shop in Guangxi. Fei 㯳 means the same as piao ⏄ for notes. This note was redeemable for 3,000 liang of silver ingots by weight and fineness as cast by the Tong qingfeng bank ࠂᇗ㉛඾ⶩ The interest rate was one fen per month for each liang and was calculated from the receipt of this note to the time it was cashed.

used for large-scale exchanges (Fig. 1.1).28 Bamboo sticks were later replaced by paper notes.29 Huizhou was an important financial center in eighteenth-century China. Since paper notes developed in this region only around 1791, bank notes must have emerged very late in the eighteenth century. Paper notes (Figs. 1.2, 1.3) were more developed in the north because of the customary forms of transportation there. In 1838, reports from ————— 28. Wang Liu, Qianbi chuyan, “Xuke,” 25b. I am grateful to Liu Demei for photocopying this book for me in Japan. 29. Wang Liu, Qianbi chuyan, “Xuke,” 25b.

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Fig. 1.3 Paper note convertible to copper coins. Issued in the Guangxu reign by the bank shop Yiqingdang ⇘ᇗ⃕, this paper note could be cashed for 500 wen in copper coins. The images and the moral teachings printed on it served as a design to prevent counterfeiting (source: Nippon ginkŇ, ChŇsakyoku, Chşgoku kindai kahei gaiyŇ, p. 20).

each province in response to an imperial inquiry revealed that paper notes denominated in copper coins were used less often in south China than in the north, especially Manchuria, Zhili, Shandong, and Shanxi. In 1838 the Zhejiang governor described the circumstances prompting the

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use of copper coin notes: “If a large sum of copper coin is exchanged [from silver], it is difficult to carry it all at once; it requires going back and forth several times, and so copper-coin paper notes are issued as a receipt. In addition to saving on transportation costs, paper notes also save the time spent counting the coins or weighing ingots.”30 Overland transportation costs using carts and animals ran about sixteen times those of water routes in traditional China.31 More water routes, which lessened the transportation costs of copper coins, were available in the south than in the north, leading to less use of notes in the south.32 Among the northern provinces, the greater prosperity of Manchuria, Zhili, Shandong, and Shanxi explains the greater prevalence there of paper notes; in the other northern provinces, paper notes circulated mainly in the big cities.33 The British consul at Canton noticed in 1850 that the paper money used in Fuzhou, Ningbo, Shanghai, and Nanjing consisted of promissory notes payable on demand.34 Convertible paper notes were used primarily in the more prosperous provinces of northern China and in the big cities of the northwest and of the southeast. In addition to the use of coins or tokens from the private sector, the imperial stress on the use of silver gave merchants even more power over currency.

Silver Use from the Sixteenth to the Early Nineteenth Centuries Before the sixteenth century, silver was rarely used to pay taxes or to conduct commercial transactions. The amount of taxes paid in copper coins in the Song dynasty was around 28 times that of taxes paid in silver. But by the late Ming dynasty (1573–1644), only around 0.5 percent ————— 30. GZD, DG 18.7.2. 31. Man-houng Lin, “Qingmo shehui liuxing xishi yapian yanjiu,” p. 273. 32. GZD, DG 18.7.7 ( Jing’ebu). The Shandong governor noted: “There are more land routes in the northwest provinces and few water routes there. Not all commercial exchanges can use silver ingots. As for exchanges in copper coin, those above 10,000 wen rely on transport by horse and cart. It is not as convenient as the paper notes.” 33. ZJHSZL, pp. 123, 125–26, 130–31, 134, 138–39, 140–41; Jiang Kerang, Quanjiao xianzhi, 6.10a; GZD, DG 18.7.7; Sasaki, “Ahen sensŇ izen no tsşka mondai,” p. 108; WJD, DG 18.9.1, 18.8.28. 34. House of Commons Parliamentary Papers, vol. 41, 1850, p. 12.

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of tax payments were made with copper coins.35 Silver dollars began to circulate more widely by the sixteenth century, and silver ingots were also common. When the copper coin system ceased to function well in the late Ming period, silver dollars of low quality were much used.36 In 1661, the Qing regulated silver to supplement the bulky copper coins. Early in the Qing regime, from 1651 to 1661, 120,000 liang in paper notes had been issued to ease fiscal shortfalls, but this practice was soon stopped to prevent the risk of inflation.37 Paper notes had been issued in the Song, Yuan (1280–1367), and early Ming (1368–1572) dynasties, to be used together with copper coins. The 1661 imperial edict explained the reasons for shifting to silver use: paper notes were empty (xu ⶦ), whereas silver was substantive (shi න) and was both more durable and more divisible than paper notes. 38 Even with this imperial mandate, however, the extent of silver use for both tax payments and commercial transactions varied considerably in the early Qing. And, merchants continued to control the supply of silver.

state and merchants in the use of silver for taxation In 1657, the Board of Revenue pointed out that all the provinces collected most of their taxes in silver. Since copper coins had become abundant but were cumbersome to transport, it was proposed that taxes be collected in the proportion of seven parts silver and three parts copper coins. All the taxes collected in silver were to be forwarded to the imperial capital, and those collected in copper coin were to be retained in the provinces for local use. The emperor agreed to this proposal.39 In 1733, all land taxes were collected in silver, but the governor of Anhui proposed having the small amount of tax payment, or the amount over a rounded figure in the large amount of tax payment, paid in copper coins. In 1736, because a greater percentage of land ————— 35. Averaged from the figures provided by Quan, Zhongguo jing jishi luncong, 1: 355–62. 36. Sasaki, “Ahen sensŇ izen no tsşka mondai,” p. 110. 37. Wang Qingyun, Siqu yuji, 5.8a; Wang Liu, Qianbi chuyan, “Qianchao yi,” 1a–2a, 44b; idem, Qianbi chuyan, “Xuke,” 9a. 38. QCWXTK, juan 13, 1: kao 4967. 39. Ibid., kao 4968.

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taxes in Zhili province had been paid in copper coins than in silver, an imperial edict said that it was still permitted to pay either in copper coins or in silver.40 Following these regulations, the inhabitants of some provinces paid taxes in silver; those of other provinces used copper coins.41 According to a remark made in 1844, 80 to 90 percent of the land tax was paid in copper coins.42 In 1846 silver ingots were used only in Shanxi and in 1847 only in Guangxi; in the other provinces, taxes were paid in copper coins.43 Foreign silver dollars were used in some provinces.44 Local officials had to exchange copper coins for silver at bank shops.45 Taxes paid in either silver coins or silver ingots involved only small amounts of silver. Both public and private silver furnaces ( yinlu 㜯ṝ) were established to melt small pieces of silver and combine them into large ingots to be forwarded to higher levels of government (Figs. 1.4– 1.8). Public silver furnaces were responsible to the provincial financial commissioners and customs offices. Private silver furnaces received licenses authorizing a certain level of operations from the Board of Revenue.46 The remelting process applied to monies collected not only for the land tax but also for the commercial tax. Foreign silver dollars had to be melted into silver ingots by the hong merchants who monopolized the Canton trade to pay for the export tax on tea and silk.47 The Qing dynasty specified that, after the local governments deducted the amounts reserved for local use and the part sent to assist other provinces, the remainder was to be submitted over the courier post routes under the supervision of officials whose ranks varied with the amount of taxes being forwarded. It was not until the Taiping Rebellion disrupted this system that the Shanxi banks, which started in ————— 40. Ibid., kao 4968. 41. HCJSWXB, 58: 60; Miao Zi, Miao Wuliegong yiji, ca. 1840–46, 1.10b, 16a–b. 42. ZJHSZL, p. 102. 43. HCJSWXB, 58: 60; Miao Zi, Miao Wuliegong yiji, 1.10b, 16a–b; ZJHSZL, p. 102; GZD, DG 26.9.9 (Wu Qijun), DXTGZY, p. 1165; ZJHSZL, p. 32; GZD, DG 27.6.26. 44. SYD, DG 9.12.16 (Ne Yancheng); ZJHSZL, p. 42. 45. Chao-nan Chen, Yongzheng Qianlong nianjian de yinqian bijia biandong, p. 68. 46. Wei Jianyou, Zhongguo jindai huobishi, p. 37. 47. Tan Bi’an, “Zhongguo jindai huobi de biandong,” p. 204.

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Figs. 1.4–1.8Silver ingots of 10 liang for paying various taxes. (upper left ) 1.4 An ingot used to make a contribution. (upper right ) 1.5 An ingot for land taxation. (lower left ) 1.6 Ingot for the Canton Customs. (lower center and right ) 1.7–1.8 Ingots kept in the prefect’s or magistrate’s office. The 10-liang silver ingot (zhongding ό⌡) was rectangular in some provinces and round in others. Tan Bi’an (p. 190) points out it is from 1724 that a standard format for the silver ingots to be be melted was established.

Shanxi in the eighteenth century and had branch offices in each province, handled the remittance of taxes.48 Merchants were often entrusted with the task of getting the silver to Beijing, but the results were not always satisfactory. A Qing official record described the reasons for making officials responsible for forwarding these taxes: “In 1814, each province was ordered to forward the tax silver to the Board of Revenue as soon as it was received. In 1832, each province was again ordered to have the officials themselves forward and hand over the tax silver, since the convention of bank shops turning over the tax in silver ingots to the treasury had become tainted with malpractice impossible to eradicate.”49 ————— 48 . Qinding Hubu zeli, kucang, p. 22; Matsui, ShinchŇ keihi no kenkyş, p. 34; Song Huizhong, “Piaoshang yu wan Qing caizheng,” pp. 394–95. 49. Zhang Huixin, “Huochang qiliu,” p. 132.

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fluctuations in the common use of silver By 1650, foreign silver dollars were commonly used in every province. With the ban on maritime trade in 1659–83, foreign dollars disappeared.50 After the ban was lifted, silver again prevailed in Jiangsu during the Kangxi (1662–1722) and Yongzheng reigns. Copper coin was never used for exchanges involving more than 1 liang. Even for small amounts, such as one fen (1/100 liang) or one li (1/1,000 liang), both silver and copper coins were used. In the early and mid-Qianlong period (around 1736–75), the use of silver gradually decreased in favor of copper coins. Most exchanges utilized copper coins, including exchanges from 10 to 100 liang.51 A Qianlong imperial edict of 1744 pointed out that the Qing state was casting more copper coins to make up for the scarcity of silver.52 Scholars of this period noted that the scarcity of silver had led to the increased use of copper coins.53 Another factor was the increasing confidence in copper coins and growing concern over counterfeit silver ingots and dollars.54 The greater reliance on copper coins raised their price relative to silver,55 and hence the government encouraged the use of silver to help lower the value of copper coins. In 1744 the emperor mandated that, except for the wages of public workers or retail exchanges involving grain and cloth, copper coin could not be used for either official business or ordinary commercial exchanges. 56 However, the switch to a monetary system dominated by silver did not occur until the influx of more convenient silver dollars, which began around 1775. The silver dollars imported in the late Qianlong period were more convenient and reliable than those that had flowed into China in the seventeenth and early eighteenth centuries. In the seventeenth century, the “barbarian coins” ( fanqian ⃍ 㞨 ) were silver dollars minted in ————— 50. HCJSWB, 26 huzheng licai shang (Mu Tianyan, “Qingkai haijin shu”), 14a. 51. ZJHSZL, pp. 8–9. 52. QCWXTK, juan 16, 4: kao 5002. 53. Zhu Lian, Mingzhai xiaoshi, yangqian, 12.1; Huang Ang, Xi Jin shixiaolu, 1.8–9. 54. ZJHSZL, p. 9. 55. Ibid. 56. QDQHS, 220: 11–12; and Wang Qingyun, Shiqu yuji, 3.9b.

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various European countries.57 These early coins were less consistent in shape and often lacked a ridged outer edge, which made them susceptible to clipping. 58 Most late eighteenth-century coins, however, were Spanish dollars stamped in Mexico; they were not only extremely consistent in weight, shape, and quality but also more fully ridged at the edges, or, in Chinese, huabian ⪹㖬 (decorated edges; see Figs. 1.9–1.12). Known as “Buddha heads” ( fotou ҝ㭵) because of the kings’ portraits on the coins, these Spanish dollars superseded all other forms of silver dollars in the late Qianlong and Jiaqing periods. 59 For example, Zhu Lian ㄶ⣮ (1736–1820), who published his Notes from the Bright Study (Mingzhai xiaoshi ᕥ䁶ෑㆅ) in 1821, said: I have heard the elders saying that in the early Qianlong period only silver circulated on the market. Twenty years later, silver turned scarce and copper coins became abundant. In the rare event that silver coins existed, they were not for exchange. Subsequently, silver coins of 0.735 liang prevailed. . . . When I was small, I still saw silver coins with the phoenix [American silver dollars with eagles], horse and sword [Dutch silver coins], foreign ships, two candles [Spanish silver coins of Charles II], and water straws on the surface. Now only the Buddha heads [Spanish coins of Charles III, of Charles IV, and of Ferdinand VII] are in circulation.60

The new foreign silver dollars flowed into Jiangsu and Zhejiang after about 1775. As Wang Huizu ᨃ㒌⎵ (1730–92), a magistrate and a private secretary, pointed out, “Before I was forty years old, the term ‘barbarian silver dollars’ ( fanyin ⃍㜯) did not exist. Occasionally merchants might bring back from Fujian and Guangdong something called ‘foreign silver’ (yangyin ᪊㜯), which was not much used in the market. Only those who were getting married used it for decoration.”61 Zheng

————— 57. Tan Bi’an, “Zhongguo jindai huobi de biandong,” p. 202. 58. See Boxer, “Plata es Sangre,” pp. 476–77, for an excellent illustration of the irregularity of coins of this period. 59. Zheng Guangzu, Iban lu, juan 6, zashu, p. 44; ZJHSZL, p. 52: all the versions of Guangzhou fuzhi contained similar observations. 60. Zhu Lian, Mingzhai xiaoshi, yangqian, 12.1; ZJHSZL, pp. 51, 53. 61. Wang Huizu, Bingta menghen lu, juan xia, Qianlong sixth year; ZJHSZL, pp. 51, 53. This could be caused by the shift from exporting Lower Yangtze area’s silk for Japanese

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Figs. 1.9–1.12 “Buddha heads” and “barbarian coins.” (upper left ) Fig. 1.9: 1675. (upper right ) Fig. 1.10: 1786. (lower left ) Fig. 1.11: 1676. (lower right ) Fig. 1.12: 1804. The coins of 1675 and 1676 were called “barbarian coins”; those 1786 and 1804, with the head of the Spanish king, were called “Buddha heads.” The change from “barbarian” to “Buddha” reflects the growing Chinese acceptance of American silver dollars. This illustration also reveals that the ridges are more complete on the coins of 1786 and 1804 and their quality was in general higher than those of 1675 and 1676. Before the early nineteenth century, Chinese were aware of the Western custom of putting the ruler’s head on coins. However, they were not yet aware of the exclusive use of the ruler’s money that monetary sovereignty signifies.

Guangzu 㘲‫⎵ؗ‬, a late eighteenth-and early nineteenth-century literatus of Jiangsu, also noted “it was only in 1775 that foreign silver dollars began to be used in Jiangsu and Zhejiang.”62 In the early nineteenth ————— or Latin American silver to exporting Fujian tea for American silver from England. And many Hong merchants in Canton were Fujianese merchants. 62. Zheng Guangzu, Iban lu, zashu 6, yangqian.

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century, Feng Guifen 㲅 ᜀ ⪴ (1809–74), a compiler of the Hanlin Academy and holder of a metropolitan degree, remarked that “wholesale trade is in terms of silver; retail trade is in terms of copper coin.”63 These accounts suggest that the use of silver increased from the late eighteenth to the early nineteenth century.

official acceptance of foreign silver dollars The machine-made foreign silver coins, which could be used directly, came to be preferred over silver ingots, which had to be weighed and proofed. The Qing dynasty acquiesced in the use of foreign silver dollars for official business. During the early Qianlong reign, when copper coins replaced silver for a time, Fujian and Guangdong remained the exceptions. Indeed, during the eighteenth century silver was widely used in these two maritime provinces.64 In Fujian, by 1769–72, foreign silver dollars had replaced silver ingots for paying taxes.65 In 1829, the emperor told the grand councillors that he had heard that all the land taxes of Fujian, Guangdong, Jiangxi, Zhejiang, and Jiangsu to the Yellow River had been paid in foreign silver dollars.66 Provinces began to use silver dollars to pay taxes because “urban residents like the convenience of being able to determine the value by counting the coins piece by piece,” as Huang Juezi remarked during the Daoguang period.67 The reliability of foreign coins also overrode Chinese imitations. Lin Zexu noted that people soon discarded the foreign dollars counterfeited by Chinese. As Lin observed, Suzhou plate and the like were lower in quality than the foreign dollars (yangban ᪊ᙫ). These native dollars commanded lower prices than the foreign dollars when exchanged for copper coin. Hence, merchant guilds forbade the use of ————— 63. Feng Guifen, Xianzhitang gao, 11.31b–32a. 64. QCWXTK, 16.4: kao 5002. 65. Momose, “Shindai ni okeru Supein dŇru no ryştsş,” p. 47. 66. DHL, 1829, 5.33b–34a. 67. Sasaki, “Ahen sensŇ izen no tsşka mondai,” p. 110; according to Wei Jianyou, Zhongguo jindai huobishi, p. 105, the Spanish silver dollar prevailed in Guangdong, Fujian, Jiangsu, Zhejiang, Anhui, Zhili, in all provinces along the Yangtze, and in Shanghai by 1856.

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counterfeit coins in transactions. Nor were counterfeit foreign dollars accepted in local markets.68 Scholars such as Feng Guifen went so far as to state that “foreign dollars copied by the Chinese would not prevail even if they did not contain lead, and foreign coins were always recognized as reliable.”69 The political and cultural significance of using foreign coins appears not to have bothered either the Chinese state or the Chinese people. It was left to merchants rather than the Qing state to assure the quality of foreign silver dollars circulating in the markets. Books were published to help merchants differentiate between the real and false foreign coins, such as The Disclosed Secrets of the Silver Code (Yinjing fami 㜯⚰ ↥␕; published in 1828 in Canton), and Distinguishing Real Foreign Silver Dollars (Yangyin bianzheng ᪊㜯㓼ᤵ; 1854, Hangzhou). These books were written to help small merchants decrease losses stemming from the circulation of counterfeit coins. They provided hints for recognizing various kinds of silver dollars. Names such as “pig pores” and “chicken droppings” were used to describe the colors and shapes of silver dollars. Even the number of hairs in the patterns was calculated exactly.70 Noticing that all the inferior imitations of foreign coins were picked out and discarded by the merchants, Lin Zexu concluded, “The civil ban is stricter than the official ban.”71

empirewide use of silver Silver was used throughout the empire. Both silver ingots and silver dollars were used in the big cities of southeast China. Silver dollars tended to circulate more in core areas, and silver ingots were used more in peripheral areas. Here, “peripheral areas” denotes not only the peripheral provinces but also regions within the core provinces that were more than 75 miles (two days’ walking distance) from main transportation lines or from the major ports.72 ————— 68. Lin Zexu, Lin wenzhonggong zhengshu, jiaji, Jiangsu zougao, 5.12a–b. 69. Feng Guifen, Jiaobinlu kangyi, shang, 43a–b. 70. Masui, “Silver and China in the 19th Century,” pp. 12, 14, 15. 71. Lin Zexu, Lin wenzhonggong zhengshu, jiaji, Jiangsu zougao, 5.3a. 72. G. W. Skinner uses the terms “periphery” and “core” to denote areas of China with different degrees of prosperity but does not give a precise definition. Skinner (The

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Around 1837, a contemporary observer noted that silver dollars tended to be used in southeast China.73 In 1838, it was remarked that silver dollars were used in southern provinces such as Jiangsu, Zhejiang, Fujian, and Guangdong.74 Another observer, writing between 1840 and 1846, pointed out that “silver ingots are used more in north China. In the several provinces of southeast China, other than the big cities, markets never have silver ingots.”75 Lin Zexu noticed that foreign silver dollars did not circulate in northern areas such as Shandong province and southern Manchuria because they had unfavorable trade balances with the southern provinces.76 In the vast area north of the Yangzi River, the price of silver was denominated in terms of silver ingots. The same was true of the great cities of central China, such as Hankou, and western China.77 In Quanjiao county in Anhui, silver ingots were used for large transactions.78 In a memorial of 1846, the governor of Shanxi described the use of silver ingots in mountainous areas: “Even in the small, isolated mountainous districts, there are still people using animals to carry silver ingots to exchange for copper coins or grain for profit.”79 In the Daoguang era, silver ingots were cast even in Inner Mongolia (see Fig. 1.13). Exceptionally powerful or wealthy families in northern China did use silver dollars. Among the confiscated properties of Heshen were 58,000 foreign silver dollars kept at pawnshops or bank shops, together with ————— City in Late Imperial China, pp. 281–82, 284–85) states that “core” denotes areas with higher per capita incomes, higher demand for commodities, higher population densities, more arable land, more capital investment, and more commercialization. But we usually do not have enough data to confirm such measurements. Thus Skinner’s definition is not as precise as Charles Remer’s (The Foreign Trade of China, p. 240) demarcation of a core as two days’ walking distance, about 75 miles, from a major mode of transportation. 73. Wang Liu, Qiangbi chuyan, xuke, 9b. Wang originally said that the paper notes denominated in copper coins were more widely used in the provinces to the “northwest” of Jiangsu than in south China. 74. SL, 312.1b, DG 18.7.1 (Shanxi Governor Shen Qixian, Sichuan Governor-General Baoxing). 75. HCJSWXB, 58: 60; Miao Zi, Miao Wuliegong yiji, 1.10b. 76. Lin Zexu, Lin wenzhonggong zhengshu, jiaji, Jiangsu zougao, 5.2a. 77. North China Herald, 1856.4.19, p. 150; collected in ZJHSZL, pp. 57–58. 78. Jiang Kerang, Quanjiao xianzhi, 6.10a. 79. GZD, DG 26.9.9 (Wu Qijun).

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Fig 1.13 Silver ingot cast near Mongolia. Guihua ᤿‫ ݓ‬is a city in Suiyuan in present-day Inner Mongolia. As this image shows, silver circulated even in such poor provinces.

much larger amounts of silver ingots, copper coins, and gold.80 As a whole, the use of silver, in ingots and in coins, prevailed nationwide— more broadly than previous scholars have described.81

limited state control over silver supply It was only through taxation that the Qing state could acquire silver stocks. The land tax revenues of the Qing government were equal to only around 2.4 percent of national income.82 In contrast, a minimum of 20 percent and perhaps as much as 40 percent of all American silver shipped to Spain went directly into the government treasury. The remainder went into the pockets of assorted government officials and various aristocratic families who owned rights in the American mines. In Tokugawa Japan, since the state monopolized both the silver mines ————— 80. Xue Fucheng, Yongan suibi, 9.15a. 81. For example, the map in Yeh-chien Wang, Zhongguo jindai huobi, p. 21, does not show that northern China used silver. 82. Yeh-chien Wang, Land Taxation, p. 133.

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Fig. 1.14 Daoguang ingot with the name of the bank and the silversmith. In contrast to the European use of the ruler’s head to illustrate monetary sovereignty, this Chinese silver ingot of 1839 used the names of the bank and silversmith to attest to its trustworthiness.

and foreign trade, the government controlled the supplies of precious metals. As early as 1775, the government of Japan cast its own silver money. 83 In Vietnam, in addition to the copper coins for small exchange, the government cast gold and silver ingots for large transactions. About 1830, the government even began casting silver dollars of the same weight as Spanish dollars.84 Historically, European countries used coins or currency as a symbol of the monarch or the state. For example, early modern French kings bought new bullion, foreign coins, or worn-out domestic specie to cast money at the royal mint.85 After the Labor government nationalized the Bank of England in 1946, the government decided to place the picture of the sovereign on paper currency, as it did on coins minted by the government.86 Even though China’s government mints put the current reign name on the face of copper coins, silver ingots had only the name ————— 83. Weatherford, The History of Money, p. 98. 84. Williams, The Chinese Commercial Guide, p. 295. 85. Miskimin, Money and Power, p. 30. 86. Weatherford, The History of Money, p. 166.

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Figs. 1.15–1.16 Silver ingot of 3–5 liang. Wishes for good fortune ( fu ⏠) and long-life (shou ஛) are inscribed on this small silver ingot, which was called a xiaoding ෑ㞦.

and location of the bank shop or craftsman who had cast them, as well as the weight (in units stipulated by the state; see Fig. 1.14): yuanbao ؑ඾ for ingots weighing 50 liang (Figs. E.1, 1.13,), zhongding ό㞦 for ingots of 10 liang (Figs. 1.4–1.8, 1.14,), xiaoding ෑ㞦 for those weighing 3–5 liang (Figs. 1.15–1.16), and xiyin ♥㜯 for smaller pieces (Fig. 1.17).87 As an assurance of quality, the state also required each silver ingot, particularly those used for taxation, to be cast with the name of the bank and its location; sometimes even the name of the craftsman who made it.88

Fig. 1.17

Silver ingots smaller than 3–5 liang (xiyin ♥㜯).

————— 87. Wei Jianyou, Zhongguo jindai huobishi, p. 22. 88. QSG, shihuo zhi 2, fuyi: changku, p. 23: “In 1776 the Board of Revenue’s proposal was granted requiring that the silver ingots forwarded by each province to the capital be inscribed with the department and district, year and month, and the silversmith’s name, regardless of whether they were yuanbao or xiaoding.”

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Fig. 1.18 Ingots shaped like slender silk. Various regions used small ingots in particular shapes; these are from the Zhejiang area.

Ingots were called different names in different regions. For example, ingots in Guangxi were called bailiuyin ↦᪸㜯, “silver in the shape of a white stream,” and in Zhejiang yuansiyin ؑ⚙㜯, “silver in the shape of a slender silk” (Fig. 1.18). Adulteration with lead and copper was common for silver used as money. Silver ingots for paying taxes had a silver content of between 92 and 100 percent; those for everyday transactions between 70 and 95 percent. Scales for weighing silver differed from place to place and could vary as much 6 to 7 fen for every liang of silver.89 This also reflects the imperial state’s lack of control over silver supply.

merchants moving silver or notes across the provinces Even though copper coins were cast by the state, they were not a national currency in the sense of serving as a medium of exchange that integrated the whole nation. Rather, they were mainly a currency to be used within a given province. The name of the originating mint was indicated in Manchu script on standard copper coins, which were intended for use only in the surrounding areas. Even the copper coins ————— 89. Wei Jianyou, Zhongguo jindai huobishi, pp. 22, 30.

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Figs. 1.19–1.20 Pul coins of Xinjiang. Eight towns in southern Muslim Xinjiang used pul copper coins. Pul was the native word for “coin.” Ili sometimes used a kind of red copper coin of a local style, which differed from the pul coin issued in southern Xinjiang. Since northern Xinjiang had more contact with inland China, the standard copper coin was used (ZJHSZL, p. 82). The pul copper coins used in Xinjiang did not have square holes in the center, were made with red copper, and weighed 2 qian, making them smaller and heavier than the standard copper coin (HCJSWXB, juan 59, 31 huzheng, qianbi, zhong.45a [Li Xingyuan, “Chouyi fangzhu Huiqianshu”]).

cast by the Beijing mints were not national currency, but were used only in Beijing and nearby Shuntian prefecture. The neighboring province of Zhili had its own mint for casting copper coins.90 In the early nineteenth century, with the exceptions of southern Xinjiang, where pul coins were used (Figs. 1.19–1.20), and Tibet, where silver dollars were used (Figs. 1.21–22), standard copper coins were used in every province, mostly for exchanges valued below 1,000 wen. The heaviness and unequal numbers of coins needed to constitute a string hindered their circulation from province to province,91 except in border areas or to provinces with no mints.92 It was silver and notes that circulated between provinces. ————— 90. King, Money and Monetary Policy, p. 127. 91. Officially, 1,000 wen of standard copper coins constituted one string; most places used at least 900 wen, although in Manchuria, Shaanxi, Zhili, and Shandong there were as few as 100 to 700 wen in a string (Wei Jianyou, Zhongguo jindai huobishi, p. 60). 92. For example, in 1844 copper coins cast in Shaanxi were used in trade with Sichuan, Hubei, and Henan (ZG, 1352, Li Xingyuan). According to an official report from Fujian, provinces such as Henan and Shandong, which did not have mints, used the copper coins of other provinces (ZJHSZL, p. 76; see also GZD, DG 22.2.27, Governor-General Yiliang, Governor Liu Hongao).

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Figs. 1.21–1.22 Silver coins of Tibet. Because Tibet did not produce copper, the Tibetan mint, merchants, and craftsmen cast silver coins. Chinese characters were inscribed on the front surface of the coins and Tibetan characters on the back; there was no central hole, but the date of the coin was inscribed around a central circle (Wei Yuan, Shengwu ji, 14.42a). Tan Bi’an (p. 208) says these Tibetan coins, first cast in the Qianlong reign, were influenced by the silver dollars from the British East India Company.

Silver ingots were comparatively more unified nationwide. In 1838, the governor of Guizhou reported that the quality of silver ingots used in various places was very uniform.93 Even though some differences in weight and fineness existed, merchants engaged in interregional trade had established exchange rates for them.94 The unity of silver content within each ingot along with the silver’s high unit value relative to copper coin allowed silver to become the medium for exchanges that crossed provincial boundaries. Indeed, a massive amount of silver flowed from province to province, even in northern China. An official report from Fengtian (Manchuria) dating to 1855 recorded: Fengtian was not originally a rich area, and most of the natives had made a living from agriculture. All those engaged in trade had relied on rich people from Shanxi to bring large amounts of capital here to open local banks, and the shop owners of this province borrowed money from them at interest. For more than one hundred years, money circulated in this way. Since the Taiping army moved ————— 93. GZD, DG 18.7.16 (Guizhou Governor He Changling). 94. Wei Jianyou, Zhongguo jindai huobishi, p. 36; Zhang Huixin, “Qingmo huobi biange,” p. 333; Tan Bi’an, “Zhongguo jindai huobi de biandong,” p. 191.

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Fig. 1.23 Bank shops of Jiangsu. In Xu Yang’s Prosperous Suzhou of the Eighteenth Century (Gusu fanhua tu ల⵪✯⯂ੌ), the shop at the right of the street is a bank shop, as revealed by its sign.

north in 1853 and the need for military funds arose, however, those rich merchants who had opened banks in Fengtian took their capital back to their native places. This amounted to not less than 3 million liang in two years.95

Moreover, as Feng Guifen noted around 1850, silver circulated by means other than the actual transport of bullion: “Today, since each of the Shanxi merchants has more than ten branches in various provinces, their drafts can be converted into cash everywhere.”96 The nationwide network of the Shanxi banks was reinforced in the late eighteenth century and certainly facilitated the circulation of silver throughout China. A public gazette of the Ministry of Agriculture, Industry, and Commerce also noted in 1907: “The Shanxi banks are crucial for the circulation of silver in China. . . . All twenty-one provinces rely on the Shanxi banks. This is a phenomenon not just of today, but of the last 110 years [i.e., since 1797].”97 The number of private bank shops engaged in ————— 95. GZD, XF 5.12.2 (Yinglong and others). 96. Feng Guifen, Xianzhitang gao, 11.34b. 97. Gugong buowuyuan, comp., Shangwu guanbao, Dingwei (1907), 26: 2 (GX 33.10.5), pp. 23–24.

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Fig. 1.24 Bank shop in Shanghai. The best standard copper coins (wanxuan guanqian ⯯㖛൴㞨) in this illustration from the Dianshizhai journal show copper coins for exchange in a Shanghai bank shop.

exchanging silver and copper coins, accepting deposits, and making loans increased in the late eighteenth century. For example, between 1766 and 1776, Shanxi merchants set up at least 130 bank shops in Suzhou (see Figs. 1.23–1.24).98 In 1846, the governor of Shanxi obtained the following information from commercial brokers (yahang Ẍ ⼾ ): “When merchants bring silver back [to Shanxi], the price of silver falls; when the merchants take silver out of the province for business, the price of silver rises suddenly.”99 Thus it was merchants, rather than the state, that controlled the interprovincial flow of silver and its price in each province. Moreover, ————— 98. Fan, Ming Qing Jiangnan shangye de fazhan, p. 66. 99. GZD, DG 26.9.9 (Wu Qijun).

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this silver was obtained from international trade. From about 1775 on, this external market shifted from Asia to the larger world. This change plunged China into a new set of circumstances.

Silver Supply from the Sixteenth to the Eighteenth Centuries the insufficiency of continental silver From the perspective of silver, which supplied an important currency for this large economy, China was deeply involved with the outside world even prior to 1842. One basic reason for this involvement was the insufficiency of continental silver from Yunnan, Burma, and Annam. The Yunnan mines had been China’s most important domestic source of silver since the thirteenth century.100 The production of Yunnan silver increased about fivefold from around 1600 to the late eighteenth century and then decreased to about one-third of the late eighteenth-century level by 1829.101 Meanwhile, due in part to the indigenous peoples’ lack of mining technology, the Chinese opened silver mines in areas of Burma and Annam bordering Yunnan and Guangxi in the mid-eighteenth century.102 The Burmese mines were opened between 1747 and 1758, and the Annamese mines between 1740 and 1775. 103 Once the Burmese and Annamese mines became lucrative, however, they became targets for depredations. The main mines in Burma were plundered in 1758 and 1759, and all their Chinese miners returned home. ————— 100. Quan, Zhongguo jing jishi yanjiu, 2: 249. 101. Shiba Yoshinobu (“Jşroku, jşshichi seiki,” pp. 46, 48) points out that Yunnan’s average annual silver production was 97,422 liang in 1599–1606. According to Quan, Zhongguo jing jishi yanjiu, 2: 248–49, Yunnan paid 62,589 liang of silver in taxes in 1812. At the 15 percent tax rate, this means that Yunnan produced 417,260 liang of silver that year. The same calculations yield figures of 460,000 liang for the period 1736–95, 160,760 liang in 1817, and 140,946 liang in 1829. 102. See Quan, Zhongguo jing jishi yanjiu, 2: 259, citing a Qing official’s remark. Shen Xu (Zhongguo Xi’nan duiwai guanxishi yanjiu, pp. 85–87) points out: “The offspring of some late Ming loyalists, as well as aborigines and poor people from Jiangxi, Hunan, Hubei, Guangdong, Guangxi, and Yunnan formed the main workforce of the Burmese mines.” The name of Vietnam was changed from Annam to Vietnam in 1804. 103. Wada, “Shindai no Buetonamu Biruma gin,” p. 134.

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The chief silver mines in Annam, on the Guangxi border, were shut down in 1775 because of pressure from the Annamese government.104 Silver from Southeast Asia did not meet the needs of even Yunnan and Guangxi, and little of this silver was forwarded to other provinces. The difficulties of transportation in Yunnan and Guangxi made these two provinces dependent on silver. The amount of silver used in Yunnanese commerce around 1451 was three times that in other provinces. 105 In early nineteenth-century Yunnan, silver and copper coins were so commonly used in commercial transactions and paper notes cashable in other areas were never used. 106 The silver from Burma’s Maolong ⫻㩁 mines supplied mainly Yunnan. When the mines closed in 1759, the supply of silver in Yunnan proved insufficient. The price of silver in terms of copper coins in Yunnan that year reached levels as high as 2,500–2,600 wen per liang of silver (even 3,000–4,000 wen on occasion), whereas in other provinces it was only 700–800 wen.107 Silver produced in the Annamese mines was exported mostly to Guangxi in the form of bracelets in exchange for needles, thread, shoes, and clothes.108 The price of silver in terms of copper coins in Yunnan and Guangxi was 1.5–2.0 times that of other provinces from the eighteenth to the early nineteenth century.109 This suggests that the demand for silver in Yunnan and Guangxi had outstripped the supply of continental silver. With the exception of Tibet, which had its own silver supply,110 ————— 104. Ibid., pp. 129, 133, 134; Martin, China: Political, Commercial, and Social, 1: 176. Dai Nam Thuc Luc (1839) recorded that the Vietnamese emperor read the Beijing Gazette and noticed that Qing officials mentioned that silver-mining taxes in Vietnam were low and the mines still produced 2 million liang a year. The Vietnamese emperor hence raised the silver taxes and started to operate the mines himself. 105. Quan, Zhongguo jing jishi yanjiu, 2: 236. 106. ZJHSZL, p. 141. 107. Wada, “Shindai no Buetonamu Biruma gin,” p. 129. 108. Quan, Zhongguo jing jishi yanjiu, 2: 258–59. 109. WJD, DG 27.2.12 (Li Xingyuan); also in Li Xingyuan’s biography in ZG. GZD, DG 26.6.20 (Guangxi Governor Zhou Zhiqi); WJD, DG 18.10.20 (Guizhou Governor He Changling); GZD, DG 27.6.26 (Guangxi Governor Zheng Zuchen). See also the table in Zheng Yongchang, “Qingdai Qianlong nianjian de siqian liutong,” p. 22, which is based on the imperial official reports housed at the First Historical Archives in Beijing. 110. Wei Yuan, Shengwu ji, 14.42a.

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Qing China used silver mainly from overseas, either from Japan or Latin America.

japanese silver supplies Until the beginning of the sixteenth century, Japan still imported silver. Only in the mid-sixteenth century were silver mines vigorously opened and expanded in Japan; whose production peaked between 1575 and 1625.111 The introduction of a new technology from Korea, which used lead and was known as the “ash-blowing method,” made it possible to refine silver on site and increased production enormously.112 Japan thus started to produce silver roughly a decade earlier than Latin America, using a different technology. The most important silver mine in Japan, the Iwami mine, was discovered in 1526. In 1533 the ashblowing technology was applied to silver production in Japan. In America, the Spanish government started casting silver dollars at its official mint in Mexico in 1535.113 The use of mercury amalgam in silver mining was introduced from Europe to Mexico in 1556. 114 Even though the mercury amalgam method was known in Japan, because Japan had plenty of lead and not enough mercury (used in the production of lacquer, cosmetics, and drugs, as well as for copper plating), the mercury amalgam process was rarely used in Japan.115 China also used lead for silver mining in the late Ming period.116 The European interest in Japanese silver led to the introduction of European smelting processes, excavation techniques, and surveying instruments that enhanced Japan’s silver production.117 The sixteenth-century global silver trade involved both Japanese and American silver (see Map 1.1).

————— 111. Tashiro, Kinsei NitchŇ tsşkŇ bŇekishi no kenkyş, pp. 332–34. 112. Tashiro, “Tokugawa jidai no bŇeki,” p. 136; Shimane Prefectural Board of Education, Iwami-Ginzan Silver Mine, n.p. 113. Ono, Kindai NihŇn heisei, p. 2. 114. Vilar, A History of Gold and Money, p. 117. 115. Innes, “The Door Ajar,” pp. 541–43. 116. See Song Yingxing, Tiangong kaiwu, pp. 244–49, for three maps showing that the Chinese silver-mining process used lead rather than mercury. 117. Innes, “The Door Ajar,” p. 543.

Map 1.1Silver routes in the sixteenth century (adapted from Iwanami Ginzan Museum, History of Iwami Silver Mines, p. 4).

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Japan’s sizable consumption of Chinese silk in the sixteenth century gave it an incentive to open silver mines to pay for these imports.118 Japan began exporting silver to China around 1540,119 and between 1560 and 1644, Japanese silver was exchanged for, among other products, Chinese silk, cloth, mercury, porcelains, old coins, paintings, calligraphy, books, medicine, carpets, cosmetics, and lacquer.120 However, the Ming dynasty banned maritime trade between 1372 and 1567,121 and the official trade, which exchanged Chinese copper coins and silk for Japanese sulfur and fans, was discontinued from 1404 to 1550. After 1592, the Japanese government sent merchants from Kyoto, Sakai, and Nagasaki to trade in Cambodia, Annam, Thailand, the Philippines, and Taiwan. All these places forwarded Japanese silver to China. 122 Between 1550 and 1650, Japanese silver was also imported into Amoy and Macao.123 During the wako ( Japanese pirate) period, extensive smuggling of Japanese silver into China occurred. Many Chinese, Japanese, and Europeans participated in this illicit trade. 124 Even though the Portuguese mostly used Spanish silver, the Portuguese in Macao (founded in 1557) chiefly used Japanese silver for the China trade.125 Because Portuguese traders habitually defied the Japanese government’s ban, imposed in 1609, on exporting good-quality silver, they were expelled from Japan and replaced, after 1635, by the more compliant Dutch traders. 126 The bakufu government also allowed Chinese traders to exchange silk for silver at Nagasaki. In 1661 the Zheng family on Taiwan replaced the Dutch as the leading exporters of Japanese silver through Taiwan to China. With the Dutch withdrawal to Batavia, ————— 118. Tashiro, “Tokugawa jidai no bŇeki,” pp. 132–35. 119. Shiba, “Jşroku, jşshichi seiki,” p. 46. 120. Kimiya, Nisshi kŇtsş shi, pp. 396–98. 121. See Cao Yonghe, “Shilun Ming Taizu,” pp. 41–70, for a description of how the first emperor of the Ming dynasty tried to limit the economic resources of local powerholders in coastal regions by adopting the maritime ban policy. According to Chang Pin-tsun (“Ming-Qing liangchao,” pp. 45–59), even though the first maritime ban of Ming dynasty was issued in 1372, the policy had begun in 1368 and ended in 1567. 122. Tamura, Higashi Ajia bŇekishi ron, p. 109; von Glahn, Fountain of Fortune, p. 121. 123. Shiba, “Jşroku, jşshichi seiki,” p. 46. 124. Tamura, Higashi Ajia bŇekishi ron, p. 108. 125. Boxer, “Plata es Sangre,” p. 459. 126. Tashiro, “Tokugawa jidai no bŇeki,” pp. 137–43.

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many more Chinese merchants entered the trade between Japan and China.127 From 1648 to 1672, Chinese traders exported two to four times the amount of Japanese silver that Dutch merchants did. This outflow of silver triggered the Tokugawa prohibition on silver exports in 1668. In order to purchase Chinese silks, the bakufu began exporting copper to China.128 Due to the depletion of Japan’s mines, Japanese silver exports to China decreased even before the silver-export restrictions and importsubstitution policies were put into effect in 1685.129 The annual average exports of Japanese silver to China through Nagasaki in the early seventeenth century were worth around $0.2 million. This increased to around $1 million in 1648–72, and then decreased to $0.8 million in 1673–84. During 1709–62, it reached a low of $2,530 per year. In the late eighteenth and early nineteenth centuries, because of copper and marine products purchases, China had an annual deficit of around $100,000 in its trade with Japan (see Table 1.3). Japanese silver also entered China through Korea and the Ryukyu Islands. The silver exported to Korea through Tsushima was generally of lower quality than that directly exported to China. But in terms of silver content, Japanese silver exports to Korea in 1686 were 6.2 times higher than direct exports to China through Nagasaki; in 1694 they were a thousand times higher.130 However, Japanese silver exports to Korea declined from the late seventeenth century to the mid-eighteenth century, and all but ceased between 1744 and 1747.131 A portion of Japan’s silver exports to the Ryukyu Islands via the Satsuma domain were also forwarded to China; after 1680 this trade also outstripped the Nagasaki-China silver trade.132 However, the Ryukyu————— 127. Nagazumi, “TŇzai kŇeki no chşkeichi Taiwan no seisui,” p. 166. 128. Tashiro, “Tokugawa jidai no bŇeki,” pp. 144–49. 129. Tashiro, “Jşshichi seiki,” p. 50. 130. Tashiro, Kinsei NitchŇ tsşkŇ bŇekishi no kenkyş, English abstract. However, Innes (“The Door Ajar,” pp. 416–17, 427) shows that Japan’s trade with China (not just the silver trade) was bigger than Japan’s Tsushima trade. 131. Tashiro, Kinsei NitchŇ tsşkŇ bŇekishi no kenkyş, pp. 270, 297, 328, 332, 337, 339–41. 132. Tashiro, “Jşshichi seiki,” p. 48.

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Table 1.3 Estimated Imports of Silver from Nagasaki, 1601–1840 (Unit: silver dollars) ____________________________________________________________________ Years Years Average (long-term) Amount (short-term) Amount per year ____________________________________________________________________ 1601–1647 1648–1708

1709–1762 1763–1840

10,067,156a 50,363,910b 136,606c –9,990,445d

1648–72 1673–84

26,103,270e 9,612,788e

1763–82 1783–90

–857,860 –39,702

214,195 825,638 1,044,131 801,066 2,530 –128,083 –42,893 –4,963

total 50,577,277 ____________________________________________________________________ note: In the original sources, amounts were expressed in the Japanese kan, the Chinese liang, and modern kilograms. All have been converted to silver dollars. aņtake Fumio, “Min-Shin jidai ni okeru gaikokugin no ryşnyş,” p. 57, using the calculations of Arai Hakuseki. bIbid., from the records of the Nagasaki trading office. cYamawaki TeijirŇ, Nagasaki no TŇjin bŇeki, p. 214, based on contemporary writers’ notes. dIbid., p. 215, quoting Ujida GinzŇ’s reliable estimate based on one diary and one note. eIbid., based on a contemporary record from Nagasaki.

Satsuma channel underwent a restructuring earlier than the TsushimaKorean channel. After 1715 the proportion of silver in this trade decreased greatly, with seaweed and miscellaneous goods from the Tokugawa bakufu taking its place.133 To sum up, imports of silver to China from the Ryukyus ended in 1715, from Korea in 1747, from Burma in 1758, from Japan in 1760, and from Annam in 1775. I therefore take 1775 as the cutoff date for Asian silver exports to China and as the year when China came to rely almost totally on Latin American silver.

the influx of latin american silver After Spain established Manila in 1571, Spanish America became another major supplier of silver to China through the Philippines. Even before the Spanish arrived, many Chinese from Fujian had settled and ————— 133. Tashiro, “Tokugawa jidai no bŇeki,” pp. 160–64.

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traded in the Philippines. From 1565 to 1815, one to four galleons with capacities of 300 to 2,000 tons each sailed annually between the Philippines and Spanish America. The price of silver in terms of gold was more than twice as high in China as in Spain. Chinese silk and Spanish silver were the two commodities valuable enough to pay for the high transportation costs of the cross-Pacific voyage. Some silver was also obtained by the Portuguese and Dutch from Spain and re-exported to China.134 Of the Spanish silver shipped to the Philippines, more and more was shared by South or Southeast Asian countries from the midseventeenth century on.135 For example, by 1810 the value of imports in Manila from India and China were equal. 136 More and more Latin American silver for China came from Europe. England was the most important European country bringing Latin American silver to China in the eighteenth century. England reached a trade agreement with China in 1699, but the Anglo-Chinese trade did not develop until the second half of the eighteenth century. The four ports opened to foreign trade in 1685 were replaced by Canton in 1757, which thereafter was the main center for the Sino-British trade.137 British trade with China increased more than tenfold from 1760 to 1800.138 On average, England controlled 78 percent of the value of total trade between China and the West during the second half of the eighteenth century.139 European countries exported more silver than goods to China in this period. For example, some 95 percent of British payments for Chinese exports between 1721 and 1740 were made in silver dollars.140 As tea drinking became widespread in England, 141 Chinese tea exports came to dominate Sino-British trade in the eighteenth century. Silk accounted for 16.59 percent and tea for 83.41 percent of the British ex————— 134. Quan, “Zailun Ming Qing,” pp. 167–71. 135. Kindleberger, Spenders and Hoarders, pp. 24–25; Souza, “Cinnamon, Silver and Opium”; Legarda, After the Galleons, p. 46. 136. Legarda, After the Galleons, pp. 46–47. 137. Yan, Zhongguo jindai jing jishi tong ji ziliao xuanji, p. 1. 138. For trends in this trade, see the index number shown in ibid., p. 3, table 1. 139. Calculated from ibid., p. 4, table 2. 140. Hsin-pao Chang, Commissioner Lin, p. 41. 141. ņtake, “Min-Shin jidai ni okeru gaikokugin no ryşnyş,” pp. 41–42.

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Table 1.4 Export Values of Tea and Silk from China to England Through the East India Company, 1760–1833 (Unit: liang) ____________________________________________________________________ Export As percentage Export As percentage value of of total value of of total Years tea export value silk export value ____________________________________________________________________ 1760–64 806,242 91.9% 3,749 0.4% 1765–69 1,179,854 73.7 334,542 20.9 1770–74 963,287 68.1 358,242 25.3 1775–79 666,039 55.1 455,376 37.7 1780–84 1,103,059 69.2 376,964 23.1 1785–89 3,659,266 82.5 519,587 11.7 1790–94 3,575,409 88.8 274,460 6.8 1795–99 3,868,126 90.4 162,739 3.8 183,915 3.6 1817–19 4,464,500 86.9 1820–24 5,707,908 89.6 194,779 3.1 1825–29 5,940,541 94.1 n.a. n.a. 1830–33 5,617,127 93.9 n.a. n.a. ____________________________________________________________________ source: Yan Zhongping, Zhongguo jindai jing jishi tong ji ziliao xuanji, p. 14. The original sources do not have data for 1800–1816.

ports from China between 1760 and 1799 (calculated from the figures in Table 1.4). After Britain passed the Commutation Act in 1784, which reduced the tea import tax from 117 percent ad valorem to 12.5 percent, tea exports increased even more as a percentage of China’s total exports. Imports increased as well, but exports still far exceeded imports, necessitating large amounts of silver imports in the 1780s.142 In addition to the silver used to purchase Chinese commodities, silver also entered China because its price in terms of gold was much higher there than in Europe. Over the first half of the eighteenth century, the gold-to-silver ratio in China remained fairly constant at 1:10– 11.143 In Inquiry into the Nature and Causes of the Wealth of Nations, which Adam Smith published in 1776, he noted that the same unit of silver could be exchanged for more gold in China than in Europe.144 ————— 142. Pritchard, “The Crucial Years,” pp. 145, 146, 155. 143. Flynn and Giráldez, “Cycles of Silver,” p. 395. 144. Peng Xinwei, Zhongguo huobishi, p. 540.

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From 1700 to 1751, England, Holland, France, Denmark, Sweden, and Prussia exported about $68,073,182 to China. In 1752–1800, the flow of silver from these countries to China increased to $104,785,273.145 The United States entered the China trade after declaring independence in 1776, and the U.S. share of China’s export trade quickly rose from 0.3 percent in 1780 to an average of 30 percent between 1805 and 1833, or 21 percent for the whole period between 1780 and 1833.146 It has been estimated that the United States exported $90 million to China from the onset of trade until 1833.147

china’s growing involvement in the global economy It is difficult to pinpoint exactly when Latin America began to eclipse Japan as China’s major source of silver. As William Atwell concludes, “From the 1530s until at least the 1570s, China’s primary source of foreign silver was Western Japan.” 148 Although China’s imports of both Japanese silver and American silver increased in the early seventeenth century, Dennis O. Flynn and Arturo Giráldez still accept Robert LeRoy Innes’s statistics that Japan was China’s primary source of silver in the late sixteenth and early seventeenth centuries.149 Based on information gathered by Richard von Glahn, in the period 1601–1700, Japanese silver accounted for 75 percent and Latin American silver for 25 percent of imported silver in China. 150 Flynn and Giráldez have expressed doubts about this number for the late seventeenth century, however, because Latin America’s silver production or silver shipments to Manila did not decrease during this time, as previous scholars have ————— 145. Yu Jieqiong, Zhongguo yinhuo shuchuru, p. 36. 146. Yan, Zhongguo jindai jing jishi tong ji ziliao xuanji, p. 5. 147. ņtake, “Min-Shin jidai ni okeru gaikokugin no ryşnyş,” pp. 67–70, which was based on statistical records of the United States and the studies of H. B. Morse and R. S. Latourette. Martin (China: Political, Commercial, and Social, 1: 176) gives a similar figure of $100 million. 148. Atwell, “International Bullion Flows,” p. 68. 149. Flynn, Giráldez, and Sobredo, European Entry into the Pacific, p. 270. 150. Calculated from von Glahn, Fountain of Fortune, p. 232, table 23.

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Table 1.5 Chinese Junks Sailing to Manila, 1570–1760 ____________________________________________________________________ Year Total Annual average ____________________________________________________________________ 1570–1579 75 7.5 1580–1643 1,677 26.2 1644–1684 271 6.6 1685–1716 525 16.4 1717–1760 549 12.4 ____________________________________________________________________ source: Qian Jiang, “1570–1760 nian Zhongguo he Lüsong de maoyi,” p. 72.

argued. 151 Zheng Yongchang has made similar observations but also noticed that China’s maritime ban against the Zheng regime in the period 1655–83 greatly decreased the number of Chinese junks sailing to Manila (see Table 1.5). The ban could have caused the decrease in silver imported from Manila.152 Conversely, the ban actually created more opportunities for the Zhengs to trade through their base on Taiwan. As von Glahn has shown, the Zhengs monopolized the Sino-Japanese Nagasaki trade at this time.153 Moreover, since the Tsushima, Ryukyu Islands, and even Annam routes were still open for transhipping Japanese silver, the total amount of silver from Japan could have still been higher than American silver from Manila or Europe in this period. The total value of Japanese silver entering China through Nagasaki was only $0.14 million between 1709 and 1762 (see Table 1.3); some $68 million in Latin American silver was imported between 1721 and 1740. Latin American silver clearly superseded Japanese silver in the early eighteenth century, with Japan’s drastically declining trade through Korea and the Ryukyu Islands to China. However, the importance of American silver for early eighteenth-century China should not be overemphasized for several reasons. First, Latin American silver dollars were used mainly in Fujian and Guangdong. Second, the Philippines divided its supply of silver among China and other countries. Third, the British trade increased only slowly. ————— 151. Flynn and Giráldez, “Born with a ‘Silver Spoon,’ ” p. 214; Flynn, Giráldez, and Sobredo, European Entry into the Pacific, p. 268. 152. Zheng Yongchang, Mingmo Qingchu de yingui qianjian xianxiang, p. 84. 153. Von Glahn, Fountain of Fortune, p. 226.

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In the early and mid-eighteenth century, Japanese silver exports to China and Korea both drastically decreased. Silver disappeared in Korea, another conduit for Japanese silver to enter China, when China had insufficient amounts of silver and more copper coins were cast in the early and mid-eighteenth century.154 It was not until 1876 that Korea imported Latin American silver. From the eighteenth century to 1876, silver was rarely used in Korea in international trade or for government business.155 But, during this period, imports of Latin American silver imports increased only slowly. Burmese and Annamese silver, used mainly in Yunnan and Guangxi, grew in importance in the early eighteenth century and some Japanese silver was still entering China prior to 1775. It was not until after 1775 that Latin American silver came to supply almost all of China’s needs. China imported so many silver dollars from Latin America not only because it lacked silver, but also because silver dollars satisfied the highly commercialized Chinese economy’s need for a more standardized medium of exchange. This was particularly true of the more convenient Spanish silver dollars that entered China after 1775. According to Zheng Guangzu, it was not until the very late Qianlong period (around 1775–95) that the gold-to-silver exchange rate in China changed in both the lower Yangzi area and in Yunnan from 1:10 to 1:15 (the international exchange rate). Zheng also noted that the exchange rate shifted to 1:16 in the Jiaqing and Daoguang reigns, as in the Western countries.156 Through the use of silver, China was becoming dependent on the global economy from late eighteenth to the early nineteenth century.

Conclusion Even though China started to use silver for tax payments in the sixteenth century, silver use continued to fluctuate. Silver was widely used before and after the maritime ban of 1661–83 and then declined in the 1740–75 period. Its use for both public and large-scale transactions in————— 154. On the insufficiency of silver in mid-eighteenth-century China, see Man-houng Lin, “The Shift from East Asia to the World.” 155. Oh, “Silver Flow and Silver as Money in Korea,” pp. 221–22. 156. Zheng Guangzu, Iban lu, zashu 6.47a.

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creased considerably in the late eighteenth century, due to imperial mandate and the availability of more reliable foreign silver dollars. The use of silver also expanded spatially. Silver dollars had been confined to Fujian and Guangdong in the early eighteenth century, but their use extended to the lower Yangzi area by the late eighteenth century and to the areas south of the Yellow River by the Daoguang period. In the early nineteenth century, even though peripheral areas used more silver ingots and core areas used more silver dollars, due in part to their relative trading power, the use of silver was in fact nationwide. The reinforcement of the Shanxi banks’ interprovincial financial network in the late eighteenth century facilitated this nationwide use. Compared with some neighboring countries, the Qing state relied more heavily on silver. The main native currency of Korea before the Japanese forced it to open to trade in 1876 were copper coins cast by the state and paper notes issued from around 1786 by merchants for long-distance transactions.157 When Japanese silver was imported into China through Korea in the early eighteenth century, the Chosžn dynasty prohibited the use of silver as domestic currency. The output of Korea’s silver mines went mainly to China.158 Still, China relied more on copper coins than did Tokugawa Japan. Although Chinese copper coins were imported by Japan into the sixteenth century,159 by the seventeenth century about three-fourths of Japan’s money was coined from gold or silver. This share dropped to about one-half in the eighteenth century and then increased to about 90 percent in the nineteenth century. Of this, gold and silver coins, as opposed to silver ingots, accounted for over half of the precious metals circulating as money.160 The Qing government, unlike India and the Tokugawa bakufu, left the supply of silver, whether in coins or by weight, to the merchants. The government of India, another important silver-using country in ————— 157 . Shibusawa, Report on Currency Adjustment in Korea, pp. 1–7; and Yong Hoon Rhee’s summary on August 10, 2004, in Seoul based on Huiyou Hong’s work published in North Korea in Korean, The Commercial History of Korea, pp. 254, 260. 158. Shin, “ChŇsen ChşsŇ jidai no kingin mondai.” 159. Von Glahn, Fountain of Fortune, pp. 53–54, 83–84, 88–96, 131–32. 160. ņkura and Shimbo, “The Tokugawa Monetary Policy,” p. 107.

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Asia, minted silver coins.161 The Tokugawa government cast both silver coins and silver by weight. The Qing state, on the other hand, provided currency for local use and stipulated the weights of silver ingots, but its openness to the use of coins of previous dynasties and its lack of control over either domestic or foreign private coins, as well as over the private issuance of notes backed by copper coins and silver, attest to its lack of monetary sovereignty. As they grew familiar with foreign silver dollars, the Chinese became aware that Western money put the ruler’s head on coins, even many people still called them “Buddha heads.” However, they were not aware of the implications of monetary sovereignty.162 According to Wei Yuan, 30–40 percent of the silver used in China came from domestic silver mines, and 60–70 percent came from overseas.163 Because domestic silver ore appears to have been very limited, Momose Hiromu has inferred that this “30–40 percent” included the Burmese and Annamese production.164 In the early nineteenth century, R. M. Martin (1803?–68) also deemed silver production in Burma and Annam to be part of China’s domestic silver production.165 From 1750 on, even though the British trade boomed and Japanese silver disappeared from China’s silver supply, silver supplies from Burma and Annam continued up to 1775. After that year, because silver from continental Asia was insufficient to meet even the needs of Yunnan and Guangxi, the dependence of other provinces on overseas silver was almost 100 percent. At the same time, the new Latin American silver coins began flowing into the lower Yangzi area around 1775, we can say that this year marked China’s almost total shift to reliance on Latin American silver. Since Korea did not use Latin American silver and Japan was determined to keep its silver for its own use, China’s dependence on the ————— 161. Lees, The Drain of Silver to the East, p. 40. 162. Liang Shaoren, Liangban qiuyu’an suibi, 3.10a: “The barbarian countries have made it the law that when a king accedes to the throne, his face be cast on the surface of silver coins. The Records of the Grand Historian records that the Persians used silver with the king’s face on it as money. When the king dies, his successor’s face is used.” 163. Wei Yuan, Shengwu ji, 14.33b. 164. Momose, “Shindai ni okeru Supein doru no ryştsş,” p. 134. 165. Martin, China: Political, Commercial, and Social, 1: 176.

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global economy through its greater use of American silver in the eighteenth and early nineteenth centuries was unique among East Asian countries. China’s growing reliance on silver and the fact that almost all of it was obtained from Latin America by the late eighteenth century set the stage for the nationwide impact of the silver outflow of 1808–56 because of the Latin American independence movements, which disrupted silver mining and the global silver supply.

chapter 2 Opium: The Culprit?

In the sixteenth to the eighteenth centuries, exports of tea, silk, and other commodities and the strong demand for silver were the main reasons for its inflow into China. It is generally held that, beginning in the early nineteenth century, opium imports led to an outflow of silver (louzhi ᰬ‫ )ޓ‬and thus the silver–copper coin crisis and the Opium War of 1839–40.1 I suggest in this chapter that opium imports were not the only factor behind the outflow and that exports played a major role in the evolving flow of silver and silver–copper coin exchange rates. The relatively sluggish world market for China’s exports, the disappearance of the basis for arbitrage in the higher price of silver in China relative to the rest of the world, and even the stimulus of opium imports due to the decrease in the Latin American silver supply were, I argue, important factors behind the silver outflow from China. In addition to silver outflow, some Qing scholar-officials and historical studies also noted the increasing supply or degeneration in quality of copper coins as factors behind the silver–copper coin crisis.2 On the other hand, both Wang Qingyun ᾄᇗ㪔 (1798–1862), who served on the Board of State History (Guoshiguan) in 1848–49, and Miao Zi ✴᜽ (1807–60), a private secretary who worked for provincial officials, ————— 1. Chung Tan, Triton and Dragon, chap. 2. 2. King, Money and Monetary Policy, pp. 142–43. Morse, International Relations, 1: 204. Peterson, “Early Nineteenth Century Monetary Ideas,” p. 24; Sasaki, “Ahen sensŇ izen no tsşka mondai”; Hamashita, “Foreign Trade Finance in China,” pp. 426–27; Hsin-pao Chang, Commissioner Lin, pp. 42–46; Wei Jianyou, Zhongguo jindai huobishi, pp. 2–10, 57–58; Tang Xianglong, “Daoguang chao yingui wenti.”

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pointed out that the supply of both silver and copper coins had decreased.3 In 1844, the Board of Revenue proclaimed, “The appreciation of silver is not caused by the abundance of copper coins; it is only caused by the decrease in silver.”4 In 1846, the governor of Guangdong noted: “The appreciation of silver is certainly due to the scarcity of silver because of its outflow rather than to a surplus of copper coins.”5 Although there is some disagreement about the role of copper coins in the crisis,6 only a few previous studies have totally denied its connection with the silver outflow.7 Previous discussions of the silver outflow have relied mainly on H. B. Morse’s study, which was based on British East India Company data ending in 1833. As we shall see, the post-1833 situation was even worse. Furthermore, the East India Company data cover neither private merchants’ trade nor the United States’ trade with China, which also influenced the movement of silver in and out of China. Since the silver– copper coin crisis lasted for nearly five decades, from 1808 to 1856, the questions of how the silver outflow developed in terms of time, space, and quantity and of how it was related to the silver–copper coin crisis require careful study. ————— 3. Miao Zi wrote: “вᕃϢᄰ䐶βấ㜯⬽䐶⢫㞨З⬽” (HCJSWXB, juan 58, huzheng 30, qianbi, shang.63a [Miao Zi, “Nigai yinbi zheqian shu”]). According to Wang Qingyun, “вᕃϢ㜯䐶ී⊧䑅㫡ὤ㜯ී䐶㞨Зී⊧” (Wang Qingyun, Shiqu yuji, 5.10a). 4. HCJSWXB, juan 58, huzheng 30, qianbi, shang.28a (Wu Wenrong: “Shefa guiqian jianyin shu”). 5. ZJHSZL, p. 122; “㜯‫כ‬ᕃᕙ䐶਷₭ᔦ㜯ී䐶⢫β㦸ϥ㞨ம.” 6 . Previous studies also mentioned the deterioration of copper coins in early nineteenth-century China. See Man-houng Lin, “Jia-Dao qianjian xianxiang chansheng yuanyin”; in that study I attribute the deterioration partly to the increasing cost of copper mining, transportation, and copper coinage, as well as the decline in bureaucratic morale caused by silver appreciation. 7. For a view that the silver outflow played no role in the silver–copper coin crisis, see Wang Hongbin, Wan Qing de huobi bijia, p. 79. Wang, a PRC scholar, deems the period from the late Qianlong to the outbreak of the Taiping Rebellion as one of peace and commercial prosperity and, following Karl Marx, argues that in a period of peace and greater commercialization, money with a high value is in greater demand, whereas in a period of war and with less commercialization money of less value is in greater demand. But early nineteenth-century China was not as prosperous as late eighteenthcentury China.

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Time, Space, and the Quantity of Silver Outflow Many scholars have relied on H. B. Morse’s study to determine the year that silver outflow began, but Morse’s data are scattered and sometimes inconsistent. Following Morse’s statistics, the first year for silver outflow is given variously as 1825, 1826,8 1827, or 1828.9 Some scholars date the onset to 1830 or even the 1830s.10 In 1799, in answer to an imperial inquiry, the governor-general of Guangdong and Guangxi said that no silver ingots had been exported from his jurisdiction.11 In 1801–13, India imported an annual average of 4,260 rupees of silver from China; imports reached 5,717 rupees in 1808–9 and peaked at 9,620 rupees in 1809–10.12 In 1809 the governorgeneral of Guangdong and Guangxi prohibited the export of silver. In 1814 the senior vice minister of the Board of Revenue proposed a strict ban on the smuggling of silver ingots abroad, and in 1822 a censor said that the supply of silver in China had decreased because of the silver outflow.13 According to the records of the London Customs, India enjoyed a net surplus in its trade with China every year from 1814 to 1856 (Table 2.1). The Indian silver import data in Table 2.1 are more reliable than the figures in Table 2.2, which Morse used to determine China’s trade balance. Morse’s statistics derive mainly from the reports of the Canton branch of the British East India Company. Since silver illegally exported from China could legally be imported into India, Indian records include the smuggled portion, or the private traders’ portion, which does not appear in the East India Company records. The Indian rec————— 8. For 1825, see Yang Duanliu, Qingdai huobi jinrong shigao, pp. 263–65; for 1826, see ibid., p. 261. 9. Yu Jieqiong, Zhongguo yinhuo shuchuru, p. 20; Yan, Zhongguo jindai jing jishi tong ji ziliao xuanji, p. 33; ņtake, Kinsei Shina keizaishi kenkyş, p. 121; Sasaki, “Ahen sensŇ izen no tsşka mondai,” p. 112. 10. Hamashita, “Foreign Trade Finance in China,” p. 389; Taiping Shanren, “Daoguang chao yinhuang wenti,” p. 42. 11. SL, 55: 30, JQ 4.11 (Governor-general of Guangdong and Guangxi Jiqing). 12. Richards, “The Opium Industry,” p. 67, table 3. 13. Yang Duanliu, Qingdai huobi jinrong shigao, pp. 203, 208.

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ords also include silver from northwest China, although the quantities involved were much less than those from southeast China.14 Anecdotal evidence suggests that the silver–copper coin crisis started to develop in some localities in the late Jiaqing period (1808–19) and became nationwide after 1820. In 1808, a censor noted that the people of Zhejiang and Jiangsu were suffering unduly from the inflation in silver prices relative to copper coins. An imperial edict of 1819, the penultimate year of the Jiaqing reign, reveals that because of a disparity in the silver–copper coin ratio among the provinces, it was found impracticable to set a fixed ratio.15 It was only in 1820, however, that Qing scholar-officials explicitly noted the silver–copper coin crisis.16 As the Qing scholar Liang Tingnan ᜮ࿱ᚵ (1796–1861) remarked, “At the very beginning, silver dollars were used to buy Chinese goods. Now, all this silver has been taken back. At the beginning, [foreign merchants] collected only silver dollars; today, they also collect silver ingots. At the very beginning, only British silver did not come; today, the silver of the United States and country traders does not come.”17 Because silver ingots were used more in inland China and silver dollars in the coastal areas, the exportation of ingots implies that the silver outflow had extended from core China to peripheral China. England (including India) and the United States were China’s main trading partners at this time. In the early nineteenth century, China had a favorable balance of trade for several years with England (not including India; see Tables 2.2 and 2.3) and usually had a favorable balance with the United States (Table 2.4). Yet its unfavorable balance with India (Table 2.1) exceeded its favorable balance with England and the United States. The reason that silver dollars from the United States and from private British merchants

————— 14. For the silver from northwest China, see Man-houng Lin, “Qingmo shehui liuxing xishi yapian yanjiu,” pp. 71–73; see also ZB, no. 1675, Wang Qingyun, n.p. 15. SL, 354: 27, JQ 24.2. 16. Bao, An Wu sizhong, 26.4b, 5a. 17. Liang Tingnan, Yifen wenji, 1.11b. The country traders are private merchants who were licensed by the British East India Company in India to purchase Chinese products and exchange them for Indian products. See Wakeman, “The Canton Trade and the Opium War,” pp. 167–68.

1824 1825 1826 1827 1828 1829

1814–23*

1814 1815 1816 1817 1818 1819 1820 1821 1822 1823 $2,545,811 $2,229,408 3,530,748 4,169,548 3,900,768 3,751,672 3,225,040

$3,095,290 $3,761,892 3,263,056 4,785,132 5,549,520 7,172,476 5,051,772

$2,829,211

$1,912,480 2,131,868 2,915,412 2,741,172 3,031,228 2,907,096

$2,502,380 2,788,480 2,997,576 3,117,428 3,142,380 2,170,264 1,090,652 3,339,284 2,555,748 1,753,920

$2,228,512 2,847,104 2,322,764 2,742,552 2,532,628 2,740,336 1,399,276 4,720,252 3,860,268 5,559,212

$1,730,112 2,293,260 2,131,944 2,818,908 3,233,452 3,336,252 2,927,144 3,041,456 3,843,424 2,936,156

$770,244 1,185,236 689,492 624,184 725,960 819,988

$685,706

$565,376 685,264 525,264 504,280 697,856 680,320 726,160 950,492 553,272 968,780

$6,761,544 7,979,040 9,644,172 10,074,472 11,650,108 9,096,800

$6,326,808

$5,296,268 6,320,848 5,845,604 6,364,260 6,372,864 5,590,920 3,216,088 9,010,028 6,969,288 8,281,912

–$4,849,064 –5,847,172 –6,728,760 –7,333,300 –8,618,880 –6,189,704

–$3,497,597

–$3,566,156 –4,027,588 –3,713,660 –3,545,352 –3,139,412 –2,254,668 –288,944 –5,968,572 –3,125,864 –5,345,756

Table 2.1 Trade Balance Between China and India, 1814–56 (in silver dollars) ______________________________________________________________________________________________ China India to China (B) (including Hong Kong) to India Other Balance Year (A) Opium Cotton products Total (A–B) ______________________________________________________________________________________________

1844 1845 1846 1847 1848 1849 1850 1851 1852

1834–43*

1834 1835 1836 1837 1838 1839 1840 1841 1842 1843

1824–33*

1830 1831 1832 1833

5,570,468 5,918,064 9,305,396 7,216,044 $5,759,382 $9,088,320 7,638,212 11,464,100 15,737,836 11,617,136 11,164,528 765,688 5,071,548 7,357,604 11,281,408 $9,118,638 $16,918,168 16,534,364 22,166,940 17,085,280 14,031,216 21,382,876 22,174,352 20,296,312 24,329,228

3,288,312 3,243,460 1,923,060 1,813,424

$2,590,751

$2,167,688 2,061,312 2,144,600 2,102,176 1,760,264 1,844,020 804,752 2,517,088 2,267,220 2,289,448

$1,995,857

$2,555,940 3,217,264 2,934,056 2,667,568 4,058,380 3,325,444 3,239,204 3,957,476 3,696,636

$5,116,656 4,725,836 3,282,480 3,454,016 2,504,480 4,054,048 2,966,016 4,641,456 9,167,704

$4,146,858

$4,474,760 2,955,264 5,383,472 5,151,936 4,115,788 4,942,220 2,787,212 2,831,356 3,316,052 5,510,520

$3,375,436

3,578,812 3,332,840 2,929,048 3,106,480

$864,320 948,124 585,364 388,632 435,680 668,236 467,016 472,372 595,136

$772,988

$672,672 880,156 866,428 878,476 659,976 841,820 465,256 803,732 861,520 799,840

$672,145

665,640 603,176 492,192 145,336

$22,899,144 22,208,324 26,034,784 20,927,928 16,971,376 26,105,160 25,607,384 25,410,140 34,092,068

$14,038,484

$14,235,752 11,473,632 17,714,000 21,768,248 16,392,900 16,948,568 4,018,156 8,706,636 11,535,176 17,591,768

$9,806,963

9,814,920 9,854,080 12,726,636 10,467,860

–$20,343,204 –18,991,060 –23,100,728 –18,260,360 –12,912,996 –22,779,716 –22,368,180 –21,452,664 –30,395,432

–$12,042,627

–$12,068,064 –9,412,320 –15,569,400 –19,666,072 –14,632,636 –15,104,548 –3,213,404 –6,189,548 –9,267,956 –15,302,320

–$7,216,212

–6,526,608 –6,610,620 –10,803,576 –8,654,436

$20,701,717

$3,320,935

$117,330,340

1844–56*

total 1814–56 $153,732,888

$4,080,910

4,105,776 3,234,280 2,556,572 3,242,512

$28,839,508

$579,317

488,236 374,780 484,052 759,172

$631,427,816

$25,361,944

30,477,676 26,818,936 25,780,536 26,371,812

–$514,097,476

–$22,041,009

–27,009,904 –23,577,588 –22,120,340 –23,220,944

*Annual average. source: Tabulated from Messenger, India and China, p. 11. Messenger’s figures are given in pounds; they have been converted to silver dollars.

1814–56* $2,728,613 $10,438,498 $3,575,183 $670,686 $14,684,368 –$11,955,755 ______________________________________________________________________________________________

$448,855,420

25,883,664 23,209,876 22,739,912 22,370,128

3,467,772 3,241,348 3,660,196 3,150,868

1853 1854 1855 1856

Table 2.1, cont. ______________________________________________________________________________________________ China India to China (B) (including Hong Kong) to India Other Balance Year (A) Opium Cotton products Total (A–B) ______________________________________________________________________________________________

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Table 2.2 Trade Balance Between China and Britain, Including India, 1818–26 (in silver dollars) ____________________________________________________________________ Chinese exports Chinese imports to Britain from Britain Balance Year (A) (B) (A–B) ____________________________________________________________________ 1818 $16,004,411 $14,144,320 $1,860,091 1819 16,262,200 13,677,721 2,584,479 1820 17,803,162 14,830,929 2,972,233 1821 15,918,993 14,757,102 1,161,891 14,649,163 556,671 1822 15,205,834 1823 17,602,334 13,177,080 4,425,254 1824 17,923,441 15,988,668 1,934,773 1825 15,932,814 14,401,016 1,531,798 1826 21,408,386 17,445,939 3,962,447 ____________________________________________________________________ source: Morse, The International Relations of the Chinese Empire, p. 91.

no longer entered China, as Liang Tingnan noted, is related to the “triangular trade” that began in the 1830s.18 In this trade, American and British merchants bought drafts from India’s opium merchants to pay Chinese merchants, who then used these drafts to pay for part of their Indian opium purchases.19 Table 2.5 covers a broader period than do Morse’s data and shows trade deficits for China in most years after 1814. The annual average of China’s net silver outflow was $3.01 million in 1814–23; $5.06 million in 1824–33; $5.8 million in 1834–43; and $17.6 million in 1844–56. These trends parallel the exacerbation of the silver–copper coin crisis, which increased the purchase price of 1 liang of silver in copper coins from 1,040 in 1808 to 2,355 in 1849. From 1849 to 1856, the ratio gradually decreased to 1,810. Not until 1858 did the ratio drop to around 1,200–1,500, the exchange rate that prevailed until 1911 (Table 2.6). The relationship between silver outflow and the silver–copper coin crisis was clearly recognized in the 1820s. In 1822, Censor Huang Zhongmo 䀋όᡞ pointed out that the appreciation in silver prices ————— 18. Temin, The Jacksonian Economy, p. 80. 19. Detailed in Hamashita, “Foreign Trade Finance in China.”

1818 1819 1820 1821 1822 1823 1824 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834

$10,413,491 13,046,112 8,793,134 8,949,705 6,923,922 10,840,790 9,944,401 6,288,642 11,333,914 19,420,660 16,832,644 16,197,436 16,172,592 14,751,084 14,642,852 15,233,528 16,089,028

$14,008,068 10,750,577 14,589,473 14,513,678 14,513,007 12,864,600 15,856,800 14,285,604 14,704,767 14,973,568 22,305,904 7,572,592 10,857,252 15,167,992 12,736,200 16,844,636 14,973,568

–$3,594,577 2,295,535 –5,796,339 –5,563,973 –7,589,085 –2,023,810 –5,912,399 –7,996,962 –3,370,853 4,447,092 –5,473,260 8,624,844 5,315,340 –416,908 1,906,652 –1,611,108 1,115,460 1838 1839 1840 1841 1842 1843 1844 1845 1846 1847 1848 1849 1850 1851 1852 1853 1854

$19,083,880 16,716,424 12,071,764 14,125,936 18,114,248 21,082,116 25,479,624 26,217,824 29,238,224 30,868,512 26,600,160 27,921,892 27,353,576 35,582,600 34,318,856 36,263,808 40,160,356

$22,305,904 7,572,592 10,857,252 15,167,992 21,708,520 29,896,692 31,763,320 36,094,264 28,634,576 23,360,352 32,246,976 31,964,852 31,904,360 43,025,880 40,714,676 34,045,956 29,869,000

–$3,222,024 9,143,832 1,214,512 –1,042,056 –3,594,272 –8,814,576 –6,283,696 –9,876,440 603,648 7,508,160 –5,646,816 –4,042,960 –4,550,784 –7,443,280 6,395,820 2,217,852 10,291,356

Table 2.3 Trade Balance Between China and England, Excluding India, 1818–57 (in silver dollars) _________________________________________________________________________________________________________________ Chinese Chinese Chinese Chinese | | exports to imports from exports to imports from England England Balance | England England Balance | Year (A) (B)(A–B) Year (A) (B) (A–B) _________________________________________________________________________________________________________________

$86,534,111

20,403,664 23,793,760 19,895,028

$126,086,574

–$14,378,308

22,317,072 27,982,760 19,612,652 –$39,552,463

–1,913,408 –4,189,000 282,376 1855 1856 1857

38,137,228 40,085,280 49,457,988

31,587,796 39,422,872 47,488,044

6,549,432 662,408 1,969,944

*Estimate notes: Data for 1818–26 calculated by deducting the figures in Table 2.2 for both England and India from the figures in Table 2.1 for India only; estimated trade balance for 1814–17 based on the data for 1818. source: Tabulated from Messenger, India and China, pp. 8–9. Messenger’s figures are given in pounds; they have been converted to silver dollars

1827–56 $712,854,584 $727,488,028 –$14,633,444 _________________________________________________________________________________________________________________

1818–26

1814–17*

1835 1836 1837

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Table 2.4 Trade Balance Between China and United States, 1814–50 (in silver dollars) ____________________________________________________________________ Year Balance Year Balance Year Balance ____________________________________________________________________ 1814 1815 1816 1817 1818 1819 1820 1821 1822 1823 1824 1825 1826 1827 1828 1829 1830 1831 1832 1833

$1,214,220 120,500 1,922,000 4,505,000 5,601,000 7,414,000 6,297,000 2,995,000 5,125,000 6,292,000 4,096,000 6,524,500 5,725,200 1,841,168 2,640,300 740,900 1,123,644 183,655 2,480,871 682,519

Total

$67,524,477

1834 1835 1836 1837 1838 1839 1840 1841

$4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 4,000,000 6,000,000 6,000,000

$36,000,000

1842 1843 1844 1845 1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856

$3,491,000 1,967,000 3,174,000 4,878,000 5,149,000 3,717,000 5,821,000 3,921,000 4,963,000 4,433,000 7,911,000 6,348,000 906,000 8,655,000 7,263,000

$72,597,000

Avg.* $3,376,224 $4,500,000 $4,839,800 ____________________________________________________________________ *Annual average. sources: 1815—Morse, The International Relations of China, p. 89; 1814 and 1816–33—ņtake, “MinShin jidai ni okeru gaikokugin no ryşnyş,” pp. 67–70, which was based on statistical records of the United States and the studies of H. B. Morse and R. S. Latourette; Martin, China: Political, Commercial, and Social, 1: 176; 1834–41— calculated by averaging the data for 1835 and 1840 in U. S. Department of Commerce, Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970, pp. 904, 907; 1842–56—Hamashita, “Foreign Trade Finance in China,” p. 403, table 4, which is based on British Parliamentary Papers and the U.S. Bureau of Statistics, Commerce of Asia and Oceania.

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relative to copper coins had occurred “because there is still an outflow of silver along the Guangdong coast.”20 The Daoguang emperor was aware of the silver–copper coin crisis in 1822, when he cited the appreciation as the reason for allowing the provincial mints to stop casting copper coins.21 However, he did not connect the crisis with the silver outflow until 1829.22 In the 1830s, Wei Yuan noted that “during the past ten years or more, the exchange rate of 1 liang of silver has risen from 1,000 to 1,500–1,600 wen of copper coin, and that of 1 silver dollar has risen from 800 to 1,300 wen; this abrupt increase occurred between 1827 and 1833. It was not until then that people started to realize that such problems were caused by the silver drain from opium imports.”23 The estimated total Chinese trade deficit is $368 million, as shown in Table 2.5. Total silver imports to India from China between 1808 and 1813 were 39,040,000 rupees, a sum equivalent to $15.6 million.24 China’s trade balance with other countries is not available, but if we add this amount to $368 million, it would be around $384 million. It roughly represents the total silver outflow of China between 1808 and 1856. Some Qing contemporaries deemed that the early nineteenthcentury silver outflow reduced China’s wealth by one half.25 In contrast, H. B. Morse argued that the silver drain was only 7.4 percent of the total supply.26 Estimates of the total supply of money, including copper coin, prior to 1850 are hampered by the lack of reliable figures for Japan’s imports of silver through Korea and the Ryukyu Islands, the quantities of copper coins minted by previous dynasties still in ————— 20. DXTGZY, pp. 46–47. 21. SYD, DG 2.9.13. 22. Lin Zexu, Lin Wenzhonggong zhengshu, jiaji, Jiangsu zougao, 18b–19b. 23. Wei Yuan, Shengwu ji, 14.42b. Wang Liu’s Preliminary Remarks on Paper Notes was published in 1831 and the revised edition appeared in 1837 as Preliminary Remarks on Copper Coins, Wei’s essay is addressed toward Wang Liu’s Preliminary Remarks on Paper Notes. Thus it was probably written between 1831 and 1837. 24. Richards, “The Opium Industry,” p. 67, for the silver import figure; p. 79, for 2 shillings per rupee. See p. xxivn8 of this book for the equivalence of $1 to 5 shillings. 25. Xu Mei, Chaobi lun, 10a. 26. Morse assumed that the total amount of silver in circulation around 1820 was $500 million and that the loss of silver from 1820 to 1833 amounted to no more than $37.1 million ( Jerome Ch’en, State Economic Policies, p. 22).

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Table 2.5 Annual Silver Outflows for Early Nineteenth-Century China, 1814–56 (in silver dollars) ____________________________________________________________________ To To To To Year India England USA Singapore Total ____________________________________________________________________ 1814 1815 1816 1817 1818 1819 1820 1821 1822 1823

$3,566,156 4,027,588 3,713,660 3,545,352 3,139,412 2,254,668 288,944 5,968,572 3,125,864 5,345,756

$3,594,577 3,594,577 3,594,577 3,594,577 3,594,577 –2,295,535 5,796,339 5,563,973 7,589,085 2,023,810

–$1,214,220 –120,500 –1,922,000 –4,505,000 –5,601,000 –7,414,000 –6,297,000 –2,995,000 –5,125,000 –6,292,000

– – – – – – – – – –

Annual average, 1814–23 1824 1825 1826 1827 1828 1829 1830 1831 1832 1833

$4,849,064 5,847,172 6,728,760 7,333,300 8,618,880 6,189,704 6,526,608 6,610,620 10,803,576 8,654,436

$3,014,081 $5,912,399 7,996,962 3,370,853 –4,447,092 5,473,260 –8,624,844 –5,315,340 416,908 –1,906,652 1,611,108

–$4,096,000 –6,524,500 –5,725,200 –1,841,168 –2,640,300 –740,900 –1,123,644 –183,655 –2,480,871 –682,519

– – – – – – – – – –

Annual average, 1824–33 1834 1835 1836 1837 1838 1839 1840 1841 1842 1843

$12,068,064 9,412,320 15,569,400 19,666,072 14,632,636 15,104,548 3,213,404 6,189,548 9,267,956 15,302,320 $20,343,204 18,991,060 23,100,728

$6,665,463 7,319,634 4,374,413 1,045,040 11,451,840 –3,176,040 87,624 6,843,873 6,416,053 9,583,025 $5,061,093

–$1,115,460 1,913,408 4,189,000 –282,376 3,222,024 –9,143,832 –1,214,512 1,042,056 3,594,272 8,814,576

–$4,000,000 –4,000,000 –4,000,000 –4,000,000 –4,000,000 –4,000,000 –6,000,000 –6,000,000 –36,000,000 –3,491,000

$24,566 132,068 103,820 29,845 22,484 229,113 481,236 430,777 427,416 676,502

Annual average, 1834–43 1844 1845 1846

$5,946,513 7,501,665 5,386,237 2,634,929 1,132,989 –7,454,867 –211,717 8,537,545 5,589,949 1,077,566

$6,977,170 7,457,796 15,862,220 15,413,541 13,877,144 2,189,829 –3,519,872 1,662,381 –22,710,356 21,302,398 $5,851,22

$6,283,696 9,876,440 –603,648

–$1,967,000 –3,174,000 –4,878,000

– – –

$24,659,900 25,693,500 17,619,080

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Table 2.5, cont. ____________________________________________________________________ To To To To Year India England USA Singapore Total ____________________________________________________________________ 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856

18,260,360 12,912,996 22,779,716 22,368,180 21,452,664 30,395,432 27,009,904 23,577,588 22,120,340 23,220,944

–7,508,160 5,646,816 4,042,960 4,550,784 7,443,280 –6,395,820 –2,217,852 –10,291,356 –6,549,432 –662,408

–5,149,000 –3,717,000 –5,821,000 –3,921,000 –4,963,000 –4,433,000 –7,911,000 –6,348,000 –906,000 –8,655,000

Annual average, 1844–56

– – – – – – – – – –

5,603,200 14,842,812 21,001,676 22,997,964 23,932,944 19,566,612 16,881,052 6,938,232 14,664,908 13,903,536 $17,561,955

Total $514,097,476 $55,772,575 –$204,858,477 $2,557,827 $367,569,401 ____________________________________________________________________ sources: India, England, and the United States: Tables 2.1, 2.3, 2.4; Singapore: Yan Zhongping, Zhongguo jindai jing jishi tong ji ziliao xuanji, p. 35, which is based on British Parliamentary Papers. Singapore was an entrepôt for the opium trade. Silver was used mainly to pay for the importation of opium from Singapore to China.

circulation, the value of paper notes not backed up by silver or copper coin,and the amount of privately minted coins, as well as any basis for determining the velocity of the circulation of money. Thus, there is no way to calculate the ratio between the $384 million in silver outflow and China’s total money supply. However, The British Parliamentary Papers estimated that, in the Xianfeng era (1851–61), the amount of silver circulating annually was about $1,670 million.27 If this estimate is correct, the $384 million in silver outflows between 1808 and 1856 would equal about 19 percent of China’s silver supply around 1814 (a figure reached by adding $384 million to $1,670 million and dividing this sum by $384 million). It thus appears that the outflow accounted for a higher proportion of the total amount of silver in circulation than Morse’s figures indicate but less than contemporary Chinese observers thought.

————— 27. Hamashita, “Foreign Trade Finance in China,” p. 391.

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Table 2.6 Silver–Copper Coin Ratios (SCCR) in the Qing Dynasty (1644–1911) (wen/liang) ____________________________________________________________________ Year SCCR Year SCCR Year SCCR Year SCCR ____________________________________________________________________ 1644 1647 1657 1670 1684 1722 1723 1724 1725 1726 1727 1728 1729 1730 1731 1732 1733 1734 1735 1736 1737 1738 1739 1740 1741 1742 1743 1744 1745 1746 1747 1748 1749 1750 1751 1752 1753 1754 1755 1756

700 1,000 1,250 850 780 800 820 845 900 925 950 980 950 925 900 880 860 840 820 800 755 830 830 830 815 800 825 850 825 850 775 790 805 820 840 850 850 850 850

1766 1767 1768 1769 1770 1771 1772 1773 1774 1775 1776 1777 1778 1779 1780 1781 1782 1783 1784 1785 1786 1787 1788 1789 1790 1791 1792 1793 1794 1795 1796 1797 1798 1799 1800 1801 1802 1803 1804 1805

910 930 950 950 950 950 950 950 955 960 910 890 870 850 910 925 940 955 970 985 1,000 1,020 1,040 1,060 1,080 1,100 1,120 1,140 1,150 1,150

1,090 1,033 1,070 1,040 997 967 920 936

1815 1816 1817 1818 1819 1820 1821 1822 1823 1824 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834 1835 1836 1837 1838 1839 1840 1841 1842 1843 1844 1845 1846 1847 1848 1849 1850 1851 1852 1853 1854

1,177 1,217 1,245 1,226 1,267 1,252 1,249 1,269 1,253 1,271 1,341 1,339 1,380 1,365 1,388 1,387 1,363 1,356 1,420 1,487 1,559 1,637 1,679 1,644 1,547 1,572 1,656 1,724 2,025 2,208 2,167 2,299 2,355 2,230

2,220 2,270

1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 1903

1,190 1,250 1,420 1,690 1,690 1,750 1,780 1,850 1,880 1,720 1,610 1,660 1,630 1,510 1,420 1,420 1,440 1,420 1,470 1,630 1,720 1,720 1,720 1,720 1,690 1,460 1,530 1,530 1,530 1,470 1,360 1,250 1,200 1,200 1,200 1,200 1,220 1,240 1,250 1,280

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Table 2.6, cont. ____________________________________________________________________ Year SCCR Year SCCR Year SCCR Year SCCR ____________________________________________________________________ 1757 850 1806 963 1855 2,100 1904 1,300 1758 850 1807 970 1856 1,810 1905 1,340 1759 850 1808 1,040 1857 1,720 1906 1,350 1760 850 1809 1,065 1858 1,420 1907 1,370 1859 1,610 1908 1,400 1761 825 1810 1,133 1762 800 1811 1,085 1860 1,530 1909 1,520 1763 850 1812 1,094 1861 1,420 1910 1,660 1764 870 1813 1,090 1862 1,210 1911 1,730 1765 890 1814 1,102 1863 1,130 ____________________________________________________________________ sources: For 1644–1722, Yang Duanliu, Qingdai huobi jinrong shigao, pp. 182–83; for 1723–1806, Chaonan Chen, Yongzheng Qianlong nianjian de yinqian bijia biandong, p. 12; for 1807–50, Yan Zhongping, Zhongguo jindai jing jishi tong ji ziliao xuanji, p. 37; for 1853–1911, Luo Shouxiang, Jianwei xianzhi, Jingji, hou, 28a–b.

Silver and Opium in China’s Balance of Payments The silver that flowed from China to India between 1814 and 1856 was used to pay for China’s deficit in its international balance of payments.28 In the early nineteenth century, much of China’s international trade took the form of barter. As both a commodity and a form of money, silver could be used to exchange for other commodities, as well ————— 28. A country’s international balance of payments usually consists of a capital account for foreign expenses, such as foreign investment and debts, and a commodity account of imports and exports. Prior to 1895, when foreign investment and debts were first allowed in China under the Treaty of Shimonoseki, China’s capital account was negligible, with the exception of remittances from overseas Chinese, which began in the 1870s (Remer, The Foreign Trade of China, p. 206). The Opium War indemnity of $27 million belongs to the capital account. Other than the portion used in China, $12.8 million flowed to India and London (Yu Jieqiong, Zhongguo yinhuo shuchuru, p. 23). Since an indemnity is not a lasting item, no special capital account was kept. In the record of silver flowing to India in 1839–43, 2,679,282 liang in indemnities was included (Yan, Zhongguo jindai jing jishi tong ji ziliao xuanji, p. 34). Arbitrage could also constitute part of the capital account; China had little gold for arbitrage, and previous studies contain no estimates of the amount of silver flow due to arbitrage. Furthermore, from the late eighteenth century to the early nineteenth century, the silver price in terms of gold was the same in China and in the West. The arbitrage element of the capital account was thus also unimportant.

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Opium: The Culprit?

Fig. 2.1Opium imported into China, 1800–1911, thousands of piculs (sources: 1795–1839: Morse, International Relations, 1: 209–10; 1840–60: Yu Ende, Zhongguo jinyan faling bianqian shi, p. 330; 1861–66: BPP, 9: 217; 1867–1911: Liang-lin Hsiao, China’s Foreign Trade Statistics, pp. 52–53). The unit used in Morse was the chest, and his data have been converted to piculs. One chest weighed around 140 pounds, although this sometimes decreased with season and type (see Hsin-pao Chang, Commissioner Lin, p. 19). One picul equals 133.3 pounds. Richards, “The Opium Industry,” pp. 62–64, gives data on Indian opium exports for 1839–1935 denominated in rupees; these do not necessarily equal exports to China. His figures can, however, be used for comparative purposes.

as to clear the deficit in China’s international balance of payments. As Yinghe ⫮࡫ (1771–1839), president of the Board of Personnel, said in 1814, “The empire’s accounts (tianxia daji ஶΰவら) consist of both barter ( yi huo yi huo ц㊜ᕪ㊜) and the exchange of commodities for silver ( yi ying yi huo ц㜯ᕪ㊜).”29 And Wang Qingyun noted, “In the past, silver dollars came in exchange for goods; today, silver goes out in exchange for goods.”30 This use of silver in China’s international commodity trade magnified the impact of silver on the domestic economy. In the trade between China and India (Table 2.1), which greatly affected China’s international balance of payments in the period 1814–56, opium constituted the chief export from India into China, except for two years when cotton exports predominated. The quantity of opium imported from India into China consistently trended upward (see Fig. 2.1 and Table 2.7). The annual average of opium imports was 4,600 piculs in 1811–20, 10,400 piculs in 1821–30, 26,000 piculs in 1831–40, 40,500 piculs in 1841–50, and 68,000 piculs in 1851–60. ————— 29. HCJSWB, huzheng (Yinghe, “kaiyuan jieliu shu”) (1814): 26.12a. 30. Wang Qingyun, Shiqu yuji, 5.19a.

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Table 2.7 Opium Imported into China, 1799–1916 (unit 1799–1860: chest; 1861–1916: picul) ____________________________________________________________________ Year Quantity Year Quantity Year Quantity Year Quantity ____________________________________________________________________ 1799

4,113

1801 1802 1803 1804 1805 1806 1807 1808 1809 1810

4,570 3,947 3,292 2,840 3,159 3,938 4,306 4,358 4,208 4,593

Avg.*

3,921

1811 1812 1813 1814 1815 1816 1817 1818 1819 1820

4,968 5,091 5,066 4,769 3,673 4,321 5,106 4,140 4,359 4,186

Avg.*

4,568

1821 1822 1823 1824 1825 1826 1827 1828 1829 1830

4,244 5,959 7,773 9,035 12,434 9,373 12,231 12,434 13,868 16,257

1831 1832 1833 1834 1835 1836 1837 1838 1839 1840

18,956 16,550 21,985 20,486 21,885 30,202 34,776 34,373 40,200 20,619

1861 1862 1863 1864 1865 1866 1867 1868 1869 1870

26,003 1841 1842 1843 1844 1845 1846 1847 1848 1849 1850

34,631 33,688 42,699 28,667 39,010 34,072 40,070 45,998 53,075 52,925 55,561 59,600 65,574 74,523 78,354 70,606 72,385 74,966 75,822 58,681

1891 1892 1893 1894 1895 1896 1897 1898 1899 1900

63,900 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880

40,484 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860

60,000 75,000 2,000 75,000 77,000 61,000 61,000 54,000 56,000 58,000 60,000 61,000 65,000 70,000 63,000 70,000 70,000 72,000 83,000 72,000

59,700 1901 1902 1903 1904 1905 1906 1907 1908 1909 1910

68,600 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890

79,000 66,000 67,000 67,000 67,000 68,000 74,000 82,000 76,000 77,000

77,000 71,000 68,000 63,000 62,000 49,000 49,000 50,000 59,000 49,000 49,000 51,000 58,000 55,000 52,000 54,000 54,000 48,000 49,000 35,000 50,500

1911 1912 1913 1914 1915 1916

28,000 22,000 18,000 7,000 4,000 1,000

Avg.* 10,361 68,607 72,300 13,333 ___________________________________________________________________ *Annual average for decade. sources: see Fig. 2.1.

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Opium was an expensive commodity. In the early nineteenth century, its unit price was close to that of silk and about one-fifth the value of silver by weight.31 Except for a drop in 1820 following the Daoguang emperor’s 1819 prohibition on opium imports, as well as during the Opium War, the value of opium imports grew rapidly from the 1810s to the 1850s. 32 The annual average was $3.1 million in 1814–23. This increased to $5.8 million in 1824–33, to $9.1 million in 1834–43, and to $20.7 million in 1844–56 (see Table 2.1). During the same period, the annual average of silver outflow was $3.0 million in the period 1814–23, $5.1 million in 1824–33, $5.9 million in 1834–43, and $17.6 million in 1844–56 (Table 2.5). For the first half of the nineteenth century, the increase in opium imports in terms of both quantity and value coincided with silver outflow: both increased from the 1820s to the early 1850s. H. B. Morse and Frank H. H. King have pointed out that the importation of opium was a coastal phenomenon. 33 A map provided by Hsin-pao Chang also shows that imported opium circulated mainly south of the Yangzi River.34 However, relying on official reports available at the National Palace Museum in Taipei, I have reconstructed the circulation of imported opium in early nineteenth-century China and found that opium markets extended deep into the country’s interior (see Map 2.1). Coastal provinces could procure opium either through maritime trade or overland along the trade routes extending inland from ports.35 For the interior provinces, peddlers transported opium on carrying ————— 31. For silk, see Man-houng Lin, “Qingmo shehui liuxing xishi yapian yanjiu,” p. 8. The silver price around 1833 in New York was $1.30 per ounce (Hsin-pao Chang, Commissioner Lin, p. 44). Since a chest of opium weighed 140 pounds, the equivalent amount of silver was worth $2,912. According to the British Parliamentary Papers (1850, p. 120), in 1847 the price of Patna opium was $500 to $630 per chest and of Malwa opium $485 to $1,100. If we take $600 as an average, the opium price is 20.6 percent that of silver of equivalent weight. 32. On the opium prohibition in the 1820s, see Yu Ende, Zhongguo jinyan faling bianqian shi, p. 48. 33. King, Money and Monetary Policy, pp. 142–43; Morse, International Relations, 1: 204. 34. Hsin-pao Chang, Commissioner Lin, p. 25. 35. For more on the circulation of opium, see Man-houng Lin, “Yin yu yapian de liutong.”

Map 2.1 Trade routes for imported opium, 1840 (source: Lin Manhoung, “Qingmo shehui liuxing xishi yapian yanjiu,” pp. 70–79)

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Opium: The Culprit?

poles from Guangdong and Fujian. Opium sent to the northern coastal provinces was also transported by cart into interior areas. Opium imports are known to have reached Shanxi by 1821, Yunnan by 1822, all five northern provinces (Zhili, Shangdong, Henan, Shanxi, and Shaanxi), plus Hubei, Hunan, and Guangxi by 1838, Manchuria and Guizhou by 1839, Tibet and Xinjiang by 1840, and Mongolia by 1842. 36 The prevalence of opium throughout all provinces was observed in an 1829 official report: Opium has spread to the interior provinces. . . . All the opium comes from foreign boats harbored near Macao and Amoy. The clerks and runners are bribed to pass it through customs, or the soldiers on cruising boats carry it inland to earn commissions or allow it to be sold to the commercial boats of each province. . . . There are various methods of distributing it, and each province in both the north and south is in much the same situation.37

The profits from the opium trade created an extensive distribution network. In one strategic crossroads area in northern Guangdong, up to several thousand opium peddlers gathered every day. The trade was so lucrative that transportation costs were relatively minimal. Merchants had enough funds to bribe government customs inspectors, and peddlers were able to pay extortion fees to bandits in the mountain passes. Hence, opium extended the networks of China’s interregional trade.38 In 1838, the inspector of the Hedong circuit (Shanxi, Shaanxi, Henan, and southern Inner Mongolia) noted: “Formerly, few people came to the five northern provinces to sell goods imported through Canton. Recently, in each prefecture, department, and district, there have been many people coming from other places and opening shops selling opium under the guise of selling Canton imported goods.”39 That same year, the governor of Henan reported that “at present no fewer than several thousand peddlers from Guangdong province, carrying their poles in groups, have scattered to other provinces. In name, they ————— 36. For more details, see Man-houng Lin, “Qingmo shehui liuxing xishi yapian yanjiu,” pp. 70–79. 37. SL, DG 9.12.16. 38. For more details, see Man-houng Lin, “Qingmo shehui liuxing xishi yapian yanjiu,” pp. 148–50. 39. CBYWSM, 424a, DG 18.6.

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are selling Canton imported goods, but in fact, they are selling opium.”40 As a result of the extension of the interregional trading network between Guangdong and other provinces, Guangdong absorbed silver from other regions of China. The governor of Fujian wrote in 1846: “The rich merchants of the northwest who trade goods in the southeast have also caused silver to flow there like water flows into canyons.”41 When Lin Zexu passed through the thriving market towns of Suzhou in Jiangsu and Hankou in Hubei, he asked merchants about the state of the market. The merchants replied, “Goods exchanged for 10,000 liang twenty to thirty years ago sell for only half that today.” Then Lin asked, “For what goods is the other half of the money used?” The answer was, “In one word, nothing but opium.”42 Opium was thus increasingly absorbing the silver of Middle Yangzi cities such as Hankou and Lower Yangzi cities such as Suzhou. Lin Zexu’s observation that the silver outflow and growing opium use coexisted raises the question why increased consumption was possible at a time when silver was increasingly flowing out of China. Whether as a medicine or as a drug, opium’s value was very high. Even in ancient China the notion that consumption of luxuries could create employment was sometimes asserted, although it was generally considered heterodox. 43 The evidence shows that opium consumption in China absorbed many unemployed people. A contemporary literatus, Jiang Xiangnan (1796–1854), held that a strict prohibition of opium would be impossible because it would affect the financial interests of too many people, including customs officers who received illegal fees. The poor were borrowing money and the wealthy selling their property to invest in the opium trade. Nor were British and American merchants about to relinquish their profits. The prohibition of opium, argued Jiang, would “give rise to war or other misfortune.”44 Rather than these economic explanations for the Opium War, scholars often cite Lin Zexu’s ————— 40. Ibid., 317b–318a. 41. ZJHSZL, p. 158. 42. Lin Zexu, Lin Wenzhonggong zhengshu, yiji, Huguang zougao, 5.11a–11b. 43. Lien-sheng Yang, “Economic Justification for Spending.” 44. Jiang Xiangnan, Qijinglou wenchao, 4.33a–35b.

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moralistic statements. But in 1833 Lin proposed the cultivation of native opium poppies as a means of stemming the outflow of silver—the first Qing official to make this suggestion. And, the court discourse over native opium was concerned more with financial security than with the physical impact of opium.45 The evidence cited thus far substantiates the conventional understanding that opium imports were responsible for the outflow of silver from China. Until 1852, however, the amount of opium imported annually into China never surpassed 60,000 piculs (see Table 2.7). In the 43 years from 1853 to 1895, with the exception of four years, annual opium imports exceeded 60,000 piculs. For 21 of these years, the level reached 70,000 piculs or more. In 1879 and 1888, it even surpassed 80,000 piculs. Table 2.8 shows that the value of imported opium between 1868 and 1906 ranged from $38.93 to $55.55 million annually, with an average during these 39 years of $45.62 million. This was about 4.4 times the annual average for the period 1814–56, $10.4 million (see Table 2.1). Yet, following the outflow of $384 million between 1808 and 1856, there was an inflow of $691 million between 1857 and 1886 (see Table 2.9), even though opium imports were much higher during this period. Both Qing literati and modern scholars have believed that China had a continual silver outflow throughout the late Qing period. It was not until Yu-kwei Cheng’s study, based on G. Jamieson’s and C. F. Remer’s insights,46 that a huge silver inflow into China between 1857 and 1886 was postulated. In calculating the international balance of payments, the FOB (free on board) price is used for imports, and the CIF (cargo, insurance, and freight included) price is used for exports. However, prior to 1887, the Chinese Maritime Customs used market prices to calculate China’s balance of payments. The market prices of imported goods at Chongqing, for example, included insurance and freight from Shanghai to Chongqing, which is properly considered Chinese revenue, ————— 45. SGD, ZB, no. 1828, Lin Zexu, a reply to the imperial edict of DG 12.8 (intercalary).12 Also Lin Zexu, Lin Wenzhonggong zhengshu, Jiangsu zougao, 1.19a. For related discussions, see Man-houng Lin, “Late Qing Perceptions of Native Opium.” 46. Remer, The Foreign Trade of China, p. 206; Yu-kwei Cheng, Foreign Trade, pp. 12–13; Yu-kwei Cheng “Woguo haiguan maoyi tong ji.”

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Table 2.8 Value of Opium Imported Annually Between 1868 and 1906 (million silver dollars) ____________________________________________________________________ Years Value Years Value Years Value ____________________________________________________________________ 1868–69 $38.93 1880–84 $42.98 1895–99 $46.43 1870–74 41.01 1885–89 43.54 1900–1904 55.55 1875–79 44.21 1890–94 46.12 1905–6 51.10 ____________________________________________________________________ source: Calculated from Liang-lin Hsiao, China’s Foreign Trade Statistics, pp. 52–53.

Table 2.9 Estimates of Total Silver Flows in and out of Qing China (million silver dollars) ____________________________________________________________________ Year Inflow Outflow ____________________________________________________________________ 1721–40 $68 1752–1800 105 1808–56 $384 1857–66 187 1868–86 504 ____________________________________________________________________ sources: 1721–40, 1752–1800: Yu Jieqiong, Zhongguo yinhuo shuchuru, p. 36; 1808–56: Table 2.5 and p. 83 of this book; 1857–66: deducting the $33 million of 1850–56 from the $220 million inflow of 1850–66 estimated in Yu Jieqiong, Zhongguo yinhuo shuchuru, pp. 25–27, since Yu’s figure for 1850–56 does not include China’s trade balance with India and the United States; 1868–86: calculated from Liang-lin Hsiao, China’s Foreign Trade Statistics, pp. 268–69.

whereas the market price for export goods in Chongqing did not include insurance and freight from Chongqing to Shanghai, which should also have been calculated as Chinese revenue. Hence, the Maritime Customs’ calculations using market prices overestimated the value of imports and underestimated the value of exports. When the proper adjustments are made, it turns out that during the period 1856–86 China enjoyed a positive balance of payments. Since the trend in opium imports did not coincide with the trend in silver movements in the late nineteenth century, we must ask whether the importation of opium was the fundamental economic cause of the silver outflow from 1808 to 1856. Opium accounted for 46.9 percent to 69.4 percent of total imports from the British empire into China, in

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Opium: The Culprit?

terms of value, between 1834 and 1850. 47 In the 1850s, the share increased steadily to 71.1 percent. Since opium was the main import item after 1860, it cannot be held solely accountable for the transition from silver outflow to silver inflow around 1856. To explain the swift in the trade balance that occurred around 1856, we must also look at changes in two export staples—tea and silk.

Chinese Tea and Silk Exports, 1850–86 Tea accounted for around 90 percent of the British East India Company’s China trade from the 1780s to the 1830s (Table 1.4) and in the late 1830s, early 1840s, and late 1860s. From the late 1840s to the early 1850s, its share fluctuated between 37.6 and 72.2 percent. 48 Between 1872 and 1887, tea’s share dropped from 53 percent to 35 percent, due to increasing silk exports.49 From 1872 to 1895, silk accounted for 30 percent to 40 percent of the total export value.50 The fluctuations in Chinese tea and silk exports can be seen in Figs. 2.2–2.5 and Tables 2.10–12. The data we obtained so far in these tables and figures denotes total Chinese tea and silk exports for the period between 1857 and 1886, while for the period 1825–56 they merely show China’s exports to the British empire, which were the lion shares of China’s exports. The data for opium shown in Table 2.14 and Fig. 2.6 also denote China’s total imports of opium for the period between 1857 and 1886 and China’s imports of opium from the British empire for the period 1825–56. On this basis, the annual average of quantity of tea exported from China between 1857 and 1886 was about 4.5 times the amount exported to the British empire between 1825 and 1856. The annual average quantity of silk exported from China between 1857 and 1886 was six times that between 1825 and 1856. The annual average value of tea exports for the period 1868–86 was 2.5 times of that to the British empire in 1825–56 (Table 2.12 and Fig. 2.4) ————— 47. Chen Ciyu, “Yi Zhong-Yin-Ying sanjiao maoyi,” pp. 144–45. 48. Ibid. 49. Man-houng Lin, Cha tang zhangnao, p. 4. 50. Inspector General of the Customs, Decennial Reports, 1922–31, Fifth issue, Synopsis of External Trade, 1882–1931, pp. 120, 190.

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Fig. 2.2 Quantity of tea exported from China, 1825–86, in millions of pounds (sources: 1825–58: Messenger, India and China, p. 7; 1859–86: Chen Ciyu, Jindai Zhongguo chaye, p. 324).

Fig. 2.3 Quantity of silk exported from China, 1825–86, in millions of pounds (SOURCES: 1825–58: Messenger, India and China, p. 7; 1859–66: Eng, Economic Imperialism in China, p. 31; 1867–86: Lianglin Hsiao, China’s Foreign Trade Statistics, p. 102).

and that of silk exports for 1868–86 was twelve times that to the British empire in 1825–56 (Table 2.13 and Fig. 2.5). In contrast, the annual average value of opium imports for 1868–86 was 3.5 times that from the British empire in 1825–56 (Table 2.14 and Fig. 2.6). The surplus of the annual average values of silk and tea exports from China over the annual average values of opium imports in the period 1868–86 was four times

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Table 2.10 Quantity of Tea Exported from China, 1825–86 (pounds) ____________________________________________________________________ Year Quantity Year Quantity Year Quantity ____________________________________________________________________ 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834 1835 1836 1837 1838 1839 1840 1841 1842 1843 1844 1845

29,245,699 29,840,401 39,746,147 32,678,546 30,544,382 31,897,546 31,648,922 31,708,956 32,057,747 32,029,052 42,052,047 48,520,508 36,502,345 38,998,572 37,191,762 22,576,405 27,639,817 37,409,544 42,779,265 51,754,485 50,714,657

1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866

54,534,248 55,355,590 47,346,817 53,102,129 49,368,001 69,487,979 65,295,202 68,639,727 83,301,550 81,560,207 84,795,802 60,295,610 73,359,599 110,906,000 101,708,000 133,300,000 173,290,000 170,757,000 156,628,000 161,293,000 158,912,000

1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886

177,406,000 196,645,000 203,702,000 184,087,000 223,896,000 236,563,000 245,648,000 231,326,000 242,391,000 234,993,000 254,563,000 253,131,000 264,929,000 279,546,000 284,925,000 268,886,000 264,910,000 268,762,000 283,763,000 295,565,000

Average of 1825–56 (A) 45,947,626 Average of 1857–86 (B) 206,536,206 B/A = 5 ____________________________________________________________________ sources: 1825–56: Messenger, India and China, p. 7; 1857–86: Chen Ciyu, Jindai Zhongguo chaye, p. 324.

that between China and the British empire for the period 1825–56 (Table 2.15). The rapid increase in tea and silk exports from 1857 to 1886 more than made up for rising opium and other imports and allowed silver to begin flowing back into China around 1856. The nineteenthcentury Chinese scholar-official Feng Guifen, the North China Herald, the British Blue Book, and other Western observers noted the movement of silver back into China after 1853–56.51 A Maritime Customs commis————— 51. Yan, ed., Zhongguo jindai jing jishi, 1: 363–64.

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Table 2.11 Quantity of Raw Silk Exported from China, 1825–86 (pounds) ____________________________________________________________________ Year Quantity Year Quantity Year Quantity ____________________________________________________________________ 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834 1835 1836 1837 1838 1839 1840 1841 1842 1843 1844 1845

123,107 169,591 128,431 212,895 120,978 19,200 8,419 28,111 22,186 582,857 737,802 1,281,839 1,807,690 721,517 360,882 247,762 277,097 180,148 275,308 353,016 1,175,866

1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866

1,836,872 2,021,765 2,241,011 1,861,537 1,812,370 2,099,134 2,470,029 2,996,411 4,952,889 5,048,997 4,195,849 7,187,090 2,521,080 6,984,920 8,371,240 6,851,620 8,184,620 4,025,660 3,172,540 5,451,970 4,118,970

1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886

5,332,000 6,798,300 5,865,200 6,131,800 7,464,800 8,397,900 7,198,200 9,064,400 9,864,200 10,130,800 7,464,800 8,397,900 10,130,800 10,397,400 7,998,000 7,998,000 7,864,700 8,131,300 6,665,000 7,598,100

Average of 1825–56 (A) 1,261,611 Average of 1857–86 (B) 7,192,110 B/A = 6 ____________________________________________________________________ sources: 1825–58: Messenger, India and China, p. 7; 1859–66: Eng, Economic Imperialism in China, p. 31; 1867–86: Liang-lin Hsiao, China’s Foreign Trade Statistics, p. 102.

sioner made the connection between booming exports of tea and silk and the flow of silver back to China: “As a consequence of this growing demand in other countries for the tea and silk of China, a most interesting reversal occurred in that movement of bullion which had played so large a part in deciding the Government of China in 1838 to attempt the suppression of the opium trade.”52 Furthermore, the silver outflow and silver–copper coin crisis came to an end at the same time. ————— 52. Banister, “A History of the External Trade of China,” p. 22.

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Table 2.12 Value of Tea Exported from China, 1825–86 (in silver dollars) ____________________________________________________________________ Year Value Year Value Year Value ____________________________________________________________________ 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834 1835 1836 1837 1838 1839 1840 1841 1842 1843 1844 1845

$11,738,280 11,936,160 15,898,456 13,071,420 12,217,752 12,759,020 12,659,568 12,683,584 12,823,100 12,811,620 16,820,820 19,408,204 14,600,936 15,599,428 14,876,704 9,030,560 11,055,928 14,963,816 17,111,708 20,701,796 20,285,864

1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866

$21,813,700 22,142,236 18,938,728 21,240,852 19,747,200 27,795,192 26,118,080 27,455,892 21,519,568 20,475,008 20,492,320

1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886

$38,053,800 42,354,500 40,562,300 32,208,850 44,201,800 48,640,250 47,127,900 45,231,300 48,039,022 48,717,448 43,850,549 43,826,320 44,454,671 47,326,675 42,322,475 41,800,733 43,176,969 37,387,734 42,850,678 44,734,118

Total (Tea), 1825–56 $550,793,500 Total (Tea), 1867–86 $866,868,092 Average, 1825–56 (A) $17,212,297 Average, 1867–86 (B) $43,343,405 B/A = 3 ____________________________________________________________________ sources: 1825–56: John A. Messenger, India and China, pp. 7–8; 1867–86: Liang-lin Hsiao, China’s Foreign Trade Statistics, p. 117. Original units have again been converted to silver dollars.

When silver started flowing back into China in the mid-Xianfeng era, the silver–copper coin ratio dropped from 2,100 wen in 1855 to 1,190 in 1864 (see Fig. I.1 and Table 2.6). Feng Guifen expressed surprise about these changes: In 1855–56, when floods devastated the Western countries, and all their mulberry trees perished, China’s silk market suddenly flourished. Since 60–70 million liang of silk were purchased annually, the value of imported goods and opium could not match it. Silver was therefore forwarded to pay for the trade

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Fig. 2.4 Value of tea exported from China, 1825–86, in millions of silver dollars (sources: 1825– 56: Messenger, India and China, pp. 7–8; 1867–86: Liang-lin Hsiao, China’s Foreign Trade Statistics, p.117; the units given in the sources have been converted to silver dollars).

Fig. 2.5 Value of silk exported from China, 1825–86, in millions of silver dollars (sources: 1825– 56: Messenger, India and China, pp. 7–8; 1867–86: Liang-lin Hsiao, China’s Foreign Trade Statistics, p.102; the units given in the sources have been converted to silver dollars).

difference, and its price has decreased continually from then to now. This shows a turning point in Sino-foreign trade.53

The data demonstrate a high correlation between the silver outflow and the silver–copper coin crisis in 1808–56. The trade balance between ————— 53. Feng Guifen, Xianzhitang gao, 11: 30.

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Fig. 2.6 Value of opium imports, 1825–86, in millions of silver dollars (sources: 1825–56: Messenger, India and China, p. 11; 1867–86: Liang-lin Hsiao, China’s Foreign Trade Statistics, p. 52; the units in the sources have been converted to silver dollars).

China and England (not including India) turned from deficit to surplus for China in 1852 (see Table 2.3). Like the onset of silver outflow and the advent of the silver–copper coin crisis, the silver inflow and the easing of the crisis did not occur on one precise date for China as a whole but happened at different times in different regions. The great increase in tea and silk exports in the 1850s raises the question why these cash crops were not devastated by the Taiping Rebellion (1850–68), which had a great impact on Zhejiang, Jiangsu, and Guang dong, where silk was produced for export, and on Fujian, Jiangxi, Anhui, Hunan, and Hubei, where tea was produced. Briefly, (1) only some tea- or silk-producing areas were ruined; (2) some silk that in normal times would have been sold on the domestic market went to the external market instead; (3) producing cash crops was one way for people resettled on land depopulated due to fighting to sustain themselves; (4) although some urban areas were ravaged by the Taiping Rebellion, rural areas could still produce cash crops; (5) northern Fujian, for ex ample, avoided transshipping its tea through Shanghai or Canton when these two ports were in danger, exporting directly through Fuzhou

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Table 2.13 Value of Raw Silk Exported from China, 1825–86 (in silver dollars) ____________________________________________________________________ Year Value Year Value Year Value ____________________________________________________________________ 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834 1835 1836 1837 1838 1839 1840 1841 1842 1843 1844 1845

$180,556 248,732 189,024 312,244 177,536 28,180 12,928 41,280 32,604 855,092 1,086,156 1,896,352 2,813,932 1,116,416 518,924 363,480 406,456 264,524 440,776 563,152 1,746,032

1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866

$2,712,224 2,992,988 3,447,820 2,783,796 2,800,404 3,367,924 3,780,812 4,845,740 14,331,344 13,730,956 16,424,832

1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886

$22,998,450 35,410,450 27,666,000 30,844,400 36,502,300 40,192,550 40,278,100 28,211,200 31,480,582 49,334,493 27,876,847 31,367,511 36,499,319 36,512,241 31,684,110 27,443,947 27,393,873 25,597,659 20,750,144 26,901,206

Total (Silk), 1825–56 $84,513,216 Total (Silk), 1867–86 $634,945,382 Average, 1825–56 (A) $2,641,038 Average, 1867–86 (B) $31,747,269 B/A = 12 ____________________________________________________________________ sources: 1825–56: John A. Messenger, India and China, pp. 7–8; 1867–86: Liang-lin Hsiao, China’s Foreign Trade Statistics, p.102. Original units have been converted to silver dollars.

instead, linking with the international market through the newly available clipper ships; and (6) both Qing and Taiping leaders encouraged the production of these crops for export in order to obtain revenues to win the war.54 ————— 54. Gardella, Harvesting Mountains, pp. 50–52; Yan, Zhongguo jindai jing jishi, 1: 362–63; Lillian Li, China’s Silk Trade, pp. 102–9; Guo Yisheng, Taiping tianguo jingjishi, pp. 413, 421–23.

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Table 2.14 Value of Opium Imports, 1825–86 (in silver dollars) ____________________________________________________________________ Year Value Year Value Year Value ____________________________________________________________________ 1825 1826 1827 1828 1829 1830 1831 1832 1833 18 34 1835 1836 1837 1838 1839 1840 1841 1842 1843 1844 1845

$4,785,132 5,549,520 7,172,476 5,051,772 5,570,468 5,918,064 9,305,396 7,216,044 9,088,320 7,638,212 11,464,100 15,737,836 11,617,136 11,164,528 765,688 5,071,548 7,357,604 11,281,408 16,918,168 16,534,364 22,166,940

1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866

$17,085,280 14,031,216 21,382,876 22,174,352 20,296,312 24,329,228 25,883,664 23,209,876 22,739,912 22,370,128 26,022,344

1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886

$49,272,300 40,237,120 42,460,880 41,398,280 45,063,480 42,585,620 44,701,580 43,990,100 43,498,024 48,068,276 51,909,414 55,349,112 62,681,416 55,489,788 64,491,332 45,884,368 43,482,584 44,861,894 43,642,131 42,870,129

Total (Opium), 1825–56 $436,899,912 Total (Opium), 1867–86 $951,937,827 Average, 1825–56 (A) $13,653,122 Average,1867–86 (B) $47,596,891 B/A=3 ____________________________________________________________________ source: 1825–56: John A. Messenger, India and China, p. 11; 1867–86: Liang-lin Hsiao, China’s Foreign Trade Statistics, p.52. Original units have been converted to silver dollars.

The increase in exports of tea and silk had other domestic causes as well. Because of the lack of silver, a barter trading system developed in 1847 to exchange tea and silk for opium, and as a result, tea and silk exports increased.55 Prior to 1870, Japan had not yet developed its modern silk trade, and China played a crucial role in the world silk market.56 ————— 55. Yan, Zhongguo jindai jing jishi, 1: 357. 56. Shi, “Production and Trade,” p. 379.

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Table 2.15 Comparison of Exports of Tea and Silk and Imports of Opium, 1825–86 (in silver dollars) ____________________________________________________________________ Silk and Opium Year Silk Tea tea (A) (B) A–B D/C ____________________________________________________________________ Annual average, 1825–56

$2,641,038 $17,212,297

$19,853,335 $13,653,122

$6,200,213 (C)

4

Annual average, 31,747,269 43,343,405 75,090,674 47,596,891 27,493,782 1867–86 (D) ____________________________________________________________________ sources: Tables 2.13, 2.14.

Until 1871, before the rise of tea exports from Japan, India, and Ceylon, China provided 85 percent of the world’s tea.57 And in 1873, steam filatures were imported to increase silk productivity.58 Without a thriving foreign market, however, tea and silk exports would not have increased. The Chinese Maritime Customs Reports and British Parliamentary Papers further illustrate that a favorable world market was responsible for the rapid expansion of China’s tea and silk exports in the mid- and late nineteenth century. As one account stated: “It is remarkable that even in spite of the fact that at the close of our present period (1843–58) this terrible and ruinous civil war was at its height, so much progress in foreign trade has actually to be recorded.”59 In 1863 and 1864, when the Taiping Rebellion reached its climax of chaos and destruction in the silk-producing districts of Jiangsu and Zhejiang, exports of silk fell by about two-thirds. But from 1865 to 1873, production in these regions returned to previous levels.60 In the 1860s and 1870s, British consuls often mentioned that the market was so favorable that tea from Taiwan sold well despite the lack of technological improve————— 57. Man-houng Lin, Cha tang zhangnao, p. 20. 58. Shi, Qingdai sizhi gongye de fazhan, p. 38. 59. Banister, “A History of the External Trade of China,” p. 23. 60. Shi, “Production and Trade,” p. 381.

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ments in production.61 The chief tea-exporting province, Fujian, fared similarly.62 These developments remind us that, rather than simply assuming that opium imports drained China’s silver in the early nineteenth century, we must also understand that Chinese tea and silk exports did not grow as fast between 1808 and 1856 as they did between 1857 and 1886, when they offset rising opium imports. Nor was opium the only import that affected the balance of trade. The value of cotton imports neared that of opium imports in quite a few years. China’s tea and silk exports were sluggish in the early nineteenth century compared with the late eighteenth and late nineteenth centuries. The price of tea exported from China through the British East India Company was lower in the early nineteenth century than in the late eighteenth century.63 The average price of a pound of tea in the United Kingdom dropped from around 36 pence in 1801 to 19 pence in 1836 to 13 pence in 1847.64 The value of tea exported from China through the East India Company in terms of silver ingots increased by 400 percent in the forty years between 1760 and 1799 but by only about 20 percent from 1817 to 1833.65 The per capita consumption of tea in the United Kingdom between 1850 and 1884 (2.04–4.71 lbs) was about 2.5 times that between 1835 and 1849 (1.43–1.69 lbs).66 If exports of tea and silk from the 1820s to the early 1850s had been as favorable as they were between the late 1850s and the 1880s, the earnings from these exports would have offset opium and other imports. The slower growth rates in tea and silk exports in the early nineteenth century, however, could not match the rapid growth in opium and other imports. The situation in Fujian, particularly in northern Fujian, the most important tea-exporting area in this province, clearly demonstrates the relevance of sluggish tea exports and the decreased availability of silver. Since copper coins were too heavy to carry far and Fujian was mountainous, merchants who sold commodities from this province always ————— 61. Man-houng Lin, Cha tang zhangnao, p. 82n65. 62. Chen Ciyu, Jindai Zhongguo chaye, p. 245. 63. Ibid., pp. 10, 19. 64. Wong, Deadly Dreams, pp. 344–45. 65. Calculated from Yan, Zhongguo jindai jing jishi tong ji ziliao xuanji, p. 14. 66. Gardella, Harvesting Mountains, p. 61.

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brought their earnings back in silver.67 The governor of Fujian noted the impact of the tea market and silver outflow in 1846: “[Fujian] does not produce silver. Only when the tea and timber merchants come to trade is silver carried here. After all the comings and goings, however, there remains little silver in this place.”68 Silver was commonly used in Fujian in the eighteenth century in contrast to other provinces, but by the Daoguang period the percentage of land transactions in northern Fujian using silver had declined drastically.69

The Global Decrease in Silver and China Economic historians Dennis O. Flynn and Arturo Giráldez have argued that Western countries’ dependence on China’s tea and silk has been overemphasized and China’s dependence on foreign silver, as evidenced by the higher price of silver in terms of gold in China compared to other places, has been underemphasized. 70 But as the Qing literatus Zheng Guangzu observed, China’s silver-gold exchange rate changed, together with that of the Western countries, to 16 : 1 in the Jiaqing and Daoguang reigns.71 A British consul also noted in 1849 that the silver price in terms of gold in Canton was almost the same as in England.72 The benefits of exporting silver to China because of the higher prices there disappeared as Western countries began to need silver themselves. ————— 67. ZJHSZL, p. 76; see also GZD, DG 22.2.27 (Governor-General Yiliang, Governor Liu Hongao). 68. GZD, DG 26.6.28 (Fujian Governor Zheng Zuchen, Governor-General of Fujian and Zhejiang Liu Yunke). 69. Yang Guozhen, Ming Qing tudi qiyue wenshu yanjiu, p. 283. Even though silver use in northern Fujian recovered in the late nineteenth century, it still could not compare with that of the eighteenth century. Tea’s importance relative to silk in China’s exports declined in the late nineteenth century compared to the eighteenth century due to the competition of teas from Taiwan, Japan, India, and Ceylon. The increase in the Russian market for tea from Hubei and Hunan exported through Hankou, and the increase in the U.S. market for the tea from Taiwan exported through Xiamen in southern Fujian could be other reasons (see Man-houng Lin, Cha tang zhangnao, p. 20; Chen Ciyu, Jindai Zhongguo chaye, pp. 294–303; and Gardella, Harvesting Mountains, pp. 63, 65, 87, 113). 70. Flynn and Giraldez, “Cycles of Silver,” p. 395. 71. Zheng Guangzu, Iban lu, zashu 6.47a. 72. House of Commons Parliamentary Papers, 1849, Canton.

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This phenomenon can be explained by the global decrease in the silver supply in the early nineteenth century. In the late eighteenth and early nineteenth centuries, the major producers of silver and gold—the world’s chief metals for backing paper notes and for direct use as money—were Russia and especially Latin America. From 1790 to 1829, Mexico produced $559,272,128 worth of silver; Chile, $7,291,696; Argentina, $124,830,272, and Russia, $6,011,924. Mexico’s share was 83.9 percent. During the same period, Mexico produced $585,017,940 worth of gold; Chile, $18,365,648; Argentina, $124,830,272; and Russia, $20,826,896. Mexico’s share of world production was 78.1 percent.73 The inability of local governments to support the silver-mining industry due to the Napoleonic Wars of 1796–1815 and the Latin American independence movements of the 1810s–1830s caused a decrease in silver and gold production in Latin America and cut the global supply of these metals (see Table 2.16 and Fig. 2.7).74 Global production of silver dropped by about 10 million ounces from 1811 to 1850 compared to the period from 1781 to 1810. The world gold supply showed a similar though less acute pattern. In 1833, the British Foreign Office calculated that, compared with the 1790s, total world silver production decreased by 6.6 percent in the first decade of the nineteenth century; by 49.5 percent between 1810 and 1819; and by 56.6 percent in the 1820s. Total silver and gold production, compared with the 1790–99 base line, also decreased 4.8 percent in 1800–1809 and 49.7 percent in 1810–19.75 ————— 73. Ibid., 1836, 37: 427. The currency unit used in this source was the British pound, which has been converted into silver dollars. 74. Vilar, A History of Gold and Money, p. 34; Coatsworth, “The Mexican Mining Industry,” pp. 278–79, points out that Napoleon’s invasion of the Iberian peninsula in 1808–12 caused the Spanish government to cut official credits to Mexican silver miners for purchasing mercury and stopped most tax exemptions and other privileges of the mining industries, which resulted in enormous disputes and decreased silver production. The independence movements and the effort to suppress them were just part of the reason for the decreased silver production in Mexico. In Peru, in contrast, silver output expanded rather than declined after 1776 and remained relatively high until 1812, when the independence movement there led to the expulsion of Spanish merchants, who tended to make short-term investments in silver mining (Fisher, “Silver Production,” pp. 297–99). 75. House of Commons Parliamentary Papers, 1836, 37: 427.

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Even though Latin America’s silver production gradually recovered after the independence movements, global silver production did not recover its previous levels until 1860 (Table 2.16 and Fig. 2.7). It was also not until the late nineteenth century, when the production of silver and gold increased markedly that speculation in silver for China resumed.76 The discovery of gold in California in 1848 and in Australia in 1851, as well as a one-third increase in production from extant mines, led to a jump in world gold production, which increased about four-fold, from 1,762,000 ounces between 1841 and 1850 to 6,313,000 ounces between 1851 and 1860.77 Silver production also picked up dramatically after 1850, and by 1900 it was more than one hundred times what it had been in the 1820s (see Table 2.16 and Fig. 2.7). In addition, with a gradual change in European countries’ monetary systems to the gold-silver double standard or the gold standard, more silver flowed from the West to China and India, the two main silver-using countries in Asia, to buy their products.78 Certainly many causes affected China’s exports of tea and silk,79 but in any case silver was needed to purchase them. And, from the 1856 to 1886, more silver was available to make such purchases. The worldwide decrease in gold and silver production in the first half of the nineteenth century not only decreased the arbitrage of silver in China but also accelerated the importation of opium. According to the British Blue Books, opium imports increased after 1821; the decline in silver dollars was highly correlated to the abrupt increase in opium imports.80 In other words, the British could not find enough silver to pay for tea and silk and ended up using opium as the medium of exchange for them. ————— 76. Remer, The Foreign Trade of China, pp. 212, 215, 222, 223, 225. 77. Vilar, A History of Gold and Money, pp. 324–27. 78. North China Herald, Shanghai, 1856.4.19; Tugan-Baronovskii, Zhouqixing gongye weiji, pp. 99–100. 79. See Chen Ciyu, Jindai Zhongguo chaye, p. 327; Shi, “Production and Trade,” pp. 379– 83; and Man-houng Lin, Cha tang zhangnao, pp. 23, 24, and 27, for detailed studies of the reasons for the fluctuation of China’s exports of tea and silk. 80. ZJHSZL, p. 37. Owen, British Opium Policy in India and China, p. 62n45, illustrates that the directors of the British East India Company sent dispatches to Bengal to increase opium production so as not to ship bullion from Europe.

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Table 2.16 World Production of Gold and Silver, 1741–1910 (in 1,000 ounces) ____________________________________________________________________ Period Gold Silver ____________________________________________________________________ 1741–60 791 17,100 1761–80 665 21,000 1781–1800 572 28,300 1801–10 572 28,700 1811–20 368 17,400 1821–30 457 14,800 1831–40 652 19,200 1841–50 1,762 25,000 6,313 26,500 1851–60 1861–70 6,108 39,000 1871–80 5,472 66,800 1881–90 5,200 97,200 1891–1900 10,165 161,400 1901–10 18,279 182,600 ____________________________________________________________________ sources: Vilar, A History of Gold and Money, p. 331; Hayasaka, Ginka to ginkawase, p. 53.

The Latin American silver scarcity also increased opium imports into China. A Spanish company, which had exchanged Latin American silver for Chinese silk or British Indian textiles in Manila since 1565, decreased its trade because of the decline in silver and gold production in Latin America. Many shareholders in this Spanish company shifted to the opium trade after 1827, the most famous among them being the Jardines and the Mathesons.81 With the loss of sales of Asian products to Latin America, the Spanish traders, who had a special dispensation to engage in the China trade, cooperated with British or American merchants who did not have such privileges to start the opium trade.82 After the ending of the Spanish galleon trade across the Pacific Ocean in the 1820s, Latin America sold even more silver via the Atlantic Ocean to Europe and the United States, and China sold more tea, rather than silk for the galleon trade, in Canton and Hong Kong for imported goods, of which opium became most important in terms of value.83 ————— 81. Cheong, “Trade and Finance in China, 1784–1834,” p. 45; Cheong, Mandarins and Merchants, p. 27. 82. Cheong, Mandarins and Merchants, p. 51. 83. Cheong, “The Decline of Manila,” pp. 142, 150, 151.

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Fig. 2.7 Annual world silver production, 1493–1900 , in millions of ounces (sources: Vilar, A History of Gold and Money, p. 351; Hayasaka, Ginka to ginkawase, pp. 53–55).

An investigation commissioned by the British Parliament on the Indian currency situation, which was completed in 1863 in Calcutta, noted the silver flow from the West to the East, particularly to India, which is also significant for our understanding of China’s situation: The drain of silver [from the West to the East] was greatest about the end of the last and the beginning of the present century; that it commenced to diminish in 1808; that a marked diminution took place in 1814; that an equilibrium was established in 1832–33; that, except during the years 1843–44, from 1833 to 1849 no very remarkable change took place; and that from the year 1857 the imports of silver increased rapidly and in large quantities.84 ————— 84. Lees, Drain of Silver to the East, p. 29.

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It is worth noting that 1808 and 1814, the first years for China’s awareness of the silver outflow problem were also the years that Western exports of silver into India began to decrease. From 1814 to 1849, the British government exchanged cotton for Indian silver.85 The flow of British silver into India stopped in 1833 and did not revive until the new discoveries of precious metals in the 1850s and 1860s.86 The decrease of Western silver exports to India may have stimulated sales of Indian opium to China, as opium revenues constituted about 6 percent of British India’s total revenues in 1789–1839 and were crucial for British purchases from the Indian Ocean area, the United States, and China.87 Within the six or seven years following 1856, upwards of 䒋50,000,000 ($200 million) in capital, subscribed for the construction of railways and other enterprises guaranteed by the British government, and 䒋25,000,000 ($100 million) in loans poured into India.88 Although the newly independent Mexican government started casting Mexican silver dollars in 1823, these coins did not reach China. Rather, the silver dollars circulating in China were still the Spanish dollars China already held. It was not until 1856 that 36 foreign companies in Shanghai headed by the Russel & Co. started to replace Spanish silver dollars with Mexican silver dollars as their unit of calculation.89 This substantiates the previous evidence that the new Latin ————— 85. Ibid., pp. 23–24. 86. Ibid., pp. 2, 40. 87. Wong, Deadly Dreams, pp. 411–12: Richards, “The Opium Industry,” pp. 54–55. 88. Lees, Drain of Silver to the East, p.49. 89. ZJHSZL, pp. 60–61. See also ZJHSZL, pp. 56–63, for the following historical materials relating to the process of this change. According to the Chinese Repository 15 (Sept. 1846), Spanish dollars were still being used in Shanghai at that time. British Parliamentary Papers: Returns of Trade of the Various Ports of China for the Years 1847, 1848, p. 13, points out that Spanish dollars rather than Mexican dollars circulated in Guangdong, Guangxi, Fujian, Jiangxi, Zhejiang, Jiangsu, Anhui, and Hunan at that time. Six Essays on the Trade of Shanghai, pp. 64–65, notes that the Chinese production of raw silk doubled in 1854. And, in 1857 foreigners were gradually starting to use Mexican dollars for small exchanges, whereas Chinese still deemed Mexican dollars 20–30 percent less valuable than Spanish dollars. The North China Herald, April 19, 1856, p. 150, cites an influx of silver into silk- and tea-producing areas. According to S. Wells Williams, The Chinese Commercial Guide (1863, pp. 198–99), the Chinese had previously preferred Spanish dollars but were switching to Mexican dollars. Zhang Huixin, Zhongguo huobi shihua, p. 30, also points out that on June 12, 1871, in Dispatch no. 510, the British Foreign Office notified Prince Gong of the Qing government that, in accord with the Treaty of Tientsin signed in 1858, British merchants in China would now use Mexican rather than Spanish

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American silver dollars did not enter China until 1856.90 And, it was only then that the silver–copper coin crisis eased.

Conclusion One Qing contemporary used the phrase “historical force” (shi ܰ) to describe the incomprehensible and unprecedented increase in silver prices due to the silver outflow from China.91 It appears that the “historical force” consisted of China’s almost complete reliance on Latin American silver from the late eighteenth century on, the more sluggish global market for China’s tea and silk, and the decrease in precious metal production in Latin America during the early nineteenth century. Between the end of the British East India Company’s monopoly in 1833 and the start of the Chinese Maritime Customs statistics, mostly after 1868, we lack sources dealing directly with the history of China’s foreign trade. Without the data provided from the London Customs and the abundant economic records contained in Chinese Maritime Customs Publications and British Parliamentary Papers used in this study, it would be difficult to perceive the global links behind China’s silver outflow between 1808 and 1856.92 Louis Dermigny and W. E. Cheong briefly mentioned the decrease in the American silver supply as a cause of China’s ————— dollars. And, during the 1870s Mexican dollars replaced Spanish dollars as the main foreign silver currency in China. 90. David A. Bello’s mention of competition from opium produced in the area of India outside the control of the British East India Company (Opium and the Limits of Empire, pp. 45–63) does not explain why the silver drain worsened from the 1830s to the early 1850s and then stopped. 91. Wang Qingyun, Shiqu yuji, 5.11b. 92. It was not until this book was in proofs that I discovered John F. Richards’s “The Opium Industry.” His statistics on silver flows from China to India cover 1801–58 and 1866–1915 and are based on Indian government data. Richards mentions that the British government not only monopolized opium in Bengal but also controlled the export of Malwa opium, particularly after 1831. This may be why the trend Richards depicts for 1814–56 is similar to that shown in Table 2.1, which is based on data from the London Customs. And, as Richards points out, smuggling could still exist. The official British figures thus indicate the lowest rather than the highest possible quantity of opium exports to China (pp. 48–49, 71, 79). This book does not use Richards’s statistics from 1866 on since the triangular trade, the device for clearing India’s balance of payments with China, disappeared in the 1850s, and the statistics compiled by China’s Maritime Customs, established in the 1850s, provide more accurate data on China’s subsequent international balance of payments. Cf. Owen, British Opium Policy in China and India, 211.

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early nineteenth-century silver outflow. 93 But they did not have the complete estimates of the trade balance over this period, not to mention for the late nineteenth century. The sluggish growth of China’s tea and silk exports in the early nineteenth century slowed the influx of foreign silver into China. It is true that if there had been no opium imports, no silver would have flowed out. This study has substantiated the impact of opium on China’s silver outflow, both from its deep penetration into the interior of China and from the temporal correlation of opium imports and silver outflow. But if opium imports had occurred without the downturn in the global markets for China’s tea and silk, the outcome might have resembled that of the late nineteenth century, when China’s gains from selling tea and silk offset its losses from purchasing opium and other imports. Furthermore, the drastic increases in the importation of opium into China after 1820 were stimulated by the global decrease of silver and gold. Thus the sluggish global market for China’s tea and silk and the global decrease in silver and gold production, rather than the importation of Indian opium per se, were the primary causes of the silver outflow. The silver outflow, better substantiated in this study than in previous studies based upon H. B. Morse’s work, amounted to about 19 percent of the silver circulating in China. The silver outflow each year was equivalent to around 0.22 percent of annual national income for the period 1808–56. 94 The trend in silver outflows this study reconstructs also correlates with the silver–copper coin crisis; both developed sporadically in some places from 1808 to the 1820s, when the impact began to be felt nationwide, and both were increasingly exacerbated from the 1820s to the early 1850s. The 1833–56 period, which H. B. Morse did not cover, was actually the worst period for both the silver outflow and the silver–copper coin crisis. Both the silver outflow and the silver– copper coin crisis stopped when silver again began to flow from the West to India and Asia in general around 1856. ————— 93 . Dermigny, La Chine et l’occident, 3: 1340–57; Cheong, “Trade and Finance in China”: Cheong, “The Beginning of Credit Finance on the China Coast”: Cheong, “China Houses and the Bank of England Crisis of 1825”; and Cheong, “The Decline of Manila.” 94. Calculated from the average of estimated national income ca. 1750 (1713 million taels) and ca. 1880s (3,339 million taels) given by Feuerwerker, “The State and the Economy,” p. 300. One tael was equivalent to around $1.45.

chapter 3 Disturbance of the Social Order

China’s reliance on silver for government finances, interprovincial and international trade, and most wholesale exchanges from the late eighteenth century on was like the body’s reliance on the bloodstream: any significant decrease in the supply of blood is detrimental to the functioning of the entire body. In the past, many scholars argued that the silver crisis, including the silver outflow and the silver–copper coin crisis affected mainly the Yangzi and maritime provinces south of the Yellow River. 1 Kuroda Akinobu’s recent work has emphasized that the copper coin and silver sectors of the Qing economy were two separate markets.2 This study will show the empirewide impact of the silver crisis and some intricate connections between the silver and the copper coin sectors. Although the fact that copper coins dominated local commerce and silver the interregional and international trade has been noted frequently, little attention has been given to the exact boundary between these two economic arenas. As contemporary officials observed, when the provincial financial commissioner issued soldiers’ pay in copper coins in the provincial capital, those who had to transport the pay to the soldiers in the districts and departments immediately converted the coins into the more transportable silver.3 Thus, in the rural-urban spec————— 1. Taiping Shanren, “Daoguang chao yinhuang wenti,” p. 41; Yeh-chien Wang, “Evolution of the Chinese Monetary System,” p. 445; idem, Zhongguo jindai huobi, p. 29. 2. Kuroda, “What Did the Silver Influx Really Do,” pp. 408–9. 3. GZD, DG 18.4.18 (Qian Baochen); Wang Qingyun, Shiqu yuji, 2.41a–41b.

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trum copper coins were present in provincial capitals. At the same time, the intraprovincial long-distance movement of copper coins from the provincial capitals was also necessary to meet local needs, especially for areas in which water transportation was more convenient. 4 On the other hand, as we have seen, silver, as ingots or as silver dollars, was used in all provinces. In addition to the interprovincial and international trade, silver was also used in the long-distance trade within each province. Particularly for the mountainous southwest provinces, as a Guizhou financial commissioner observed, “commoners make exchanges for copper coins only around urban areas.”5 In this spatial division in the use of silver and copper coins, it was urban merchants who set the copper coin–silver exchange rate.6 When the silver outflow took place, both silver ingots and silver dollars were sucked abroad. Since people in peripheral areas had less silver but still had to pay rents and taxes in silver or use silver to purchase necessities from distant markets, they suffered more from the exorbitant silver-copper exchange rate. Most poor people as well as merchants, landlords, scholars-officials, and the government in both rural and urban areas were impoverished. As the silver problem penetrated to every corner of the empire, vagrancy, riots, political impotence, and moral corruption increased in tandem with this crisis. Even though the early nineteenth-century silver–copper coin crisis led to the dynasty’s loss of control over the social order, the Qing empire did not fall. Does the survival of the Qing dynasty to 1911 indicate a weak connection between the world economy and dynastic decline for late imperial China? This study argues that the silver crisis constituted an important threat to the Qing dynasty, but that the reversal of the flow of silver starting in the 1850s, plus the expectation of more state protection in a horrible civil war, saved the dynasty. To illustrate the “bloodstream” function of silver and to understand how the silver problem impacted the entirety of early nineteenth————— 4. Zheng Yongchang (“Qingdai Qianlong chao qiangui shiqi zhi siqian zhengce,” pp. 9–10) notes that more privately minted coins circulated to other provinces than did official coins, particularly when waterways were available. 5. GZD, DG 18.5.20 (Guizhou Governor He Changling). 6. HCJSWXB, juan 58, huzheng 30, qianbi, shang.17b (Ding Lüheng, “Qianbi yi ” ).

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century China, it is necessary to delineate more clearly how the silver crisis wreaked havoc in both the interregional and the intraregional rural-urban dimensions.

Interregional Dimensions Silver’s high economic value helped it overcome transportation costs and long distances to reach remote markets. As William Skinner has noted, “Transactions between the centrally located cities of one region and those of another were minimized by the high costs of unmechanized transport and the great distances.”7 The various local economies of Qing China were like the various organs of the body. But there were also light and valuable things that played the role of the “bloodstream” integrating all these organs. 8 In addition to power, knowledge, and technology, silver was a key component of this bloodstream. Depletion of the bloodstream endangered the whole body. The silver scarcity certainly affected the core areas. Miao Zi estimated that the decline in the amount of silver left 80–90 percent of the people of southeast China unable to make all necessary conversions of copper coins.9 People in the southeast were also burdened with excessive taxes and poor administration. 10 In 1832, Censor Sun Lanzhi ൕⶄᚂ (1773–?) disclosed that Jiangsu and Zhejiang were severely affected by the silver–copper coin crisis. 11 Taiwan experienced a more and more desperate decline in prosperity partly because of the decrease in silver; in 1850, the Taiwan circuit intendant observed: In the past, Taiwan was deemed to be better off than mainland China, and this statement was true. Nevertheless, after I arrived at this place, I noticed that the Taiwan of ten years ago was worse off than twenty years ago; the Taiwan of five years ago was worse off than ten years ago; and the Taiwan of one to two ————— 7. Skinner, The City in Late Imperial China, p. 217. 8. For this author, the bloodstream/organ metaphor more effectively represents the organic function of the silver sector for the copper coin sector than does the reservoirpool engineering metaphor of Kishimoto, Shindai Chşgoku no bukka to keizai hendŇ, pp. 206–7. 9. HCJSWXB, juan 60, huzheng, qianbi, xia.3b (Miao Zi, “Yinbi lun, xia”). 10. Ibid., 7b. 11. SYD, DG 12.9.12; ZJHSZL, p. 11.

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years ago was worse than five to six years ago. Why? In sum, the supply of silver has gradually decreased and grain does not sell as well as it did in the past.12

The situation in peripheral areas, where the silver–copper coin conversion rate tended to be equal to or even higher than that in the core areas, was generally worse, since these areas had more difficulty obtaining silver because they did not produce much to exchange for silver. The rate could be uniform throughout core and peripheral areas. For example, an official report from Fujian in 1846 stated that the exchange rate in the surrounding prefectures was almost the same as that in the provincial capital. 13 In 1844, an official report from Jiangxi reported that rates in the surrounding prefectures had always followed that of the provincial capital.14 However, some reports observed that the peripheral area had a higher exchange rate than the core area. A report by Muzhanga ⑜၅㨊 (1782–1856), a grand councilor, pointed out in 1846 that “one liang of silver is exchanged for up to 2,000 wen in the capital, whereas in the provinces it is exchanged for 2,200 to 2,300 wen.”15 Bao Shichen reported in 1844 “one liang of silver is exchanged for 2,000 wen in the south, and it is said that in the north it is exchanged for more than 2,000 wen.”16 Silver was more difficult to obtain in peripheral areas, as Ding Lüheng pointed out: In the big cities, since the silver supply is more abundant, silver can be purchased at the market price. As for the isolated or small departments and districts, the stock of silver is very limited. The merchants tend to take advantage of the urgency in forwarding taxes and raise the price of silver. It is quite common for the silver price to drop one day after taxes have been forwarded.

Ding added, “Since taxes were generally collected in copper coin and forwarded in silver by local governments, merchants, especially those in peripheral areas, tended to rig the prices.”17 ————— 12. Ding Yuejian, Zhitai bigaolu, pp. 282, 327–29. 13. GZD, DG 22.2.27 (Governor-General Yiliang and Governor Liu Hongao). 14. GZD, DG 24.3.11 ( Jiangxi Governor Wu Wenrong). 15. YFD, DG 26.2.1. 16. Bao, An Wu sizhong, 26.37a. 17. HCJSWXB, juan 58, huzheng 30, qianbi, shang.17b (Ding Lüheng, “Qianbi yi”).

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Many rebellions took place in the peripheral areas. The Zhong Renjie Rebellion of 1842, which was ultimately sparked by high tribute-grain payments due to silver appreciation and occurred in a peripheral area, was a typical case. Hubei’s Chongyang ຄ㨻 district, where the rebellion took place, was “surrounded by thousands and thousands of mountains” 200 li from the provincial capital.18 An official report in 1847 from the peripheral province of Guangxi, expressing the difficulties caused by the silver–copper coin crisis, began by explaining that Guangxi is “located in a peripheral area where there are absolutely no big merchants.”19 Even distant Xinjiang in northwestern China was eventually affected by the silver–copper coin crisis. Silver was uncommon in Xinjiang. In 1837, the nationwide exchange rate for one liang of silver was 1,500 wen; in 1840 in Zhejiang, it was 1,570 wen. In 1840, the rate was 1,200 wen in Ili (see Table 3.1). However, in 1844 an official report from Ili noted that the silver price in terms of pul copper coins had doubled: “Formerly, in each of the Muslim Xinjiang towns, each liang of silver was exchanged for some 200 wen of pul copper coins. Because of the recent depreciation of copper coins and appreciation of silver, each liang of silver can be exchanged for some 400 wen of pul copper coins.”20 Several official reports clearly pointed out the nationwide scale of the silver–copper coin crisis. An official report from Guizhou in 1838 stated that the high cost of silver prevailed throughout the province. 21 In 1846 a report from Zhejiang noted: “Silver prices in past times were not as high as they are today. Previously, increases occurred only at certain times and were limited to certain places. Prices quickly dropped again to previous levels. In contrast, the silver prices of recent years simply increase without decreasing and furthermore increase in every ————— 18. Kuhn and Fairbank, Introduction to Qing Documents, pp. 20–24. 19. GZD, DG 27.6.26 (Guangxi Governor Zheng Zuchen). Wakeman (“China and the Seventeenth-Century Crisis,” p. 5) has stressed the impact of the seventeenthcentury silver supply on the lower Yangtze delta. The depression that Gu Yanwu observed, however, occurred in Shandong and Shaanxi as well, especially affecting those “who resided in mountainous and remote areas and could not obtain enough silver to pay the tax collector” (Gu, Tinglin wenji, 1: shang, 18). The late Ming monetary problem extended well into the interior areas of China, as did the silver–copper coin crisis of the early nineteenth century. 20. ZJHSZL, p. 88. 21. WJD, DG 18.8.17 (Guizhou Governor He Changling).

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province.”22 Additional evidence for the nationwide distribution of the silver–copper coin crisis came from a provincial official in Shandong, a censor in Guizhou, and another censor at the Board of Works.23 The silver–copper coin ratios reported for various provinces are summarized in Table 3.1. Areas that directly reported or noted the silver–copper coin crisis were the core provinces of Anhui, Fujian, Zhejiang, Hubei, Guangdong, Hunan, Jiangxi, Zhili, Shandong, and Shanxi, as well as the peripheral provinces of Henan, Shaanxi, Guizhou, Gansu, and southern Mongolia.24 Reports from these provinces, even though they are insufficient to yield a correlation coefficient, reveal a fairly consistent trend in the fluctuation of the exchange rate. Before 1842, the ratio hovered around 1,400–1,500 wen; from 1842 to 1846, it jumped to 1,600–2,000; and between 1846 and 1853, the ratio vaulted to 2,000– 2,750. Some local records with longer time series, listed in Table 3.2, show similar trends for silver–copper coin ratios. Between 1830 and 1835, the rate in Sichuan was below 1,500; it reached a maximum of 2,200 to 2,270 in 1854 and dropped drastically after 1856 to 1,420 in 1859. Hebei’s data illustrate an upward trend from 1808 to 1850, with a ratio of 1,300– 1,500 between 1821 and 1835, 1,500–1,724 between 1835 and 1844, and 2,025–2,230 between 1845 and 1850. And then the ratio dropped from 2,200 in 1853 to 1,530 in 1860. Tunxi in Anhui, a tea-producing area, had a lower exchange rate. However, the rate increased from 1,245 in 1840 to 1,698 in 1856 and then dropped to 1,274 in 1857. Data from Zhejiang (Ningbo) cover a shorter period but still show an increase from 1,227 in 1819 to 1,788 in 1842. ————— 22. GZD, DG 26.6.22 (Liang Baochang). 23. A Shandong official report dated 1838 noted, “In all provinces the silver price has risen” (GZD, DG 18.7.7, Jing-e-bu). An official report of 1842 notes: “Recently, in the markets and shops of each province, the silver price has risen higher and higher, and the copper coin price has dropped lower and lower” (DXTGZY, DG 22, Censor Overseeing Guizhou Huang Zhongmo, p. 46). An 1853 official report said, “In 1840, for example, 1 liang of silver was exchanged for 1,300 wen of copper coin. It is almost the same in every province” (GZD, XF 3.11.16, Metropolitan Censor Overseeing the Board of Works Wang Yuanfang). 24. For more on the core-periphery differentiation, see Yeh-chien Wang, Land Taxation in Imperial China, pp. 84–88.

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Table 3.1 Silver Appreciation Reports for Various Localities, 1824–54 ____________________________________________________________________ Silver– copper coin Year Place ratio Sources ____________________________________________________________________ 1824 1824 1826 1828 1829 1829 1830 1831 1831 1832 1835 1836 1837

Henan Fujian Jiangsu Jiangsu Beijing Fujian Shaanxi Shaanxi Jiangsu Zhejiang Hubei Beijing Sichuan

1837 1838 1838 1838 1838 1840 1840 1841 1842 1842 1842 1842 1842 1842 1842 1842 1843 1843 1843 1843 1843 1843 1843

Jiangsu Shaanxi Hunan Guizhou Nationwide Zhejiang Ili Jiangxi Nationwide Nationwide Zhili Hubei Shaanxi Guizhou Guizhou Shandong Jiangxi Shaanxi Shanxi Jiangsu Hubei Fujian Zhejiang

1,100 1,240 1,150–260 1,280 1,400 1,300 1,350 1,300–480 1,300 1,428 1,428 1,200–300 1,500–600 1,400 1,429 1,428 1,600 1,570 1,200 1,666–95 1,400–500 1,590 1,470 1,639 1,480 1,429 1,587 1,400–500 1,600 1,540 1,620 1,666 1,600 1,500–600

*ZJHSZL, pp. 79–82 Ibid.; SL, 65: 36, DG 4.2.27 *ZJHSZL, pp. 79–82 Ibid. SL, 163: 2, DG 9.12.17 *ZJHSZL, pp. 79–82 Ibid. SL, 198: 4, DG 11.10.1 *ZJHSZL, pp. 79–82 SL, 221: 16, DG 12.i9.12 GZD, DG 22.2.25 *CBYWSM, 1: 2 *ZJHSZL, pp. 79–82 *ZJHSZL, pp. 79–82 SL, 315: 17, DG 18.10.20 GZD, DG 22.2.20 *ZJHSZL, pp. 79–82 *CBYWSM, 1: 2 *ZJHSZL, pp. 79–82 Ibid. *ZJHSZL, pp. 79–82. WJD, DG 22.12.22 GZD, DG 22.2.27 *ZJHSZL, pp. 79–82 GZD, DG 22.2.25 GZD, DG 22.3.14 GZD, DG 22.4.22 *ZJHSZL, pp. 79–82 GZD, DG 22.11.18 SL, 391:15, DG 23.4.12 GZD, DG 23.4.12 *ZJHSZL, pp. 79–82 Ibid. Ibid. Ibid. DXTGZY, p. 661

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Table 3.1, cont. ____________________________________________________________________ Silver– copper coin Year Place ratio Sources ____________________________________________________________________ 1844 1844 1845 1845 1846 1846 1846 1846 1846 1846 1846 1846 1846 1846 (May) 1846 ( July) 1846

Jiangxi south China north China Shaanxi

1,630 2,000 > 2,000 1,200–800

Beijing other provinces Yunnan Guizhou Guangxi Guangdong Gansu Shanxi Anhui Jiangxi Nationwide Jiangsu

2,000 2,200–300 1,580–640 1,600 1,600 1,500 2,000 1,700–2,000 2,000 1,900 2,000 1,800–900

Jiangsu Beijing; other provinces Shaanxi Hunan Guangxi

2,000 2,000 2,200–300 1,700–2,000 2,200–300 1,900–2,100

Bao, An Wu sizhong, 26.15a Ibid., 26.37 Lin Zexu, Lin Wenzhonggong zhengshu, 1:8 *HCZDLZ, qianbi 4: 4 *ZJHSZL, p. 120 *Ibid. *Ibid., p. 119 *Ibid. *Ibid. *Ibid., p. 118 *Ibid. *Ibid., p. 119 Xu Mei, Chaobi lun, p. 32 Li Xingyuan, Li Wenggonggong yiji, 10.52, DG 23, p. 2963 *ZJHSZL, p. 118 YFD DG 26.2.1

GZD, DG 26.9.9 WJD, DG 27.6.24 GZD, DG 27.6.26, 27.7.23 1847 Shanxi; 1,500 *ZJHSZL, p.118– 120 1848 Fujian 1,900 *ZJHSZL, p.118–20 1848 Jiangsu 2,000 Li Xingyuan, Li Wenggonggong yiji, 17.39, DG 28, p.4107 1851 Nationwide 2,000 HCDXTGZY, 1:45 GZD, XF 3.11.16 1853 Nationwide 2,600–700 1854 Nationwide 2,750 GZD, XF 4.17.15 1854 Nationwide 2,000 Feng Guifen, Xianzhitang gao, 11: 30 ____________________________________________________________________ 1846 1846 1847

note: Sources marked with an asterisk (*) are taken from Ichiko, “ShinchŇ kaheishi kŇ,” pt. 2, pp. 23–29.

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Table 3.2 Silver–Copper Coin Ratios, Selected Locations, 1808–1860 ____________________________________________________________________ Anhui Hebei Zhejiang Sichuan Year (Tunxi) (Ningjin) (Ningpo) ( Jianwei ) ____________________________________________________________________ 1808 1809 1810 1811 1812 1813 1814 1815 1816 1817 1818 1819 1820 1821 1822 1823 1824 1825 1826 1827 1828 1829 1830 1831 1832 1833 1834 1835 1836 1837 1838 1839 1840 1841 1842 1843 1844 1845 1846 1847

1,040 1,065 1,133 1,085 1,094 1,090 1,102 1,177 1,217 1,245

1,245 1,245 1,358 1,377 1,377 1,509 1,604 1,660

1,226 1,267 1,252 1,249 1,269 1,253 1,271 1,341 1,339 1,380 1,365 1,388 1,387 1,363 1,356 1,420 1,487 1,559 1,637 1,679 1,644 1,547 1,572 1,656 1,724 2,025 2,208 2,167

1,227–87 1,233–300 1,211–67 973–1,192 1,159–87 1,093–183 1,080–107 1,117–48 1,131–212 1,205–67 1,247–81 1,267–87 1,267–301 1,333

1,403

1,330 1,280 1,170 1,290 1,350 1,490 1,420

1,413–500

1,460

1,353–55

1,400 1,786–88

1,440 1,610

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Table 3.2, cont. ____________________________________________________________________ Anhui Hebei Zhejiang Sichuan Year (Tunxi) (Ningjin) (Ningpo) ( Jianwei ) ____________________________________________________________________ 1848 1,660 2,299 1,610 1849 1,651 2,355 1850 1,660 2,230 1851 1,660 1852 1,660 1853 1,660 2,220 2,220 1854 1,660 2,270 2,270 1855 1,660 2,100 2,100 1,810 1,810 1856 1,698 1857 1,274 1,720 1,720 1858 1,132 1,420 1,420 1859 1,170 1,610 1860 1,126 1,530 ____________________________________________________________________ sources: Anhui: Yu-kwei Cheng, Zhongguo jindai duiwai jing ji guanxi yanjiu, pp. 127, 147; Hebei: Yan Zhongping, Zhongguo jindai jing jishi tong ji ziliao xuanji, p. 37; Zhejiang: Chao-nan Chen, Essays, p. 36; Sichuan: Luo Shouxiang, Jianwei xianzhi, Jingji, hou.28a–b.

The Intraregional Rural-Urban Dimensions Under the sway of this nationwide silver–copper coin crisis or silver outflow itself, various social groups in both urban and rural areas were affected, as observed by contemporaries.

impoverishment of copper-coin earners and increasing vagrancy Since copper coins were used mostly for retail exchanges and wages, the depreciation affected those—workers, retailers, and peasants—who earned their incomes in copper coins. As Wu Jiabin ࠦ঒㊾ (1803–64), a metropolitan degree holder and a Hanlin Academy compiler, noted: “No one who sells cloth, grains, beans, crafts, and labor for copper coins can avoid losses.”25 Even though their income in copper coins did not change, the depreciation of copper coins increased the prices they ————— 25. Wu Jiabin, Qiuzidezhishi wenchao, 4.15.

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paid for goods whose trade involved silver, as well as rents and taxes, which had to be paid in silver. In 1851, Zuo Zongtang ༟൳᝴ (1811–70), then governor-general of Fujian and Zhejiang, described the plight of laborers: “With the price of silver increasing daily, silver is more and more difficult to obtain. Peasants suffer from the fact that the copper coin they earn as their wages is as worthless as dirt.”26 In several provinces, including Jiangsu, Zhejiang, Sichuan, Fujian, and Jiangxi, tenants were impoverished since they had to sell grain for copper coins and then change those coins into silver to pay their rents. In 1845 silk weavers in Hangzhou went on strike for higher wages, as did incense makers in Jiaxing in 1849. Craftsmen, charcoal burners, carpenters, blacksmiths, bean-curd makers, rice grinders, and miners were some of the early participants in the Taiping Rebellion.27 The vagrancy problem worsened from the 1820s through the 1850s, as the number of jobless people increased with the silver–copper coin crisis. These vagrants sometimes became bandits or salt smugglers.28 Bao Shichen claimed that the problem began on the eve of the 1820s.29 Wang Zhi ᾄម (1792–1852), a native of Zhili and governor of Anhui, remarked that the growing number of vagrants was a serious problem and had worsened between the 1830s and 1850s. In 1850, Wang recalled hearing elders say in the 1830s that “in former times, there were but a few vagrants in each rural area and market, and they would feel very ashamed because people would laugh at them; today, a rural area with several hundred households will have dozens of vagrants, and they are seen as natural.” Wang further noted: “The situation today is even more serious.” The vagrancy problem was much worse in urban areas. As Wang commented, “This is the situation in the countryside; that in the cities can only be worse.”30

————— 26. Zuo, Zuo Wenxianggong quanji, Shudu, 1.35b. 27. Peng Zeyi, “Yapian zhanzheng hou,” pp. 58–59. 28. Feng Guifen, Xianzhitang gao, 11.31; Wu Jiabin, Qiuzidezhishi wenchao, 4.15–16. 29. Bao, An Wu sizhong, 26.1a–b. 30. Wang Zhi, Fu Wan zouyi, pp. 61–62, cited in Peng Zeyi, “Yapian zhanzheng hou,” p. 63.

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landlords’ problems At this time of money shortage, the market for agricultural crops shrank. Bao Shichen observed that farmers suffered even when they had a good crop of mulberry leaves or cotton, because the market was sluggish because of money shortage.31 In a letter to a friend in 1851, Zuo Zongtang wrote: The price of silver has been increasing day by day, and copper coins are also difficult to get. . . . Food is easy to obtain, but money is not. Money rather than grain is valuable ( jinsheng gusi 㚷 ₟ ⑚ ᥁ [literally, “money lives and grain dies”]). Isn’t this a situation similar to what Gu Yanwu 㮛ᵔᤸ [1613–82] called a “depression in a year of good harvest” ( fengsui zhi huang ㉛᤼Ϣ⬽)?32

With agricultural income down, the landlord suffered since they had to pay taxes in silver. One censor mentioned in 1840: “The poorest people are unable to own land. They just use their labor to cultivate other people’s land and do not have the chance to pay taxes. Those who pay land taxes are rich families.” 33 And Zuo Zongtang said in 1852: “Landlords suffer from having to pay for military expenses or tribute grains in silver.”34 And it was actually the topsoil landlords who had to face this ordeal. At this time in southeastern China, and sometimes in other regions, there were both subsoil (yehu ៚ቤ) landlords, who owned the land, and topsoil landlords (dianhu ҉ቤ), who leased the land from the subsoil landlord and might further lease their right to use the land to subtenants.35 Studies of Qing landownership often do not clearly distinguish the tax-paying responsibilities of these two types of landowners. Evidence for the early nineteenth century shows that it was the topsoil landlords who had to pay land taxes, and their tax burden increased because of the silver appreciation: ————— 31. Yeh-chien Wang, “Evolution of the Chinese Monetary System,” p. 444. 32. Zuo, Zuo Wenxianggong quanji, Shudu, 1.35b. 33. ZJHSZL, p. 32. 34. Zuo, Zuo Wenxianggong quanji, Shudu,1.35b. 35. Dai Yanhui (“Qingdai Taiwan zhi daxiaozuye,” p. 2) said that this system prevailed in Jiangsu, Zhejiang, Jiangxi, Anhui, and Fujian; he (p. 7) cites Japanese studies of the same practice in Shaanxi, Hubei, and Hunan.

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Topsoil landlords actually did not have much of a harvest after a year of toil. They furthermore had to sell their grain for copper coin to exchange it for silver, which they took to the officials to pay [taxes] ( fuguan jiaona м൴❓♇). As the silver price more than doubled from the Qianlong period, the topsoil landlords could not afford it.36

Special tax exemptions were granted to families designated as “large households,” who secured further decreases in their tax burden by taking advantage of the practice of “selling disaster,” in which yamen clerks and runners literally sold tax remissions to the highest bidders.37 Basically, it was middle and small landowners who led the tax-resistance or rent-resistance movements common throughout the empire during the silver–copper coin crisis. 38 Topsoil landlords resisted paying rent to subsoil landlords. One such movement in Jiangsu led to the destruction of the houses of 36 subsoil landlords.39 Wei Yuan noted that the subsistence threat to the small landowners was a mortal threat to the regime.40 As income decreased and the tax burden increased, there was a tendency to alienate land. Between 1812 and 1837, the amount of cultivated land reported to the government decreased by about 7.3 percent of the total reported in 1837. 41 An official report from 1853 stated that although the price of land had dropped, few people could afford to buy it. Other than a few who took this opportunity to accumulate land, landowners in general lost out with the drop in land prices. With rich people accumulating more land and the poor getting poorer, the distribution of landownership became increasingly unequal.42 ————— 36. Peng Zeyi, “Yapian zhanzheng hou,” p. 58. 37. Bernhardt, Rents, Taxes, and Peasant Resistance, pp. 49–50. 38. Peng Zeyi, “Yapian zhanzheng hou,” p. 67. See Yang Guozhen, Ming Qing tudi qiyue wenshu yanjiu, on the three-level landownership system of the Ming and Qing periods. Yang’s focus was on the differentiation of land use and ownership rights, and neither his study nor related studies have investigated the changes in responsibility for tax payments. Yang (p. 344) merely mentions that with the increase in the tax burden because of the silver appreciation, landownership became clearly differentiated in Taiwan. 39. Peng Zeyi, “Yapian zhanzheng hou,” p. 65. 40. Kuhn, Origins of the Modern Chinese State, p. 118. 41. Calculated from: Taiping Shanren, “Daoguang chao yinhuang wenti,” p. 46. 42. Peng Zeyi, “Yapian zhanzheng hou,” pp. 61–62.

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commercial decline and losses for the merchants Except for bankers, who owned silver and could take advantage of fluctuating exchange rates, most merchants, particularly those engaged in long-distance trade or salt distribution, were impoverished by the silver crisis. As Feng Guifen noted of the situation of the Lower Yangzi area around 1852: “The profits that merchants make have decreased, and merchants are reluctant to engage in business. The large, wealthy merchants have gone bankrupt, and trade has fallen by 50 to 60 percent.” One observer in Hunan claimed in the early 1850s that “former merchants have turned into today’s paupers; former peddlers have turned into today’s beggars.”43 Feng Guifen explained that “when commodities are brought in by the merchants, they tend to be purchased wholesale in silver and sold retail in copper coin. Since silver has become expensive, the nominal price of goods purchased in silver has not increased, yet their real price has increased. On the other hand, although the nominal price of goods sold in copper coin has increased, their real price in silver has actually fallen.”44 As for the decline of long-distance traders, an official report from 1835 stated that the number of junks sailing from Amoy to Southeast Asia had decreased by more than 40 percent because merchants had less capital at their disposal. An official report ten years later said that there had been a rapid decline in the numbers of cargo boats sailing from Fujian, Guangdong, and Tianjin.45 In 1850 the Taiwan circuit intendant remarked on the decline of Taiwan’s long-distance trade merchants. Previously, when officials in Taiwan purchased horses from the regions beyond the Great Wall, there had been enough junks engaged in the long-distance trade with Taiwan to finish shipping these horses from spring to autumn. By 1850, the number of junks had dwindled to

————— 43 . Lo Bingzhang, Lo Wenzhonggong zouyi, 5: 11, cited in Peng Zeyi, “Yapian zhanzheng hou,” p. 57. 44. Feng Guifen, Xianzhitang gao, 11.32. 45. Yeh-chien Wang, “Evolution of the Chinese Monetary System,” p. 445.

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such an extent that it took more than three years to transport one year’s order of horses.46 Salt merchants were also impoverished by the crisis because salt taxes were paid and salt was purchased in silver but sold in copper coin. Moreover, their transport and labor costs had become more expensive with the silver appreciation. The merchants, however, could not increase retail salt prices because salt smugglers would quickly expand their market share.47 In 1847, the salt inspector ordered the four merchants who headed the group of 61 salt merchants in Fuzhou to make sure all delinquent payments were made good within a certain period of time.48 An official report in 1847 noted: Going back to the years before 1838, when 1 liang of silver was exchanged for 1,200–1,300 wen of copper coin, the salt merchant’s wealth was already exhausted. In recent years, 1 liang of silver has increased in value to 1,500–1,600 wen of copper coin. Even rich, bona fide merchants, not to mention merchants with small capital, cannot afford to sell salt for copper coin and pay taxes in silver. As a result, five out of ten of the salt license–holders cannot pay the tax; nine out of ten salt merchants are poverty stricken.49

As Huang Juezi said in 1838, “Formerly merchants vied for the right to engage in the salt trade; now it has turned horrible because of the silver appreciation.”50

diminishing incomes of soldiers and officials The statutes of the Board of Revenue for 1838 and 1851 stipulated that official salaries remain the same.51 In 1843, when a slight reduction in military pay was proposed, the emperor declined to enact it.52 The statutory salaries of officials and soldiers continued to be paid during ————— 46. Ding, Zhitai bigaolu, pp. 282, 327–29. 47. DXTGZY, DG 30 (Shanxi Governor Zhaonasutu), p. 921. 48. House of Commons Parliamentary Papers, 1847, XL, p. 142. 49. DXTGZY, DG 17 (Shandong Governor Jing’ebu, Salt Controller Zhongling), p. 403. 50. CBYWSM, 2: 4–6. 51. Qingding Hubu zeli (1851 ed.), juan 11, linglu; juan 74, linglu. 52. ZJHSZL, p. 168.

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the silver–copper coin crisis.53 This does not mean, however, that the income of officials and soldiers was not affected by the crisis. Soldiers endured great hardships when silver appreciated. During the Qing dynasty, some 600,000–700,000 soldiers were stationed in the provinces; together with those stationed in the capital, the number of soldiers totaled 800,000–900,000.54 The monthly pay of a calvaryman was 2 liang and of a foot soldier was 1.5 liang, excluding other allowances.55 To a great extent, however, soldiers were paid in terms of depreciated copper coins. A censor wrote in 1843 that the official conversion rate of 1 to 1,000 had originally been meant to benefit soldiers, since that rate was set at a time when 1 liang of silver exchanged for 700–800 wen on the market. The soldiers gained 200–300 wen when their pay was converted from silver to copper coins by the 1 : 1,000 ratio. 56 Yet when the market rate moved above 1,000, or even worse above 2,000, this policy became quite adverse for soldiers. In 1843, an official report from Shaanxi, for example, pointed out: “Now one liang is exchanged for some 1,600 wen. Soldiers get some 600 wen less for one liang of salary.” 57 The same situation extended as far as Xinjiang. In 1844 it was reported that when the silver price doubled in Xinjiang, soldiers suffered greatly. This was thought to have a deleterious effect on the defense of this frontier area.58 As a result, the proportion of copper coin used in paying soldiers’ salaries was decreased.59 But soldiers still suffered from silver appreciation while they waited for the adjustment. Military histories often point to the decline of the Eight Banners and Green Standard forces of the Qing dynasty on the eve of the Taiping Rebellion, but the effect of the silver–copper coin crisis on this decline needs more attention. The incomes of both local and metropolitan officials were low during this period. In 1814, Gong Zizhen complained that before the Song ————— 53. Miao Zi, Miao Wuliegong yiji, 1.18a. 54. Wang Qingyun, Shiqu yuji, 2.41b–42a. 55. Ibid., 2.39b. 56. ZJHSZL, p. 151. 57. GZD, DG 23.4.12 (Li Xingyuan). 58. ZJHSZL, p. 88. 59. SYD, DG 2.9.13 (Qiu Shutang).

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dynasty (960–1279) officials had enjoyed good incomes, which helped them nourish their scholastic, artistic, and administrative concerns, whereas officials in his own time were obliged to worry about providing for their own families. Some did not even have two meals a day, and eight or nine out of ten local officials were in debt. Others could not feed their horses, and their families were continuously harassed for unpaid rent.60 Many official families had income from landowning or mercantile activities.61 With both land and mercantile earnings lowered, official incomes decreased. Particularly, officials often had to make up tax deficiencies at the time of silver-copper coin crisis in the process of forwarding tax payments in silver to higher-level authorities. This process entailed transportation and meltage expenses. Some of this silver was lost during the melting process; tax funds were also used when officials had to purchase silver from merchants or ask them to melt silver. Raising the conversion rate of copper coin and silver over the market rate was one way to cover these costs. Thus, taxes as levied were higher than those stipulated in law. This had been the case long before the silver–copper coin crisis. As Miao Zi pointed out in 1849, previously, when the official rate was 1,000 copper coins per liang of silver and the market exchange rate was 900, officials gained 100 wen for each liang of taxes at the official rate: “This surplus was enough to cover the costs of transportation, exchanging, and melting, and hence tax payments were rarely deferred.”62 As silver appreciated, tax conversion rates also rose. Depending on the locale, the rises were higher than, equal to, or lower than the increase in the market rate. In some places, the conversion rate was far above the market rate. For example, in 1829 in Henan the market rate was 1,400 wen per liang, but in several places in the province the official conversion rate was as high as 2,000–2,300 wen. The Daoguang emperor condemned such practices as exploitative.63 Nevertheless, they appeared elsewhere as well. In Shandong, the conversion rate increased from 1,750 in 1820 to ————— 60. Gong, Gong Zizhen quanji, 1: 29–30. 61. Chung-li Chang, The Income of the Chinese Gentry, pp. 125–95. 62. Miao Zi, Miao Wuliegong yiji, 1.29a. 63. SL, 163: 21, DG 9.12.17 (An imperial edict to the grand councilors).

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2,850 in 1830.64 A provincial degree holder and a local schoolteacher in Jiangsu believed that “the conversion rate for tax payments had increased by one-third over the past thirty years.”65 The charges Miao Zi observed as a magistrate in 1840–46 moved in tandem with the market rate.66 In some locales the rise lagged behind the market rate. In 1840, a censor noted that on his way from Fujian to the capital in 1839, he had heard that people of Fujian and Zhejiang were willing to increase the rate by 50–60 percent and those of Jiangsu and Shandong 30–40 percent. Under such circumstances, for each liang of tax, the magistrate still had to make up 100 to 600 wen in lost revenues.67 No matter what relation the increase in the conversion rate bore to the increase of the market rate, however, the tax burden increased. When the rise in the tax burden was accompanied by a decline in the price of rice in terms of copper coins and of copper coins in terms of silver, the tax burden was increased in three dimensions.68 In 1852 Zeng Guofan deplored the fact that the de facto tax burden had doubled over the past fifty years, even though the nominal rates remained the same.69 The real tax burden in 1849, as Miao Zi and Feng Guifen noted, was double that of the early Daoguang reign and three times that of the pre-Qianlong period.70 When people could no longer pay the growing tax burden, the amount of taxes forwarded to the government fell. Miao Zi wrote: People are used to the conversion rate of former days and do not pay according to the market rate. In order to avoid inciting riots, department and district magistrates have not forced people to pay the new amounts. Thus, taxes paid ————— 64. ZJHSZL, p. 32. 65. HCJSWXB, juan 60, huzheng, qianbi, xia.10a (Lu Fuen, “Qianbi yi ” ). 66. According to Miao Zi, Miao Wuliegong yiji, 1.15a. At that time, the market exchange rate was 2,100 wen. Extra fees, including charges to make up for the loss in melting, weigh the silver, provide food for the workers, pay the forwarding carriers, clerks, and runners, and purchase paper and other stationery, amounted to 0.19 liang per liang of silver; 0.19 u 2,100 wen is 399 wen. Hence Miao Zi’s adjustment of the conversion rate to 2,500 wen reflected the market rate. 67. ZJHSZL, p. 31. 68. Bao, An Wu sizhong, 26.15a–b. 69. Zeng, Zeng Guofan quanji, pp. 29–30, XF 1.12.18. 70. Miao Zi, Miao Wuliegong yiji, 1.15b; the piece by Miao Zi cited here was written in 1849 (ibid., 1.22a). Feng Guifen, Xianzhitang gao, 11.30–35.

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by people can meet only 60–70 percent of the tax quota. Upon investigation, the deficiency found to be as great as tens of thousands of liang. Although there are other kinds of misappropriation, the high value of silver actually accounts for 50–60 percent of the deficiency.71

In 1838, Huang Juezi described the growing difficulties officials faced in making up tax deficiencies caused by the silver-copper coin crisis.72 Bao Shichen, drawing on his personal experience as a magistrate in a district of Jiangxi, noted in 1839 that for each liang of tax forwarded, the magistrate had to supply some 80 wen. Since the tax quota for this district was 430,000 liang, each year the total deficit came to 3.4 million wen.73

The Crisis of the Qing State shortfalls in tax payments The revenue of the Qing state amounted to only 4–8 percent of national income around 1750. The outflow of 384 million silver dollars in the 48 years between 1808 and 1856 meant a decrease of 8 million dollars a year, or about one-fourth of the land tax or 6 percent of the Qing state’s total revenue in 1842.74 With the silver outflow, land tax shortages occurred in various provinces. The combined land taxes of Jiangsu, Zhejiang, Anhui, Jiangxi, Hubei, and Hunan provinces fell short of the official quota by 12 percent in 1841, 18 percent in 1842, 13 percent in 1845, and 33 percent in 1849.75 The land tax shortage for all provinces prior to 1843 was 5,934,800 liang. Between 1843 and the first six months of 1847, there was again a shortfall of 2,064,800 liang; for the latter half of 1847, another shortfall of 1,065,300 liang was found; for 1848, despite the ————— 71. Miao Zi, Miao Wuliegong yiji, 1.16b–17a. 72. CBYWSM, 2: 5. 73. Bao, An Wu sizhong, 26.15b. Bao calculated that the current market ratio was 1,630; 1,885 was the rate at which people paid taxes. After food and labor costs for the workers who transported the copper coins deposited in the tax boxes to the district office, 1,827 wen remained. Melting and weighing expenses, wages, and gifts to the officials, when added to the 1 liang of tax, totaled 1.17 liang. 74. Feuerwerker, “The State and the Economy,” p. 300; and Table 8.1 in this book. 75. See Taiping Shanren, “Daoguangchao yinhuang wenti,” p. 47, for the land tax quotas and actual amounts collected by these provinces for these years. Based on his data, I have calculated the percentages.

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waiving of 2.8 million liang in tax arrears, the shortage was still 7.7 million liang.76 As Miao Zi calculated in 1849, “The southeast area is the most important source of the state’s revenue. . . . Since silver prices increased daily, only 10–20 percent of the provinces in this area have collected their land taxes fully enough to forward. The others can only remit 70–90 percent of the assessed tax.”77 In 1840, a censor found that Jiangsu paid the greatest amount of land tax among all provinces, but that collection shortfalls there were also the greatest.78 In addition, Henan and Shandong were one-third short of the official tax quotas.79 Salt tax revenues also decreased. Tax collections in the Lianghuai salt area of Jiangxi, Hunan, Hubei, Anhui, and Jiangsu, which accounted for half the total salt tax, were about 37 percent lower than the stipulated figure in 1841, 1842, 1845, and 1849. In addition, collections in the Liangzhe salt area of Zhejiang, Anhui, and Jiangsu, the second largest salt area, were less than half the official quota. Amounts in other salt areas, such as Changlu (Zhili and Henan), Shandong (Shandong and Jiangsu), Fujian-Guangdong (Guangdong, Guangxi, Guizhou, and Fujian), Guangxi (Guangxi and Guangdong), and Sichuan (Sichuan and Hubei), fell short of official quotas in 1841, 1842, 1845, and 1849. In total, collections were one-third short of official tax quotas.80 In the general commercial sector, customs revenues fell short of quotas with the decrease in trade,81 and informal contributions also decreased. Large portions of provincial government expenses were offset by contributions from the customs and salt administrations within their territories.82 With the commercial depression, informal revenues drawn from the commercial sector decreased. In the case of informal contributions, Feng Guifen noted: ————— 76. Peng Zeyi, “Yapian zhanzheng hou,” p. 49. Feng Guifen (Xianzhitang gao, 11.30– 35) wrote: “The poorer the people get, the more difficult it is to collect the land tax. The land tax deficiency has escalated year by year.” 77. Miao Zi, Miao Wuliegong yiji, 1.29a. 78. ZJHSZL, p. 32. 79. Wang Qingyun, Shiqu yuji, 3.37a–39a. 80. Ibid., 5.32b–37a. 81. Feng Guifen, Xianzhitang gao, 11.32a; ZJHSZL, p. 107. 82. Zelin, The Magistrate’s Tael, p. 58.

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In the Qianlong and Jiaqing periods, when contributions were called for, they could often go as high as 10 million [liang]. Today, when contributions are called for to pay military stipends, there is little response. Why? China has only a certain amount of silver to circulate around the whole country. When contributions are called for, it is intended that silver be moved from here to there. Now, since there is no silver here, how can silver be circulated there?83

Total revenues from the land, miscellaneous, salt, and customs taxes—the real taxes collected—in 1841, 1842, 1845, and 1849 were on average 14.28 percent short of the official quotas.84 As a censor said in 1848, “The assessed annual revenues of the state are more than 40 million liang. Recently, the annual shortage has reached one-third of this total each year.”85 The Board of Revenue’s tax registration books held in Beijing also reveal that the tax reserves at the board had dropped. If the index of tax reserves is set at 100 for 1842, it fell to 73 in 1843, 83 in 1845, 81 in 1848, 80 in 1849, and 66 in 1850.86 At this difficult period, some taxes were exempted. As Board of Revenue official Wang Qingyun pointed out that taxes exempted were customarily those to be forwarded to the central government rather than those to be reserved for local governments,87and thus the central government was even more affected. Bao Shichen said, “The silver price is to the land tax and the tribute grain what rice grains are to cooked rice.”88 The silver–copper coin crisis played a crucial role in all these tax shortfalls.

shrinking government expenditures Because the government had to exchange copper coins for silver at bank shops to pay expenditures calculated in silver, when copper coins became devalued relative to silver, the cost of public expenditures calculated in silver increased. Tribute grain can serve as an example. For several provinces in southeast China, the tribute grain was paid as part of the land tax, and the grain intendant would forward the tribute grain, or ————— 83. Feng Guifen, Xianzhitang gao, 11.32a. 84. Calculated from Wang Qingyun, Shiqu yuji, 3.49b–50a. 85. DXTGZY, DG 28 (Censor Jiang Hongsheng), p. 842. 86. Peng Zeyi, “Yapian zhanzheng hou,” p. 49. 87. Wang Qingyun, Shiqu yuji, 2.41. 88. Bao, An Wu sizhong, 26.39a.

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the silver into which it had been converted, northward via the Grand Canal.89 Eighty percent of the fees of the carriers was paid in silver ingots or silver dollars; only 20 percent was paid in copper coin. When the silver price in terms of copper coins doubled, at least several hundred thousand more strings of copper coin had to be exchanged for the silver, even though there was no real increase in the fees themselves. Since almost all other expenses of local governments were paid in silver, the funds of the departments and districts were exhausted with the doubling of the price of silver.90 This is why Feng Guifen said, “With the silver–copper coin crisis, what the state buys with silver has also decreased by one-third.” 91 With decreased revenues and increased expenses, the deficit of the Board of Revenue was calculated at 1,279,946 liang in 1843; 37,210 liang in 1848; 559,017 liang in 1849; and 2,375,925 liang in 1850.92 On average, the deficit reached around 4 percent of regular revenues of 120 million liang. In the end, the state had to pay more to deal with problems that arose because of its lack of expenditures. Feng Guifen vividly depicted this vicious circle: With decreased revenues, a principle of frugality has been proposed for public expenditures. When this principle is overused, administration becomes perfunctory. Irrigation work that should be repaired is left undone, causing people to rely on relief from the treasury when uncontrollable floods devastate their land. Local defenses that should be set up are not established; so small thieves turn into rebels, just as ailments left untreated will develop into serious illnesses. Pacification again consumes more of military revenues. All the affairs that should be handled locally are held up with the excuse of tight revenues, although even more is later spent to remedy the situation. Complications are intertwined with other complications, and one bad practice gives rise to another. Consequently, how can the imperial state not be poor?93 ————— 89. Miao Zi, Miao Wuliegong yiji, 1.21a. 90. Ibid., 1.17a–b. 91. Feng Guifen, Xianzhitang gao, 11.30–35. 92. Peng Zeyi, “Yapian zhanzheng hou,” p. 49. 93. Feng Guifen, Xianzhitang gao, 11.30–35. In 1846 an official report from Expositor of the Academy Zhu Zun ᘮ໱ (1792–1862) mentioned the increase in expenses caused by riots during the silver–copper coin crisis (HCZDLZ, qianbi 4, pp. 6–8).

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the worship of money and corruption As people became impoverished by the silver crisis, they desperately craved money, whether they were high officials or ordinary civilians. Guan Tong ╎ࠂ (1780–1831), a scholar with a provincial-level degree, deplored the fact that the contemporary world was epitomized by two words: “profit-seeking” and “flattery.” Subordinates visited their superiors as often as possible.94 Feng Guifen mentioned that people of his time did not hesitate to talk about the profitability of official positions. In 1850 he told his patron, Lin Zexu, about the naïveté of a friend who had been a magistrate. When the friend heard an official talking about the gains to be had from posts in the Shanyang บ㨻 and Taixing ᩴ⨱ departments of Jiangsu, he thought the official was referring to the profits of a soy sauce shop named Sanyang ή㨻 and a silk filature shop named Taixing ᩴ⨱. Since official positions were widely assessed in terms of income, even Lin Zexu clapped his hands at this joke. Feng further said: There is not one capital official who does not rely on the contributions of officials outside the court. Honest officials are still doubtful about whether this is acceptable; corrupt officials manage to get whatever they can by establishing various pseudo teacher-disciple or brotherly relationships. Generally speaking, honest high officials will have enough to use and corrupt officials will have a surplus, but low-level officials will be in debt. With their creditors always nagging them, how can these low officials maintain their purity in public functions?95

As a result, a great many public functions were left to private secretaries, clerks, and runners, who institutionalized bribery. The private secretaries, the so-called Shaoxing shiye ♬⨱དྷṶ, helped local officials with financial and legal matters and had the ability to propose candidates for local posts. Relatives who owned shops provided avenues for bribing the officials. An imperial edict of 1836 mentioned a private secretary named Wu Liemen ࠦᵽ㥹 who had served ————— 94. HCJSWB, 7 zhiti, 16a (Guan Tong, “Niyan fengsu shu”). 95. Feng Guifen, Jiaobinlu kangyi, juan shang, 7a–b.

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in a provincial financial commissioner’s office for several decades. Corrupt magistrates and prefects felt his power and adored him as an elder, for Wu controlled the private secretaries of each district and department and took a share of the profits to be had in recommending officials. Wu’s offspring, nephews, brothers, other relatives, and friends opened Shaoxing wine shops, bank shops, and shops specializing in southern goods, all of them fronts for official corruption.96 Shaoxing wine shops were opened in various provinces and formed another cross-provincial network.97 Corruption and money fetishism had existed to a certain extent in previous periods. During the period of Heshen’s influence at court from 1775 to 1799, he managed to develop political corruption on a grand scale.98 The poems of Yuan Mei ⽧  (1716–98) of the Qianlong period, for example, mention that nothing was more powerful than money. The painter Zheng Xie 㘲Ṉ (1693–1765) noted in 1759 that he preferred silver to other gifts as payment for his paintings.99 During the silver–copper coin crisis, however, corruption was further intensified. The five- to tenfold rise in the pay of private secretaries from the Jiaqing period to 1854 indicates the abrupt increase in corruption. The private secretaries were almost as numerous as officials themselves, numbering around 27,000.100 In 1854, a censor calculated that corruption by clerks and runners accounted for as much as 5–6 million liang a year. In addition, private secretaries had increased their annual pay from 100–200 liang in the Jiaqing period to 500–600 liang for small districts or rural areas and 1,000–2,000 liang for big districts and departments. This amounted to 2–3 million liang for all 1,400 departments and districts in the country per year.101 The approximately 8 million liang thus misappropriated was equivalent to one-fifth of the state’s total annual revenues. The institutionalization of the private financial secretaries called zhang fang shiye བቩདྷṶ in the early nineteenth century is also indica————— 96. SYD, DG 16.5.18. 97. Guo Runtao, Guanfu, muyou yu shusheng, pp. 250–57. 98. Hummel, Eminent Chinese of the Ch’ing Period, p. 288. 99. For these two examples, see Xiao Qing, Zhongguo gudai huobi sixiangshi, pp. 305–6. 100. Guo Jian, Shaoxing shiye, pp. 2, 17. 101. DXTGZY, XF 4 (Censor Overseeing the Henan Circuit Fan Chengdian), p. 1159.

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tive of the exacerbation of bribery in this period. Since the eighteenth century, the private secretaries of local officials had been responsible for handling legal codes, financial affairs, official reports, campaigns, and lawsuits. The early nineteenth century, however, witnessed the emergence of the private financial secretary responsible for keeping a secret record of the gifts to be requested from an official’s subordinates and those to be sent to his superiors.102 When the unprecedented silver–copper coin crisis occurred, the established values of society were mortally threatened by the overriding concern for money. Guan Tong commented that behind contemporary flattery there was regrettably no loyalty or love. He went on to say that “even brothers or fathers and sons do not take care of one another. People care about those who can earn a great deal of money. No matter what other shortcomings such people have, rich people will be deemed capable. Even the scholar-officials behave this way. It goes without saying that commoners do too.” 103 Consequently, officials tended to be reticent. Scholars were concerned not with learning but with getting higher positions or earning more money. Moral integrity and principles in public administration were not their business.104

the threat to qing dynastic rule In some cases, tax shortfalls forced officials to compel people to pay more taxes, and this often incited resistance. Many of the 110 riots or rebellions between 1842 and 1849 occurred because higher silver prices had increased the tax burden.105 Several high officials attributed the biggest riots to the silver crisis and abuses by clerks and runners in carrying out punishments.106 The 110 riots between 1842 and 1849 in Jiangsu, Zhejiang, and Fujian were not related to secret societies, but those after 1847 in Guangxi, Guangdong, and Hunan were. When rebellions ————— 102. Guo Jian, Shaoxing shiye, pp. 174–76. 103. HCJSWB, 7 zhiti, 15b (Guan Tong, “Niyan fengsu shu”). 104. ZG, no. 4332, Guan Tong. 105. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 1: 237 106. Zeng, Zeng Guofan quanji, pp. 29–30, XF 1.12.18; HCJSWXB, juan 58, huzheng 30, qianbi, shang.32b (Liu Liang ju, “Qing zhiding yinqian huayi zhangchengshu”; 1845).

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headed by secret societies extended to southeast China, economic riots forced the masses to join the Taiping Rebellion.107 The rebellions between 1850 and 1870 cost the Qing court 420 million liang in silver (about $580 million). 108 However, in 1852 the annual revenues of the Qing state were reduced to 60 percent of the regular revenues of 1850. In 1852, a great sale of official positions commenced. As described by Senior Vice President of the Censorate Huashana ⪹ᨪ♇ (1806–59), The rich used their advantage to purchase positions, and the poor scholars failed. The severity of selling official positions was worse than that of the Qianlong period. When the imperial examination system deemed by scholars as the last refuge impervious to money was wantonly sold, the imperial state lost the support of scholars. Their despair brings forth nothing but criticism and repudiation.109

By 1853 the Qing state was losing not only the support of scholars unable to get official positions but also its capacity to maintain itself. The annual salary bill for officials and bannermen totaled about 30 million liang in silver.110 Only 290,000 liang remained in the Board of Revenue’s coffers in 1853—a deficit of 90 percent of the amount needed to maintain the state’s machinery.111 Through several commercial taxes, however, the government was able to tap into the silver flowing back into China between 1856 and 1886 and to ease this great crisis. High officials responsible for pacifying the Taiping Rebellion, such as Zeng Guofan and Hu Linyi ⥇ᙽ⢟ (1812–61), levied heavy taxes on the commercial sector, since they realized that agricultural taxes could not be increased further.112 The share of commercial taxes in total tax receipts increased greatly in the second half of the nineteenth century. Between 1841 and 1849, commercial taxes constituted only 11 percent of annual revenues;113 by 1890 they ac————— 107. Chen Zaizheng, “Shijiu shiji sishi niandai,” p. 10. 108. Peng Zeyi, “Shijiu shiji wushi zhi qishi niandai Qingchao caizheng weiji,” p. 131. 109. DXTGZY, XF 2, p. 1067. 110. Miao Zi, Miao Wuliegong yiji, 1.18a. 111. Peng Zeyi, “Shijiu shiji wushi zhi qishi niandai Qingchao caizheng weiji.” 112. Hou Houji and Wu Qijing, Zhongguo jindai jingji sixiang shi gao, 1: 308–9. 113. Jerome Ch’en, State Economic Policies, table XXI. Cf. the figure of 24 percent for 1842 in Table 8.1 of this book.

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counted for about 65 percent. 114 The increased commercial taxes included customs revenues (a source of income that expanded greatly after the opening of treaty ports), salt taxes, lijin 㚶㚷 (a new kind of domestic tariff created in 1853), opium taxes (introduced after 1858), and native tariff taxes.115 In 1890, the land tax accounted for 28.2 percent of collections, customs revenues for 24.7 percent, salt taxes for 15.35 percent, the lijin for 14.56 percent, opium taxes for 9.25 percent, and native tariff taxes for 1.12 percent.116 Although still faced with difficulties visà-vis foreign imperialism, these commercial taxes enabled the Qing state to cope with internal crises until its fall in 1911.

Conclusion As Frederick Mote has noted, cities and countryside were much more interrelated in the traditional China than in many other traditional societies.117 During the silver–copper coin crisis, we can see how silver, which was more used in the cities, and copper coins, which were more used in the countryside, were tied to each other. For example, although officials and merchants in the cities held silver, their silver came from copper coins paid by the common people in the countryside and ex————— 114. Man-houng Lin, “Wan Qing de yapian shui,” p. 444. Cf. the figures of 52 percent for 1885 and 56 percent for 1890 in Table 8.1. 115. Native tariffs contrast with the custom revenues levied on foreign imports after 1842 when the Treaty of Nanjing was signed. The native tariff can be traced back at least to 1429, and the Ming tariff was mostly continued by the Qing dynasty. The Qing government levied tariffs by ship size or by part of the cargo, and the Board of Revenue or the Board of Works was responsible for their supervision. By 1824, there were 24 inland customs offices for levying native tariffs under the Board of Revenue. Between 1683 and 1842, four maritime customs offices were set up for the four coastal provinces. After 1842, when more and more maritime customs were established for levying taxes on foreigners, corresponding inland customs for levying native tariffs were also set up. Both inland customs and lijin bureaus set up after 1853 levied native tariffs. But the native tariffs levied by the inland customs were forwarded to the central government, whereas the lijin was kept for provincial use. There were only a few inland customs offices in each province. But the lijin bureaus were more widely distributed and were often placed only a few li apart. See Chen Guodong, “Changguan,” pp. 225–26. 116. Man-houng Lin, “Wan Qing de yapian shui,” p. 444. 117. For the relation between cities and country, see Mote, “The City in Traditional Chinese Civilization.”

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changed with bank merchants. Such exchanges were subject to the rates set by bank merchants in the cities, and in the early nineteenth century this rate was affected by the silver outflow. Thus, it was the international market rather than the state that held the key to China’s urban-rural network. Kishimoto Mio has suggested that the silver sector, which was tied to the international market, was a less stable market, whereas the copper coin sector, to a large extent supplied domestically, was a more stable market. 118 This may have been the case during the early and midQianlong period (ca. 1736–75), when silver had not as yet secured a commanding role in the Chinese monetary system. But the early nineteenth-century silver–copper coin crisis is clear evidence that fluctuations in the silver sector had been transmitted to the copper coin sector. That copper coin earners had become subject to the silver–copper coin exchange rate set by the silver sector was the crucial link in this transmission. Both the increase in silver prices relative to copper coins and the dwindling supply of money increased friction between government and taxpayers, between topsoil landlords and subsoil landlords, between employers and workers, and between merchants and craftsmen. Neither peripheral provinces nor peripheral areas in core provinces escaped this crisis. With the same need to pay taxes or purchase necessities, peripheral areas suffered even more than the core areas since it was more difficult for the peripheral areas to obtain silver. At a time when money was scarce, the resort to corrupt means to maintain personal income threatened existing values. The reduction in the real incomes of officials and soldiers, along with the growing impotence of the government due to financial deficits, posed a dire threat to the authority of the state. Along with the silver outflow and the inflation in silver prices in terms of copper coins, vagrancy, corruption, poverty, and riots worsened from the 1820s to the early 1850s. These problems foreshadowed the rise of the Taiping Rebellion, which almost overthrew the Qing dynasty in three years. The flow of silver back into China, however, provided new and greater commercial tax revenues, which were used to pacify the rebellion with the successful ideological campaign of Zeng Guofan and others. Although schol————— 118. Kishimoto, “ShinchŇ to Yşrashia” p. 34.

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ars are still debating the connection between the world supply of silver in the seventeenth century and the fall of the Ming dynasty in 1644, given the late Qianlong period’s reliance on silver, both the exacerbation of the currency crisis in the early nineteenth century and its eventual easing in the mid-nineteenth century indicate China’s close link with the world supply of silver.

pa rt i i Cultural Resources for Economic Debates

In early nineteenth-century China, neither J. M. Keynes (1883–1946) nor Friedrich August von Hayek (1899–1992) was available to guide economic debate, as they were in the 1930s. Although the early nineteenth-century currency crisis developed partly because of the increased use of Latin American silver in the eighteenth century, the early and mid-nineteenth century marked the last period that only traditional ideas were available to deal with an intangible monetary problem in China. A heated debate, much like that between Keynes and Hayek over the proper role of the state during a monetary shortage, took place among low-ranking statecraft scholars and high-ranking officials. Although still not thinking in terms of a central bank, one group of thinkers proposed that the state retrieve power over the issuance of money in order to achieve a “Keynesian” result: namely, increasing public works to counteract unemployment. Except for closing some state mints, privatizing silver and copper mining, and allowing some local governments to issue silver dollars, the government opted to maintain the status quo, which was actually close to Hayek’s economic ideal: namely, having private banks compete to provide currencies based mainly on noninflationary precious metals and letting the market regulate itself. As we shall see, the inflationary policy adopted in 1853–61 failed, as the noninterventionists predicted. In England before John Locke (1632–1704), there had been no intellectual argument against issuing money for fiscal purposes. Yet early nineteenth-century Chinese scholar-officials cited numerous Chinese historical examples to guard against this practice. Even proposals modified from the extreme inflationary suggestions— such as issuing paper notes in smaller denominations or allowing tax revenues

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destined to be used locally to be levied in the less expensive copper coins—were not adopted on the grounds that paper notes would be counterfeited and the silver– copper coin exchange rate was too erratic. In contrast with the stereotyped view that China had a deep-rooted inflationary tradition for fiscal purposes, it actually had a richer intellectual repertoire for guarding against inflation than the one John Locke inherited.

chapter 4 Monetary Debates and Policies

How did contemporary Chinese intellectuals respond to the unprecedented threat to people’s wealth, values, and the state’s authority posed by the early nineteenth-century silver–copper coin crisis? Did they advocate that the state step in to ease the crisis and, if so, in what way? Or that the market be allowed to function by itself ? From 1814 on, the main proposals for dealing with the problem were that the state (1) issue paper notes or mint copper coins with a face value above or equal to their intrinsic worth; (2) encourage the use of copper coins rather than silver for more purposes; (3) cast its own coins in precious metals to supplement the silver dollars and ingots held by private merchants; and (4) maintain the status quo. Different proposals implied different degrees of state intervention in the market. Issuing inconvertible paper notes or minting copper coins with a face value above their intrinsic worth was the most interventionist proposal, because the state would then be exchanging paper or inflationary coins for goods and services. Maintaining the status quo of using silver dollars or silver ingots from private merchants was the least interventionist, because the state would then continue to concede most monetary power to the merchants. To issue convertible paper notes, to cast coins in precious metals, to use copper coins instead of silver, to mint copper coins with a face value equal to their intrinsic worth—all these proposals would extend the state’s power while the state continued to provide real goods

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in exchange for people’s goods and services. Other than a few suggestions to use grain and cloth or jade and seashells as currency,1 contemporary ideas for dealing with the crisis fell into these four categories. Licentiate Wang Liu can serve as a focus for understanding these proposals. He advocated that the government issue inconvertible paper notes. Wang’s design was presented in a book entitled Preliminary Remarks on Paper Notes (Chaobi chuyan 㛧ེ⫂や), written in 1828, printed in 1831, and published in 1837 with the new title Preliminary Remarks on Copper Coins (Qianbi chuyan 㞨ེ⫂や). Wang spent nearly thirty years writing this book under the instruction of his father, who had proposed paper notes in the late Jiaqing period.2 The elder Wang, who had long believed in the feasibility of paper notes, expressed his views when an expositor of the Hanlin Academy, Cai Zhiding ⲱϢ൶, was punished in 1814 by the emperor for proposing that the government issue paper notes. Wang’s father commented that although Cai had erred in citing the issuance of paper notes in the Ming dynasty instead of the precedent set in the Shunzhi (1644–61) period, he thought that if misfeasance could be avoided, paper notes could be issued. Wang Liu presented a copy of Preliminary Remarks as a gift to his dying father.3 He also sent copies of the book to high officials as well as to well-known scholars, eliciting an enormous amount of feedback. 4 Bao Shichen around 1837, Wei Yuan between 1831 and 1837, and Xu Mei ィ្ (1797–1870) in 1846 harshly criticized Wang Liu for trying to seize the people’s wealth for the state. Many of these critiques were printed in the main text of or in an addendum (xuke ❧‫ )ۀ‬to Preliminary Remarks, and Wang responded in a further sequel (zaixu ‫ )❧و‬that quoted historical precedents of similar proposals and contained further notes by Wang. Xu Mei’s and Wei Yuan’s criticisms, however, went unanswered by Wang Liu. Alongside this debate, discussions of monetary proposals close to those of Wang and his critics continued inside and outside the court. The ————— 1. For example, Sun Dingchen (Bentang chulun, 1.15b) proposed abolishing silver and using grain and cloth instead. 2. Wang Liu, Qianbi chuyan, “Qianchao yi,” 1a–2a, 44b, “Xuke,” 9a. 3. Ibid. 4. Ibid., “Zaixu,” 5a.

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debate occasioned by Wang Liu’s book thus exemplifies the intellectual response to the silver–copper coin crisis of early nineteenth-century China.

Wang Liu’s Proposals Most countries now have a central bank that lends money to commercial banks, and commercial banks deposit money in this bank. The central bank is also the government’s bank, and the government buys and sells its securities through it. The bank also implements governmental monetary policies to control the national money supply.5 Early nineteenth-century China had no such central bank, and the concept was unknown to Wang Liu. Wang did, however, propose that the government control China’s money supply, with the Board of Revenue serving as the agency issuing paper notes and retrieving old notes issued by the board. Reinforcing the state’s monetary sovereignty was Wang’s main concern (Fig. 4.1). Wang suggested issuing paper notes and exchanging them for all the silver circulating in China, thereby solving the problems caused by the use of silver. In addition, Wang proposed that copper coins be minted in large and small denominations. Paper notes would be used to purchase, at high prices, the copper used by commoners for casting copper coins. The more reliable paper notes issued by the state would replace the paper notes issued by rich families. The much lighter and standardized paper notes would then be used instead of foreign silver dollars.6 As in today’s central banks, in Wang’s plan the state’s monetary sovereignty would be clearly defined by its exclusiveness against other economic powers, domestic and foreign, and would be supported by trust from the people. Existing bank shops would become agencies for circulating the state currency; in return, they would be allowed a profit of 10 percent of the face value of the notes distributed through them. People could exchange copper coins and notes of all denominations at bank shops by paying a commission of 2 percent of their face value.7 ————— 5. Lipsey and Chrystal, Economics, pp. 657–59. 6. Wang Liu, Qianbi chuyan, “Qianchao yi,” 1.2b, 5a. 7. Ibid., “Ni qianchao tiaomu,” 16a.

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Fig. 4.1 This passage in Wang Liu’s Huozhouyuan chugao records his lament for the lack of monetary sovereignty of his dynasty in his own handwriting (courtesy of the Beijing Library).

Wang thought that several actions would be necessary for the imperial state to acquire monetary sovereignty. The government would have to confiscate silver; only half of its value would be returned to the owner five or ten years after the first issuance of notes. Ten or twenty years later, merchants would be allowed to use paper notes to buy silver

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at half price from the government to make silver utensils.8 All foreign trade would be in barter, and the monetary use of silver would be forbidden.9 Notes in medium- and large-size denominations were to replace the big notes of the bank shops. To control the use of copper, civilian copper shops would be closed down, and official shops would manufacture instead musical instruments, locks, and buttons made of copper.10 Wang also proposed arrangements to create trust in the state-issued currencies. The paper used for the notes would be of the best quality and would not be sold on the market. Elaborate containers would be used to hold the notes.11 The cost of casting copper coins would be around 90–100 percent of the face value.12 All the provincial commissioners, magistrates, and banks through which the paper notes passed would stamp their chops on the notes. At various places, officially paid personnel would verify that the notes were genuine for the public. Counterfeiters would be beheaded, and their accusers highly rewarded.13 The responsible government official could also swear an oath in front of a deity that the values of the notes would never be changed.14 By collecting taxes and paying officials in paper notes, the government would demonstrate its own confidence in the paper notes. Except for taxes below 1,000 wen, which would be collected in copper coins, all other taxes would be collected in paper notes whose value would be appreciated by 10 percent (that is, 100 wen in notes could be used to pay 110 wen of taxes). Old notes would be collected back when they were used to pay taxes. When the paper notes were first issued, official salaries would be doubled. The original salaries would still be paid in silver, but the added amount would be paid in paper notes. After the paper note system became prevalent, the entire salary would be paid in paper notes, with the total amount greatly increased.15 ————— 8. Wang Liu, Qianbi chuyan, “Ni qianchao tiaomu,” 17b. 9. Ibid., 18b. 10. Ibid., 14a. 11. Ibid., 14b–15a, 17a. 12. Ibid., 15a–b. 13. Ibid., 16b–18a. 14. Ibid., 17a. 15. Ibid., 18b.

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As for the quantity of notes, Wang said, the issuing of the paper money “can be stopped when there is almost enough for the entire society to use.”16 Wang emphasized that the wealth derived from paper notes would be new wealth; it would not be taken from anyone else. The benefit to be derived from a small note would be nine times that of the cost; that of a big note, nineteen times. 17 With this newly created wealth, the state would be able to ameliorate the problems caused by the silver–copper coin crisis by constructing irrigation works, developing new lands, relieving misfortunes caused by natural calamities, eliminating misfeasance in the administration of rivers, salt, and the tribute grain, stopping the sale of official titles, and reducing various taxes.18 Wang Liu’s proposal lacked crucial elements found in modern central banking systems, such as separating the office in charge of public finance from the central bank and differentiating the activities of central and other banks. In Wang Liu’s plan, governmental revenues and expenditures were the government’s main means for reclaiming or releasing money, in addition to exchanging old notes for new notes or silver for the state’s paper notes through the bank shops. Modern central banks, however, control the money supply by adjusting the interest rates they charge commercial banks or by selling and buying public bonds issued by the central bank.19

General Responses to Wang Liu’s Book Wang Liu’s book was distributed in Beijing, Anhui, Jiangsu, and Hubei to various individuals, including Expositor of the Academy Gu Chun 㮛♎ (1765–1832), Minister of the Board of Revenue He Linghan җ ‫ٳ‬᰹ (1772–1840), Governor-General Lin Zexu, Magistrate Bao Shichen, and Magistrate Li Zhaoluo ᙅؔ᪗ (1769–1841), as well as a vice-minister, a circuit intendant, a licentiate, and an educational commissioner.20 ————— 16. Wang Liu, Qianbi chuyan, “Ni qianchao tiaomu” 17b–18a. 17. Ibid., “Ni qianchao tiaomu,” 12a; “Xuke,” 16a. 18. Ibid., “Qianchao yi,” 1.3b; “Xuke,” 7a–b. 19. Lipsey and Chrystal, Economics, pp. 657–59. 20. Wang Liu, Qianbi chuyan, “Preface,” 1a–b; “Xuke,” 3a, 4b, 6a, 8b, 10a, 11b. Their names were Chen Yongguang 㨴₤‫( ؗ‬1768–1835), Ma Shifang 㲃ஐ⪺, Wu Dexuan ࠦ

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The evidence indicates that Wang’s family was well-to-do. Wang Liu was a native of the Wu ࠦ district of Jiangsu and a descendant of a Ming dynasty grand secretary.21 Wang’s grandfather was a jailor, and his father was a schoolteacher and a former student at the Imperial Academy. After failing the examinations, Wang Liu purchased a teaching qualification as a licentiate and was able to concentrate on reading and writing. He himself said that he was lucky that his parents had encouraged him to engage in academic work. He also mentioned that he was fortunate to be able to travel around the country and associate with wise people and to make the acquaintance of several scholar-officials in Beijing.22 Wang not only printed several hundred copies of Preliminary Remarks on Copper Coins along with his other books but also could afford to print his friends’ books.23 Wang’s book garnered both positive and negative attention. Wang’s letter to Lin Zexu reveals that it was Lin who had asked to see Wang’s book.24 But Wang’s letter to Gu Chun noted that people of his time were dubious of his proposal. Wang asked Gu to use his high position to support his opinions,25 a request Wang made to other high officials as well. In a letter to He Linghan, Wang even mentioned that difficulties must have kept He from writing an official report supporting Wang’s ideas, even though He had promised to do so. 26 In 1843, Wang’s close friend Zhang Lü ရฐ (1792–1851) summarized the general response to the book: “He Linghan keeps silent about this book; Lin Zexu shows some interest; Gu Chun, Bao Shichen,

————— ၾᔰ, and Tang Jinzhao ᮭ㚷㚻 (1772–1856). The original text uses literary names to refer to many of these people. The formal names were obtained by consulting Wang Deyi’s Qingren biemin zihao suoyin. Based on literary names, the circuit intendant’s name may have been either Ma Shifang or Ma Qisheng 㲃㍅‫ݴ‬. 21. Zhang Lü, Jishi wen’gao, 25b. 22. Ibid., 1a, 3a–b. 23 . Wang Liu (Qianbi chuyan, “Youpeng zengda,” 40b) mentions that Wang Liu printed a book for his friend Shen Yao and that Wang employed workers to print his own book (ibid., 44b). 24. Ibid., “Xuke,” 6b. 25. Zhang Lü, Jishi wen’gao, pp. 40a–b. 26. Wang Liu, Qianbi chuyan, “Xuke,” 5b.

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and Li Zhaoluo think that these ideas are applicable.” 27 As we will see, however, Bao’s acceptance of Wang’s ideas included many reservations.

Wang Liu’s Dialogue with Bao Shichen and Chen Shan Chen Shan 㨴㹝 (1753–1817, whose literary name was Fuya ኖ㩰) was among the earliest to criticize Wang’s book harshly. Chen particularly singled out the suggestion that unprecedentedly large notes worth 1,000 strings be issued and Wang’s proposal that the state absorb commoners’ silver and then sell all silver at half price for use in making silver utensils. Wang responded that the general populace could share 20 percent of the profits of issuing notes through the 10 percent benefit they would receive from exchanging silver for the paper notes and the 10 percent discount when paying taxes in paper notes.28 In addition to the final version of Wang Liu’s book, which was mailed to Bao Shichen in Anhui, the first version of the book had been sent to Bao Shichen in Beijing through Zhang Lü, a mutual friend of both Wang and Bao. Bao Shichen responded with one letter to Zhang Lü and two to Wang Liu.29 Bao was in agreement with the idea of a state-issued paper currency. Bao said that he himself had supported the issuance of paper notes for thirty years for the same reason as Wang: “Observing the practice of paper notes issued by bank shops, there is no reason that paper notes cannot be issued by the government.”30 Yet Bao’s ideas differed from Wang’s in several respects: 1. Paper notes should replace only bulky copper coins. For Bao, paper notes would be issued to replace copper coins for long-distance or large-scale transactions. 2. Government agencies should circulate paper notes. Bao proposed that the paper notes issued by the Board of Revenue be circulated through the financial commissioner and each department and district ————— 27. Zhang Lü, Jishi wen’gao, 17.2b. 28. Wang Liu, Qianbi chuyan, “Xuke,” 27b. 29. In addition, in 1839 Bao wrote “Yinhuang xiaobu” 㜯⬽ෑ⾪ (A small redress to the silver scarcity problem). Bao himself said that these four essays had expressed his basic monetary ideas; see Bao, An Wu sizhong, 7 xia.3a–b. 30. Bao, An Wu sizhong, 26.7b.

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rather than through bank shops. Each district and department would set up bureaus to circulate paper notes. 3. Silver should remain in use as money. Bao objected strongly to Wang’s proposal to abolish silver: “It is a lesson from the past that money made of more valuable material has to be used together with that of less valuable material. When paper notes are issued, empty (xu ⶦ; i.e., less valuable) things have to be supplemented with substantial (shi න; more valuable) things. Silver and copper coins are substantial, whereas paper notes are empty.”31 4. The government should make more use of paper notes as a demonstration. In addition to collecting land taxes in paper notes, as suggested by Wang Liu, Bao proposed that the government collect tariffs and contributions for imperial degrees or official positions in paper notes before asking people to accept them.32 5. Only smaller denominations of paper notes should be issued. In Bao’s opinion, paper notes should be used only to replace copper coins, for convenience of circulation and not to store wealth; hence, it was not necessary to have such large denominations as 1,000 strings (i.e., 1,000,000 wen). Bao proposed paper notes ranging in value from one string (1,000 wen) to 50 strings (50,000 wen).33 6. A smaller amount of paper notes should be issued. Bao argued that the unlimited amount of paper notes suggested by Wang was behind the frequent failure of paper notes in previous dynasties. Bao suggested that the amount of the first issuance be equivalent to half the value of annual statutory revenues from the land tax. The amount could be increased to an amount equal to twice the annual revenues from the land tax. 7. More silver would flow abroad if it were no longer used as a currency domestically. Bao thought that Wang’s suggestion would quite likely lead to more silver being used to buy opium from abroad since the Chinese paper notes would be useless to foreigners selling opium to China. ————— 31. Ibid., 26.10b–11a. 32. Ibid., 26.7b–9a. 33. Wang Liu, Qianbi chuyan, “Xuke,” 14b–15a.

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8. There should be no ban on the use of copper utensils. Bao also objected to Wang Liu’s suggestion of prohibiting the common people’s use of copper and using it instead to cast copper coins of large denominations.34 9. The silver–copper coin ratio should be closer to the market ratio. Bao had suggested a maximum exchange rate of 1,300 wen for 1 liang of silver. Soldiers’ salaries would be calculated at the rate of 1,300 wen rather than 1,000 wen; other official salaries and expenses would be paid by converting 1 liang at 1,200 wen. Wang Liu made the following points in response to Bao: 1. There was no need for paper notes to be convertible. Wang disagreed with Bao’s claim that paper notes were “empty” and silver was “substantial.” For Wang, “Silver and paper notes are the same, since both have shape and substance and neither can be used as clothing or food.”35 He felt that the government’s authority would support the paper notes issued by the state: “For paper notes issued by bank shops to obtain silver and copper coins, it is still acceptable to describe them as ‘empty’ and silver and copper coins as ‘substantial.’ However, since the paper notes to replace silver and copper coins are to be issued by the government, how can they be described as ‘empty’?”36 Bao clarified his concept of “empty” and “substantial” to support his stance for convertible notes by referring to the state’s power over purchased official positions. “It has been estimated that only 20–30 percent of those who purchase degrees actually get official positions. With such a possibility for actualization, the state can thereby use substantial things to manipulate empty things. Degree purchasers have hence competed for the possibility of gaining position without any complaints.” Therefore, Bao maintained, paper notes must be backed by something substantial, such as silver.37 Wang responded that Bao had expressed a subtle realization of the benefits of using paper notes. For Wang, such remarks spoke more to ————— 34. Bao, An Wu sizhong, 26.17a–b. 35. Wang Liu, Qianbi chuyan, “Xuke,” 11a–b. 36. Ibid., 14a. 37. Ibid., 20b.

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the dispensability of reserves for the paper notes. As long as paper notes could be used to pay taxes, they would win people’s confidence.38 Wang can be seen as perspicacious; the paper notes we use today are inconvertible and not linked to a “substantial” precious metal. The possibility of using these notes to pay taxes or to buy things provides them with credibility, as Wang perceived. Inconvertible paper notes can create wealth by stimulating production and the circulation of goods and services throughout society. Wang’s concept fully conveys this understanding of money. To fulfill this function, currency does not have to be linked to a precious metal. The monetary crisis of early nineteenthcentury China illustrates the constraints of a system based on a precious metal when the available stock of the precious metal does not meet the needs of the economy. Even with our current levels of knowledge and skills in managing money, it is still difficult to estimate production levels and consumption needs of the society so as to calculate the amount of money that will not lead to inflation or deflation. Wang Liu could only suggest some vague principles. The concept of legal tender is based on trust in the state. Many of Wang Liu’s opponents questioned the existence of this trust, and scholars such as Bao Shichen proposed using convertibility as a means to construct confidence in a paper currency. 2. The quantity of paper notes should be adequate for use. Although any amount could be issued, “it is like water and fire; though inexhaustible, people just need a fixed amount of them.”39 But what was a reasonable amount? In additional correspondence with Bao Shichen, Wang Liu gave an exact number: “The quantity of notes to be issued should be sufficient to exchange all the silver in society. It cannot be randomly set. As for its use for the state, the kingly principle (wangzhi ᾄ‫ )ڻ‬in the Zhou Institutions can be followed to set thirty years of expenditures as a standard.”40 To issue paper notes sufficient for thirty years of imperial expenditures, as Wang proposed, differed greatly from ————— 38. Ibid., 24b. Ye Shichang (Yapian zhanzheng qianhou de huobi xueshuo, p. 40) notes that this remark of Bao’s appears in Wang Liu’s book but was apparently edited out of the same letter as it appears in Bao’s collection. This may show that Wang had proved his point. 39. Wang Liu, Qianbi chuyan, “Xuke,” 14b. 40. Ibid., 16a.

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the two years of revenues suggested by Bao.41 It also differs from managed monetary systems found today that issue paper notes in the amounts required to meet the needs of economic development. 3. Paper notes would replace silver for storing wealth. Wang thought that the silver appreciation problem would die with the abolition of silver as money. In the future, paper notes would become a medium for storing wealth and not just a medium of exchange, as Bao proposed. Consequently, Wang believed that paper notes of great denominations should be produced for the purpose of storing wealth.42 4. There would be different roles for bank shops. In reply to Bao’s assertion that the benefit of issuing notes was taken from the bank shops, Wang said that the benefit of issuing notes was the new wealth created between Heaven and Earth; it was not taken from the bank shops or from “families annexing wealth.” As for Bao’s suggestion of setting up official note bureaus rather than using bank shops to circulate the notes, Wang replied that when officials exchange money with the people, it was inevitable that clerks and runners would misappropriate some of the money. Therefore, it was better to issue notes through bank shops in which people had more confidence rather than setting up official bureaus.43 Following more discussions of such issues as taking an oath in front of a deity to win people’s confidence in the paper notes and writing moral homilies on the notes,44 Wang conceded one point to Bao: the notes should not be differentiated by province.45 ————— 41. Wang Liu, Qianbi chuyan, “Xuke,” 15b. 42. Ibid., 15a. 43. Ibid., 16a–b. 44. Wang Liu wanted to print the Zhu family precepts compiled by Zhu Yongchun ᘮ₤♎ on the paper notes. Zhu (literary name Bolu ѻ࿩, a native of Kunshan in Jiangsu) was a licentiate of the late Ming period who became a hermit in the early Qing. He followed the philosophical school of the Cheng brothers and Zhu Xi and emphasized a combination of knowledge and action. His aphorisms for ordering the family were very prevalent in Chinese society (Shangwu yinshuguan, Ciyuan, p. 49). In Xu Mei’s critique of Wang Liu, Xu mentioned that Zhu’s aphorisms on ordering the family had been printed on the paper notes issued by private banks (Xu Mei, Chaobi lun, 19b). In 1990, Gansu renmin chubanshe in Lanzhou published the Zhu Xi Family Precepts edited by Zhu Yongchun and annotated by Li Muhua. 45. Wang Liu, Qianbi chuyan, “Xuke,” 26a–b.

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Criticism from Wei Yuan and Xu Mei Beyond the critiques collected in Wang Liu’s book, Wei Yuan and the Xu brothers, Xu Mei and Xu Lian ィᠰ (1787–1862), also attacked Wang’s ideas in other publications. The third part of Wei Yuan’s “Chapter on Military Financial Sources” (“Junchu pian” 㑌‫ )╥؃‬addressed Wang Liu’s Preliminary Remarks on Paper Notes.46 Regarding Wang’s centralization proposal, Wei said, “As mighty as the emperor’s power is, it still cannot compel people to do what they are not willing to do.”47 Instead, Wei proposed the casting of silver dollars and the use of jade and seashells as currency; money had to have an intrinsic value and could not consist of valueless things whose status as money was enforced by a government’s power: “All money has to be the quintessence of the five elements and the various goods (wuxing baichan zhi jinghua Њ⼾↧₡Ϣ☑⯂), objects melted and beaten down by the natural forces of mountains and rivers. Such money can certainly not be goods that spoil easily or that can easily be popularized by resorting to punishments and political force.”48 An even harsher and more detailed critique of Wang Liu’s book is found in Xu Mei’s Discussion on Paper Notes (Chaobi lun 㛧ེㄚ), which discusses Wang’s proposals item by item. Following each item, Xu Mei’s elder brother, Xu Lian, added his own comments. Xu Lian also wrote a preface for his brother’s book. Among other things, he remarked that as silver flowed out of China, people were trying to “turn stone into gold,” and that Wang Liu was arguing strongly for this stance. Xu Lian noted that many officials and scholars valued Wang’s Preliminary Remarks. Afraid that more and more people would think they could transform “stone” into “gold,” presenting the “stone” to officials and expelling more “gold” to foreign countries, Xu Lian wrote that he himself

————— 46. Wei Yuan, Shengwu ji, 14.40b. Wei started by saying: “Recently, due to the increasingly depleted supply of silver, which further appreciated in price, people have proposed changing to paper notes. The paper note proposal has recently been elaborated on by a licentiate of Wu district, Wang Liu.” 47. Ibid., 1439a–b. 48. Ibid., 14.42a–42b.

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had been thinking of pointing out their mistakes. Although many engagements had prevented him from doing so, his younger brother, Mei, while recovering from an illness at home, had mailed him the Discussion on Paper Notes he had just written. Since for the most part Xu Lian agreed with Xu Mei’s points, he thought this work could represent the views of the Xu family.49 At this time, Xu Mei, retired from his job as secretary of the Board of Revenue, was at the family home in Haichang ᫡ᕣ in Zhejiang, and Xu Lian, acting prefect of Zhenjiang 㠉᧺, was in Jiangsu. Both had metropolitan degrees, and both were skilled at etymology, phonetics, calligraphy, and law and were also interested in the study of the classics. Xu Lian was knowledgeable about medicine and had published books on throat diseases, obstetrics, and surgery. Their home press, Ancient Phonetics Pavilion (Guyun ߢ੨ [㭐]㦏)Press, printed the Discussion on Paper Notes (see Fig. 4.2).50 Unlike Wei Yuan, who, in addition to criticizing Wang Liu’s book, had proposed changes to the monetary system, the Xu brothers suggested only that silver not be used to buy foreign opium. 51 The Xu brothers attacked Wang on several points, however: 1. Centralization is inferior to competition. Xu Mei disagreed with Wang Liu’s opinion that paper notes issued by the government would be superior to foreign silver dollars and paper notes issued by bank shops. 52 The bank shops’ paper notes were redeemable for silver or copper coins, whereas those issued by the state, under Wang’s proposal, would not be. True, some bank shops misappropriated their clients’ money, but, Xu Mei asked, “How can the state’s turning tens of millions in silver belonging to the people into paper not be called a misappropriation of people’s money?”53

————— 49. Xu Mei, Chaobi lun, preface, 1b. 50. For biographical data, see Miao Quansun, Xu beizhuan ji, 79: 26–27. 51. Xu Mei, Chaobi lun, 34a. 52. Ibid., 13b. 53. Ibid., 14b.

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Fig. 4.2 Cover of Xu Mei’s Discussion on Paper Notes. This work was printed from woodblocks in the seventh month of 1846 by Xu Mei’s home press, Gugunge ߢ੨㦏. Scholars tended to print their own works or have friends print them to circulate their ideas.

2. Precious metal is superior as currency. According to Xu Lian, the basic weakness in Wang Liu’s argument was his proposal to use notes as money to replace silver, which presumed that gold, silver, and copper could not compete with paper for use as money. “The five metals created by Heaven have their fixed value. Even silver cannot replace gold; so how can paper replace copper coins?”54 Xu Lian added, “Only the value of gold and silver is steady in comparison with other materials used for monetary purposes.”55 He explained that the intrinsic value of precious metals was related to their scarcity.56 “If several million to 10 million more paper notes were issued to society, society would despise ————— 54. Ibid., 21a. 55. Ibid., 12a. 56. Ibid., 11b.

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them; if several million [liang of] silver or gold spread throughout society, society would not despise this. Goods have their intrinsic values, which cannot be reversed by human beings.” 57 Xu Lian pointed out, “Places in Jiangsu and Zhejiang where foreign silver dollars are used will not use paper notes, since paper notes are empty and foreign silver dollars are substantial.”58 3. Paper notes are inclined to inflate. Wang Liu had urged that the quantity of paper notes be limited to the amount needed. Xu Mei, however, cautioned against the ever-increasing tendency to issue paper notes.59 For Xu Mei, Wang Liu’s suggestion that notes be issued up to the amount sufficient for use by the entire society and that all taxes be levied in notes would work only in good times: “If there are no unexpected expenses, there will be no problems when the issuance of notes is stopped, with a fixed quantity of notes collected as taxes. If there are unexpected expenses, however, where will the expenditures be taken from? There would definitely be an increase of paper notes issued.”60 According to Xu Mei, Wang Liu’s attribution of several instances of inflation to the scarcity of goods held true when metal money was used but not when paper notes were used. In the latter case, an oversupply of paper notes tended to be inflationary.61 Like Bao Shichen, Xu Mei thought that the ultimate reason for the frequent failure of paper notes was their inexhaustibility.62 4. The issuance of paper notes would cause economic loss and political harassment. In Wang Liu’s plan, the government would collect taxes in the paper notes and then exchange these notes for silver held by the people. In other words, people would merely shift from paying silver to a tax agency to paying it to a note agency.63 Xu Mei also doubted the basic feasibility of Wang’s plan. “With a piece of paper, the state can gain nine to nineteen times the value of ————— 57. Xu Mei, Chaobi lun, 25b. 58. Ibid., 13b. 59. Ibid., 25a–b. 60. Ibid., 24b–25b. 61. Ibid., 38b–39a. 62. Ibid., 11b–12a. 63. Ibid., 27b–28b.

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the people’s silver; so it is quite favorable for the state. But it is most unfavorable for the people. If it is unfavorable for the people, benefit for the state can certainly not be obtained.” 64 Xu Mei believed that people would not accept paper notes issued arbitrarily, an act that might even spark disturbances. If used for official salaries, military pay, and the wages of governmental workers, the notes would be rejected when they were brought to the market.65 The more powerful provincial officials would force rich families to exchange their goods, copper coins, or even silver for the official notes. If the rich families refused, they would be accused of boycotting the new currency.66 The issuance of notes would not only cause economic losses for the people but also result in much political harassment. Like Bao Shichen, Xu Mei pointed out that the issuance of different paper notes in each province would plague interprovincial travelers. Anyone traveling from Zhejiang to Beijing would have to change notes in Jiangsu, Shandong, and Zhili. Also, as Wang Liu noted, since only big cities would set up bureaus for such exchanges, travelers would be forced to take the main routes that passed through big cities.67 The Xu brothers also feared that the government would be unable to monitor the counterfeiting of paper notes, which could be quite lucrative. Craftsmen could make the same kind of paper and copy the stamps for the notes and could write or change the characters on them.68 Furthermore, like Bao Shichen and Wei Yuan, Xu Mei thought that inhibiting the use of silver as money would cause more silver to flow abroad. With much more silver drained away, silver prices would rise even higher. As for Wang Liu’s ultimate purpose of exalting the state’s majesty by consolidating its sovereignty over economic affairs, Xu Mei wrote, “Where on earth is the state’s majesty when it absorbs all the silver, abolishes all paper notes issued by bank shops, and monopolizes all of ————— 64. Ibid., 29a–b. 65. Ibid., 28a. 66. Ibid., 33b. 67. Ibid., 30a–b. 68. Ibid., 22b–24a.

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society’s sources of economic interest?”69 Not only did Xu doubt the state’s ability to absorb people’s wealth; he also questioned the state’s rationale for doing so. So what could be done about the immediate problem of the devastating silver outflow? According to Xu Mei, “Silver use should be discouraged only in the case of buying opium; for other trade, silver could be used so as to bring more silver into China.”70 This reveals Xu Mei’s deep belief in market mechanisms—and in fact, this is what actually happened in China after 1856. In the debate between Wang Liu on one hand and Xu Mei, Chen Shan, Bao Shichen, and Wei Yuan on the other, the four scholars feared that Wang Liu’s proposal would support fiscal abuse by the monarch. The extensive discussion by other scholars both inside and outside officialdom of monetary proposals similar to those of Wang and Wang’s opponents suggests the great influence of this debate.

Further Monetary Discourse followers of wang liu’s ideas and their critics The scholars Yang Xiangji ួ㉥᳐ (1825–78), 71 Peng Yi ၃⡶ (dates unknown), 72 and Zhou Yuerang ࡐᄚㆭ (dates unknown) 73 attacked proposals for paper notes like Wang Liu’s, criticizing either the exploitative nature or the wasteful expense of issuing notes. ————— 69. Xu Mei, Chaobi lun, 12b. 70. Ibid., 34a. 71. For Yang Xiang ji’s proposal, see HCJSWXB, juan 60, huzheng 32, qianbi, xia.16a– 18a (“Xingchao yinyi”). This essay agrees with Zheng Zucheng’s 㘲⎵Ύ 1846 proposal to prohibit commoners’ wasteful use of gold, and it dates either from the same time or later. For Zheng’s proposal, see ZJHSZL, p. 158. Although Yang does not mention Wang Liu in his essay, it is clear that Wang Liu’s proposal was the target of his attack: “When people were asked to change their silver for paper notes issued by the state . . . when silver for common use was abolished . . . the exchange medium and communication medium used in the Tang and Song periods could be converted into copper coin. Paper notes proposed now cannot be cashed.” At that time only Wang Liu had made such a proposal. 72. Qi Sihe et al., Yapian zhanzheng, 1: 509–10, selected from Peng Yi’s Wujing minzhai wenchao. 73. HCJSWXB, juan 60, huzheng 32, qianbi, xia.33a–34b (“Bo chaofa yi”).

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Among officials, Hu Diaoyuan ⥇ㄈؑ, a candidate circuit intendant in Jiangsu, in about 1849–53,74 and Wang Maoyin ᾄ⫻Ⲽ (1798–1865), vice minister of Board of Revenue, in 1850,75 supported proposals for paper notes much more moderate than Wang Liu’s, and in 1852, Huashana, a former vice-minister of the Board of Revenue and then current senior capital censor of the Censorate, advanced a proposal only slightly less radical than Wang Liu’s. The proposals differed in the details. Hu was the first to propose issuing paper notes denominated in silver rather than in copper coin, as Wang Liu had proposed, and only in one denomination, 1 liang, which he believed was neither too large nor too small. Hu believed that during the contemporary scarcity of silver, silver notes should be issued instead. 76 Like Hu Diaoyuan, Wang Maoyin and Huashana proposed that paper notes be denominated in silver.77 Wang proposed denominations of 10 and 50 liang.78 Huashana suggested 5, 10, and 50 liang notes, mirroring the xiaoding, zhongding, and yuanbao used in the financial commissioners’ offices. 79 All these denominations were smaller than Wang Liu’s proposed notes in denominations as high as 1,000 strings, the equivalent of 1,000 liang at the official silver–copper coin exchange rate. As for the number of paper notes to be issued, Wang Maoyin underscored the principle that the greater the quantity of notes issued, the less valuable they became. The initial issuance should be for 100,000 liang; the amount would be doubled annually after one or two years, until a maximum of 10 million liang were reached. This amount equaled only one-third of the central government’s statutory annual land tax, far ————— 74. ZJHSZL, p. 334. Hu’s proposal was found in the documents left by Jiangsu, Jiangxi, and Anhui Governor-General Lu Jianyin 㨹࿲᳾ (1792–1853) and Jiangsu Governor Yang Wending ួᓾ൶ (?–1857), with the original endorsement saying that they would propose such opinions on behalf of Hu Diaoyuan whenever it became an issue. Since Lu held this position between 1849 and 1853, Hu’s proposal dates to this time (Li Borong, Wei Yuan shiyou ji, p. 34). 75. Chen Pingmin, “Wang Maoyin ji qi huobi lilun,” p. 20, quoting Wang Maoyin’s son; ZJHSZL, p. 318. 76. ZJHSZL, p. 333. 77. DXTGZY, XF 2 (Senior President of the Censorate Huang Zhongmo), p. 1072. 78. ZJHSZL, p. 318. 79. DXTGZY, XF 2 (Senior President of the Censorate Huang Zhongmo), p. 1071.

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less than the amounts proposed by Bao Shichen (twice annual revenues) and by Wang Liu (thirty times annual revenues). In contrast to Wang Maoyin’s gradual issuance of 10 million liang,80 Huashana proposed the circulation of 100 million liang of paper notes over a period of several years.81 Hu Diaoyuan said that notes should be convertible.82 Wang Maoyin proposed using 4 liang of imperial revenues to back each liang in paper notes as a means of building confidence in paper notes. 83 Huashana opposed convertibility: “If paper notes prevail, the cost could even be paid by the paper notes themselves.”84 Unlike Wang Liu’s proposal to replace silver with paper notes for all monetary uses, these three advocates suggested using silver notes to supplement silver.85 Like Wang Liu, Wang Maoyin suggested that paper notes be issued to the public through bank shops, by paying them a small commission and having each shop be responsible for the notes with its shop stamp marked on them. Beijing would use paper notes first, absorbing 10 percent of the notes issued. The other 90 percent would be distributed to bank shops in each provincial capital.86 Hu Diaoyuan, Wang Maoyin, and Huashana’s proposals were more moderate than Wang Liu’s. In Wang Liu’s communication with Bao Shichen, Bao viewed the issuance of paper notes merely as an effective remedy for economic distress ( jiubi zhi shanshu ᓓ࿽Ϣप⽃), whereas Wang Liu saw it as a grand design for managing wealth (licai zhi dajing ῟㊖Ϣவ⚰).87 For Wang Maoyin, like Bao Shichen, using notes was an expedient remedy for current problems rather than a long-term system for managing national wealth. Hu Diaoyuan’s idea was to use paper notes as another monetary tool to combat the prevalence of vagrancy ————— 80. ZJHSZL, p. 318. 81. DXTGZY, XF 2 (Senior President of the Censorate Huang Zhongmo), p. 1072. 82. ZJHSZL, p. 335. 83. DXTGZY, XF 1 (Censor Overseeing the Shanxi Circuit Wang Maoyin), p. 971. 84. DXTGZY, XF 2 (Senior President of the Censorate Huang Zhongmo), pp. 1079– 80. 85. ZJHSZL, pp. 318, 332. 86. ZJHSZL, pp. 319–20. 87. Wang Liu, Qianbi chuyan, “Xuke,” p. 18a.

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and sloppy administration. 88 Huashana’s ideas were closest to Wang Liu’s, in that he also viewed paper notes as a fiscal tool. For Huashana, paper notes could transfer wealth from the people, especially the wealth of banks, to the state.89 Unlike Wang Maoyin’s proposal to give bank shops a small commission on each transaction, Huashana advocated punishing bank shops that did not accept notes in exchange for copper coins.90 Wang Liu’s proposal to issue big coins denominated in values of more than one wen was even more widely discussed than his proposals on paper notes. Opposition came from both officials and scholars such as Hu Diaoyuan,91 Wang Maoyin,92 and Feng Guifen,93 on the grounds that although counterfeit paper notes would become useless when noticed by the government, illegal copper coins could still be melted for use as copper, a fact that would encourage more counterfeiting. The supporters of Wang’s proposal differed over the details for its implementation. Around 1850, Cheng Yi ቄᦀ, who obtained his metropolitan degree in 1838 and was a prefectural director of studies in Hunan, proposed casting a big coin with a face value higher than its cost.94 Ding Lüheng,95 Wu Jiabin,96 and Sun Dingchen ൕ䁄⨓ (1819–59)97 supported a big coin with a face value equal to its cost. Wu Jiabin and Sun Dingchen envisioned the big coin as a partial replacement for silver, whereas Ding Lüheng proposed it as an adjunct of silver. None of these scholars followed Wang Liu in proposing the abolition of silver. Among officials, Liang Zhangju ᜮⓄ㜅 (1775–1849) was the first to propose the issuance of a big coin. Liang was financial commissioner of Jiangsu between 1826 and 1832 and governor of Jiangsu in 1841.98 Al————— 88. ZJHSZL, p. 334. 89. ZB, 2051, Huashana. 90. DXTGZY, XF 2 (Senior President of the Censorate Huang Zhongmo), p. 1073. 91. ZJHSZL, pp. 332–33. 92. ZJHSZL, p. 318. 93. Feng Guifen, Xianzhitang gao, 11.33a–35a. 94. Cheng Yi, Qiuzaiwozhai wencun, 2.21a, 13b. 95. HCJSWXB, juan 58, huzheng 30, qianbi, shang.18a (Ding Lüheng, “Qianbi yi”). 96. Qi Sihe et al., Yapian zhanzheng ziliao, 1: 501. 97. Sun Dingchen, Bentang chulun, 2.4a. 98. Wei Xiumei, Qing ji zhiguan biao, p. 843.

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though there is no direct evidence, it is quite likely that Liang had read Wang Liu’s book, given the many similarities between the two men’s proposals and Liang’s long stay in Jiangsu. 99 Other officials who supported big coins made revisionary proposals. Censor Lei Yixian 㪘цㄲ in 1842, Censor Zhang Xiuyu ရԏ⤠ in 1843, Anhui Governor Wang Zhi in 1846, Supervising Censor Jiang Hongsheng ᧺㻨‫ ݴ‬in 1848, and Sichuan Educational Commissioner He Shaoji җ♬૥ in 1852 proposed issuing big coins.100 The existing copper coin weighed 1 qian 2 fen; the standard was to use 6.48 fen of copper and 5.52 fen of zinc and lead in each coin. Thus, 100 wen contained 6.48 liang of copper. Lei Yixian suggested using 1 liang of copper to cast a copper coin with a face value of 100 wen. 101 Zhang Xiuyu proposed following the example of the Muslim area in Xinjiang by casting a copper coin with a face value of 10 wen with a weight of only 1 qian 5 fen of copper. 102 Wang Zhi recommended new copper coins with five face values ranging from 3 wen to 50 wen and with a copper content less than the existing coins.103 The difference between Jiang’s proposal and these big copper coin proposals was that Jiang wanted the face value of the big coin to be equal to its total cost. Jiang also objected to the ban on copper utensils, since it would be too inconvenient for the people. The copper for the big coins would come from the established copper quotas of each mint. Although the big coins could not increase the state’s revenue, they could make up for the scarce supply of silver and reinforce the state’s monetary sovereignty.104 Wang Qingyun accepted most of Jiang’s proposal but disagreed with his idea of replacing silver with big coins in all public expenditures.105 Bao Shichen’s ideas also struck many echoes. ————— 99. Liang Zhang ju, Guitian suoji, 2: 4, has Liang’s proposal for casting big coins. In addition, Liang proposed that paper notes be issued as a substitute for silver (ZJHSZL, p. 336). 100. SL, 75: 12, XF 2.10 (Educational Commissioner He Shaoji). 101. ZJHSZL, pp. 145–50, particularly 150; DXTGZY, DG 22 (Lei Yixian), pp. 595– 601. 102. ZJHSZL, pp. 150–54. 103. ZJHSZL, p. 155. 104. ZJHSZL, pp. 157–58. 105. ZB, 1675; Wang Qingyun, Shiqu yuji, 5.8b.

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bao shichen and his followers In addition to questioning Wang Liu’s argument, Bao Shichen was himself a vigorous proponent of the replacement of silver by copper coins for public expenditures and revenues at the intraprovincial level. Bao suggested that the six provinces of Jiangsu, Zhejiang, Hubei, Hunan, Anhui, and Jiangxi, which had more water routes than other provinces, collect and forward as many taxes as possible in copper coins. He also proposed that copper coins be substituted for silver in paying local funds. Local funds formally included fees for worship, civil and military officials’ salaries, soldiers’ pay, and food expenses for clerks. Informally they were used to pay salaries for private secretaries, contributions, customary fees, and tribute grain administration fees. The recipients of these payments in silver had to convert them to copper coins for ordinary use. The purchase of silver with copper coins by the government and the subsequent sale of silver by the recipients doubled the bank shops’ profits. Payments in copper coin, converted at the market silver–copper coin exchange rate, would not decrease the real income of those involved. Bao calculated that implementing this change would save nearly 10 million liang of silver annually and favor a decline in silver prices. The replacement was to be only partial, however. Funds that entailed long-distance transport—for example, provincial tax remittances sent to the Board of Revenue, assistance fees for Gansu and for Guizhou—would still have to be delivered in silver. 106 Bao’s proposal was echoed by Jiangxi Governor Wu Wenrong ࠦᓾ㟳 (1792– 1854) in 1844, Censor Liu Liangju ۸⪀㲝 in 1845, country teacher Cheng Yi in 1840 and 1846, Zhu Zun ᘮ໱ (1792–1862) in 1846, Wang Qingyun around 1849, Miao Zi on the eve of 1849, Zeng Guofan in 1850, and Feng Guifen in 1852.107 ————— 106. Bao, An Wu sizhong, 26.15a–17a. 107. For Wu Wenrong, see GZD, DG 24.3.11 (Wu Wenrong), and Wu Wenrong, Wu Wenjiegong yiji, 11.1a–4b; for Cheng Yi, see his Qiuzaiwozhai wencun, 2.21a, 13b; for Wang Qingyun, see his Shiqu yuji, 2.41a–41b; for Zhu Zun, see ZJHSZL, p. 109, and Jerome Ch’en, State Economic Policies, document 1; for Liu Liangju, see ZJHSZL, pp. 104–7; for Miao Zi, see his Miao Wuliegong yiji, 1.22a; and for Feng Guifen, see his Xianzhitang gao, 11.34b.

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Miao Zi proposed replacing silver with copper coins in general transactions, but the others proposed the replacement only for tax payments. Feng Guifen favored this replacement for all tax payments, whereas Wu Wenrong, Liu Liangju, Zeng Guofan, and others proposed a partial replacement in tax payments or government expenditures. Wu Wenrong suggested that local governments below the provincial level use copper coins for all their revenues and expenditures. The newly cast copper coins would be used to pay official allowances rather than soldiers’ salaries. Liu Liangju suggested collecting salt taxes, internal tariffs, and contributions only in copper coins, collecting land taxes partly in copper coins, and paying the Yellow River conservancy fees and local government expenses in copper coins. Zeng Guofan argued for paying the soldiers of the Eight Banners in the capital and of the Green Standard of the province in copper coins, but continuing to pay the Eight Banners in garrison posts in silver. In addition, all provinces that did not need to forward revenues to other provinces would collect all their taxes and pay all expenditures in copper coins. Miao Zi and Liu Liangju felt that the exchange rate of silver and copper coin could be set at what the Board of Revenue had recommended: 1 : 1,500. Cheng Yi suggested taxes be paid in copper coin by converting from silver according to the original official silver–copper coin ratio of 1 : 1,000. Wang Qingyun believed that the market exchange rate for silver and copper coin would not harm soldiers. Feng Guifen and Wu Wenrong, like Bao Shichen and Wang Qingyun, suggested following the market rate. Zeng Guofan suggested that the silver–copper coin conversion rate be changed to 1 : 2,000 and adjusted by the Board of Revenue every year. In replacing silver with copper coins, most scholar-officials suggested that more coins be cast; only Zhu Zun wanted to stop mintage altogether. To compensate for the weight of copper coin, Bao Shichen, Miao Zi, and Feng Guifen suggested that either paper notes or the exchange bills of the Shanxi banks replace copper coin for long-distance transactions. Wang Qingyun suggested that soldiers be paid directly by magistrates of districts or departments closer to the battalions rather than by the financial commissioners.

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new approaches close to those of wei yuan Although Xu Mei had advocated the use of precious metals as currency in his debate with Wang Liu, it was Wei Yuan who proposed between 1831 and 1837 that they be used in coinage. The use of precious metals to cast coins was also suggested by a number of other scholar-officials, among them Ding Lüheng around 1818, Lin Zexu and Tao Shu 㨷Ბ in 1833, He Changling ㊱㥳䂊 (1785–1848) in 1838, and Gong Zizhen prior to the Opium War. In 1846, Zheng Zuchen 㘲⎵Ύ (?–1851) proposed that gold-plated money be cast. Ding Lüheng suggested that the government cast gold and silver dollars in addition to copper coins in large and small denominations. 108 Ding argued that the state’s casting of coins in precious metals would preclude the setting by merchants of the silver–copper coin exchange rate for the market.109 In 1833 Jiangsu Governor Lin Zexu noted the belief of some merchants that the only way to suppress foreign silver dollars would be for the official mints to cast silver dollars instead of copper coins. The expense would be ten times less than that of casting copper coins. The new silver dollars could first be used to pay soldiers and would thus come into circulation among the general populace. The market exchange rate would be applied.110 Like Wei Yuan and Lin Zexu, Gong Zizhen proposed the casting of silver dollars to replace the foreign silver dollars.111 Zhou Tenghu ࡐ㳣⶛, a literatus from Yanghu in Jiangsu, suggested in 1854 that silver coins be cast with the same fineness and weight as Western silver coins.112 For Guizhou Governor He Changling, the yellow copper, zinc, and lead used to cast copper coins were crude and base and could not be deemed national treasures. White copper, in contrast, was good in quality and rated highly. Although white copper ————— 108. The gold coins would be cast in denominations of 1 liang and 5 qian: the 1 liang coin would be worth 20,000 wen of copper coins, and the 5 qian coin would be exchanged for 10,000 wen. The silver dollars would be made in denominations of 8 qian (equivalent to 1,000 wen) and 4 qian (500 wen). 109. HCJSWXB, juan 58, huzheng 30, qianbi, shang.18a (Ding Lüheng, “Qianbi yi”). 110. SYD, DG 13.4.6; SL, 235: 4, DG 13.4.6 (Sun Lanzhi); ZJHSZL, pp. 17–18. 111. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shigao, 2: 74–75. 112. HCJSWXB, juan 58, huzheng, qianbi, shang.64a–66a (Zhou Tenghu, “Zhu yinqian shuo”).

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had hitherto been used only for pleasure and decoration, it could be used to supplement silver at a time of silver scarcity.113 In 1846 Fujian Governor Zheng Zuchen suggested that people owning gold have it melted at bank shops into both large and small square gold plates to be used along with silver. One liang of gold would be worth sixteen liang of silver. In Zheng’s eyes, copper was heavy and tiring to use, whereas gold was precious and more appropriate as a supplement for silver. Gold plates could be used to pay taxes and soldiers.114 To obtain the precious metal to be cast into coins, Ding Lüheng and He Changling suggested purchasing them at good prices from commoners, prohibiting craftsmen from making instruments of white copper, and banning the domestic use of white copper by officials, soldiers, and commoners.115 Gong Zizhen also proposed the consolidation of precious metals in the state’s hands;116 in contrast, Wei Yuan and Lin Zexu advocated that private merchants open new mines.117 For Zheng Zuchen, in addition to the gold decorations used by private merchants, another source of gold was the civilian mines already in operation.118

Monetary Policies Taken Before 1853, all proposals to issue paper notes and/or big coins were rejected because of bureaucratic corruption and market forces reinforced by the silver–copper coin crisis itself. When Hu Diaoyuan’s suggestion ————— 113. GZD, DG 18.5.20 (He Changling). Wang Liu, Qianbi chuyan, “Xuke,” 22b, quotes Bao’s differentiation of various kinds of copper. The copper from the mines was red copper. Musical instruments used red copper combined with tin. Blue copper was red copper combined with zinc. Black copper was red copper combined with lead. White copper was red copper added to iron. The price of white copper was about oneeighth that of silver, 2 liang a catty at the place of production, and it was very difficult to obtain. 114. ZJHSZL, pp. 162–64; YFD, DG 26.10.14. 115. HCJSWXB, juan 58, huzheng 30, qianbi, shang.18a (Ding Lüheng, “Qianbi yi”); GZD, DG 18.5.20 (He Changling). 116. Whitbeck, “The Historical Vision of Gong Zizhen,” p. 124. 117. He Changling also suggested that Yunnan, Guangdong, Fujian, Jiangsu, and Zhejiang investigate the approximate annual supply of white copper. This implies that He also advocated mining, but he did not elaborate on this point (GZD, DG,18.5.20, He Changling). 118. ZJHSZL, pp. 162–64; YFD, DG 26.10.14.

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was sent to the governor-general of Jiangsu-Anhui-Jiangxi, the response was: Paper notes have been issued in the past. How can they not be used today? What bank shops issue is also a kind of paper notes. The reason that paper notes can be used among commoners while they cannot be used by the state is not that people do not believe in paper notes; it is because people do not believe in officials. It is not merely because people do not believe in officials; it is officials who do not believe in themselves.119

In addition, head Grand Councilor Muzhanga rejected Wang Zhi’s proposal to cast big coins by saying, “Administrators today are not as good as those of previous dynasties. The evils of today are even more serious than those of former times. If it is said that what could not be carried out by ancient people can be performed by contemporaries in particular, your ministers cannot believe it.”120 The strong possibility of counterfeit money with a face value much above the intrinsic value was Grand Secretary Zhuo Bingtian’s ‫␌ݾ‬ᄇ (1782–1855) reason for not further considering proposals to issue paper notes.121 Cheng Yi finally admitted that his big coin proposal would be difficult to carry out. He noted that lightness and convenience in transport were what all humans sought and realized that all his suggestions were empty words when the situation was so bad. He also concluded that whenever economic benefits were involved, it was more appropriate to learn from merchants. 122 In rejecting Censor Lei Yixian’s proposal to mint big coins, the Board of Revenue argued that since the market already would not accept officially cast copper coins at half their original value, it was unlikely to accept coins with an even lower intrinsic value.123 Market forces eventually convinced Bao Shichen that the idea of replacing silver with copper coins was impractical. 124 Huang Entong 䀋ᄄျ (1801–83), provincial governor and diplomat for negotiating the ————— 119. ZJHSZL, p. 336. 120. YFD, DG 26.10.14. 121. GZD, XF 1.11.13. 122. Cheng Yi, Qiuzhaiwozhai wencun, 2.22b. 123. ZJHSZL, pp. 149–50. 124. Bao, An Wu sizhong, 7 xia.3b.

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Treaty of Nanjing, a onetime advocate of such ideas, elaborated on their impracticality: “The official rate tended to be lower than the market rate.” Conversely, the market price would also be difficult to observe “since the market price has been so unsteady.” He concluded that, all in all, “economic power would still be in the hands of the market rather than the state.”125 In addition to the impossibility of following the market exchange rate, the Anhui governor also mentioned the immense increase in transportation costs as another reason to reject this proposal. He said that if 1 liang of silver were converted into 1,500 wen, it would be 500 wen less than the market rate. At that exchange rate, people would be glad to pay copper coins instead of silver. But the 1,500 wen would weigh 180 liang. Even water transportation, which was less expensive, could not have sustained an increase of this magnitude, and the cost of land transportation was even more enormous.126 In contrast with the total rejection of proposals to issue paper notes or big coins, and to replace silver with copper coins, the precious metal coinage proposal was partially carried out. Even though the emperor rejected Lin Zexu’s proposal to cast coins in silver, Lin still cast silver dollars when he was governor of Jiangsu. Like Ding Lüheng, Lin Zexu was upset with the bank shops’ rigging of the price of silver, particularly when taxes were about to be forwarded.127 This may have encouraged him to cast silver coins.128 Because their quality was low, however, the effort was not sustained for long.129 The most effective actions were to decrease or stop the minting of copper coins. Except for Yunnan, Guangdong, and Sichuan, most provincial mints had been allowed to halt or decrease production for most of the period between 1824 and 1850 (see Table 4.1). This was a sharp break from the reinforcement of government mints in the early and mid-eighteenth century. ————— 125. ZJHSZL, p. 122. Without modern computer programs or statistical systems to gather and process rapidly changing information, officials’ impotence in tackling these market fluctuations is understandable. 126. GZD, DG 26.8.6 (Governor of Anhui Wang Zhi). 127. Lin Zexu, Lin Wenzhonggong zhengshu, jiaji, “Jiangsu zougao,” 1.20a. 128. SYD, DG 16.11.21. 129. Feng Guifen, Jiaobinlu kangyi, juan shang.43a–b.

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Table 4.1 Decrease or Stoppage of Copper Coinage in the Provincial Mints, 1822–47 ____________________________________________________________________ Stoppage (*) Year Province or decrease (-) Sources ____________________________________________________________________ SYD, DG 2.9.13 SL, 52.1 ZJHSZL, p. 76 ZJHSZL, p. 76 ZJHSZL, p. 76 SYD, DG 2.9.16 SL, 163.21a 1830 Fujian * ZJHSZL, p. 76 1831 Zhili * SYD, DG 11.5.23 1831 Shanxi * SYD, DG 11.8.7 1831 Shaanxi * SYD, DG 11.10.1 1835 Hubei * SYD, DG 15.6.22 Jiangsu * SYD, DG 15.8.23 1835 1836 Shanxi * SYD, DG 16.7.6 1837 Jiangsu * SL, 302.8a 1837 Sichuan ZJHSZL, p. 81 1838 Guizhou * ZJHSZL, p. 82 1838 Hunan * ZJHSZL, p. 81 1838 Guizhou * ZJHSZL, p. 82 1839 Sichuan GZD. DG 19.6.20 1839 Jiangsu * ZJHSZL, p. 80 1840 Zhejiang * ZJHSZL, p. 80 1840 Xinjiang (Ili) * ZJHSZL, p. 81 1842 Zhili * ZJHSZL, p. 79 1842 Hunan * SYD, DG 22.3.11 1842 Shaanxi * SYD, DG 22.3.26 1842 Fujian * SYD, DG 22.4.3 1842 Hubei * ZJHSZL, p. 81 1843 Hubei * SYD, DG 23.10.17 1843 Fujian * ZJHSZL, p. 80 1844 Zhili * ZJHSZL, p. 79 1845 Jiangxi * ZJHSZL, p. 80 1847 Guangxi * ZJHSZL, p. 82 ____________________________________________________________________ 1822 1824 1826 1828 1829 1829

Shanxi Fujian Jiangsu Jiangsu Jiangsu Zhili

* * * *

Numerous official reports asserted that the reason for ceasing to mint coins was the silver–copper coin crisis. The crisis increased the costs of casting copper coins, which were generally paid in silver, to a level higher than that of the silver for which the coin could be ex-

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changed.130 For example, in 1842 the transportation fees for the Fujian mint for copper and zinc or lead from Yunnan and Hubei was 2.64 liang of silver for every 1,000 wen of copper coin. The then price of 1 liang of silver was 1,590 wen.131 In 1843, a report from Hubei pointed out that if the coins cast sold at the official rate of 1,000 wen for 1 liang, no one would buy them; yet if they were sold at the market price, the mint would lose 0.33 liang of silver on each 1,000 wen. The total provincial quota of copper coins to be cast would result in a loss of some 28,400 liang.132 It is worth noting that private coinage also decreased for the same reasons.133 The decrease in soldiers’ demand for copper coins was also crucial in the stopping of copper coinage or its decline. In 1822, when the Shanxi governor first proposed a cessation in minting, he pointed out that “compared with the market exchange rate, for every liang of soldiers’ pay, some 200 wen less is given. The poor soldiers will naturally be impoverished.”134 Similar proposals to stop minting copper coins were made throughout the country. 135 The emperor, because of petitions from the Board of Revenue, often ordered a resumption of mint operations so that the copper coin system would not become completely bankrupt.136 Provinces continued to report difficulties caused by these resumptions because of the plight of soldiers.137 ————— 130 . For example, official reports made in 1829, Zhihli (SYD, DG 9.12.16, Ne Yancheng), and in 1842, Shaanxi (GZD, DG 22.3.14, Funiyanga). 131. GZD, DG 22.2.27 (Governor-General Yiliang, Governor Liu Hongao). 132. ZJHSZL, p. 78. 133. With the bureaucracy in deep crisis as a result of Heshen’s corruption, some 13,000 strings of private coins were seized in Tianjin in 1796 (GZD, JQ 1.2.2). The number of private coins seized in the Daoguang period in Beijing, where the largest number of private mints was found, amounted to 50 strings in 1825, 23 strings in 1831, 300 strings in 1846, and 335 strings in 1851 (ZJHSZL, pp. 96–99). In 1849, Miao Zi remarked, “The copper coin currently used leaves little profit after subtracting the costs of copper, lead, furnaces, fuel, and wages. That is why there are few private mints” (Miao Zi, Miao Wuliegong yiji, 1.24a). 134. SYD, DG 2.9.13 (Qiu Shutang). 135. SYD, DG 9.12.16, 11.8.7. 136. ZJHSZL, p. 76. 137. SYD, DG 13.3.20 (Wu Rongguang), 15.8.23 (Lin Zexu), 16.7.6 (Shen Qixian), 23.10.17 (Yutai); GZD, DG 21.11.24 (Shanxi Governor Yang Guozhen), 22.2.27 (Governor-General of Fujian and Zhejiang Liu Hongao), 22.3.14 (Shanxi Governor Fu-

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Fig. 4.3 The Xianfeng emperor and the depleted coffers. This imperial edict of June 16 of Xianfeng 3 (1853), taken from the Qing Veritable Records, had two parts. The second part points out that only a little over 227,000 liang remained in the imperial coffers, since 29,630,000 liang in formal revenues from the land tax, salt tax, custom revenues, and contributions had been spent on military expenses or were already budgeted to meet the costs of combatting the Taiping rebellion. The first part ordered the use of a fast horse capable of galloping 500 li per day to notify each province to share the emperor’s anxiety about his depleting coffers. The provinces were expected to implement the paper notes system already practiced to some extent in Beijing. Merchants should be called on to establish bank shops to exchange the paper notes issued by the Board of Revenue for copper coins. More copper should be procured to cast more copper coins and big coins to back the paper notes.

Beginning in 1853, a drastic change was seen in this trend when the state started to issue inconvertible paper notes and big coins, a policy followed for the next ten years or so. The fiscal difficulties caused by the Taiping Rebellion (Fig. 4.3) led to the adoption of ideas like those of Wang Liu’s. 138 Officials in the Board of Revenue who proposed making paper notes convertible, such as Wang Maoyin, were dismissed; ————— niyanga), 22.4.22, 27.6.26 (Guangxi Governor Zheng Zuchen), 21.11.29 ( Jiangxi Governor Wu Wenrong), 22.1.22. 138. ZJHSZL, p. 336.

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the imperial princes stepped in to implement the paper notes and bigcoin policies. However, big coins were continuously debased, and the paper notes found less and less backing. The result was that such policies, which did not extend much beyond Beijing, completely failed in 1860–61.139

Conclusion Early nineteenth-century statecraft scholars tend to be described as a monolithic bloc. But the monetary debate of this period reveal that on the spectrum of state-society relations, the Xu brothers strongly disapproved of intervention, and Wang Liu’s proposal to shift monetary power from the private sector to the government by issuing paper notes was highly interventionist. Between these two extremes were Wei Yuan’s idea of casting coins made of precious metal to be obtained by opening new mines, Wei’s and Bao Shichen’s proposal to issue a limited number of convertible paper notes, and Bao’s notion of replacing silver with copper coins for some local uses. Books, letters, travel, scholar-officials’ personal relations, and official reports all linked these various opinions and aroused a nationwide discussion. Certain proposals were even modified again and again in an attempt to ease the pressing crisis. But before 1853, any policies involving government intervention were not adopted due to loss of confidence in a state that was itself corrupted by the silver–copper coin crisis. The idea of replacing silver with copper coins was also dropped because copper was bulkier to use, the market had depreciated its value relative to silver, and the fluctuating market exchange rate was difficult for the state to follow. The only action taken before 1853 was the stopping or slowing of production in many of the state mints. The state not only did not step in but went even farther in letting the market run by itself. It was not until 1853, when the public coffer was really threatened, that ideas like those of Wang Liu were turned into policy. However, as Xu Mei, Bao Shichen, and Wei Yuan warned, the common people did not accept the paper notes and big copper coins without an intrinsic value ————— 139. King, Money and Monetary Policy, pp. 152–63.

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compatible with the face value. The government begged merchants to contribute silver to back up these monies, but the merchants demurred on the grounds that they themselves were impoverished. Officials, again as the skeptics had predicted, misappropriated these newly issued monies, and the credit needed for a credit system simply did not exist.

chapter 5 Chinese Inspiration and Western Comparison

Although the early nineteenth-century monetary crisis was prompted mainly by a market failure caused by the world economy, Chinese scholars were not aware of this factor. For the most part, the knowledge that Chinese scholar-officials used to discuss the crisis was Han Chinese in origin. The only exceptions were Wang Liu’s brief mention of Japan’s use of paper notes,1 Liang Zhangju’s reference to Xinjiang’s use of big coins,2 and Wei Yuan’s relating of the history of silver dollars in Tibet and the pul copper coin in Xinjiang.3 All other evidence cited by scholars to reinforce their arguments was drawn from Chinese historical sources or current experience. Unlike later periods, when Western economic concepts had become available, early nineteenthcentury China marks the last time that only traditional ideas were available to deal with intangible monetary problems such as the silver– copper coin crisis. The response to the crisis thus provides a window ————— 1. Wang Liu (Qianbi chuyan, “Xuke,” 2b) mentions that Dongyang ᙝ᪊ had long used paper notes. Wang (ibid., 24a) also notes the growing scarcity and deterioration in quality of Yunnan copper and the mixing of Dongyang copper with Yunnan copper. Since Japan was China’s only source of copper other than Yunnan at this time, the term “Dongyang” must refer to Japan. According to Pascal Salin (Currency Competition and Monetary Union, p. 69), both feudal lords and merchants in Japan issued paper notes from the middle of the sixteenth century on, although their use was not unified until 1882. 2. ZJHSZL, pp. 143–44. 3. Wei Yuan, Shengwu ji, 14.42a–b.

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for understanding China’s traditional political-economic ideas and for comparing them with similar Western ones. Based on the conventional view of the Salt and Iron Discourse, it is often thought that from the Han dynasty on the Chinese state monopolized copper coinage and Chinese political-economic thinking tended to be interventionist. 4 The historical evidence cited by the early nineteenth-century scholars, however, reveals a much more flexible political-economic tradition. The historical knowledge of recessions and money shortages was roughly comparable with that found in Western theorizing on similar problems such as seventeenth-century England’s coin shortage, the Great Depression of the 1930s, or even today’s economic downturns. This comparison allows us to see how China’s long intellectual tradition was used to argue against the fiscal use of money, the existence in China of a concept of wealth and of the value of money different from that of eighteenth-century Europe’s bullionists, the existence in China of both supporters and critics of a centralized monetary system, and the attention paid in China to interactions between people and the state in predicting the outcome of economic policies.

Negligible Foreign Intellectual Influence Economic ideas from the West played a negligible role in monetary discussions in early nineteenth-century China. True, some Chinese scholar-officials of this period were curious about the West. Li Zhaoluo, for example, became interested in the Europeans he saw in Canton and produced a work entitled Notes on Overseas Countries (Haiguo jiwen ᫡੄☺⣨) based on a Chinese sailor’s account of Western countries, Records of Overseas Countries (Hailu ᫡㞐).5 These two works circulated widely in the 1840s and constituted the main source of Chinese officials’ knowledge about Western countries. For the most part, these accounts dealt with Western geography. Robert Morrison (1782–1834), ————— 4. Cf. Wei Jianyou, Zhongguo jindai huobishi, p. 48. 5. Hailu, recorded by Wu Lanxiu ࠦⶄԏ, was an account of Xie Qinggao ㅖ᭘㵪 (1765–1821), who had worked with Western ships for fourteen years and visited several Western countries. Xie retired from this work in 1790 due to blindness. See Hummel, Eminent Chinese of the Ch’ing Period, p. 449.

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Chinese Inspiration and Western Comparison

Karl F. Gutzlaff (1803–51), and other Westerners were publishing Chinese-language magazines to introduce Western ideas, but most of this information related to religion, geography, and history.6 The only available discussion of Western economic and currency systems was the Treatise on Commerce (Maoyi tongzhi ㊰ᕪ㕗႕), excerpted in Wei Yuan’s Illustrated Treatise on the Maritime Countries (Haiguo tuzhi ᫡੄ੌ႕).7 This had been adapted from Gutzlaff ’s Treatise of Commerce (1840), which in turn had been adapted from John Ramsey McCulloch’s commercial dictionary, first published in London in 1832.8 Passed from Lin Zexu to Wei Yuan in 1841, Gutzlaff ’s adaptation did not appear in Chinese until the 1867 edition of the Illustrated Treatise on the Maritime Countries.9 Wei Yuan’s remark “Their paper notes, like China’s, are issued by the monarch” was evidently made in his late years, after the Qing government had started to issue paper notes in 1853. Even though Wei’s concepts of trade may have been influenced by direct observations of Sino-Western trade, before 1850 his ideas on currency were almost completely unaffected by the West. The negligible impact of Europe on even an “expert” on the West such as Wei Yuan demonstrates how little ————— 6. Hsi-t’ung Chang, “The Earliest Phase,” pp. 4–10. 7. In the section on Europe in the Maoyi tongzhi, Wei Yuan summarized trade between China and the West, mentioning the chief exports of different countries, the volume of trade, and the number of vessels. In a section entitled “Foreign Situations for Reference” (“Yiqing beicai” ிᅌ֐ᎄ), Wei Yuan mentioned four Western financial institutions. In addition to insurance, Wei said that China had institutions comparable to Western paper notes, banks, and exchange bills (huipiao ᘍ⏄). Wei noted that in the West merchants managed exchange bills and insurance, whereas merchants or the state managed banks and paper notes. Among the Western countries, Wei Yuan mentioned that banks flourished in Holland, England, and the United States. Dutch banks began in 1609, and British banks, which were the largest, in 1673. In the United States, the bank shops had failed but had recently been revived (Hsi-t’ung Chang, “The Earliest Phase,” p. 8; Wei Yuan, Haiguo tuzhi, 52.15–16). 8 . Barnett, “Protestant Expansion and Chinese Views of the West”; Hsi-t’ung Chang, “The Earliest Phase,” p. 8. McCulloch (1789–1864) was a leading Ricardian economist. 9. All the Western sources, including Gutzlaff ’s book, collected by Lin Zexu were handed over to Wei Yuan in 1841 while Lin was en route to Ili in disgrace. Wei Yuan’s Illustrated History of the Maritime Kingdoms, which synthesized these Western sources, was first published in 1842 and circulated among officials in the capital and provinces. The Illustrated History was later revised three times.

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European economic theories influenced the discussions in early nineteenth-century China. Wang Liu’s case illustrates the domestic sources of the knowledge base of early nineteenth-century Chinese scholars. His main proposals— issuing paper notes, prohibiting the use of copper utensils, and minting big coins—were a self-avowed synthesis of the proposals of earlier scholars, such as Zhang Yong ရ᩷ of the Song dynasty, who was the first to discuss paper notes; Xin Qiji 㓶᝜ℊ (1140–1207), Chen Zilong 㨴ീ䂭 (1608–47), and Qian Bingcheng 㞨␌㡓 (1612–93), who advocated paper notes later; Jia Yi ㊸ㄅ (200–168 bce) of the Han dynasty, who listed seven benefits of prohibiting copper utensils; Liu Bei ۸֐ (the first emperor of the Han regime established in Sichuan), who followed the proposal of Liu Ba ۸༪ and cast big coins with a face value of 100 wen; and Han Yu 㬳ᆅ (768–824), who suggested copper coins in denominations of 5 wen. 10 Wang Liu’s predecessors thus include scholar-officials from the Han, Tang, Song, and Ming dynasties.

A Flexible Tradition of Economic Ideology As illustrated in the following items, the historical knowledge cited by early nineteenth-century Chinese scholars reveals that China had a flexible tradition of economic ideology.

the problem of the six boards and eight administrations Some scholars are of the opinion that Chinese history limited scholarofficials’ economic ideologies. For example, it has been suggested that the categorization of late Qing statecraft works under the Six Boards— Civil Administration (Libu ࠅ㗵), Revenue (Hubu ቤ㗵), Rites (Libu ⏷㗵), Military Affairs (Bingbu ‫ط‬㗵), Punishment (Xingbu ‫ڠ‬㗵), and Works (Gongbu ༞㗵)—rather than under the eight administrations of the Zhou Institutions of the Book of Documents, which put food (shi 㯵) and money (huo ㊜) as the first two priorities, fettered scholars’ eco————— 10. Wang Liu, Qianbi chuyan, “Qianchao yi,” 4b–5a.

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nomic thinking and limited their ability to deal with the unprecedented crisis of the nineteenth century.11 In the statecraft works dealing with the silver–copper coin crisis, however, history was a flexible resource rather than a rigid framework. Even though most of the currency-related essays were placed in the revenue section of collections of statecraft writings published since the early nineteenth century, these works often cited the eight administrations of the Zhou Institutions. For example, Ding Lüheng’s essay proposing the coinage of money in precious metals in the Collected Writings on Statecraft of the Reigning Dynasty cites the Zhou Institutions. Ding wrote that food and money were two of its eight administrations and that money was used to share wealth, to distribute profits, and to serve as a means of exchange between the haves and the have-nots.12 Miao Zi referred to the sages’ support for managing wealth and using the monetary system to regulate surpluses and shortages as recorded in the Zhou Institutions.13 Wu Jiabin also cited the eight administrations of the Zhou Institutions in suggesting that copper coins be stressed.14 Wei Yuan quoted the Zhou Institutions to criticize the exploitation of the rich, especially agricultural families, by exacting officials.15 Wei also referred to the spirit of “substantial” assistance stated in the Zhou Institutions when he argued for convertible paper notes.16 What is interesting is that even though scholars cited the same eight administrations, they proposed different strategies for solving economic problems. For example, Ding suggested casting coins in gold, silver, and copper; Wei advocated silver coinage; Miao stressed the use of copper coins; and Wu argued for the issuance of coins in large denominations.

————— 11. Wang Ermin, “Jingshi sixiang de yijie wenti,” p. 37. 12. HCJSWXB, juan 58, huzheng 30, qianbi, shang.16a (Ding Lüheng, “Qianbi yi”). 13. Miao Zi, Miao Wuliegong yiji, 1.22a. 14. HCJSWXB, 58 huzheng 30, qianbi, shang. 51b (Wu Jiabin, “Nishang yinqian bingyong yi”). 15. Wei Yuan, Guweitang neiwai ji, 3.43a–44a. 16. Ibid., 14.39a.

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duke shan mu’s monetary stance China’s flexible tradition of economic ideology can also be seen in the various interpretations of the same historical authority, such as the monetary stance of Duke Shan Mu ौ⑜ (dates unknown, originally named Shan Qi ौᔺ) of the Zhou dynasty (1134–256 bce). Duke Shan Mu stated, as recorded in Conversations of the States (Guoyu ੄ン): “When people felt the insufficiencies of light money, the state would issue heavy money and keep both in circulation” (minhuanqing ze zuo zhongbi i xingzhi ᦾ ᄰ 㒅 ‫ ۉ‬Ҟ 㚳 ེ ц ⼾ Ϣ ). 17 Liang Zhangju, the Board of Revenue, and Ding Lüheng interpreted this remark differently. Ding interpreted “light money” as less valuable money and “heavy money” as more valuable money and thus proposed the casting of coins of precious metals.18 Liang Zhangju interpreted “heavy money” as coins of larger denominations but without proportionally increased intrinsic values. The Board of Revenue, rejecting Liang’s suggestion, said that Duke Shan Mu was arguing against the minting of big coins, which King Jing ᖩᾄ (544–520 bce) of the Zhou dynasty had intended to initiate.19 Duke Shan Mu was the first political leader in Chinese monetary history to propose coordinating the main and the supplementary money supplies (muzi xiangquan ᦈീ⇽ᣵ). Wang Liu himself applied this principle differently in his Preliminary Remarks on Copper Coins. He once remarked that he had used this idea to suggest the interchangeability of notes and copper coins. When there was a substantial supply of copper coins, they became the “main money” (mu ᦈ), and the paper notes the “supplementary money” (zi ീ). In another case, Wang said that when notes were of larger denominations and used for large-scale exchanges, they were mu; when copper coins in small denominations were used for small-scale exchanges, they were zi. Xiangquan ⇽ᣵ means “backing up” in the first case and “mutually assisting each other” in the second case.20 ————— 17. For Duke Shan Mu’s original text and discussions, see Hu Jichuang, Zhongguo jing ji sixiangshi, 1: 166. Conversations of the States is a historical record of the Spring and Autumn period describing the political and economic discourse of various kingdoms of China around 440–110 bce. 18. HCJSWXB, juan 58, huzheng 30, qianbi, shang.17b (Ding Lüheng, “Qianbi yi”). 19. ZJHSZL, pp. 143–44. 20. Wang Liu, Qianbi chuyan, “Xianzheng mingyan,” 22b–23b.

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the legalist and confucian differentiation China’s flexible tradition of political-economic ideology can also be seen in scholars’ fluid choice between Legalist and Confucian assertions. In the study of Chinese political-economic ideas, the Legalist versus Confucian dichotomy is often used to categorize historical figures. Legalists are often characterized as interventionist and the Confucians as laissez-faire. Yet Wei Yuan’s citations reveal that he was both for and against the Legalists. He cited the Guanzi, often categorized as a Legalist work, to support the prolonged use of gold,21 but described Wang Liu as crueler than the notoriously cruel Shang Yang (?–338 bce) and Li Si (?–208 bce) of ancient China, both of whom were Legalists.22 Wang Liu, who was more interventionist than previous Legalists as described by Wei Yuan, was actually “fond of Confucian remarks” (hao Rujia yan ௱‫׮‬ඍや). Wang wrote one book interpreting a chapter of The Analects and another book explaining a chapter of The Book of Odes. He also wrote about the geography involved in The Four Books.23 Cheng Yi, who taught Confucianism in the countryside, thought that paying taxes in grain and cloth would fit the Guanzi’s spirit of exalting agriculture.24 Bao Shichen provided a list of books in which he was particularly proficient; among them were Confucian works such as The Book of Odes, Record of Rites, Mencius, and Xunzi ⬫ീ, as well as Legalist works such as Hanfeizi 㬳㫡ീ.25 The Legalist-Confucian dichotomy cannot be applied to late imperial scholars, for whom both traditions served as sources of knowledge.

————— 21. Wei Yuan, Shengwu ji, 14.35b. Several people other than Guan Zhong (730–645 bce) actually wrote the Guanzi in the Warring States period (475–221 bce). See Hu Jichuang, Zhongguo jing ji sixiangshi jianbian, pp. 15–18. 22. Wei Yuan, Shengwu ji, 14.43a. 23. Zhang Lü, Jishi wen’gao, 17.2a. 24. Cheng Yi, Qiuzaiwozhai wencun, 2.16b. 25. Bao, An Wu sizhong, 1 (zongmu xu).3b.

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contending views for historical efficacy of various monetary proposals China’s flexible tradition of political-economic ideologies can also be seen in contending views on the historical efficacy of various monetary proposals. The early nineteenth-century scholars tended to proclaim that earlier versions of their proposals had been successful. Wang Liu, for example, cited the long use of paper notes in Chinese history to prove their practicality. He traced the use of notes in China to Zheng Xuan’s 㘲ώ (127–200) record of the Zhou dynasty’s (1134–256 bce) use of cloth as a medium for exchange. Wang asserted that if the bad practices found in the 500-year use of paper notes in the Song, Jurchen Jin (1115–1234), Yuan, and Ming dynasties were eliminated, paper notes would be preferable to silver, which had been used for just two to three hundred years from the mid-Ming onward.26 Wang attributed the fall of the Ming dynasty to its abolition of paper notes. Because of the resulting lack of funds, he maintained, taxes had been increased, exhausting people’s wealth. Message carriers had also been abolished, giving rise to the rebellion of Li Zicheng ᙅ⨙ቄ (1606–45).27 In contrast, Xu Mei deemed Wang Liu’s theory to have been derived from early Ming practices, which featured the least convertible notes of all previous paper systems. When first issued, the paper notes of the Song and Jurchen Jin dynasties were exchange bills used to collect coins; 28 in contrast Yuan notes became a kind of fiat money (guchao ൐㛧). Xu Mei thought that this development was the result of a combination of deceit on the part of the state and foolishness on the part of the masses.29 The Yuan notes, which were backed by silk, however, were not as deceitful as those of the Ming, which had no backing. The early Ming government prohibited the use of gold and silver, whereas Yuan rulers had set up an official bank in each provincial-level administrative area (lu ㎡) for the exchange of gold and silver to stabilize paper ————— 26. Wang Liu, Qianbi chuyan, “Qianchao yi,” 10a–b. 27. Ibid., 30a–b. 28. Xu Mei, Chaobi lun, 1a. 29. Ibid., 3b.

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notes.30 The early Ming method of issuing inconvertible notes together with the use of copper coin was similar to what Wang Liu proposed.31 Xu Mei thought that silver was superior as a currency because it checked fiscal abuses of money by monarchs. Indeed, he maintained, the superiority of silver could best be illustrated by the long use of precious metal in Chinese history. From the end of the Zhou to the Han dynasty, the use of gold had prevailed. As gold became scarce from the Wei (220–65) and Jin (266–420) dynasties on, however, silver use increased in order to supplement the heavy copper coin. Although silver use did not thrive until the Ming dynasty, it had played a role in the monetary system long before that. Xu Mei traced the origin of silver’s use as money to a much earlier date than the Liang dynasty (503–49), proposed by Gu Yanwu (1613–82) as the date when silver had first been used. Xu Mei found that silver had been used for public expenditures in the Jin dynasty. Silver had also been used for military expenses in the Tang dynasty and for commoners’ money in the Song dynasty. For the abolition of silver, Wang Liu cited the famous Gu Yanwu for support. Xu Mei underscored the point that although Gu Yanwu opposed the use of silver to pay taxes, he did not object to its common use.32 The historical authority Wang Liu cited for issuing paper notes amounting to thirty years’ worth of imperial expenditures was from juan 12 of the Book of Rites. The original text says to store grain for nine years.33 Wei Yuan drew on seven historical examples to warn against Wang Liu’s inflationary proposal: (1) silver dollars and deerskin money issued by Emperor Wu (140–88 bce) of the Han dynasty, which caused inflation and were shunned by the people; (2) inconvertible paper money issued at one point in the Song dynasty and in the early Ming dynasty, which the people rejected; (3) the lack of preference for paper notes both during Song dynasty and in his own time in southeast China, where water transport was convenient; (4) the fact that paper notes made of silk fabric and thin silver slate in the Yuan and Jurchen Jin dynasties could not prevent depreciation; and (5) the unsuccessful tax ————— 30. Ibid., 4b–5a. 31. Ibid., 6a. 32. Ibid., 7a–8b. 33. Ye Shichang, Yapian zhanzheng qianhou de huobi xueshuo, p. 8.

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policies adopted by the Hongwu (1368–97) and Yongle (1402–24) emperors, who tried to use an exchange rate much lower than the market rate for tax payments. The final historical lesson Wei cited was an international one. In 1215, the use of copper coins had been prohibited in the Jurchen Jin dynasty, when paper notes were used. Rich families, who suffered from hoarding so many coins at home and from the frequent changes in the value of paper notes on the market, finally sold their coins in the area south of the Huai River, and these coins went indirectly to the territory of the Song. Wei Yuan hence concluded that if paper notes were used and metal money abolished, as Wang Liu suggested, all metal money would flow to other countries.34 Arguments over correct monetary policy were thus based largely on historical interpretation. The proponents of the various lines of thought tended to assert the superiority of their historical credentials over those of their opponents and sometimes distorted history for their own use.

Western Comparisons This flexible Chinese tradition of political-economic ideology displays some unique characteristics when compared with Western economic notions, particularly on the topics of money shortages and economic downturns.

comparison with british tradition before the seventeenth century Contemporaries of John Locke commented that before Locke there had been no theoretical guards against the fiscal abuse of money by monarchs. 35 During a coin shortage in the late seventeenth century, Locke opposed both decreases in the silver content of coins and limitations on loan rates. It was also under Locke’s influence that Britain’s two–three-century adherence to precious-metal currencies began. Locke insisted that money could not enjoy a price higher than bullion ————— 34. Wei Yuan, Shengwu ji, 14.39b–41b. 35. Appleby, Economic Thought and Ideology, p. 239.

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because it drew its total value from the universal esteem conferred on it by gold and silver. Both interest and specie, Locke said, had a natural value that legislators and kings were unable to change.36 In reflecting on why China experienced hyperinflation during World War II, Chang Kia-Ngau referred to the inflationary tendency in China’s tradition.37 From the early nineteenth-century statecraft scholars’ discussions, however, we can understand that Chinese history provided a repertoire of precedents that argued against using monetary policy for fiscal purposes. Wei Yuan’s criticism of Cai Jing ⲱМ (1047– 1126), the minister of the Board of Revenue who followed Wang Anshi’s (1021–86) inflationary policy,38 and various interpretations of Duke Shan Mu’s theory arguing against the state’s issuance of inflationary money are just two examples of this tendency. The use of money made of precious metals was also an attempt to limit the state’s fiscal abuse of money. In historical practice, coins made of precious metals, the policy advocated by Ding Lüheng, He Changling, Wei Yuan, and Lin Zexu, were relatively rare. The only precedents they could cite were the coins made by Emperor Wu of the Han, those made by the Jurchen Jin dynasty, and the coins of Tibet. However, the cake-shaped metal money cast by the Qi (479–501) and Liang dynasties, mentioned by Gong Zizhen, and the use of gold money in the Zhou dynasty, noted by Wei Yuan, could also be seen as examples of the use of monies made of precious metal. The monetary tradition that early nineteenth-century China inherited seems to have had more noninterventionist elements than the feudal ————— 36. Ibid., pp. 221–22. 37. Chang Kia-Ngau, The Inflationary Spiral, pt. I, “Historical Backgrounds.” 38. The paper notes that Wang Liu proposed to issue, as Wei Yuan realized, were like those issued by Cai Jing in the Song dynasty. Wei quoted the Song official Ye Shi’s Ⰸ㖏 (1150–1223) remark describing the notes issued by Cai: “Cai Jing’s issuance of inconvertible paper notes was to lure and grab the property of merchants using the methods of a bandit. The green sprouts policy of Wang Anshi [an interest-bearing loan to peasants from the government when the rice or wheat plants budded, with the debt cleared at harvest] would be shunned by Sang Hongyang, while the paper note policy of Cai Jing would also be shunned by Wang Anshi” (Wei Yuan, Shengwu ji, 14.43a). However, Wang Liu (Huozhouyuan chugao, “Bianfalun”) himself deemed Wang Anshi an incompetent doctor who used the wrong medicines.

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tradition that early modern England inherited. The fact that less interventionist proposals came to the fore after Wang Liu’s proposal was an extension of this Chinese tradition.

comparison with the “ bullionists ” From John Locke’s time to the eighteenth century, the “bullionists” held sway in Europe; these “mercantilists” urged the state to develop exports to earn as much precious metal as possible, since these alone constituted national wealth. 39 The early nineteenth-century Chinese scholars who emphasized the use of precious metals to check the monarch’s fiscal abuse of money were by no means “bullionists.” A different concept of wealth and of the value of money operated in these two parts of the world. The bullionists deemed only bullion to be wealth, whereas the Chinese concept of wealth included that derived from the utilization of natural resources. Among the rationales proposed in 1844 for an imperial edict to allow the common people of China to open new mines were the following: “Natural resources on earth are provided for the use of millions and millions of people”; “It is also one way of hiding wealth among the people” (cangfu yumin ⴾගᔦᦾ); and “Neither can they [the officials] repress or manipulate all affairs.” 40 The fact that Wang Liu attributed the inflation at the end of the Jurchen Jin and Yuan dynasties to a scarcity of goods shows that, for him, goods also constituted wealth.41 In addition, this illustrates his realization that both goods and money affected prices. Early nineteenth-century Chinese scholars had different opinions on the export trade as well. Some suggested banning most foreign trade. A letter from Wu Jiabin to Lin Zexu proposed extending the power to prohibit foreign trade from the coastal customs to the local govern————— 39. Blaug, The Early Mercantilists, pp. ix–xi. 40. SL, 404: 9–10, DG 24.4 (Imperial edicts to the grand councilors). ZB (He Changling), no. 971, reveals that He Changling was ordered to have all silver mines in Guizhou opened by private merchants if they were willing to do so. 41. Wang Liu, Qianbi chuyan, “Qianchao yi,” 6a–b.

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ments of the hinterland.42 In contrast, Wei Yuan thought that foreign trade could be a means to learn about advanced Western technology, to increase revenues, and to provide useful goods for the general public.43 He noted that, if the opium trade were eliminated, China would have a trade surplus and gain wealth. 44 Foreign trade could assist “selfcultivation and self-strengthening.”45 Yet unlike some British mercantilists who considered bullion to be the only form of wealth and trade the only source of wealth, Wei Yuan thought of foreign trade as only one source of wealth.46 And unlike the beggar-thy-neighbor policy of some mercantilists, Wei Yuan thought foreign trade could be helpful in forming alliances with other countries to keep England in check.47

comparison with twentiethcentury economic theories Both the silver–copper coin crisis of early nineteenth-century China as described by contemporaries and the Great Depression of the 1930s were marked by less money to buy goods, idle resources, and unemployment. For Keynesians, both monetary and nonmonetary reasons, such as the desire of the private sector to invest, are important factors in economic cycles. No economy ever achieves equilibrium by adjusting itself. Most Keynesians believe that deliberate changes in monetary policy to induce an increase in aggregate demand can stabilize the economy, although many of them also think that economic development can ease economic difficulties. The remedy of earlier Keynesians for recession was to issue government bonds to finance public works, which would increase the aggregate demand reduced by the tight money supply. Later Keynesians have underscored economic develop————— 42. Wu Jiabin, Qiuzidezhishi wenchao, 6.13b–14b. 43. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 1: 134–35. See also Wei Yuan, “Chouhai pian,” III, in his Haiguo tuzhi, 2.4, 11. 44. Wei Yuan, “Mingdai shibing erzheng lu xu,” quoted in Wu Baosan et al., Zhongguo jing ji sixiang, p. 144. 45. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 1: 141, 187. According to Wu Baosan et al., Zhongguo jingji sixiang, p. 127, Wei’s article was written in the Xianfeng period. The date for its first draft cannot be ascertained yet. 46. Wu Baosan et al., Zhongguo jingji sixiang, p. 137. 47. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 1: 141.

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ment. On the whole, the Keynesians tend to be interventionist.48 In the decades that followed the Great Depression of the 1930s, economic theories were dominated by the Keynesian approach.49 From the 1930s to the 1970s, Hayek engaged in a forty-year debate with the Keynesians. For Hayek, the market system has a spontaneous order that is “more complex and intricate than can be explained in terms of deliberate efforts to achieve coordination among individual activities.”50 Intertemporal coordination—for example, period A’s overproduction offset by period B’s underproduction—also exists to adjust economic ups and downs. The intervention of macroeconomic policies into the intertemporal short-term discoordination would result in an artificial economic boom, inevitably followed by an economic bust. Beyond objecting to governmental intervention in economic cycles, Hayek opposed the nationalization of the money supply. He doubted that government had either the will or the ability to manipulate the money supply in the public’s best interest. For him, the business of issuing money was better turned over to private enterprise. He also explored the feasibility of competing currencies.51 Hayek’s followers repeatedly criticized the defects of the Keynesian recipe for solving economic recessions and for ignoring the demerits of a centralized monetary system. They mentioned that in the twentieth century people took the government’s monopoly of the issuance of paper money for granted, just as they have come to accept the state’s monopoly over law, the military, morals, and language. Actually, this phenomenon was the result of developments over the past century and a half of human history. The development of a centralized monetary system saved much in terms of the transaction costs of changing various kinds of money and helped solidify the authority of the state. Yet it is also true that human beings were never before so threatened by inflation as in the twentieth century, especially after the ending of the gold standard. When ————— 48. For Keynes’s remedy, see Heilbroner, The Worldly Philosophers, p. 271; for the general Keynesian approach, see Lipsey and Chrystal, Economics, p. 607. 49. John Eatwell et al., eds., The New Palgrave: A Dictionary of Economics (hereafter New Palgrave Dictionary), Hayek, p. 613. 50. Hayek, The Counter-Revolution of Science, p. 39. 51. New Palgrave Dictionary, Hayek, pp. 609–14.

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the unification of money is achieved, the stability of money is sacrificed. Moreover, the government tends to issue notes to meet its needs and thus levies a hidden tax. Although it claims to issue notes in the amount that the public needs, there is always a gap between the optimal amount for the government and the optimum for the public. In this view, in the days when precious coins were used or when paper notes were issued by competing banks, there had been much more monetary stability. Bank failures did occur, but free competition ensured that the most reliable banks survived and that only a small number of people suffered losses. With present-day central banks, however, there is no competition, and everyone potentially loses. Well-intended bureaucrats do many good things for people, but their actions do not necessarily result in good and can bring additional costs.52 In addition, there are also the monetarist and the neoclassical approaches. For the monetarists, money supply is crucial for economic activity. For them, the private economy tends to be stable. Economic instability results from inappropriate government monetary policies. The government’s responsibility is to stabilize the growth of the money supply. For neoclassical economists, equilibrium prevails at all times. Economic cycles come from shocks such as decreases in the money supply, oil price increases, and technological changes. Monetary or fiscal policy will not help, because the private sector has rational expectations. Hence, the neoclassical stance supports a noninterventionist policy. In the Keynesian and monetarist concepts, the government is exogenous to economic development. However, in the neoclassical framework, the government and the private sector interact by trying to guess what the other will do. Thus, the conduct of policy becomes similar to a game in which strategy and the perceptions of the other players matter.53 During China’s silver–copper coin crisis, the spectrum of monetary proposals had two extremes. At one end, scholars urged more governmental intervention in economic affairs; at the other end, scholars argued for minimal intervention. The Xu brothers’ critique of Wang Liu is very similar to the Hayek school’s criticism of Keynesian economics ————— 52. Salin, Currency Competition and Monetary Union, pp. 8, 14, 31, 42–43, 47, 51, 53, 70, 77, 127, 279. 53. Lipsey and Chrystal, Economics, pp. 607–8.

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in the twentieth century. Xu Mei and Xu Lian also shared with the Hayek school the following beliefs: (1) the centralization of currency issuance in the government’s hands will always result in the issuing of more paper notes than necessary;54 (2) a precious metal currency system can protect people’s property better than one based on paper notes; (3) the coexistence of many competing bank shops is better than a centralized monetary system; and (4) the market itself will cope with market failures. In contrast, Wang Liu and the Keynesian school favor shifting people’s money from consumption to investment. Keynes encouraged people to buy public bonds in order to increase public investment in areas such as telephone services, electrical development, and land drainage that would employ a lot of people. Wang Liu encouraged the increased issuance of paper notes for building dikes, opening land, relieving misfortune caused by flood and famine, and decreasing corruption and tax surcharges. Although the public works suggested by both Wang Liu and Keynes had the potential to decrease people’s wealth if public bonds or state currency could not be used in the future to exchange for usable goods, both could ease unemployment, and neither changed the property rights system.55

————— 54. Xu Mei cautioned against the snowball effect of ever-increasing paper notes: “When Song, Jurchen Jin, and Yuan dynasty rulers issued notes, they also intended to issue only what was sufficient for use. The reason that an endless quantity of notes ended up being issued was that although they could satisfy the needs of society [literally, ‘all under Heaven,’ or tianxia ஶΰ], they could not satisfy the needs of the state (guojia ੄ඍ). Every emperor who inaugurated a dynasty in the past estimated revenues from all land and natural resources to determine expenditures. At the very beginning of each dynasty, there was such an abundance of revenues that a surplus remained. Subsequent rulers, both good or bad, confronted the problem that revenues would be increasingly insufficient for expenditures due to increased expenses for floods, droughts, military affairs, ceremonies, and other incidental costs. Thus, these rulers could not help but levy irregular taxes on the people. In the periods when paper notes were issued, the state would not only exact excessive taxes, but would also increase the issuance of paper notes” (Xu Mei, Chaobi lun, 25a–b). 55. Keynes, The Collected Writings of John Maynard Keynes, vol. 9, Essays in Persuasion, p. 99; Wang Liu, Huozhouyuan chugao, “Fujiao lun,” “Haiyun yi,” and “Yu youren lun chaobi shu,” n.p.

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In the 1930s, when millions of people were unemployed, Western democratic institutions were threatened, and Italy and Germany turned to fascism.56 Keynes tried to ease this tendency by making adjustments between the propensity to consume and the inducement to invest.57 In this respect, both Wang Liu and Keynes recommended not disturbing the current property system, which for both of them was based mainly on private property and extensive free transactions. However, there was a great difference between the monetary systems that Keynes and Wang Liu faced. Wang Liu’s proposal—centralization and unification of the monetary system with incompletely convertible paper notes to be issued in the optimal amount that society needs and to be used together with coins for small-scale exchanges circulated through bank shops and used for tax payments or public expenditures—was well known among nations of the twentieth century, including the system that Keynes lived in. But it was a drastic change from the existing monetary system of Wang’s day, in which bank shops controlled the more important form of currency. Wang Liu’s provision that the government should restrict the money supply to the level that society needs is similar to the monetarist concern with the quantity of money a government supplies. In this connection, Karl Marx argued that the relation between the quantity and the value of money differs for various kinds of money. The value of token money (paper notes and precious-metal coins whose face value is higher than their intrinsic value) is affected by how much of it is in circulation. The value of full-bodied precious-metal money (face value equal to intrinsic value) is also affected by the quantity of it in circulation, although this kind of money does have a self-regulating mechanism that adjusts its supply or value relative to the demands of the market. 58 Xu Mei displayed a similar grasp of how currency works when he noted that the market mechanism would eventually redress the serious silver outflow problem of his time. Although both Keynesians and monetarists deem government to be basically exogenous to economic development and the neoclassical ————— 56. New Palgrave Dictionary, Keynes, p. 30. 57. Keynes, The General Theory of Employment, Interest, and Money, pp. 378–79. 58. Marx, Grundrisse, p. 196; Ye Shichang, Zhongguo huobi lilunshi, p. 22.

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school stresses the game between the government and the people, early nineteenth-century China’s economic discussions tended to refer to possible interactions between people and the government. The following statements are evidence of early nineteenth-century Chinese scholarofficials’ awareness of the people’s perception of and strategies toward the state’s monetary policy: Money certainly is not something that can easily prevail by resorting to punishment and political force.—Wei Yuan If it is unfavorable for the people, benefit for the state can certainly not be obtained.—Xu Mei The reason that paper notes can be used among commoners while they cannot be used by the state is not that people do not believe in paper notes; it is because people do not believe in officials.—Muzhanga Money can surely be created by the emperor, but whether or not such money will be circulated will be decided by the people. . . . Even if the emperor has the power to decide whether or not it will circulate, it is people who will set the price. In fact, it is not the people who set the prices; it is the trends of the times (shishi ᖈܰ) that push prices up and down.59—Zhuo Bingtian

Conclusion The Western knowledge introduced to the early nineteenth-century China concentrated on religion, geography, and history and rarely dealt with economic issues. The scholar-officials of the early nineteenth century looked to Chinese historical precedents or ancient classics to offer solutions for contemporary economic problems. Many of their disputes were over the historical efficacy of earlier examples of their proposed solutions or over divergent interpretations of ancient classics such as Duke Shan Mu’s heavy-money concept. Clearly, no fixed template such as the supposed preference for the Six Board intellectual hierarchy over the Eight Administration intellectual hierarchy for economic issues or the boundary between the Legalists and the Confucians confined their choice of ideas. Free choice applied not only to historical events of a particular period such as Gu ————— 59. GZD, XF 1.11.13 (Zhuo Bingtian).

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Yanwu’s perception of silver use but also to relevant events in various periods of Chinese history such as Wang Liu’s drawing inspiration from Jia Yi, Liu Bei, Xin Qiji, and many others for their monetary discussions. As Philip Kuhn pointed out in a lecture given in Taiwan in summer 1977: “Tradition is like a basket containing various kinds of things. The upcoming generations choose whatever they need from it.” The stereotypical view left by the Salt and Iron Discourse could serve as another example to reflect the rigidity or the flexibility of China’s tradition of political-economic thinking. No one involved in the nineteenth-century policy debates referred to the famous Salt and Iron Discourse, although the discussion concerned the role of the state in issuing money. The following two examples also diverge from the statist monetary control stereotype view left by the Salt and Iron Discourse. According to Wang Liu, both Emperor Wen (r. 179–157 bce) of the Former Han dynasty and Zhang Jiuling ရϯ䂊 (673–740) of the Tang dynasty, a famous poet, espoused private mintage to ease the currency shortage, 60 In addition, Wei Yuan’s discussion of mining policy shows that private mining coexisted with government-run mining as far back as 1133.61 It has been pointed out that traditional Chinese scholars tended to apply the quantity theory of money to prices.62 Actually, the quantity theory of money, particularly that of the Guanzi, which is often mentioned in the history of China’s monetary thought, was not cited in the early nineteenth-century debates. 63 Also, in addition to the silver outflow, which affected the quantity of money available, commercialization and the greater use of silver were raised as reasons for the silver appreciation. Like seventeenth-century England, early nineteenth-century China encountered a scarcity of money. The discussion that ensued among Chinese scholars and the historical authorities they cited further reveal that China had a lively tradition warning against the fiscal abuse of money; this contrasts with the monetary precepts that early modern England inherited. ————— 60. Wang Liu, Qianbi chuyan, “Zaixu,” 12b–14a. 61. Wei Yuan, Shengwu ji, 14.36a–b. 62. Wang Hongbin, Wan Qing huobi bijia yanjiu, pp. 164–65, 183–84. 63. For the quantity theory of money in the Guanzi, see Ye Shichang, Zhongguo huobi lilunshi, pp. 15–23.

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Chinese tradition also shows greater variety when early nineteenthcentury China’s political-economic discussion on monetary issues is compared to some Western discussion of similar issues. The monetary discourse in early nineteenth-century China gave rise to noninterventionists and interventionists, as in the twentieth-century West. Both Wang Liu and his followers in the early nineteenth-century China and the Keynesian and monetarist economists in the twentieth century thought that government is exogenous to society and that government efforts could solve monetary problems. Although concerned with the international balance of payments, as were the bullionists in eighteenthcentury Europe, early nineteenth-century Chinese scholar-officials nevertheless did not see precious metals as the only form of wealth; they also emphasized the common people’s use of natural resources. Nor did they consider only the supply of money when considering its value, as the PRC scholar Wang Hongbin has argued.64 Rather, they also paid attention to the demand for money and to the supply of and demand for goods. Along this line, unlike the bullionists in eighteenth-century Europe or the monetarists in the twentieth century, Wang Liu, like later Keynesians, paid attention to economic development as a factor affecting monetary issues. The noninterventionists of early nineteenthcentury China, like the neo-classical economists in the twentieth century, deemed that the outcome of economic policy is the result of interactions between the government and the people—that is, the government is not exogenous to the people. Among these Chinese and Western scholars involved in monetary discussions, Xu Mei and Friedrich Hayek are particularly similar in their claims for the benefits of a competitive monetary system run by the private sector. In addition to the lack of precise econometric reasoning, the early nineteenth-century Chinese scholars also did not have the central bank system that the twentieth-century scholars faced. In this regard, the interventionist Wang Liu and the noninterventionist Hayek schools were both revolutionary for their times. Unlike the twentieth-century scholars dealing with economic issues, most of whom are pure economists, the traditional Chinese scholars who discussed monetary issues could at ————— 64. Wang Hongbin, Wan Qing huobi bijia yanjiu, pp. 183–84.

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the same time be famous poets, doctors, or scholars of classic studies. Although there was no traditional template to limit the early nineteenth-century Chinese scholar’s mind or Western ideas to inspire their thinking, their interventionist or noninterventionist political-economic approaches still have some implicit mental models worthy of study, and these are the subjects of the following chapters.

pa rt i i i The Competition Among Intellectual Models

The statecraft thought of early nineteenth-century China was often based on perceptions of human nature, as seen in scholar-officials’ debate over monetary issues. Different perceptions of human nature justified different views of state-market relations, as well as of allegiance to absolute vis-à-vis pluralistic power. Interest in statecraft issues led to interest in a literary style that produced easily understood essays that could shape society. But in the early nineteenth century, the statecraft literary style divided into two branches, one emphasizing imitation and control over the structure of the essay, the other underscoring creativity and better control over the rhythms of the words used. Scholars of the second style were more inclined to follow the New Text School of classical studies, which promoted Confucius as the “uncrowned king” whose role was to check the secular king. As it turned out, the scholars who emphasized creativity in writing tended to perceive the overwhelming sway of market forces in the process of market failure, whereas those who emphasized imitation favored a larger role for government. The latter group of men might loosely be said to have formed an interventionist school, and the former an accommodationist school. When monetary problems threatened the state in the early nineteenth century, intellectual schools emphasizing pluralistic sources of power also got the upper hand. Later, in the 1850s–1880s, the Interventionist school became dominant, since strong leadership was required to meet the threat of civil war and since the flow of silver back into China provided the state with more commercial revenues with which to pacify the rebellions. However, the late nineteenth-century inclination toward intervention, which has been deemed representative of the Chinese tradition, is actually not typical.

chapter 6 The Social Theories of the Two Statecraft Groups

The debate around Wang Liu’s book, which took place before implementation of the 1853 inflationary policies, shows that two social theories—featuring concepts about self, society, and historical change—were embedded within the opposing camps’ approaches to the silver–copper coin crisis. These social theories were also expressed in views on problems related to the silver–copper coin crisis such as commercialization, unemployment (vagrancy), corruption, the increasing gap between the rich and the poor, and other social issues. Although the views of some statecraft scholars changed over time, the social theories inherent in their proposals were generally consistent in themselves. Some early-modern European works on social theory, such as Leviathan by Thomas Hobbes (1588–1679) or John Locke’s Two Treatises of Government, used premises about human nature to argue logically for particular forms of government in the form of a single thesis. By contrast, the social theories held by Qing statecraft scholars were expressed in a more fragmentary form. Still, the metaphors, rationales, and details of their discussions reveal their basic mental models. Intellectual historians tend to discuss philosophers’ abstract theories of human nature and social relations; we can also discern these theories in practical discussions of the silver–copper coin crisis. For the sake of convenience, the term “interventionist group” is used here to denote those who tended to condemn human selfishness and asked for more state intervention, and “accommodationist group”

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Fig. 6.1 Discussion on human nature for statecraft scholars. This catalogue of Wang Liu’s collected work, Huozhouyuan chugao, a woodblock version of which once existed in the East Asian library of the University of California, illustrates the importance of discussions of human nature (xingshuo დー) for statecraft scholars. Wang Liu’s contemporary, the statecraft scholar Wu Jiabin, remarked that human nature is the root of life (source: Xu Shichang, Qingru xuean xiaozhuan, juan 18, Wu Jiabin).

for those who took human selfishness for granted or at least took it well into account and asked for less state intervention (see Fig. 6.1). The more vocal members of both groups are listed in Table 6.1. Bao Shichen and Wei Yuan belonged to the accommodationist group, and Wu Jiabin and Wang Liu to the interventionist. This chapter focuses on their social theories, in particular, their perceptions of human nature; concepts of the state; views of state power

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Table 6.1 Scholars of the Two Statecraft Schools ____________________________________________________________________ Name Native province Position ____________________________________________________________________ The Accommodationists Bao Shichen (1775–1855)

Anhui

Ding Lüheng (1770–1833) Feng Guifen (1809–74)

Jiangsu Jiangsu

Gong Zizhen (1792–1841)

Zhejiang

He Changling (1785–1848)

Hunan

Lin Zexu (1785–1850)

Fujian

Wei Yuan (1794–1856)

Hunan

Xu Lian (1787–1862)

Zhejiang

Xu Mei (1797–1870)

Zhejiang

Provincial degree holder, private secretary, magistrate Magistrate and MDH Hanlin compiler and provincial offical, MDH Secretary of the Board of Rites, MDH Educational official, circuit intendant, provincial official, MDH Hanlin compiler and provincial official, MDH Private secretary, magistrate, prefect, MDH Prefect, grain circuit intendant, MDH Bureau secretary of the Board of Revenue, MDH

The Interventionists Cheng Yi (ca. 1850) Guan Tong (1780–1831) Liang Zhangju (1775–1849) Shen Yao (1798–1855) Sun Dingchen (1819–59)

Hunan Jiangsu Fujian Zhejiang Hunan

Schoolteacher Provincial degree holder Provincial official Private secretary Compiler and reader-in-waiting of the Hanlin Academy, MDH Wang Liu (1786–1843) Jiangsu Licentiate Wu Jiabin (1803–64) Jiangxi Hanlin compiler, MDH Zhejiang Expositor-in-waiting of the Xie Jieshu (?–1826) Hanlin Academy, MDH Xu Zi (1810–62) Jiangsu Hanlin compiler, MDH ____________________________________________________________________ note: MDH = metropolitan degree holder

relative to the power of Heaven, sages, and market forces; attitudes toward commerce, trade, merchants, and consumption; and rationales for private property. Another important aspect is their approach to historical change, which was expressed in their views on how the metaphor of

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the Age of the Three Sage-Kings (Sandai ήф) was applied to the changes they espoused, whether changes should be gradual or transformative, and whether technology or education should be emphasized in reforming society.

Perceptions of Human Nature The accommodationists were more vocal in attributing early nineteenth-century China’s silver–copper coin crisis to a silver drain. As we have seen, the problem of the outflow of silver was raised several times in the Jiaqing period. In 1820, Bao Shichen became the first writer to link it with opium imports.1 Lin Zexu, Wei Yuan, Xu Mei, and Feng Guifen forcefully supported this viewpoint.2 Some of the interventionists also cited external factors to explain the crisis. Wang Liu, for example, once mentioned opium as a cause.3 In contrast, Guan Tong, Liang Zhangju, and Wu Jiabin attributed the decrease in China’s wealth to imports in general. 4 Some interventionists mentioned internal reasons, such as the insufficient domestic supply of silver.5 Many of the interventionists condemned human selfishness or indulgence for the prevailing use of silver within China and saw this as a crucial factor. Wu Jiabin, for example, underscored silver’s high unit value, which facilitated the selfish human inclination to hoard personal wealth, as the fundamental cause of the silver–copper coin crisis. 6 In contrast, for ————— 1. Peterson, “Early Nineteenth Century Monetary Ideas,” p. 40. 2. For Lin Zexu, see Lin Wenzhonggong zhengshu, jiaji, “Jiangsu zougao,” 1.18a–b; for Wei Yuan, see his Shengwu ji, 14.42a; for Xu Mei, see his Chaobi lun, endnote; for Feng Guifen, see his Xianzhitang gao, 31.30–35. 3. See Wang Liu, Qianbi chuyan, “Xuke,” 1a. 4. Liang Zhangju, for example, said, “In these days, only the imported goods are valued. Native cloth, grain, and other daily necessities are used to exchange with foreign goods. . . . With the increase of wondrous foreign goods, there remains less native cloth and food. The granaries have therefore been depleted, and the wealth of the people is exhausted. How can a sigh be enough for facing such a situation?” (Tuian suibi, 7.7–8). For similar remarks, see Guan Tong, Yinjixuan wen chuerji (1830), 2.6–8; and Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shigao, 1: 169. 5. Cheng Yi, Qiuzaiwozhai wencun, 2.19a; Miao Zi, Miao Wuliegong yiji, 1.1a. 6. HCJSWXB, juan 58, huzheng 30, qianbi, shang.45a (Wu Jiabin, “Nishang yinqian bingyong yi”).

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many accommodationists, silver (in the form of both ingots and dollars) was desirable because it was handier to transport than copper coins and was hardly a cause for moral judgment.7 In the accommodationist view, the public preference for silver dollars stemmed from natural human feeling (renqing Хᅌ).8 For Wu Jiabin, blaming the silver drain for the crisis was “like a drinker who thinks his pot is empty because of drought.”9 In this view, silver, which “embodies people’s selfishness,” becomes expensive under its own momentum.10 For the accommodationists, the problem of the silver–copper coin crisis was rooted in the silver drain;11 “If the drain is not stopped, mending the jug cannot keep it full of wine.”12 These contrasting metaphors capture the two groups’ differing perceptions of the problem: an empty pot drained by a greedy drinker versus a spilled jug caused by something beyond human control. Liang Zhangju and others saw the use of silver as going hand in hand with the private vice of profligate spending.13 According to Xu Zi ၞ䁇 (1810–62), as the taste for extravagance developed, fancy items from abroad, rather than agricultural products, were sought. 14 Such spending not only squandered natural resources but also disrupted a ————— 7. GZD, DG 18.5.20 (He Changling); Lin Zexu, Lin Wenzhonggong zhengshu, jiaji, “Jiangsu zougao,” 1.17a. 8. Lin Zexu, Lin Wenzhonggong zhengshu, jiaji, “Jiangsu zougao,” 5.15a. 9. Even Wu Jiabin once said that the use of silver in society had not decreased (HCJSWXB, juan 58, huzheng 30, qianbi, shang.45a [Wu Jiabin, “Nishang yinqian bingyong yi”]), but in a letter to Lin Zexu, Wu said that all poverty in China had been caused by the flow of money to Guangdong (Wu Jiabin, Qiuzidezhishi wenchao, 6.13b–14b). 10. HCJSWXB, juan 58, huzheng 30, qianbi, shang.45a (Wu Jiabin, “Nishang yinqian bingyong yi”). 11. Feng Guifen said, “When I asserted that the high cost of silver was caused by the silver outflow, half the people did not believe me. Only now [when silver has flowed back to China because of a favorable world market for China’s silk and tea] do they realize that my viewpoint is not wrong” (Xianzhitang gao, 11.32). 12. Xu Mei, Chaobi lun, endnotes.1a. 13. Xu Zi, Weihuizhai wenji, 1.2a–2b; Tang Peng, Fuqiu zi, 10.12a–b; Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shigao, 1; 152–58. Liang Zhangju ( Guitian suoji, 2.7), for example, was disgruntled that even middle- and lower-class families used several heating furnaces in winter, owned big cabinets with mirrors, heavy washing basins, and coal containers, and played drums and other musical instruments that once were played only by the rich. 14. Xu Zi, Weihuizhai wenji, 1.7a–b, 3.5a–b.

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social order that required each social class to maintain its proper consumption patterns. 15 Guan Tong and Shen Yao both condemned the moral degeneration of the age.16 The accommodationist group did not resort to moral judgments as often as the interventionist group did. As mentioned above, Lin Zexu clapped his hands and laughed when told about the naïve magistrate who did not know that official positions were ranked by their “profitability.” Bao Shichen said that embezzlement by officials overseeing mining operations was unavoidable.17 Feng Guifen and Gong Zizhen attributed bureaucratic corruption to a decrease in income rather than to moral decay. Gong Zizhen said, “Ultimately, there is not much difference between scholars and servants. Such is nature.” He attributed the immorality of contemporary scholars to their poor pay. Under such circumstances, it was difficult for them to behave according to Jia Yi’s admonition “to forget one’s household for the sake of the state, to forget the self for the sake of the public.”18 He agreed with Mencius in exalting the love between blood relations and objected to Mozi’s (468– 376 bce) idea of indiscriminate love. For Gong, the difference between human beings and animals lay in the selfish human trait of protecting oneself and one’s family first and foremost. He explicitly said, “Selfinterest comes before public-mindedness.”19 Feng Guifen held a similar opinion: “It is the state that has forced officials to become avaricious; they are not avaricious by nature.”20 When Xu Mei cautioned against the snowball effect of the ever-increasing issuance of paper notes, he attributed it not to bad rulers but to “accidental expenses,” which “would cause an increase in the issuance of paper notes if such a system existed.”21 Again, it was not moral decay but institutional arrangements that Xu considered most relevant. ————— 15. Ibid., 3.12b–13a. 16. Shen Yao noted that whereas rich people in the Qianlong and Jiaqing periods had had to be capable in order to obtain positions, in his own time only money mattered; talent played no role in such decisions (Luofanlou wenji, fan 10:20a). 17. Bao, An Wu sizhong, 26.37b. 18. Gong, Gong Zizhen quanji, 1: 29–30. 19. Ibid., 1: 91–92. 20. Feng Guifen, Jiaobinlu kangyi, shang.9b. 21. Xu Mei, Chaobi lun, 25a–b.

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Thus differences in these scholars’ perceptions of human nature corresponded to differences in their views about the relationship between state and society, the role of trade and merchants in society, the methods and content of education, and the tendencies of historical change, even though, as statecraft scholars, all shared some beliefs in common.

Concepts of the State The common terms for “state” used by Qing scholar-officials were guojia ੄ඍ, guo ੄, or shang ί.22 The state was seen as distinct from society (tianxia ஶΰ or xia ΰ).23 Guojia had statutory power and territorial boundaries. Areas outside the effective control of the central government might be said not to belong to the state.24 The coexistence of several states (guo) in the Eastern Zhou period of ancient China, and in the Song, Liao (907–1125), and Jurchen Jin periods, served as a model for scholar-officials of the early nineteenth century when pondering the relationship between China and other countries.25 ————— 22. Zeng Guofan said in 1852, “The state ( guojia) is also plagued [by the silver– copper coin crisis]” (Zeng Guofan quanji, pp. 29–30). Yang Xiangji said, “The state (guojia) can always have other multiple benefits by casting big coins” (HCJSWXB, juan 60, huzheng 32, qianbi, xia.18a [“Xingchaoyin yi”]). Miao Zi estimated that replacing copper coins with silver could earn the state ( guojia) one or two years’ revenue (Miao Zi, Miao Wuliegong yiji, 1.27a–b). Sun Dingchen said, “It is not reasonable if what is despised by the state (shang) is expected to be valued by society (xia)” (Bentang chulun, 2.5a). 23. Sun Dingchen said, “When society (tianxia) benefits from obtaining this copper coin, the state ( guojia) can enjoy endless benefits as well” (Bentang chulun, 2.5a). 24. One local gazetteer pointed out, “In the Taiping disturbance, several southern provinces did not belong to the state ( guojia)” (Nie Yurun and Li Tai, Dali xian xinzhi cungao, 4.7b). Wang Qingyun said, “Since its [the big coin Wang suggested casting] weight would be as heavy as that of the copper coin cast in the Kangxi reign, there was a precedent in the state ( guojia)” (Shiqu yuji, 5b–8b). 25. When talking about the silver outflow, Bao used the metaphor “The bow lost by the Chu people is still retained by the Chu people” (Churen wanggong, Churen degong ៊Х Гဂ, ៊Хၣဂ) to describe the consumption of luxury goods other than opium, which would not cause silver to flow out of the territory of China (Bao, An Wu sizhong, 26.5a). When warning against Wang Liu’s proposal to use paper notes instead of silver, Wei Yuan cited the precedent of the Jurchen Jin dynasty. When it prohibited the use of copper coins and used paper notes, coins flowed to the Song territory (Wei Yuan, Shengwu ji, 14.40b).

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Although the term “sovereignty” and perceptions of how it is intertwined with government, territory, and people to constitute a nationstate were not part of the concept of guojia, nationalism spread through both the accommodationist and the interventionist groups. 26 Both groups inveighed against the state’s loss of power over currency due to the use of foreign silver.27 Cheng Yi pointed out “silver is controlled by cunning merchants abroad.”28 And Gong Zizhen wrote, “It is possible to find a style and birds [a symbol often used on foreign coins] for the precious metal; so why do we have to rely on foreign vessels to bring us their coins?”29 Gong Zizhen’s, Lin Zexu’s, and Wei Yuan’s calls for the replacement of foreign coins by native coins illustrate the rise of nationalism.30 In contrast to the previous coexistence of coins of various dynasties and the prevalent use of foreign coins for commercial exchanges and even for tax payments, there emerged attempts to make coins a symbol of the state. The national motifs that scholars suggested for making Chinese silver dollars were not Han-centered. Some suggested that domestically cast silver coins should have the circle and hole design of the standard copper coin; on one side, Manchu characters would be used to inscribe the name of the mint, and on the other side, Chinese characters would be used to engrave words such as “currency of the Daoguang reign” (Daoguang tongbao 㕿 ‫ ؗ‬㕗 ඾ ) or “currency of the Xianfeng reign” (Xianfeng baohuo ࢐㉛඾㊜).31 Others suggested that coins be cast with————— 26. ZJHSZL, p. 143. For example, one reason that Liang Zhangju advocated the casting of “big coins” was as a replacement for foreign coins. 27. For Zhu Zun, as another example, “[The use of silver has] left sovereignty over economic affairs to the merchants and plagued both the state and the society” (ZJHSZL, p. 109; Jerome Ch’en, State Economic Policies, Document 1). Ding Lüheng also remarked, “If copper coins can be expanded to be used together with silver, the benefits will spread among the people, and the power will be controlled by the sovereign” (HCJSWXB, juan 58, huzheng 30, qianbi, shang.16a–18b [Ding Lüheng, “Qianbi yi”]). 28. Wu Jiabin, Qiuzidezhishi wenchao, 2.19a–b. 29. Gong, Gong Zizhen quanji, 1: 520. 30. Ibid.; Lin Zexu, Lin Wenzhonggong zhengshu, jiaji, “Jiangsu zougao,” 1.17b; Wei Yuan, Shengwu ji, 14.42a–b. Although Xu Mei did not propose that domestic coins be cast, he once mentioned that he would nod in agreement with the idea (Chaobi lun, 13a–b). 31. SYD, DG 13.4.6; SL, 235: 4, DG 13.4.6 (Sun Lanzhi); HCJSWXB, juan 58, huzheng 30, qianbi, shang.64b (Zhou Tenghu, “Zhu yinqian shuo”); ZJHSZL, pp. 17–18.

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out a hole in the center, following the style of the Tibetan silver coin or the Xinjiang pul copper coin. This suggestion was also traced back to various precedents: “The History of Tang recorded that the coins of Nepal did not have a hole in the center. The History of the Three Kingdoms recorded that Indian money had no holes in the center.”32 The reasoning was that since the Tibetan and Xinjiang coins were coins of the Celestial Empire that imitated the style of foreigners, there was no reason that the Chinese government itself should not cast silver dollars as a convenience for the people. Wei Yuan’s remark that “following the foreign style to inhibit the use of foreign silver dollars is one aspect of the monetary system that can be changed” was one expression of his “learning the barbarian’s advanced technology to control the barbarian.”33 Despite their shared nationalism, however, the different remedies that scholar-officials proposed for the silver–copper coin crisis reveal their different perceptions of the state’s power.

State Versus Heaven or the Sages The accommodationist group tended to see the state in terms of small government, in contrast to the big government desired by the interventionist group. The scholar-officials’ concepts of the relationship between the state and Heaven, the Sages, or market forces reveals the two groups’ views of a state with either limited or omnipotent power. The interventionists’ view of the state’s omnipotence can be seen in their ideas on the state’s practical capacities. When it was suggested that copper coins should not replace silver because of the problem of transporting large quantities of heavy copper coins, Wu Jiabin remarked, “Society has doubted the convenience of copper coins because of the difficulty of carrying them. But they are cast by the state for the use of society; so why are they inconvenient?”34 A similar vision of the state’s power was expressed by Wang Liu in regard to paper currency: “Paper notes issued by the state are different from the paper notes issued by rich families. The state has power (quan ᣵ) and force (shi ܰ), ————— 32. Wang Qingyun, Shiqu yuji, 3.18a. 33. Wei Yuan, Shengwu ji, 14.42b; Wei Yuan, Haiguo tuzhi, preface. 34. HCJSWXB, juan 58, huzheng 30, qianbi, shang.45a (Wu Jiabin, “Nishang yinqian bingyong yi”).

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and rich families do not. People’s confidence in the paper notes issued by the state must be a thousand times greater than in notes issued by rich families.” 35 Wu Jiabin further remarked, “It is up to the state’s whim to decide whether silver will be appreciated or not. . . . It is a definite principle that what is not used will be abolished, and what is exclusively used will be insufficient, particularly since silver comes from Heaven (tian ஶ) and copper coin is cast by the state (shang ί).”36 This passage reveals the interventionist perception that the state’s power was greater than that of Heaven. In contrast, the accommodationists believed that the power of Heaven was above that of the emperor. Gong Zizhen noted: “The differentiation of wealth and population size has existed from ancient times. Even Heaven cannot confine it; so how can the emperor set a limitation on it?”37 He Changling said, “It is quite natural to witness the ongoing change between prosperity and poverty, between abundance and scarcity.”38 Wei Yuan further commented, “The Heavenly Way prefers distribution to accumulation,” since the spending of the rich could increase the employment of the poor.39 In choosing materials to produce money, the interventionists tended to select materials whose value would be conferred by the state, such as copper coins or paper notes, whereas the accommodationists tended to select materials whose value came “naturally” or was “created by ————— 35. Wang Liu, Qianbi chuyan, “Xuke,” 25a. Other interventionists made similar comments. Liang Zhangju reasoned: “To be an emperor is to be powerful. He seizes power to give official positions. Since the emperor is powerful enough to change the positions of people, how can he not [be powerful enough] to change the value of things?” (ZJHSZL, p. 143). Censor Zhang Xiuyu said: “It is the state that seizes the power to influence the value of silver or copper coin. If the state uses more silver, silver will be more valuable; if the state uses more copper coins, copper coins will be more valuable” (ZJHSZL, p. 151). Huashana wrote: “The emperor has seized both the power of wealth and the prestige to rule society. His sovereignty over economic affairs can make a man become a minister immediately. Why can the power of wealth not be kept in his own hands?” (DXTGZY, XF 2, Huashana, p. 1077). 36. HCJSWXB, juan 58, huzheng 30, qianbi, shang.45a (Wu Jiabin, “Nishang yinqian bingyong yi”). 37. Gong, Gong Zizhen quanji, 1: 54. 38. ZB, no. 971, He Changling. 39. Wei Yuan, Guweitang neiwai ji, neiji, 3.44a–b.

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Heaven,” such as precious metals, jades, or even seashells. “Only the five metals that had accumulated the Creator’s quintessence” (zaowu zhi jinghua 㕝ẘϢ☑⯂)40 and “were beaten down by the natural forces of mountains and rivers and the primeval force” ( yin yu yang 㨱⨰㨻) would last long, they maintained. Or in Xu Mei’s words, “Goods have their intrinsic values, which cannot be reversed by people.”41 Besides Heaven or nature, the accommodationists also exalted the Sages as counterparts to secular power: “Money is what the Sage uses to gauge the value of various kinds of things.”42

State Power Versus Market Force In discussing issues exacerbated by a market failure, the accommodationist scholars also tended to exalt the efficiency or other benefits of the market, whether in the large-scale movement of goods (the grain transport system, for example), the provision of key commodities (the salt trade, for example), or the management of big enterprises such as mining.43 In Wei Yuan’s view, the early Qing experience of allowing private navigation along the coast was a good example of the superiority of private enterprise because it improved navigation technology and built commercial honesty. In contrast, the officially managed maritime transportation of tribute grain in the Yuan dynasty (1279–1367) had wasted huge sums on ships and created a vast hierarchy of personnel. The result was “idle personnel and a stagnant technological level that could not meet transport needs.”44 The idea that market forces could lead to better results than state management can also be seen in the accommodationists’ discussion of mining. Lin Zexu noticed in 1849 that the government had insufficient capital to work mines and lacked the capacity to supervise the day-to-day operations. Lin concluded that miners ————— 40. GZD, DG 18.5.20 (He Changling). 41. Xu Mei, Chaobi lun, 25b. 42. Wei Yuan, Shengwu ji, 14.42a–b. 43. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shigao, 1: 134–35. See also Wei Yuan, “Chouhai pian,” III, in his Haiguo tuzhi, 2: 4, 11; and idem, “Fu Wei Zhifu lun haiyun shu,” Guweitang neiwai ji, waiji, 7.35a–b. 44. Wei Yuan, “Fu Wei Zhifu lun haiyun shu,” Guweitang neiwai ji, waiji, 7.35a–b.

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themselves could find more promising silver-mining sites by trial and error.45 The accommodationist group also cited the self-regulating tendency of the market and objected to externally imposed regulations. When the trustworthiness of the private bank shops was questioned and government supervision proposed, He Changling replied, “No matter how stupid the commoners are, when they are seeking economic profit, they are so bright that any regulation to supervise [them] is redundant.”46 Trying to control market forces would increase political harassment. In response to Wang Liu’s proposal to limit silver use to utensils, Xu Mei wrote: “If those who used silver utensils for exchange were accused, those who really used silver as utensils would also be ravaged by runners and local bullies for the possibility of using them for exchange.”47 The accommodationist group urged the government to take action chiefly when rampant private vice collided with the public interest. Wei Yuan, for example, suggested the use of taxation or punishments to check such transgressions.48 In Lin Zexu’s clarification of his stance on opium smoking, he also expressed the belief that government should take care of the external cost of private evils: “When opium is not widespread, the opium smokers hurt only themselves. Just a few beatings with a stick will suffice. Yet when it is widespread, the punishment has to be severe.”49 Xu Mei also said, “Only when things are inconvenient for people do they have to be changed; when people feel that paper notes issued by bank shops are convenient, why should they be changed?”50 In contrast, the interventionists had great confidence in the state’s power to control even the market. In regulating monetary exchange rates, Xu Zi deemed that punishments imposed by the state would deter “cunning merchants who rig prices.”51 If the state wanted to accu————— 45. Lin Zexu, Lin Wenzhonggong zhengshu, bingji, “Yun-Gui zougao,” 9.21b. The date of this official report was obtained from Lin Chongyong, Lin Zexu zhuan, p. 599. 46. WJD, DG 18.8.17 (He Changling). 47. Xu Mei, Chaobi lun, 31a. 48. Liu Kwang-Ching, “Shijiu shiji chuye Zhongguo zhishifenzi,” p. 1020. 49. Lin Zexu, Lin Wenzhonggong zhengshu, yiji, “Huguang zougao,” 5.14b. 50. Xu Mei, Chaobi lun, 15b. 51. Xu Zi, Weihuizhai wenji, 3.12b–13a.

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mulate copper in order to cast big coins, all it had to do was establish bureaus to buy copper with grain or with standard copper coins, and “it would take only a few months” to acquire the desired quantity.52 In urging the issuance of big coins, Lei Yixian, Wang Zhi, and Zhang Xiuyu cited Confucius and said that “people can be made to follow the Way, but cannot be made to understand it.” 53 In 1843, Zhang Xiuyu also wrote in a memorial: “It is the state that seizes the power to influence the value of silver or copper coin. If the state uses more silver, silver will be more valuable; if the state uses more copper coins, copper coins will be more valuable.”54

Commerce, Trade, and Consumption The two groups also differed in their views on the functions of commerce, trade, migration, merchants, and consumption. The interventionist group tended to think that the wealth of society was fixed and that commerce merely moved wealth from one party to another. As Guan Tong said, “With the wealth being fixed, it is quite natural that when some place is enriched, another place will turn poor.”55 Wu Jiabin, Liang Zhangju, and other interventionists opposed trade inside and outside China.56 Guan Tong regretted the northern provinces’ “importation” of silk fabrics from the lower Yangzi area as well as the sale of cocoons there.57 Xu Zi complained that both the common people and scholar-officials bought silk in the market that was provided by professional male craftsmen. The common people should have their women engage in sericulture by themselves, and scholar-officials should buy their embroidery and silk gowns from government enterprises.58 ————— 52. Liang Zhangju, Guitian suoji, 2.7b. 53. ZJHSZL, pp. 149, 155; DXTGZY, DG 22 (Censor Overseeing the Zhejiang Circuit Zhang Xiuyu), pp. 660–64; Analects 8.9. The original Chinese is ᦾ߬Ҽ₭Ϣ䐶β ߬Ҽ⊨Ϣ. 54. ZJHSZL, p. 151. 55. Guan Tong, Yinjixuan wen chuerji, 2.6–8. 56. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shigao, 1: 169; see also Liang Zhangju, Tuian suibi, 7.7–8. 57. HCJSWXB, juan 42, huzheng 14, nongzheng, xia.3 ( Guan Tong, “Chuanmin cansang shi shuo xu”). 58. Xu Zi, Weihuizhai wenji, 3.4a.

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The interventionists further pointed out that the development of commerce was detrimental to agriculture. As seen in the Songjiang and Suzhou areas, more and more people turned away from agriculture and went into business as commerce became increasingly lucrative. Commerce, however, was very vulnerable, as exemplified by the fact that cloth from Suzhou had replaced cloth from Songjiang and in turn been supplanted by foreign textiles. The fundamental strategy, for Xu Zi, was to stress agriculture.59 By developing new land and irrigation, promoting advanced agricultural technology, and prohibiting extravagance, more grain and cloth would be produced.60 Since silver was the medium of the merchants, the displacement of the power of silver would encourage people to engage more in agriculture than in commerce. 61 Wang Liu, although suggesting the issuance of paper notes through bank shops, was ultimately concerned with promoting agriculture; he argued that the paper notes would increase revenues for agricultural development.62 Wang’s proposals to differentiate paper notes by province and set up exchange bureaus only in the big cities, which were criticized by Bao Shichen and Xu Mei, also reflect the interventionist group’s neglect of interregional trade, particularly trade that did not pass through the big cities.63 Both groups’ views on migration coincided with their perceptions of commerce, since the two categories were related. The interventionist Xie Jieshu ㅖ㩈ᡫ (?–1826) suggested that people be strictly confined by government regulation to their native places.64 The accommodationist He Changling’s view on the relations between Han migrants and the Miao reveal his belief that trade and migration could increase wealth. When a censor petitioned the government to investigate how evil Han Chinese migrants were exploiting the Miao, the Daoguang emperor asked He, as Guizhou’s governor, to respond on this issue. For He, notwithstanding Han-Miao ethnic conflicts and the transference of the consumption patterns of Han migrants from more developed areas to ————— 59. Ibid., 3.7a–11a. 60. Sun Dingchen, Bentang chulun, 1.17b–18a. 61. Ibid., 2.1a–3b. 62. Wang Liu, Qiangbi chuyan, “Qianchao yi,” 1a–b. 63. Wang Liu, Qiangbi chuyan, 30a–b. 64. Cited from Zhao Jing and Yi Menghong, Zhongguo jindai jing ji sixiangshi, p. 126.

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the minority people in less developed areas, interregional migration and trade had been mutually beneficial to both parties. Contrary to the interventionists’ claim that wealth was fixed, He was convinced that wealth could be created by commerce: Guizhou does not produce salt and cloth but relies on the supply of other provinces for these and other precious goods. The cave-dwelling Miao people have an abundance of minor grains and lumber. If Han migrants did not trade with them, they would have no daily supplies to live on, nor would they be able to sell their things. . . . Han migrants have been thrifty, persistent, and hard-working. They have selected cheap land on which to build their homes. It is not unfair to say that both sides benefit through their contacts. . . . Even if there were no Han migrants, it would not guarantee the Miao people wealth.65

Both schools noticed that in China’s trade with the West native goods were being replaced by foreign goods. Whereas the interventionists merely deplored the situation, the accommodationists noted that foreign technology could be learned and thus benefit the people. Like the interventionists, the accommodationists stressed the importance of agriculture. Gong Zizhen’s 1823 essay “Agricultural Patrilineage” (“Nongzong” 㔄൳) indicates his dream of an ideal agricultural society in which land would be inherited in each generation by the eldest offspring, and the younger branches of the family obtained onefourth of the amount of the land of the eldest offspring from the government and employed one-fifth the number of tenants of the eldest offspring. The eldest branch was to carry out ancestor worship, and both the eldest and the younger offspring were to pay 10 percent of their harvests in taxes.66 Wei Yuan also showed more regard for agricultural riches than commercial riches, although he did not suggest exploiting commercial wealth.67 Nonetheless, the accommodationists put more emphasis on commerce than the interventionists did. Bao Shichen, for example, has pointed out, “Without agriculture, there would ————— 65. ZB, no. 971, He Changling. This chronological biography of He does not give the date of the official report cited here. It is, however, placed between He’s 1838 official report on the silver leakage and his 1840 official report on cultivating Asian cotton in Guizhou. Thus, I infer that the report dates between 1838 and 1840. 66. Gong, Gong Zizhen quanji, 1: 49. 67. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shigao, 1: 156.

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be no food; without industry, there would be no tools; without merchants, goods could not be supplied. If any of these links were lacking, people would not be able to sustain life.”68 The accommodationists understood that the development of commerce relied on the expansion of consumption. In contrast with the criticism of luxury, Wei Yuan believed that consumption was an essential mechanism for spreading wealth: “Frugality is a kind of virtue. . . . It can be used to admonish the poor; it cannot be used to exhort the rich.” Wei Yuan quoted the Zhou Institutions to say that the rich were protected not because of the preservation of wealth but because consumption by the rich would increase employment for the poor and achieve a more equitable distribution of income among people of the various social classes.69 Nicholas Barbon (ca. 1640–98) commented in seventeenth-century England: “There is no other use of Riches but to purchase what serves our Necessity and Delight. A conspiracy of the Rich Men to be Covetous, and not spend, would be as dangerous to a trading State, as a Foreign War.”70 This reasoning—that the consumption of the rich could work to accomplish the public interest—was very similar to Wei Yuan’s support for the prodigality of the rich.

Private Property Aside from some weakly voiced arguments for limiting private landownership, 71 neither the interventionists nor the accommodationists suggested changes in private ownership.72 The accommodationists, in————— 68. Ibid., 1: 134–35. See also Wei Yuan, “Chouhai pian,” III, in his Haiguo tuzhi, 2: 4, 11; and idem, “Fu Wei Zhifu lun haiyun shu,” Guweitang neiwai ji, waiji, 7.35a–b. 69. Wei Yuan, Guweitang neiwai ji, neiji, 3.43a–44a. 70. Appleby, Economic Thought and Ideology, p. 173. 71. Tang Peng (Fuqiu zi, 10.6) believed that if lands were not accumulated in the hands of a few, the number of vagrants would decrease. Wu Ting suggested that the land owned by each landlord should not exceed 50 mu in core areas and 300 mu in peripheral areas. He thought that limitations on landownership might help in a period when the well-field system could not be restored (HCJSWXB, juan 35, huzheng 7, fuyi 2.3–4 [Wu Ting, “Yinshi lun 11, juntian, xiantian”]). 72. Hu Peihui (1782–1849) pointed out that a shift in landownership from the rich to the poor would be a tremendous disturbance. The rich could only be urged to relieve the plight of the hungry and to provide charity for widows and orphans but could not

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deed, proposed a more profound rationale for private property. In 1817, Gong Zizhen stated that the property owned by an individual should be appropriate to his status. Lower-ranking people should not expand their wealth to surpass that of higher-ranking people.73 In 1823, however, he became a strong advocate of private landownership, as expressed in his “Agricultural Patrilineage.” This essay traces private landownership to ancient times when men stopped relying on wild grain and started to use their intelligence and labor to cultivate grain. Since then, according to Gong, those who were able to grow grain on one square foot of land have become masters of that amount of land, and those who were able to do so on 100–200 square feet of land have become masters of that land. The emperor was thus the greatest landlord among them.74 Gong also added, “Being capable makes one manly; being manly makes one a landowner.”75 Gong was espousing a principle similar to John Locke’s concept that “a person is entitled to the fruits of his labor.”76 As for the employment of tenants, Gong said, “As a matter of fact, it is not tenants who rely on the agricultural patrilineage for their living; it is they themselves who produce grain for the entire society.” Hence, in Gong’s proposal for solving the vagrancy problem, no one had to sacrifice to help others. It was designed to develop each person’s ability to benefit all of society. In addition, those members of the agricultural patrilineage who became officials of the sixth rank and above were eligible to receive part of their salaries in land. The management of such land was to be differentiated from that of the land of the agricultural patrilineage. Agricultural knowledge, for example, was required for the offspring of officials to inherit such land.77 The ability principle was again underscored. After the publication of “Agricultural Patrilineage,” when Gong was asked if ————— be coerced to do so (HCJSWXB, juan 41, huzheng 13, nongzheng, shang.5 [Hu Peihui, “Jingtian lun”]). Liang Zhangju represents the interventionists’ general tendency to esteem agriculture. Although they were against commercial riches, they held a laissez-faire attitude toward agricultural wealth (see Liang Zhangju, Tuian suibi, 7.3, 5). 73. Gong, Gong Zizhen quanji, 1: 78. 74. Ibid., 1: 48. 75. Ibid., 1: 54. 76. John Locke, Two Treatises of Government, pp. 288–99. 77. Gong, Gong Zizhen quanji, 1: 51.

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he would set 100 mou as the upper limit for landownership, he replied, “The differentiation of wealth and population size has existed from ancient times.”78 Indeed, Gong not only advocated keeping and developng private landownership but in 1820 also urged the transformation of military settlements, which tended not to fully utilize the land, into private land.79 With regard to the relationship between the agricultural patrilineage and the government, some scholars have thought that Gong expected the government to be responsible for the allotment of land. 80 Yet a careful reading of Gong’s text shows that the government was to step in only when there was not enough land to share among people of the same surname or when tenants with different surnames from that of the landowner were involved in disputes. High officials should become involved only when there was interregional migration due to major disasters. For Gong, the agricultural patrilineage could foster benevolence, filial piety, rites, and integrity, since basic material needs would be satisfied, and the close reciprocal relationships in the lineage encouraged moral principles. If each family were ordered like this, the emperor would need to take care only of the state’s infrastructure. He could act like the center of a wheel; when the spokes are busily turning, the center need do nothing.81 Another way to protect private property was to keep taxes light. The accommodationists argued for light taxes on both agricultural and commercial wealth.82 Gong once used the word “evils” ( yao ఄ) to describe aggressive merchants.83 Hou Houji interprets this as a call for ————— 78. Ibid., 1: 54. 79. Wu Baosan et al., Zhongguo jing ji sixiang, p. 11. 80. Whitbeck, “The Historical Vision of Gong Zizhen,” p. 159. 81. Gong, Gong Zizhen quanji, 1: 51. The character fu ཤ, “broadcloth,” here is interpreted as the fu 㒡, “spoke,” of Laozi ⢤ീ; I thank Professor Lu Baoqian for this suggestion. 82. Gong’s theory on agricultural patrilineage proposed that 10 percent of the agricultural harvest constitute the tax. Gong believed that without this small tax, the emperor and bureaucracy could not be maintained ( Gong Zizhen quanji, 1: 50). Tang Peng believed that the lighter the tax, the better (Fuqiu zi, 10.8b–9a). Wei Yuan was specifically opposed to exploitation of rich people (Guweitang neiwai ji, neiji, 3.43a–b). 83. Gong, Gong Zizhen quanji, 1: 78.

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governmental checks on mercantile annexations. 84 At the end of his statement, however, Gong continued, “This is not something that can be changed by the administrative orders of those with political power. Through the adroit use of strategies compatible with nature, the ruler can . . . rule with a light heart.”85 Light taxes and least intervention are ways to secure private property.

Historical Change Both the interventionists and the accommodationists believed that change was needed to solve the crisis before them. But their choice of vocabulary showed that the interventionists tended to favor more radical solutions. Wang Liu himself and his contemporaries spoke of Wang’s views as “holistic institutional change” (bianfa ㆨᩝ), the term used later, in 1898, for Kang Youwei’s ࿀ᘑᵱ (1858–1927) radical reform program. 86 In contrast, the accommodationists used the terms “change” (geng ᘃ ), 87 “modifying institutions” (gengfa ᘃ ᩝ ), “seeking alterna————— 84. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shigao, 2: 70–71. 85. Gong, Gong Zizhen quanji, 1: 80. 86. In rejecting the use of seashells as money, Wang Liu mentioned that since shells could not consolidate the power of the state, how could they have a holistic impact on institutions (bianfa)? The implication is that what he proposed was bianfa (Wang Liu, Qianbi chuyan, “Qianchao yi,” 11a). Wang’s Huozhouyuan chugao also included an essay entitled “Bianfa lun” (On institutional change), which describes his monetary proposals. The epilogue for Chaobi lun also used bianfa to describe Wang’s proposal: “Since silver prices have increased, both the public and people have been plagued. . . . It is not the institution ( fa) but the silver drain that gives rise to the problem. If the silver drain is not stopped . . . it is impractical to support the issuing of paper notes that has been increasingly advocated. Mr. Wang of Jiangsu started this theory. . . . If there are problems with the institution, then the institution should be changed. If it is not the institution that matters, what institution should be changed?” (Xu Mei, Chaobi lun endnotes, 1a–b). When the editor of A Sequel to the Collected Writings on Statecraft of the Reigning Dynasty included part of Qianbi chuyan, he added an editor’s explanatory note: “Wang widely cited previous theories. As long as those who are responsible for the national account do not recklessly try to change the institution, there will be no problem” (HCJSWXB, juan 60, huzheng 32, qianbi, xia.20b [Wang Liu, “Ni fuguo fumince”]). 87. When Wei Yuan proposed the casting of foreign silver dollars, he said, “This is one aspect of the monetary system that can be changed (geng)” (Wei Yuan, Shengwu ji, 14.42a–b).

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tives” (gaitu ᓄੌ),88 and “revision of institutions” (gaifa ᓄᩝ),89 all of which imply change of a less radical nature. Wei Yuan mentioned “holistic institutional change” for general social change yet used the term with great caution.90 Wei Yuan also noted the importance of finding sagacious people to truly carry out institutional change; without sagacious people, institutional changes would result in evils.91 Judging from the experiences of 1898, or at least from Liang Qichao’s ᜮऐ㍍ (1873–1929) version of it, both Wei and Gong, as adherents of the New Text School, might be assumed to have favored more radical reform.92 However, this was not the case as far as their ideas on monetary reform were concerned. Views of historical change also correlated with attitudes toward the Age of the Three Sage-Kings. Both Gong Zizhen and Wu Jiabin cited those ancient times as an ideal for society, but they differed as to what those times signified. For Wu, the Age of the Three Sage-Kings was a society in which people simply grew grain and wove silk without the need for commerce or money. For Gong, as expressed in his “Agricultural Patrilineage,” however, it was a society in which social differentiation began with people’s ability to settle the land and in which the patrilineal system provided people with a living and maintained social order through reciprocal assistance within the lineage; the state would need to levy only a light tax to maintain the bureaucracy and would concern itself with only the basic infrastructure.93 Although there were lineages in Gong’s proposal for society, his proposed change from the inheritance ————— 88. Gong has long been described as an advocate of gengfa, “modifying the institutions,” and gaitu ᓄੌ, “seeking alternatives” (Hu Jichuang, Zhongguo jing ji sixiangshi, 3: 659). 89. Feng Guifen said in 1852, “Since there is no way to stop the silver outflow, a revision of institutions ( gaifa) cannot be helped.” Feng further said that his principle for change was “The spirit of administration lies in changing without straying too far from old customs. The way lies in nature without compulsion” (ᓈᘪᓄ㕝⢫β㪋⨳ᇈΔ㕿 ੖⨙᷋⢫βՎ‫ܡ‬ဝ), expressing a preference for gradual change (Xianzhitang gao, 11.33a–34b). 90. Liu Kwang-Ching, “Statecraft and the Rise of Enterprise,” p. 16; idem, Jingshi sixiang yu xinxing qiye, pp. 66, 160, 166. 91. Fang, “Wei Yuan shixue yanjiu,” p. 192, citing Wei Yuan ji, “Mogu,” xia. 92. Liang Ch’i-ch’ao, Intellectual Trends in the Ch’ing Period. 93. Gong, Gong Zizhen quanji, 1: 49–50.

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system based on equal distribution to a form of primogeniture was a drastic one. It was not, however, as drastic as the abolition of commerce and money that Wu Jiabin dreamed of. The monetary system conceived by Wang Liu was unprecedentedly static, as Wei Yuan and Xu Mei pointed out. Wang Liu’s call for a total break from ancient times was an even more radical claim. Wang Liu pointed out the differences between his own time and remote antiquity: “In the Age of the Three Sage-Kings and earlier . . . it was the people’s self-sufficiency which preconditioned that of the monarch. . . . After the Age of the Three Sage-Kings . . . the satisfaction of the monarch was given priority over that of the people.”94 Different views of historical change also had an inner logic in line with varying emphases on technological improvement. The accommodationists were ambivalent about the relationship between the Self and the Way, the Sages, and the Ultimate. On one hand, according to Gong Zizhen, man is the master of the world: “The world is created by people, especially by the masses themselves. The Sages do not create it. The master of the masses is not the Way or the Ultimate, but the Self.” Gong even believed that “characters, languages, and morals are all articulated by human beings. Human beings also change the natural world. Even religion is man-made. The heavenly deity is [conceived by] man; the earthly god is [conceived by] man; the human ghost [i.e., the spirits of the ancestors] is also [conceived by] man.”95 In the use of natural resources, the accommodationists called for greater human initiative than did the interventionists. In arguing for the opening of mines, Minister of the Board of Personnel Yinghe said that natural resources were created for the use of human beings.96 The interventionists, in contrast, said that opening mines would destroy the ————— 94. Wang Liu, Qianbi chuyan, “Qianchao yi,” 1a–b. In terms of Huang Zongxi’s 䀋 ൳⡡ (1610–95) concept of the Age of the Three Sage-Kings, Gong was closer to Huang, whereas Wang was very different. Huang deemed that the Three Sage-Kings had established institutions such as schools, the marriage system, the way to lead life, and military service for the sake of the whole society, whereas later rulers set up institutions for their own family (de Bary, Waiting for the Dawn, p. 97). 95. Gong, Gong Zizhen quanji, 1: 12–13. 96. HCJSWB, huzheng, 26.11a (Yinghe, “Kaiyuan jieliu shu,” 1814).

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natural environment. 97 At a time when society was confronted with famine and vagrancy and many scholars were talking about the earth’s inability to feed the ever-growing population, Bao Shichen was still certain that there were enough resources to nourish all people, particularly with the improvements in agricultural technology.98 In dealing with the unequal distribution of wealth in society and with the selection of currency materials, the accommodationists often defended inequality under the authority of Heaven and the Sages. Yet since the accommodationists claimed that each man was entitled to the fruits of his labor, their defense of individual economic accomplishment in the name of Heavenly Ways was compatible with their encouragement of technological improvement to make better use of natural resources. In contrast, the overriding concern of the interventionists was to have the state mold society through educational efforts. Wang Liu’s proposal to print maxims by the Cheng brothers of the Song dynasty or Zhu Xi’s aphorisms for ordering the family on paper money reflects Wang’s deep concern to teach the public. 99 Wang’s related effort can also be seen in a book on self-cultivation he wrote, The Broad Meaning of the Small Learning and the Great Learning (Xiaoxue daxue guangyi ෑൟவൟ ࿢⡛). Wang felt the inadequacy of two important books that officials used to learn administration. Zhen Dexiu’s ∖ၾ␆ (1178–1235) Interpretations of the Great Learning (Daxue yanyi வൟ⼿⡛) and Qiu Jun’s λ᳛ (1420–95) Supplement to Interpretations of the Great Learning (Daxue yanyi bu வൟ⼿⡛⾪) dealt only with the “great learning” (Daxue வൟ) for ordering society and omitted the “small learning” (xiaoxue ෑൟ) of selfcultivation. Wang Liu’s book included both types of learning to prepare people to gain access to the philosophy of the Sages.100 Embracing a lifelong ambition to order society ( jingshi ⚰κ), as a close friend described him, Wang Liu also wrote essays on nature and self-cultivation. They compared nature to the rice plant (he ␄) and good nature (shan ————— 97. Xu Zi, Weihuizhai wenji, 1.1a–8a. 98. Bao, An Wu sizhong, 26.2a–b. 99. For example, in Xu Mei, Chaobi lun, 19b. 100. Wang Liu, Huozhouyuan chugao, “Xiaoxue daxue guangyi xu,” n.p.

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प) to rice (mi ◟). Thus Wang asserted that good nature was not innate but something to be achieved by cultivation.101 Like Wang Liu, Wang Maoyin thought that if the government could get the right person to carry out a paper note system, it could work.102 When some people used the deterioration of bureaucracy to argue the impracticability of paper notes, Wang Maoyin said: Just like sound local security arrangements (baojia ԃ₮) and the charity granary systems, which cannot be carried out without good officials, institutions themselves are not to blame. And so it is with the paper note system. If departments and districts can get the right people, merchants will observe the institution. If the governor-generals and the governors can get the right people, officials will observe the institution.103

This does not mean that the accommodationists were not concerned with education, even though they were not interested in printing philosophical teachings on the paper notes. For example, Wei Yuan once named four additional books to supplement the Four Books that had formed the basic education of Chinese scholar-officials since the Song dynasty (960–1279), 104 reflecting his search for standard educational books beyond those selected by the Cheng brothers and Zhu Xi. ————— 101. Ibid., “Shixing” (On nature), n.p. 102. Wang Liu (Qianbi chuyan, “Xianzheng mingyan,” 36b) said that if the magistrates could supervise the clerks and runners well, the people would not be troubled. 103. ZJHSZL, pp. 321–22. 104. The Four Books are the Analects, Mencius, the Doctrine of the Mean, and the Great Learning. The Analects, which describes the life of Confucius, is next to the Six Classics in the Han and Sui records. It is not until the Song that it achieved prime importance in understanding Confucius. Mencius, crucial for the Confucian tradition, became one of the twelve classics in Southern Song dynasty. The Great Learning, which teaches the route from self-cultivation to ordering society and the Mean, which conveys the Heavenly philosophies, were elevated in status from chapters in the Record of Rites to separate classics only in the Southern Song. Zhu Xi was crucial in the promotion of these Four Books to establish neo-Confucianism. The Yuan dynasty, which worshiped Zhu Xi, began the inclusion of the Four Books as subjects for the imperial examination (see Zhou Yutong, Zhongguo jingxueshi jiangyi, pp. 111–14). Zhang Shunhui (Qingren wenji bielu, p. 438) mentions that Wei Yuan selected Ancient Classics for Self-Cultivation (Xiaoxue gujing ෑൟߢ ⚰), The Subtleties in Ancient Texts to Order Society (Daxue guben fawei வൟߢᘪ↥ၸ), Collected Biographies in the Classics of Piety (Xiaojing jizhuan ൌ⚰㩱֦), and The Subtleties of Zengzi’s Remarks (Zengzi fawei ᘉീ↥ၸ) as “Four Books suggested by Wei Yuan” (Guweitang sishu ߢၸ૫ਣᘆ).

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Because officials were chosen through the examination systems for their proficiency in the philosophy of the Cheng brothers and Zhu Xi, the interventionists were quite confident that they could steer society in the right direction. Whether restoring the ancien régime as Wu Jiabin expected or moving to a brand new monetary system as Wang Liu suggested, the interventionists saw all types of change, no matter how drastic, as possible. The accommodationists, in contrast, sought gradual change, for they were mindful of the unintended consequences of human behavior, such as public benefits brought about by private luxury, the improvement of technology and commercial honesty by developing self-interest, and the limited ability of state power to shape market forces.

Conclusion The early nineteenth-century scholars’ statecraft perceptions were related to their concepts of human nature. Confucians have often been described as believing in the goodness of human nature. However, early nineteenth-century statecraft scholars were well aware of human selfishness and preoccupation with material well-being. The interventionists condemned such a selfish or materialistic nature; the accommodationists acknowledged its existence. The two groups thus developed different perceptions of the state-society relationship and of historical change. At a time when commercialization was causing serious problems, the interventionists advocated limiting commerce, trade, migration, and the activities of merchants, including their importing and issuing of money. The accommodationists perceived the problem differently: economic forces were so overpowering that political force could only accommodate or utilize them, not repress them; the state should intervene only when private vice intruded on public justice. The serious crisis originating from abroad also prompted yearnings to reinforce monetary sovereignty. The accommodationists’ proposal that China cast its own silver dollars with a design different from that of foreign coins reveals an attempt to make coins a symbol of the state. They suggested that both Han Chinese and Manchu decorations on the new coins replicate those on the standard copper coins. Although na-

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tionalism vis-à-vis foreign countries was emerging, Han and Manchu ethnic nationalism did not appear, at least in discussions of monetary problems. Even though both schools sought to strengthen the state’s monetary power, the accommodationists wanted to do so only on the condition that the state refrain from appropriating people’s wealth by excessive issuance of money. Therefore, when proposing to cast coins in precious metals, which they thought would be more efficient for exchange, the accommodationists underscored the precious metals’ intrinsic value. The more consolidated power of the state that the accommodationists were eager to build up was also a limited power. The statecraft scholars of the early nineteenth century have often being depicted as reformists, in contrast to those scholars who resisted change. Also, accommodationist scholars such as Wei Yuan have been seen as representative of statecraft thought. This study shows that another statecraft group advocated even more drastic change than did Wei Yuan and his associates. This interventionist group calling for drastic change was at times even further removed from the ideal laissez-faire metaphor of the Age of the Three Sage-Kings than was the accommodationist group. Previous scholarship also has often linked the rise of the statecraft school in the early nineteenth century to the rise of New Text Confucianism in this period.105 The following chapter will show that New Text Confucianism did not inspire all statecraft thought.

————— 105. Elman, From Philosophy to Philology, p. 237.

chapter 7 Classical Studies, Writing Styles, and Statecraft Thought

Other than New Text Confucianism, Old Text Confucianism also nurtured statecraft thought. This chapter will show one strand of statecraft thought, inspired by New Text Confucianism, called for accommodative change, whereas another strand, inspired by Old Text Confucianism, urged transformative change. Old Text adherents sometimes also called for a laissez-faire approach, and New Text proponents sometimes urged intervention. Yet in the discussion surrounding the silver– copper coin crisis, there was a tendency for Old Text scholars to be more interventionist than New Text scholars. The statecraft scholars also promoted ancient-prose style, which helped implement statecraft proposals. The differentiation of branches of the statecraft movement in terms of writing style overlaps to some extent with differences in choices of the classics to study and in stances on political-economic opinions. However, the disparities in the various political-economic views display no particular group interests defined by age, class, ethnicity, or official position. Some Marxist scholars have insisted that people holding similar ideas formed alliances prior to the acceptance of these ideas, rather than vice versa.1 This chapter will show how ideas are crucial in bringing people together. ————— 1. Appleby, Economic Thought and Ideology, p. 11.

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Statecraft Scholars’ Practical Interests official position The more vocal scholars commenting on the silver–copper coin crisis were not always officials. Their official positions are shown in Table 6.1. Some had passed only the district examination and served as private secretaries or schoolteachers; others had passed the metropolitan examination and served as lower-ranking staff at court. The Qing government had no official specifically responsible for economic policies. All officials of sufficiently high rank were potential monetary advisers, since neither the Board of Revenue nor any other body had a monopoly over giving advice on monetary affairs.2 Most official reports on the silver–copper coin crisis came from provincial officials, such as governors-general, governors, and, from time to time, financial commissioners. Many also came from censors and court officials of every sort, including those in charge of rites, works, punishments, academic work, and revenues. There appears to have been no particular difference in the official positions held by scholars who backed different economic proposals. Many in both the accommodationist and the interventionist groups held positions in the Hanlin Academy, posts granted those with the best examination records before appointment to the regular bureaucracy. Wu Jiabin, Xie Jieshu, and Xu Zi in the interventionist group and Lin Zexu (Fig. 7.1) and Feng Guifen (Fig. 7.2) in the accommodationist group, for example, had all worked in the Hanlin Academy. Economic proposals in the early nineteenth century do, however, reveal some differences between court officials and provincial officials. Those serving in Beijing advocated replacing silver with copper coins as the unit for calculating local government’s revenues, as proposed by Bao Shichen (Fig. 7.3); provincial officials objected to this. 3 According to Bao ————— 2. King, Money and Monetary Policy, pp. 129–34. 3. According to Wang Liu’s biography by Zhang Lü ( Jishi wen’gao, 17.2), many court officials had proposed Wang Liu’s opinions, yet some provincial officials disagreed. Hence, up to 1843, when Wang Liu died, it was not certain whether Wang Liu’s ideas would become policy. Bao Shichen (An Wu sizhong, 26.38b) mentioned that Muzhanga,

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Fig. 7.1 Lin Zexu. In the Qing dynasty, the palace kept paintings of high officials in the Ziguang Pavillion (Ziguang ge ♡‫ؗ‬㦏), but there were no portraits of scholars. Ye Yanlan, from the same native place as Kang Youwei, spent about thirty years gathering various materials to make 170 paintings of Qing scholars from Gu Yanwu to Wei Yuan. His grandson supplemented his collection with paintings of late Qing scholars and printed them as Portraits of Qing Dynasty Scholars (Qingdai xuezhe xiangzhuan ᭘фൟ⢧ ㉥֦), which is the source of this and all other portraits of Qing dynasty statecraft scholars in this chapter.

Shichen, private secretaries reluctant to decrease the monetary value of silver lest their incomes (paid in silver) decrease were primarily responsible for formulating the proposals of the provincial officials.4 Given the private secretaries’ possible links with bank shops, their vested interest in rigging the price of silver may have led them to reject this change. Yet Bao himself was a private secretary, and other private sec————— the head of the Grand Council, had strongly advocated Bao’s opinion but provincial officials had strongly opposed it. An imperial edict of 1846 records the provincial response to the proposals of Wu Wenrong, Liu Liangju, and Zhu Zun: “All the governors and governors-general who have responded have said that nothing can be changed. The portion of the payment, which can be paid in copper coin, is also insignificant. It cannot relieve the silver–copper coin crisis” (SL, 26.6.10). 4. Bao, An Wu sizhong, 26.39a.

Classical Studies, Writing Styles, and Statecraft Thought

Fig. 7.2 Feng Guifen

Fig. 7.3

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Bao Shichen

retaries such as Wang Liu and Wu Jiabin also proposed decreasing the monetary value of silver. Their proposals reveal different theoretical underpinnings. Moreover, the censors Liu Liangju and Zhu Zun made proposals similar to Bao Shichen’s rather than Wang Liu’s. Official position, then, cannot explain differences in statecraft thought.

age and regional differences Nor can a generational gap explain adherence to interventionist or accommodationist statecraft thought. Scholar-officials of roughly the same age asserted different ideas. Such differences existed among Ding Lüheng, Bao Shichen, and Liang Zhangju (Fig. 7.4), all of whom were born in the 1770s; among Lin Zexu, He Changling, Xu Lian, Guan Tong, and Wang Liu, born in the 1780s; among Gong Zizhen, Wei Yuan (Fig. 7.5), and Shen Yao, born in the 1790s; and among Feng Guifen, Wu Jiabin, Xu Zi, and Sun Dingchen, born in the first and second decades of the 1800s (see Table 6.1).

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Fig. 7.4 Liang Zhangju

Regional differences, too, fail to correlate with the different approaches within statecraft thought. Some scholars claim that the political-economic proposals of the early nineteenth century reflected the conflict between the Qing monarch and the landlords and big merchants of the heavily taxed southeastern maritime area, who expressed their discontent and protest through politically dissatisfied high officials.5 However, not all scholar-officials who offered opinions on the silver–copper coin crisis came from the southeastern provinces. From available biographical sources, we have Muzhanga and Yinghe from the Manchu banners, Huashana from the Mongol banners, Zhuo Bingtian from Sichuan, Zhu Zhun from Yunnan, Shen Qixian, Zhang Xiuyu and Wang Zhi from Zhili.6 Nor were all of them politically dissatisfied. Although it is true that most of the scholar-officials involved in this ————— 5. Zhao Jing and Yi Menghong, Zhongguo jindai jing ji sixiangshi, p. 24. 6. For Muzhanga, see Hummel, Eminent Chinese, p. 582; for Yinghe, ibid., p. 931; for Huashana, ZB, 2051–1; for, Zhu Zun, QSG, juan 421, leizhuan 208, p. 12157; for Zhang Xiuyu, Li Borong, Wei Yuan shiyou ji, p. 58; for Sheng Qixian, Zhuo Bingtian, and Wang Zhi, Qingmi shuwen, pp. 611, 630, and 637, respectively.

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Fig. 7.5 Wei Yuan

debate came from provinces south of the Yangzi River (the region that provided most of China’s officials in any case), some were interventionist and others were accommodationist.7 In his study of the Evidential Research school of Jiangnan, Benjamin Elman emphasizes the leading role played by Hunan and Guangdong rather than Jiangnan in the rise of the statecraft school in the early nineteenth century.8 The regional distribution of scholar-officials who spoke out on the silver–copper coin crisis, however, reveals that Jiangnan still led in both number and importance. Even within the same region, opinions differed; Wang Liu and Xu Mei directly disagreed with each other, and both came from Jiangnan. Regionalism, therefore, does not explain the theoretical differences in political-economic assertions. ————— 7. From the interior provinces to the maritime provinces of Jiangnan, we have the following configuration of opposing opinions: in Hunan, Sun Dingchen and He Shaoji vs. He Changling, Wei Yuan, Tao Shu, and Li Xingyuan; in Zhejiang, Yang Xiangji and Shen Yao vs. Gong Zizhen, Xu Mei, and Xu Lian; in Jiangsu, Wang Liu, Guan Tong, and Xu Zi vs. Feng Guifen and Ding Lüheng; and in Fujian, Liang Zhangju vs. Lin Zexu. 8. Elman, From Philosophy to Philology, pp. 241–42.

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In early nineteenth-century China, a scholar could send his essays by mail to opponents or supporters in other regions to ask for a response.9 Monetary opinions were exchanged through the mail over long distances, as between Lin Zexu in Yunnan and Li Xingyuan ᙅᕰᨘ (1791– 1851) in Shaanxi, between Wang Liu in Jiangsu and Lin Zexu in Hubei, between Xu Lian in Jiangsu and Xu Mei in Zhejiang, between Wang Liu in Jiangsu and Bao Shichen in Beijing and Anhui, and between Wu Wenrong in Jiangxi and the Board of Revenue officials in Beijing.10 The availability of mail communications and printing, as well as the travels of local officials and private secretaries around the country, enabled Qing scholar-officials to keep in touch with the opinions of people from other regions.11

ethnic interests Although it was mainly Han Chinese who wrote about the silver–copper coin crisis, some evidence suggests that certain scholar-officials involved in the crisis, such as Bao Shichen, Lin Zexu, and others in the southeast were on fairly good terms with Manchu officials. Other than the ethnic connotations of proposals to use both Manchu and Chinese writing on coins, the many personal connections between Han and Manchus also show that ethnic differences were not a factor. Two favorites of the Jiaqing emperor, Zhu Gui ᘮῌ (1731–1807) and Yinghe (Fig. 7.6), who were also opponents of Heshen, were patrons of ————— 9. According to Ying-wan Cheng (Postal Communication, p. 37) as late as the nineteenth century private letters were usually entrusted to friends, acquaintances, special messengers, travelers, chair-bearers, cart-drivers, or muleteers for delivery. In large cities, mail was delivered by regular couriers or private letter agencies (minxin ju ᦾԇ෱). 10. For Lin Zexu’s relationship with Li Xingyuan, see Lin Chongyong, Lin Zexu zhuan, pp. 13, 572–73; for the communication between Xu Lian and Xu Mei, see Xu Lian’s preface to Xu Mei’s Chaobi lun. 11. As an example of scholars’ movements around the country, Fang Dongshu ᔤ ᙝᡫ (1772–1851) was in Jiangxi in 1798 and then moved to Anhui. In 1819, he was in Guangdong. In 1822–23, he was in Nanjing. Then he moved again to Anhui. In 1832, he was in Suzhou. In 1840, he was first in Suzhou and then moved to Guangdong again. Finally, he returned to Tongcheng in Anhui after 40 years of moving around (Hummel, Eminent Chinese, p. 238).

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Fig. 7.6

235

Yinghe

the accommodationists.12 Yinghe, who had been subchancellor of the Grand Secretariat, vice minister of the Board of Rites, minister of the imperial household, and a grand councilor, helped to turn many accommodationist proposals into policies. In 1809, Bao Shichen proposed the maritime transport of tribute grain to the Minister of the Board of Rites Dai Quheng ባ⽍Й (1755–1811), and in 1825 he proposed this idea to Yinghe.13 Yinghe’s stance on mining and tribute grain policies ————— 12. Zhu Gui, the tutor of the Jiaqing emperor when the latter was still a prince and whose promotion had been foiled by Heshen in the late Qianlong period, had the full attention of the Jiaqing emperor (Hummel, Eminent Chinese, pp. 185, 236). It was due to his official reports that forbidden late Ming books were allowed to be published, an act that raised Han morale (ņtani, “HŇ Seishin no jitsugaku shisŇ ni tsuite,” pp. 1, 65). Yinghe, whose father had opposed his marriage with Heshen’s daughter, was also very much liked by the Jiaqing emperor (Hummel, Eminent Chinese, p. 931). Bao was Zhu Gui’s private secretary in 1797 in Anhui, and in 1801 he was invited by Zhu to Beijing (ņtani, “HŇ Seishin no jitsugaku ni tsuite,” p. 63). In 1805, Minister of the Board of Rites Dai Quheng (1755–1811), Grand Secretary Zhu Gui, Vice Minister Enpu (?–1806) (Mongol), and Yinghe were Li Zhaoluo’s examiners for the metropolitan examination, and all thought that Li was very promising ( Jiang Tong, Li Shenqi nianpu, 1: 8). 13. ņtani, “HŇ Seishin no jitsugaku shisŇ ni tsuite,” pp. 63–64.

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was in agreement with that of Bao Shichen, Lin Zexu, Tao Shu, and He Changling. Late in 1826, Yinghe even incurred the Daoguang emperor’s displeasure by requesting permission to open silver mines near Beijing.14 Nevertheless, the Daoguang emperor was supportive of the tribute grain and mining policies of Bao Shichen, Lin Zexu, and others. Even with the conflict between Muzhanga and Lin Zexu in the late Daoguang period, Muzhanga was supportive of the open-franchise salt system and the replacement of silver with copper coin that Bao Shichen advocated.15 Other than the tribute grain issue, which affected the livelihood of the bannermen, no Manchu-Han conflict was apparent in the remedies proposed for the silver–copper coin crisis.

class interests Were the pro-merchant arguments of the accommodationists affected by merchants themselves? It is true that several accommodationists were very close to local merchants. Lin Zexu had petitioned the government to give copper merchants advances with which to buy copper from Japan. His requests to let merchants go abroad, open mines, and cast silver dollars suggest that these were local merchants’ opinions.16 In the Collected Writings on Statecraft of the Reigning Dynasty, compiled by Wei Yuan for He Changling in 1826, natives of the Jiangsu and Zhejiang areas wrote many articles about maritime transportation.17 In addition to essays written by officials and gentry, one was by the merchant Xie Zanren. 18 As a merchant who often navigated between Fujian and ————— 14. Hummel, Eminent Chinese, p. 932. 15. For Lin Zexu’s conflict with Muzhanga, see Lin Chongyong, Lin Zexu zhuan, pp. 267–68; and also Polachek, The Inner Opium War, esp. chaps. 6–7. 16. Lin Zexu, Lin Wenzhonggong zhengshu, yiji, “Liangguang zougao,” 2.17a–21b, notes merchants’ petitions for opening foreign trade; ibid., bing ji, “Yun-Gui zougao,” 9.20–21, notes merchant support for mining; SYD, DG 13.4.6, and SL, 235: 4, DG 13.4.6 (Sun Lanzhi), notes merchants’ opinion on the advantage of issuing silver dollars. 17. Wei Xiumei, Tao Shu zai Jiangnan, pp. 109–10. 18. Yamawaki TeijirŇ (Kinsei Nitchş bŇeki shi no kenkyş, p. 50) mentions that a statecraft compilation includes an essay by a merchant named Wang Lujie, who was monopolizing the salt trade of Anhui and the purchase of Japanese copper, on the change

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Manchuria, Xie paid attention to the tribute grain transportation system when he did business in Tianjin. He pointed out that due to the progress made in navigation technology in the direct route from Jiangsu and Zhejiang along the coast around the Shandong peninsula to Tianjin and Manchuria and to the reliability of true merchants, the maritime route should be considered for transporting tribute grain.19 Although maritime transportation finally won the support of merchants, 20 the evidence does not show that it was the merchants who pushed for such changes. In an essay written in 1826 for He Changling, Wei Yuan said, “When maritime transportation was just started, merchants were quite reserved. They were more willing to transport merchandise than grain. It was not until they discovered that grain could be quickly handed over to the government at the destination spot and that the rewards were handsome that they felt no regrets about carrying rice.” 21 In 1825, when Bao Shichen wrote “Ten Appropriate Procedures” for maritime transportation for the reference of the newly arrived Jiangsu governor, Tao Shu, Bao was still not confident of the merchants’ response. Bao also mentioned that although mines could be opened, in a time of capital shortages, few merchants might invest in an enterprise whose profits were so uncertain.22 In times of a scarcity of money, when it was better to save money than to spend it, merchants did not necessarily welcome commercial activities encouraged by the government. Some modern research has suggested that a conflict between the landlord class and the bank shops emerged during the silver–copper coin crisis, since bank shops rigged the price of the silver they held.23 Scholar-officials often condemned the usurpation of the state’s eco————— from using the native chiefs to general officials in the aboriginal area of Hunan. We do not know how many statecraft authors were of merchant origin. 19. HCJSWB, juan 48, huzheng 23, caoyun, xia.23a–b (Wei Yuan, “Fu Wei Zhifu xun haiyun shu”). See also Wu Baosan et al., Zhongguo jing ji sixiang, pp. 103–8. 20. Bao, An Wu sizhong, 3.24b. 21. Wei Yuan, Guweitang neiwai ji, waiji, 7.34a. Jane Kate Leonard (Controlling from Afar, p. 80) points out that the Daoguang emperor scrutinized the whole grain tribute issue closely. 22. Bao, An Wu sizhong, 26.38a. 23. Ye Shichang, Yapian zhanzheng qianhou de huobi xueshuo, p. 12.

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nomic power by bank shops in the silver–copper coin crisis. As Cheng Yi said, “Having the sufficiency or insufficiency of silver controlled by merchants and cunning powerful families has already been harmful for the state.”24 Officials relied on bank shops for melting the silver collected to pay taxes, and the bank shops were the source of capital for all trade. The government’s leverage lay in its ability to remove licenses or levy direct taxes on the banks, but the banks could always close and force all trade to a standstill.25 The rigging of prices by bank shops affected not only the landlord class but also everyone who needed to pay taxes or borrow capital, creating a general problem for the entire society and not just for a particular class. R. M. Martin’s contemporary observation pointed out that officials and even the government were investing in pawnshops, a kind of bank.26 The accumulation of capital for banks and other commercial activities was often carried out by partnerships (hegu ߾⤔). Using a common property name for these enterprises was a convenient way for investors to hide their involvement, since their own names did not appear, and it also encouraged investment by officials for private profit.27 Banks of various ranks existed in cities of different levels of importance. Landlords of varying levels could become involved with banks of corresponding levels.28 Thus, China’s bank shops and landlords were not separated into two distinct classes since China’s cities and countryside were much more integrated than was the case in many other traditional societies. Many scholar-officials of early nineteenth-century China came from merchant families.29 Although Bao Shichen was from a declining landlord family on his paternal side and a merchant family on his maternal side, 30 he nevertheless complained about the bank shops’ usurpation of economic power. All this suggests that the proposals of these scholars were based on more than mere practical interest. ————— 24. Cheng Yi, Qiuzaiwozhai wencun, 2.19a–b. 25. Martin, China: Political, Commercial, and Social, 2: 106. 26. Ibid. 27. Man-houng Lin, “Interpretive Trends,” p. 907. 28. Skinner, “Marketing and Social Structure in Rural China.” 29. Shen Yao, Luofanlou wenji, fan 24: 11b, 12b, 14b. 30. Zhao Jing and Yi Menghong, Zhongguo jindai jing ji sixiangshi, p. 62.

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Intellectual Inclination ancient-prose styles and statecraft A list of the proponents of the Tongcheng ancient-prose style (Tongcheng guwen ᜍૂߢᓾ) includes the names of many of the scholarofficials who wrote on the silver–copper coin crisis, including Guan Tong, Gong Zizhen, Chen Shan (Fig. 7.7), Yang Xiangji, Wu Ting ࠦ㝪 (1800–1833), Wu Jiabin, and Li Zhaoluo (Fig. 7.8).31 One key goal of writing in the ancient-prose style was to recapture the writing style of ancient China. Ancient prose was easier to understand than the later parallel-prose style, piantiwen 㲩㵧ᓾ, which, in addition to the control of rhythm, used numerous rhetorical figures and difficult allusions. The ancient-prose style movement started in the Tang and Song dynasties and was revived in the Ming and again in the Qing dynasty. This literary movement sought to make ideas communicable to society so as to influence society. Proposing ideas to order Chinese society was also the purpose of statecraft thought. Hence, it was quite logical that scholars concerned with the silver–copper coin crisis were also interested in ancient-prose style. The Qing revival of this literary movement began with Fang Bao ᔤ⫞ (1668–1749), who came from Tongcheng district in Anhui. The prose style he advocated was thus called the Tongcheng ancient-prose style. When Fang Bao first promoted this style, his prose selections were intended as teaching materials for would-be officials.32 In addition to essays of the eight masters of ancient-prose style of the Tang and Song dynasties, the ancient-prose style scholars read the three classic texts on rites (li ⏷).33 Zeng Guofan called these classics “the statecraft ————— 31. Liu Shengmu, Tongcheng wenxue yuanyuankao, 1.7, 9.1. 32. In 1733 Fang compiled an anthology entitled Selections of Ancient-Prose Style Writings to help students understand the classical sages’ teachings and enhance their skills in composing examination essays (Hummel, Eminent Chinese, p. 236). The ancient-prose movement of the Tang and Song periods is related to the substitution of scholarofficials for hereditary aristocrats, as depicted in Bol, “This Culture of Ours.” 33. Hummel, Eminent Chinese, p. 236. Fang Bao supervised the compilation of The Commentaries on the Three Rituals (Sanli yishu ή⏷⡛⃤), including Commentaries on the Zhou Institutions (Zhouli ࡐ⏷), Decorum Ritual (Yili ‫)⏷נ‬, and Record of Rites (Liji ⏷ゕ).

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Fig. 7.7

Chen Shan

Fig. 7.8 Li Zhaoluo

studies of ancient China.”34 Reading the statutes and orders of previous dynasties and writing essays on related issues was one step toward achieving the ambition to order society.35 Wang Liu, as a scholar who was also determined to order society, was familiar with these studies.36 Writing essays related to official documents, however, created particular writing problems. As Shen Yao, a protégé of a Tongcheng essayist, pointed out, in the Jin, Liu Song (421–81), and Northern Wei (386–527) dynasties, essays on court discussions, laws, institutions, food, money, and finance were elegant, concise, and serious. He suggested that official proclamations of his time follow this spirit, referring to the style of Han Yu. They should not be recklessly printed as anthologies, as vulgar people had done, for this would not be helpful for administration in general and was even more harmful for literature.37 At any rate, the ancient-prose style scholars pinpointed writing style as a field for study, since essays on ————— 34. Sun Dingchen, Bentang chulun, preface, 1. 35. Wang Liu, Qianbi chuyan, “Qianchao yi,” 1b. 36. Zhang Lü, Jishi wen’gao, 17.1b. 37. Shen Yao, Luofanlou wenji, fan 8.17a.

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administration would not be effective if the writing style were not refined.38 In contrast with the Han Learning School’s downgrading of the study of writing,39 Fang Bao said that he would dedicate himself to the “small skill” of writing, which had been lost for seven hundred years.40

two branches of ancient-prose style Although Tongcheng scholars shared the basic goal of writing easily understood essays to help order society, two branches of the Tongcheng ancient-prose style school emerged—Tongcheng in Anhui and Yanghu 㨻ᮙ in Jiangsu—named for the native places of the founders of these two branches (see Fig. 7.9). The founders of the Yanghu branch, Zhang Huiyan ရᅢや (1781– 1802) and Yun Jing ᅱᓩ (1757–1817), learned their essay style from Qian Lusi 㞨㷒჋ and Wang Huisheng ᾄᄥ₟. Qian had studied with Liu Dakui ۸வ㶱 (1698–1780), who, in turn, had studied with Fang Bao.41 Yao Nai (Fig. 7.10), the founder of the Tongcheng branch, had studied with Liu Dakui, but his style was closer to Fang Bao’s. Liu, a representative of the Yanghu branch, and Yao, of the Tongcheng branch, differed in their emphasis on Fang Bao’s concept of yifa ⡛ᩝ. For Fang Bao, yifa could be two separate words or used as a combined term. When used as separate words, yi ⡛ is dao 㕿, “the content,” “the truth,” and fa ᩝ is wen ᓾ, “essay-writing skill.” When yifa is used as a combined term, it means “approach to essay writing.”42 For Fang Bao, yi or dao was the philosophy of the Cheng brothers and Zhu Xi, and fa was the writing method espoused by Han Yu and Ouyang Xiu ᤨ㨻ԏ (1007–72).43 Whether yi and fa were combined as a single term or treated as two words depended on the nature of the essay. In ————— 38. Guo Shaoyu, Zhongguo wenxue pipingshi, p. 389. 39. According to Zhou Yutong, Zhongguo jingxueshi jiangyi, pp. 30–32, it was not until the nineteenth century that the terms “Han Learning” (Hanxue ᰹ൟ and “Song Learning” (Songxue ൬ൟ) were created to differentiate Later Han learning, which stressed evidential research, and Song learning, which focused on philosophy. Qing scholars of these two diverse emphases were sometimes categorized under these two terms. 40. Guo Shaoyu, Zhongguo wenxue pipingshi, pp. 355, 395. 41. Ibid., p. 428; Zhang Huiyan, Mingkewen erbian, xia.2a–3a. 42. Guo Shaoyu, Zhongguo wenxue pipingshi, p. 361. 43. Ibid., pp. 360–61.

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Fig. 7.9 (a)

Genealogy of the Main Branch of the Tongcheng School

Fig. 7.9 (b)

Genealogy of the Yanghu Branch

Classical Studies, Writing Styles, and Statecraft Thought

Fig. 7.9 (c)

Fig. 7.9

243

Genealogy of the New Text School

Academic Genealogy of Scholars

the writing of an argument, for example, the terms would be separated; in a narrative, they would be combined.44 At the same time, Fang Bao pointed out that the writing style would change according to the content: “The change of fa is due to the arbitrary requirement of yi.”45 Liu Dakui emphasized writing methods ( fa), spirit (shenqi ⎻᧌), rhythm ( yinjie 㭊╡), and rhetoric (ziju െߣ).46 Because classical Chinese essays have no punctuation or paragraph divisions, the attention paid to rhythm and rhetoric help convey the author’s line of reasoning (mailuo ⥧⚊) and his spirit.47 In contrast, Yao Nai emphasized content ( yi), not paying much attention to rhythm and rhetoric.48 In the aspect of writing method ( fa), the Tongcheng branch focused more on the structure of chapters (zhangfa Ⓞᩝ) and sections ( pianfa ╥ᩝ).49 In ————— 44. Ibid., p. 362. 45. Cited from Anhui renmin chubanshe, Tongchengpai yanjiu lunwenji, p. 98. 46. Guo Shaoyu, Zhongguo wenxue pipingshi, p. 366. 47. Ibid., pp. 367, 374. 48. Ibid., p. 370. 49. Liang Kun, Tongcheng wenpai lun, pp. 5–9.

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Fig. 7.10

Yao Nai

learning the writing method, the Tongcheng branch stressed the importance of recitation.50 It has been said that the Tongcheng essayists were shadows of their previous masters, such as Han Yu or Ouyang Xiu, rather than creative.51 The Yanghu branch’s combination of parallel-prose style, Evidential Research, and various ancient philosophies with ancient-prose style contrasted with the Tongcheng branch’s concentration on ancient-prose style and Song Learning. Although Yao Nai tried to combine Evidential Research with ancient-prose style writing, neither Han Learning scholars nor his own students thought that he did so with much success.52 Yao was so poor in Han Learning that its master, Dai Zhen ባ㪦 (1724–77), refused to accept him as a disciple.53 Before Zhang Huiyan and Yun Jing learned ancient-prose style, Zhang had been adept at Evidential Research and parallel-prose style, and Yun had done extensive reading of the works of various ancient philosophers. ————— 50. Guo Shaoyu, Zhongguo wenxue pipingshi, p. 392. 51. Zhang Shunhui, Qingren wenji bielu, p. 333. 52. Guo Shaoyu, Zhongguo wenxue pipingshi, pp. 385–86. 53. Hummel, Eminent Chinese, p. 900.

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The greater stress on parallel-prose style was also seen in the work of another Yanghu essayist, Li Zhaoluo, who learned ancient-prose style from Zhang Huiyan and Yun Jing. Li compiled A Selection of Parallel-Prose Style Works (Pianti wenchao 㲩㵧ᓾ㛧) to compete with Yao Nai’s Categorized Anthology of Prose in the Ancient Style. Li Zhaoluo was dissatisfied with the current ancient-prose style essayists, whom he said followed only Tang and Song writers and dared not follow those of the Former and Latter Han dynasties.54 The Yanghu branch’s greater interest in Evidential Research and the study of ancient philosophies linked it to the New Text study of the classics. Yanghu was the capital of Changzhou ཚ༙ prefecture, where the Changzhou New Text school had emerged. Zhuang Cunyu ⭪േ⨰ (1719–88) laid this school’s foundation by stressing the importance of the Gongyang Commentary.55 Zhuang’s grandson and disciple Liu Fenglu ۸㕟⏕ (1776–1829) was the first scholar to allege the misuse of the Zuo Commentary by Liu Xin ۸᤟ (53–23 bce). Liu Fenglu compared the Zuo and Guliang ៸☇ commentaries with the Gongyang, coming down strongly in favor of the Gongyang.56 Gong Zizhen studied the Gongyang Commentary with Liu Fenglu.57 In 1838, Gong wrote the Spring and Autumn Annals as a Reference for Judicial Judgments (Chunqiu jueshi bi ᕵ␍ᨏЂᦍ) to develop Liu Fenglu’s ideas.58 Wei Yuan also learned the Gongyang Commentary from Liu Fenglu. His Ancient Subtleties of the Book of Odes (Shiguwei ヌߢၸ) and Ancient Subtleties of the Book of Documents (Shuguwei ᘆߢၸ) pointed out the forgeries of some Old Text commentaries on the Book of Odes and Book of Documents.59 Both Wei Yuan and Gong Zizhen learned the Yanghu essay style from Li Zhaoluo and Zhang Huiyan.60 The New Text School and the Yanghu branch were hence closely related. ————— 54. Cited from Guo Shaoyu, Zhongguo wenxue pipingshi, p. 399. 55. Hummel, Eminent Chinese, p. 207; see also Elman, Classicism, Politics, and Kinship, p. xxxii. 56. Hummel, Eminent Chinese, pp. 518–20. 57. Ibid., p. 432. 58. Gong, Gong Zizhen quanji, 1: 621. 59. Zhou, Jing jinguwen xue, p. 32. 60. ņtani, “HŇ Seishin no jitsugaku shisŇ ni tsuite,” p. 38.

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Both the New and the Old Text schools studied classical works, particularly Confucian works from before the Qin dynasty. The first emperor of the Qin had ordered these works burned, but some fragments written in the style of Chinese characters used before the Qin remained; these came to be called the Old Text classics. Other texts, recalled from memory and written down by Confucians in the forms of Chinese characters used in the Han dynasty became the New Text classics. Among the Confucian works, The Spring and Autumn Annals (hereafter The Annals) was important as a chronicle of the Lu kingdom (722– 481 bce), the home of Confucius. Since the entries in The Annals are short or fragmentary, three commentaries were written to elaborate its meaning. The Gongyang Commentary was written in the New Text style by a legendary author named Gongyang Gao ‫ذ‬⡃㵪 and expounded the implications of The Annals in a somewhat mystical fashion. The Zuo Commentary, which supplied more historical facts, was said to have been written in the Old Text style by Zuo Qiuming ༟λᕥ (519–447 bce), a contemporary of Confucius; in the New Text school’s view, this text was fabricated in the late Former Han period to prepare for Wang Mang’s ᾄ⮗ (45 bce–23 ce) usurpation of the Han regime. The Guliang Commentary was said by some to have been written in the Old Text style to supplement the Zuo Commentary, and by others to be in the New Text style to be in the same vein as the Gongyang Commentary. However, the Guliang Commentary was generally considered less important than the other commentaries in substantiating either historical facts or bringing out the implications of The Annals. In addition to The Annals, there are five other Confucian classics— for poetry, documents, rites, music, and divination. Some parts of them are Old Text versions; other parts are the New Text versions. The contents and particularly the interpretations of these texts differentiate the New Text and the Old Text schools. 61 According to the New Text school, Confucius wrote the six classics himself,62 whereas the Old Text ————— 61. Zhu Weizheng, Zhou Yutong jingxueshi lunzhu xuanji, pp. 1, 164, 206, 219, 220, 240, 242, 250, 251, 254, 258–70, 416, 499. 62. In Chinese, “six classics” is liu jing ‫⚰ر‬. Jing has meant Confucian works since the Warring States era. It was not until the Han dynasty that the jing became officially recognized works for scholars to study. See: Zhou Yutong, Zhongguo jingxueshi jiangyi, p. 14.

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school held that Confucius only edited existing historical sources and compiled them into the six books. Hence, in the New Text view, Confucius was an “uncrowned king” (suwang ♚ᾄ) whose philosophy exerted great influence on current institutions; in the Old Text view, Confucius was merely a historian and teacher who compiled books without affecting the polity. Moreover, the New Text school worshipped heavenly gods, and the Old Text school ancestors.63 In addition, the New Text scholars believed that the emperor had to be responsible to Heaven. 64 In the New Text interpretation, a gentleman ( junzi ࠏീ) emphasized self-expression.65 The New Text school also thought that change was a natural historical phenomenon.66 Scholars have characterized the Old Text and New Text schools in the late Qing as follows: the Old Text tended to stress ethnic nationalism, revolution, human will, and the priority of superstructure; the New Text, however, tended to emphasize cosmopolitanism, evolution, liberalism, and the priority of economic development.67 New Text scholarship was dominant in the Former Han period but declined after Zheng Xuan’s integration of New Text scholarship into a basically Old Text synthesis.68 Some scholars have asserted that the terms New Text ( jinwen вᓾ) and Old Text (guwen ߢᓾ) were not coined in early nineteenth-century China. A comment by Jiang Xiangnan on the essays of Wei Yuan, Gong Zizhen, and Liu Fenglu reveals that these terms were in fact already in use at this time. Jiang Xiangnan said that among his contemporaries, he respected Liu Fenglu, Gong Zizhen, and Wei Yuan most, because they were “good at the pedagogic principles of New Text studies of the classics” and were “familiar with the institutions of this dynasty.”69 ————— 63. Zhou, Jing jinguwen xue, pp. 11, 43. 64. Wakeman, History and Will, p. 107, citing Dull, “History and the Old Text–New Text Controversy in the Han.” 65. Wakeman, History and Will, p. 111. 66. Wilhelm, “Chinese Confucianism on the Eve of the Great Encounter,” p. 308. 67. Shimada, “ShŇ Heirin ni tsuite Chşgoku dentŇ gakujutsu to kakumei.” 68. For the dominance of Old Text over New Text approaches in the sixteen centuries since this synthesis, see Zhou Yutong, Zhongguo jingxueshi jiangyi, pp. 28–30. 69. Jiang Xiangnan, Qijinglou wenchao, “Yu Tian Shuzi lun guwen tishan shu,” cited by Li Borong, Wei Yuan shiyou ji, p. 124. The original Chinese reads:‫࠰⃕ظ‬κ⢫Ὥၩፔታ ⢧䐶ᘑ۸⏷㗵₯₧Ɍ䂱⏷㗵൶྾Ɍ㶿‫߯ڿ‬䀚ᭊɍήࠏ☑〦᰹вᓾϢඍᩝ䐶⢫ߐ 㕗ᘪᘟϢ፰ᓋ. Wei Yuan repeatedly used New Text and Old Text in his preface to

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Tongcheng school scholars, with few exceptions, still clung to Old Text studies.70 Jiang Xiangnan and Shen Yao reveal the rivalry between the Yanghu and Tongcheng groups. Jiang deemed that Liu Fenglu, Gong Zizhen, and Wei Yuan were “able to manifest the true ancient-prose style (zhenguwen ∖ߢᓾ) to society.” Jiang further said that the Tongcheng adherents’ writings did not display true ancient-prose style.71 Jiang’s disciple remarked that Jiang was determined to correct the bad effects of the “false eight masters” (wei bajia ո‫د‬ඍ) ushered in by Gui Youguang ᤿ ᘑ‫( ؗ‬1506–71) and Fang Bao.72 Conversely, Shen Yao, in a letter to a friend living in the countryside, criticized Gong Zizhen’s essays harshly: Gong’s ancient-prose style ranks the highest in the capital. Xianting 㦆Н [the addressee of the letter] has not made a name for himself and is hence unknown by people. It has occurred to me that Gong Zizhen is, in a way, drawing ghosts, and people are frightened when they see them, whereas Xianting has been drawing men, and people do not see anything peculiar in them. There are few people whose ancient-prose style is worth mentioning. No one can compare with Sun Xie ൕṈ [another Tongcheng essayist]. Even Zhang Lü ရฐ [1792–1851] cannot compare with him. . . . Although our native region cannot compete with the big capital in gaining fame through unusual behavior, our scholarship and essays, I should think, are much superior to what we have seen in the capital.73

The rivalry between these two groups intensified from the time of Yao Nai to the time of Zeng Guofan. Yao Nai’s Categorized Anthology of ————— Ancient Subtleties of the Book of Documents; see Wei Yuan, Guweitang neiwai ji, waiji, 1.51a. The original Chinese is ᘆߢၸҗᵱ⢫Ҟϱ? ቪц↥ᕥ〦᰹ෙᘆвߢᓾϢၸやவ ㄅ䐶 ⢫㦽ᙝ᰹㲃㘲ߢᓾϢ㢔⑿᷀དྷ֦ɍ 70. See Zhou, Jing jinguwen xue, pp. 11, 32, for a list of all scholars engaged in New Text studies in nineteenth-century China. Among them, only Shao Yichen 㗌ስ㔂 (1810–61) was affiliated with the Tongcheng school. Shao’s New Text study was a criticism of Liu Xin’s forgery of an Old Text version of the Book of Rites. Zhou Yutong added that Shao was one of the scholars who simply pointed out the differences between the New and Old Text versions and did not purely advocate New Text. For Shao’s affiliation with Tongcheng ancient-prose style, see ZG, no. 4328, Wu Minshu. 71. Cited from Guo Shaoyu, Zhongguo wenxue pipingshi, p. 401. 72. Jiang Xiangnan, Qijinglou wenchao, pp. 12b, 39a–42b. 73. Shen Yao, Luofanlou wenji, fan 10.5b. Sun Xie also wrote official reports for Shen Yao, which were collected in Luofanlou wenji.

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Prose in the Ancient Style contained sixteen essays by Liu Dakui but only fifteen by Su Shi ⵪㑱 (1019–83).74 Both Zeng Guofan and Wu Minshu ࠦᓑᡫ complained about Yao’s favoritism toward Liu.75 Zeng Guofan, who claimed to combine the parallel prose with ancient-style writing, was closer to Yao Nai. Zeng said, “It is due to Mr. Yao’s inspiration that I have a rough knowledge of essay writing.” Zeng even ranked Yao Nai with the Duke of Zhou and Confucius.76 When Jiang Xiangnan’s one disciple discussed how the Tongcheng ancient-prose essayists failed in their attempts to convey the truth (zaidao 㑻㕿), he pointed out the philosophical difference between these two groups: “The truth that my mentor [ Jiang Xiangnan] talked about referred to human feelings, historical contingencies, and the change of Heaven and Earth; not nature (xing დ) or external necessity (ming ࡠ) that the scholars of the study of principle (lixue ῟ൟ) talked about.”77 The adherence to the Old Text and New Text philosophical schools reflected the philosophical differences between the Tongcheng and Yanghu prose schools.

school affiliation and economic opinions When we trace the literary and classics school backgrounds of the scholar-officials who expressed opinions on the silver–copper coin crisis, we can see the relevance of some scholars’ intellectual inclinations to the social theories implied in their economic proposals (see Table 6.1 and Fig. 7.9). Many interventionists were related to the Tongcheng branch of ancient-prose style writing or to Old Text Confucianism. Fang Dongshu ᔤᙝᡫ (1772–1851), who encouraged the acceptance of poverty and spoke out against the pursuit of economic interest; Guan Tong, who disparaged trade and private enterprise; and Mei Zengliang ᜱᘉО (1786–1856) were the three main disciples of Yao Nai.78 Sun ————— 74. Hummel, Eminent Chinese, p. 900; Anhui renmin chubanshe, Tongchengpai yanjiu lunwenji, p. 85. 75. Anhui renmin chubanshe, Tongchengpai yanjiu lunwenji, p. 85. 76. Guo Shaoyu, Zhongguo wenxue pipingshi, p. 441. 77. Jiang Xiangnan, Qijinglou wenchao, preface, 13a. 78. Zhang Shunhui, Qingren wenji bielu, pp. 379, 388.

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suance of big coins, was Yao Zhuang’s హᡆ disciple.89 Yao Zhuang, a native of Jiangsu and student of Yao Nai, had pursued statecraft and made a great effort in his later years to propagate Zhu Xi and his disciples’ books.90 Xie Jieshu, who served as academic commissioner in Hunan in 1816, had Yao Zhuang’s biography placed among those of a group of officials who were outstanding in literature (cichen 㓿⨓), specifically the ancient-prose style.91 Xie ranked second in the metropolitan degree examinations of 1808; his examination essays were mostly imitations of previous work, although some were superior to their models.92 Xie advocated a strict ban upon migration. Cheng Yi, who supported the minting of big coins around 1838, was from the same region as Zeng Guofan and received Zeng’s help in publishing his book.93 It is also worthy of notice that Fang Bao, the founder of the Tongcheng school, had proposed a prohibition of liquor in the early Qianlong period in order to protect grain supplies.94 In contrast, the accommodationists were related more to the Yanghu branch of ancient-prose writing and New Text Confucianism (Table 6.1 and Fig. 7.9). Ding Lüheng, who first advocated the use of gold and silver for coins, was a native of Changzhou. He had studied the Gongyang Commentary with Zhuang Shuzu ⭪㔳⎵ (1750–1816), a son and disciple of Zhuang Cunyu. Ding also wrote a book entitled The Gongyang Interpretation of the Spring and Autumn Annals and was a close friend of Zhang Huiyan, Yun Jing, and Li Zhaoluo. Li studied the Gongyang Commentary with Liu Fenglu through the introduction of Ding Lüheng. Ding had learned statecraft from Bao Shichen through the introduction of Li Zhaoluo.95 Li Zhaoluo and Liu Fenglu were known as “the two Shens of Changzhou” because they both used the literary name Shen ————— 89. Liu Shengmu, Tongcheng wenxue zhuanshukao, p. 3. 90. ZG, no. 4424, Yao Zhuang. 91. Li Huan, Guochao qixian leizheng chubian, juan 132, cichen 28, p. 48; Qingshi liezhuan, “Wenyuan zhuan,” 73: 22. 92. Li Huan, Guochao qixian leizheng chubian, juan 132, cichen 28, p. 48. 93. Cheng Yi, Qiuzaiwozhai wencun, preface. 94. Dunstan, Conflicting Counsels to Confuse the Age, pp. 203–5. 95. Xu Shichang, Qingru xuean xiaozhuan, 8.6–132; Eguchi, “Shindai keiseika no gin ryştsş shi kenkyş ni tsuite,” p. 33.

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₯.96 The maternal grandfather of Gong Zizhen, Duan Yucai ᥲᾂ⾕ (1735–1815), was both a friend and a teacher of Ding.97 The New Text scholar Gong Zizhen, as we have seen, proposed a rationale for private property similar to John Locke’s and was in most cases opposed to political interference in the economic order. Wei Yuan, who advocated government-cast silver dollars, convertible paper notes, foreign trade as a means to learn advanced foreign technology, civil management of mining, the open-franchise salt system, and maritime transportation of tribute grain, had studied the Gongyang Commentary and the Yanghu essay style along with Gong Zizhen. 98 Bao Shichen, who supported the maritime transport of tribute grain by private merchants, the open-franchise salt system, and convertible paper notes, was a close friend of Li Zhaoluo. It was in Li’s library of fifty thousand volumes that Bao wrote his own books.99 Bao’s daughter was married to the nephew of the Yanghu school founder, Zhang Huiyan.100 Both Bao Shichen and Wei Yuan became friends with Lin Zexu while Lin was judicial commissioner and governor of Jiangsu from 1823 to 1836.101 In addition to Tao Shu, Lin Zexu was also in agreement with Bao. Lin advocated and actually minted silver dollars and promoted the maritime transport of tribute grain. He also encouraged Chinese merchants to go abroad to engage in foreign trade and realized that market forces could help to spot good sites in silver mining. According to his biographer, he also became friends with Yao Zhuang and Zhang Jiliang while he was in Hunan in 1837 and 1838.102 Yao and Zhang belonged to the Tongcheng group; Bao and Wei had closer relations with the Changzhou or Yanghu group. Lin’s longer, closer affiliation with the Changzhou group than with the Tongcheng group is in keeping with the greater similarity between his economic ideas and those of the Changzhou group. ————— 96. Hummel, Eminent Chinese, p. 518. 97. Zhi, Qingdai puxue dashi liezhuan, p. 336. 98. ņtani, “HŇ Seishin no jitsugaku shisŇ ni tsuite,” citing the remarks of Liang Qichao. 99. Hummel, Eminent Chinese, p. 610, Eguchi, “HŇ Seishin no shŇhŇron ni kansuru ichi kŇsatsu,” p. 2. 100. Hu Yunyu, Bao Shenbo xiansheng nianpu, 34a. 101. Lin Chongyong, Lin Zexu zhuan, p. 632. 102. Ibid., p. 180.

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He Changling, who advocated interregional trade, the use of precious metals as money, paper notes issued by bank shops, maritime transport of tribute grain by private merchants, and opening new mines, sponsored Wei Yuan’s compilation of The Collected Writings on Statecraft of the Reigning Dynasty in 1826.103 He’s family was so close to Wei that He’s father-in-law in Hunan even wrote to Wei in Jiangsu to ask his advice about investments.104 A confidant of He Changling,105 Wang Qingyun, vice-minister of the Board of Revenue, was well aware of the external causes of the monetary problem and opposed inflationary big coin proposals. Feng Guifen, who also opposed the use of inflationary big coins and paper notes as currency, was a private secretary of Lin Zexu and studied with Li Zhaoluo.106 Chen Shan, the first scholar to criticize Wang Liu, was a student of Zhang Huiyan, the Yanghu master.107 Chen Shan and the brothers Xu Mei and Xu Lian (Fig. 7.11), who harshly criticized Wang Liu, were from the same native place and had studied epigraphy and etymology together.108 The Xu brothers were students of Ruan Yuan 㧼ؑ (1764– 1849) (Fig. 7.12), a metropolitan degree holder of the Qianlong reign who served as governor-general of both Guangdong-Guangxi and Yunnan-Guizhou.109 Ruan Yuan, who sponsored many classical studies, studied under Li Daonan ᙅ㕿‫( ނ‬1712–87), who was in turn an examination disciple of Zhuang Cunyu. Ruan collected many New Text works in his Qing Exegesis of the Classics (Huang Qing jingjie ↭᭘⚰ね), compiled in 1829.110 It was Liu Fenglu who suggested that Ruan Yuan print the Commentaries on the Thirteen Classics (Shisanjing zhushu ‫ݱ‬ή⚰ᩬ ⃤) and the Qing Exegesis of the Classics, two great collectanea of classical ————— 103. Xu Shichang, Qingru xuean xiaozhuan, 14.006.796. 104. Zhao Jing and Yi Menghong, Zhongguo jindai jing ji sixiang ziliao xuanji, pp. 107–8. 105. Hummel, Eminent Chinese, p. 813. 106. Eguchi, “Shindai keiseika no gin ryştsş shi kenkyş ni tsuite,” pp. 45–46. 107. Liu Shengmu, Tongcheng wenxue zhuanshukao, 3b. 108. Xu Lian, Guyunge yizhu, 4b. 109. Xu Lian (ibid., 3a, 4b) and Fashishan (Qingmi shuwen, pp. 623–24) note that both Xu Mei and Xu Lian attained the metropolitan degree when Ruan Yuan was chief examiner in 1833. 110. Elman, “Qing Dynasty Schools of Scholarship,” p. 14.

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Fig. 7.11 Xu Lian

Fig. 7.12

Ruan Yuan

studies.111 Xu Mei’s work was included in the 1898 edition of collected works of statecraft essays compiled by Sheng Kang ⇥࿀ (1814–1902), a native of Changzhou, 112 perhaps because of Xu’s affiliation with the Changzhou group. There were also scholars who fell between these two groups, as did their political-economic ideologies. Tang Peng ᮭ㼉 (1801–44), for example, objected to the usurpation of power by merchants whose consumption surpassed that of officials. He argued for civil management in enterprise, state management of money, and adoption of the openfranchise salt system.113 Tang was a close friend of Mei Zengliang, who wrote his epitaph;114 Yao Ying wrote his biography.115 Tang Peng, Wei ————— 111. Hummel, Eminent Chinese, p. 519. 112. Sheng Kang, who got his metropolitan degree in 1844 and had been a circuit intendant and Li Hongzhang’s private secretary, was Sheng Xuanhuai’s father. 113. Scholars of China sometimes translate this system as “ticket salt system” since it sold salt tickets for small units of purchase to invite lower-income buyers. 114. Tang Peng, Fuqiu zi, Tang’s epitaph. 115. Ibid., 1a–3b.

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Yuan, Gong Zizhen, and Zhang Jiliang had been famous young scholarofficials in Beijing who organized the Xuannan ൾ‫ ނ‬Poetry Club to compose poems, drink wine, and discuss current state affairs.116 Tang Peng had close relations with Li Xingyuan, who objected to the use of big coins. Li’s anthology of poems contained several poems for Tang and his parents.117 A shared interest in statecraft and ancient-prose style brought many of these scholar-officials together from time to time. Among Yao Nai’s twenty famous direct or indirect students, eleven had essays collected in the revenue section of the various sequels to the Collected Writings on Statecraft of the Reigning Dynasty compiled by Wei Yuan.118 Many members from the two opposing groups joined the Xuannan Poetry Club in Beijing, including Cheng Enzhe ␵ᄄᲠ (1785–1837), Tao Shu, Lin Zexu, Liang Zhangju, Huang Juezi, Gong Zizhen, Wei Yuan, Yao Ying, Zhang Jiliang, Tang Peng, Chen Yongguang (Fig. 7.13), He Shaoji, Wu Jiabin, Mei Zengliang, and Xie Jieshu.119 Correspondence between the members of the two groups was frequent: Wu Jiabin wrote to Lin Zexu about restrictions on trade, and Shen Yao, Wang Liu’s close friend who

————— 116. Ibid.; Lin Chongyong, Lin Zexu zhuan, p. 87. 117. Li Xingyuan, Li Wengonggong yiji, “Shiji,” mulu. 118. According to Eguchi (“Shindai keiseika no gin ryştsş shi kenkyş ni tsuite,” p. 49), the work included essays by Guan Tong, Mei Zengliang, Fang Dongshu, Yao Ying, Wu Dexuan ࠦၾᔰ, Chen Yongguang 㨴₤‫( ؗ‬1768–1835), Wu Jiabin, Lü Huang ࠳⁃ (1778–1838), Long Qirui 䂭ொ‚ (1814–58), Shao Yichen, Yang Yizhen ួးᾶ (dates unknown), and Sun Dingchen. 119. For the members of Xuannan Poetry Club, see ņtani, “HŇ Seishin no jitsugaku shisŇ ni tsuite,” p. 39; and Lin Chongyong, Lin Zexu zhuan, pp. 88–93. For Xie Jieshu’s participation in the Xuannan Poetry Club, see Duan, Tao Shu yu Jia-Dao jingshi sixiang yanjiu, p. 222, which lists members of both the Xiaohan and the Xuannan poetry clubs. Tang Peng (Fuqiu zi, 1a–3b) said that when Yao Ying was at the capital, he became friends with Wei Yuan, Zhang Jiliang, Gong Zizhen, Huang Juezi, Xu Baoshan, and Tang Peng. Zhang Jiliang (Zhang Hengfu quanji, 2.35–36, 4.23) recorded that when Ding Lüheng went to the capital in his old age, Ding and the much younger Zhang became close. Zhang wrote both Ding’s epitaph for and a birthday celebration essay for Ding’s ninety-year-old mother. Tang Peng (Fuqiu zi, 1a–3b) said that Zhang was also a member of the Xiaohan Poetry Club. Chen Yongguang was a disciple of Yao Nai and the publisher of Yao’s letters (Hummel, Eminent Chinese, p. 901).

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Fig. 7.13

Chen Yongguang

had criticized Gong’s essay writing so much, wrote to Gong Zizhen to discuss military history.120 Despite these interactions among members of the opposing camps, the two groups were clearly divided at times. For instance, Lu Fuen 㨹䀷ᄄ (dates unknown), a native of Changzhou, noted that when Wang Liu’s Preliminary Remarks on Copper Coins was printed, Jiangsu Governor Lin Zexu expressed a desire to visit Wang. However, Lin’s subordinates Financial Commissioner Chen Luan 㨴㢓 (1786–1839) and Judicial Commissioner Yiliang ჎⪀(1791–1867) dissuaded him from doing so.121 When Lin Zexu was the governor-general of Guangdong————— 120. Shen Yao (Luofanlou wenji, fan 7.21a, 10.1a) recorded that Shen often corresponded with Wang Liu, Wang wrote a biography of Shen’s teacher (ibid., 10.14a), and Shen and Wang passed the imperial examination under the same examiner (ibid., preface). Wang Liu published a book for Shen Yao, and Shen Yao also often asked Wang Liu to find books for him. For Shen’s discussion of military history with Gong, see ibid., fan 4.19a. 121. HCJSWXB, juan 60, huzheng 32, qianbi, xia.15a–b (Lu Fuen, “Qianbi yi 4”). The names of Yiliang and Chen Luan were obtained from Wei Xiumei, Qing ji zhiguan nianbiao, pp. 912, 947.

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Guangxi, he wanted to employ Wang as a private secretary. Vice Minister Shen Weiqiao, Wang Liu’s patron and Zhang Jiliang’s teacher, forwarded this message to Wang by mail, and although Wang was eager to accept, he never was offered the position.122 In another instance, it has been noted that Xie Jieshu published a book in 1844 opposing Gong Zizhen’s opinions, even though Gong was one of the few friends that Xie had made while at the Hanlin Academy in Beijing.123 Association and division within the circles of statecraft scholarofficials are most vividly seen in the correspondence related to the controversy prompted by Wang Liu’s book. Wang’s book invited harsh criticism not only from Bao Shichen but also Chen Shan, Wei Yuan, Xu Mei, and Xu Lian. Hence, the groups that engaged in the economic debate corresponded to a great extent with the groups who selected different literary or philosophical schools. However, not all scholars expressing economic views in the early nineteenth century had strong affiliations with the literary or philosophical schools. For example, it is not yet known whether Miao Zi and many other scholars were affiliated with a school. It is known, however, that some of the opinions of those with no clear school affiliations were near to those clearly linked to a school. Miao Zi’s proposals, for example, were similar to those of Zhu Zun and Liu Liangju and reflected a great deal of Bao Shichen’s thought. Although there was variation within each group, there was a consistency of spirit that distinguished one group from the other. For example, even though He Changling argued for the use of white copper, Wei Yuan for silver, and Ding Lüheng for gold, silver, and copper, they shared a similar emphasis on the use of precious metals as money.

Conclusion In contrast with previous scholarship attributing the rise of the statecraft school to the rise of New Text Confucianism in this period, James Polachek has argued that there was no New Text statecraft school at ————— 122. Min, Beizhuan jibu, 17.20. 123. Whitbeck, “The Historical Vision of Gong Zizhen,” p. 154; Li Huan, Guochao qixian leizheng chubian, juan 132, cichen 28, p. 48; Qingshi liezhuan, “Wenyuan zhuan,” 73: 22.

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all. Members of the Jiangsu “statecraft party” in the early nineteenth century, in his view, were not members of a scholarly movement, but men who “operated mainly within a framework of bureaucratic and political relationships—relationships, that is to say, which were structured through hierarchical ties contracted in office, and which functioned, at least in part, to promote the personal and career interests of these literati as a discrete group.”124 Many of the statecraft scholars were members of the Xuannan Poetry Club described by Polachek. Among the members in this poetry club, different statecraft ideas were proposed. Gong Zizhen, for example, endorsed a migration policy, but Xie Jieshu completely opposed migration. Both advocated the reinforcement of lineages to deal with vagrants. Gong urged the least intervention by the government in lineage affairs, whereas Xie sought close government surveillance over the lineages. Liang Zhangju disparaged luxury; Wei Yuan said the consumption by the well-to-do could increase employment for the poor. Liang Zhangju and He Shaoji advanced a big-coin proposal similar to Wang Liu’s, which Wei Yuan harshly criticized. Wei Yuan, Tao Shu, and Lin Zexu proposed a greater role for merchants in economic affairs; Wu Jiabin and Mei Zengliang’s close friends Xu Zi and Sun Dingchen called for government restriction of commercial activities. Statecraft scholars’ different political-economic stances also displayed no particular group interest defined by age, class, ethnicity, or official position. By contrast, New Text scholars or scholars from the Yanghu branch of ancient-prose style tended to propose accommodationist political-economic ideas, and the Old Text scholars or scholars of the Tongcheng branch of ancient-prose style tended to propose interventionist political-economic ideas. This correlation could be further explained by the common core concepts inherent in the two groups’ various academic interests. Since both the Yanghu and Tongcheng schools followed Fang Bao’s concept of yifa, in which fa could change according to changes in yi, ————— 124. Elman, From Philosophy to Philology, p. 237, citing Polachek’s Ph.D. dissertation (University of California, 1977); this passage does not appear in Polachek, The Inner Opium War.

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both branches accepted the possibility of change. But since the Tongcheng school’s fa focused on the structure of chapters and sections and the Yanghu school’s fa stressed rhythm and rhetoric, the Tongcheng school was more inclined to structural change, and the Yanghu school favored technical change. This contrast is similar to that between the Old Text school and the New Text school in terms of revolution and development. Development is based on technical improvement, whereas in the process of revolution the fundamental change of society through education was crucial. The Old Text school’s emphasis on superstructure was also akin to the Tongcheng school’s stress on yi, the Sages’ “truth” or “content,” as the basis for change. Wang Liu’s enthusiasm for printing Zhu Xi’s teachings on paper notes could be understood within this academic background. The contrast between Wang Liu’s holistic change of the monetary system and the Wei Yuan group’s gradual change by adding some precious metal coins to the extant monetary system also show the difference in the suggested degree of change. When Ding Lüheng, Wei Yuan, Lin Zexu, and He Changling advocated the use of precious metals or the convertibility of paper notes to limit the endless absorption of people’s wealth by the monarch, they called upon the authority of the Sages, Heaven, and even the five elements. This matched the New Text school’s idea that checks should be imposed on the power of secular rulers by either an “uncrowned king” such as Confucius or by Heaven itself. The notion of the existence of market forces and their ability to check political force, asserted by Lin Zexu, Xu Mei, Wei Yuan, and Bao Shichen, was also in line with the New Text realization of some force that existed beyond secular political power. The New Text school’s emphasis on the Confucian gentleman’s independence was compatible with the accommodationists’ emphasis on individual initiative. The Old Text school’s stress on loyalty was compatible with the interventionist view of the state’s omnipotent power, as well as with the Tongcheng school’s emphasis on the imitation of earlier masters. The primacy given to the individual creation of words and phrases in the Yanghu school was in accord with the New Text school’s emphasis on individual initiative and with the accommodationists’ advocacy of private enterprise, free trade, and free migration.

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Indeed, the scholarly basis for differentiating groups within the statecraft movement suggests that ideas themselves were key to group formation. Meanwhile, ideas were interpreting social realities as the following chapter will disclose.

chapter 8 The Temporary Victory of the Accommodationist Stance

Many scholars have claimed that China had a continuous tradition of commercially repressive and statist political-economic ideas. Developments in the Tongzhi Restoration period (1862–74) have been deemed representative of the Chinese tradition.1 An essay dealing with late Qing scholars influenced by Western ideas who favored commerce generalizes even more broadly: “It is an unarguable fact as well as common knowledge that for two thousand years, a tradition prevailed in China to exalt agriculture and depreciate trade and commerce. Developed under the Han (206 bce–25 ce), this tradition continued well into the nineteenth century.”2 A more recent academic trend stresses that, since the Middle Ages, China increasingly valued the role of merchants and commercial freedom, a trend that culminated in the early nineteenth century. 3 The question of whether this stress on commerce was reinforced continuously since the eighteenth century has also drawn scholars’ attention.4 This chapter finds both continuity and discontinuity in the development of state-commerce ideologies during the transition from the eigh————— 1. M. C. Wright, The Last Stand of Chinese Conservatism, pp. 148–49. For her, “The principle ‘exalt agriculture’ and its corollary ‘disparage commerce’ had been emphatically reiterated in the Classics and Histories, and agriculture continued to be regarded as not merely the only feasible basis for the Chinese economy, but the only desirable basis.” 2. Wang Ermin, “Shangzhan guannian yu zhongshang sixiang,” p. 235. 3. Yu Yingshi, Zhongguo jinshi zong jiao lunli yu shangren jingshen, esp. p. 97. 4. See, e.g., Rowe, Saving the World, p. 456.

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teenth century to the nineteenth century. By pointing out some obvious discontinuities, this chapter bears witness to a temporary victory of the accommodationist stance in the early nineteenth century and the interventionist shift in the late nineteenth century. Such a shift also appeared in the approaches to the study of the classics and the selection of ancient-prose writing styles. Using a linear perspective, some historians might deem the rise of accommodationist ideas in the early nineteenth century to be part of “the sprouts of capitalism.” However, the accommodationist stance did not aim to prepare for a capitalist mode of production. Instead, it grew out of an interpretation of this particular period, in which the silver–copper coin crisis was a big problem. The interventionist stance observed in the Tongzhi period and in the SelfStrengthening era (1850–95) was also related to the drastic social crisis and the Qing state’s firmer control over commercial taxes in this period. The problem of relating China’s culture and its socioeconomics has generally been addressed through the question of the influence of culture on socioeconomics. In contrast, this chapter describes how socioeconomic realities affected ideas. Unlike the preceding chapter’s stress on intellectual ideas rather than practical interests in the formation of intellectual schools, this chapter underscores the historical contingencies that led to the rise and fall of various strands of ideas. Thus, I begin by describing the dominance of the accommodationist stance in the early nineteenth century and then depict its vicissitudes as they relate to the early nineteenth-century silver–copper coin crisis.

Acceptance of Accommodationist Economic Proposals In early nineteenth-century China, aside from the rejections of interventionist monetary proposals, cutbacks in or suspensions of provinciallevel mintage, and some coinage of precious metals, suggestions to limit private landownership were weakly voiced, and the status quo of that system was maintained. Even though there were complaints about bank shops’ accumulation of wealth, no particular steps were taken to change this situation. Free movement for merchants and others continued, and no sumptuary laws were proclaimed. And, by looking at the state’s mining policies, maritime transport of tribute grain, and the open-franchise salt system, we can get some idea of the abruptness of the acceptance of accommodationist ideas.

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mining policies In 1801 (the sixth year of the Jiaqing era), when some officials proposed the opening of lead and copper mines to comply with merchants’ requests, the emperor objected vehemently. He feared that he would be characterized as “an emperor enamored of goods rather than a good emperor” and saw merchants who wanted to open mines as “ignorant and concerned with their own trivial interests.” The emperor said, “We cannot help but prevent the spread of such an evil. Officials should ‘purify their hearts and minds’ and not carelessly become involved in issues which take advantage of the public order to benefit their private interests.”5 Yet in 1814, still in the Jiaqing reign, when one vice minister proposed increasing revenues by selling official titles, Minister of the Board of Personnel Yinghe objected and proposed other ways to cut back on payments and increase revenues. Yinghe used the term “managing wealth” (licai ῟㊖) rather than the phrase “talking about interest” ( yanli や‫)ڱ‬, which the Jiaqing emperor had abhorred. One of Yinghe’s several proposals for increasing revenues was to open mines. He thought that having either official or merchant management of the mines was acceptable.6 By the 1840s, more proposals to open mines had been approved. Following Wei Yuan’s 1842 proposal to allow private operation of mines,7 an imperial edict of 1844 ordered the grand councilors to lift the ban on mining and allow commoners to open mines.8 The positive and laissez-faire mining policy of the late Daoguang period contrasts with the more restrictive policy of the early Jiaqing period. This suggests a change away from state operation of mines and toward merchant management in the early nineteenth century. ————— 5. SL, 87: 23–24, JQ 6.9.26 (Grand Secretary Qingjie). The Chinese text is ᕼ⇺βцᘚᵱ㋉ ࠏ䐶〲ᵱ௱㊜Ϣϗ⊧; ੖ࣾᦾ┍᷀⊨〭䐶ෑらߒ㞠㜿. 6. HCJSWB, 26 huzheng, 11a, 12a (Yinghe, “Kaiyuan jieliu shu,” 1814). 7. Wei Yuan, Shengwu ji, 14.33b–34a. 8. SL, DG 24.4, 404: 9–10 (Imperial edict to the Grand Council). ZB, no. 971, He Changling, reveals that He was ordered to allow all silver mines in Guizhou to be run by willing private merchants.

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maritime transportation of tribute grain The maritime transportation of tribute grain by merchants was tried in 1825. The practice was suspended between 1827 and 1847 but was resumed in 1848 and continued until the late Qing period.9 This policy transformed the tradition of shipping tribute grain up the Grand Canal, which had lasted for about four hundred years, from the mid-Ming on. 10 The maritime transportation of tribute grain by merchants had been proposed off and on since 1700. But the proposal was not adopted until 1825, when the Daoguang emperor himself initiated the change.11 In 1803, when Bao Shichen had suggested this, he had wondered whether the state would feel embarrassed to hire merchants for public service but had justified the practice by saying, “It would not defy ‘political institutions’ (zhengti ᓈ㵧), since so many things used by the government are purchased from the people.” By 1825, the “political institution” issue was not a problem. What was asserted was the benefit to be gained by the use of merchant vessels.12 Even though it was tried for only a few years in the early nineteenth century, the change from state to merchant management of tribute grain transport was unprecedented in the Qing dynasty.

the open-franchise salt system The salt system of the early Qing dynasty tended to be a monopoly. Yunnan’s salt was transported and sold by the government, but salt from other areas was transported and sold by merchants who obtained licenses for purchasing and delivering salt from the salt superintendent or the Board of Revenue. Each license allowed the purchase of more than 200 catties of salt, an expense too great for people of average income. The salt trade was generally lucrative before the early nineteenth————— 9. Wei Xiumei, Tao Shu zai Jiangnan, p. 118. See also M. C. Wright, The Last Stand of Chinese Conservatism, pp. 175–76. 10. Wei Xiumei, Tao Shu zai Jiangnan, p. 70. 11. Wei Yuan, Guweitang neiwai ji, waiji, 7.31a–31b, 37a. 12. Bao, An Wu sizhong, 1.2b.

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century silver–copper coin crisis, and license-holders tended to pass their licenses to their offspring. The early nineteenth century saw some development of free competition in the salt trade. In 1830, Bao Shichen proposed that anyone who bought a ticket for at least one catty of salt and paid taxes to the salt superintendent be allowed to sell salt freely within the boundaries of the marketing area covered by the ticket. 13 From 1832 on, the ticket method was applied in Anhui, the most important salt area in the Qing dynasty.14 Although applied only in the Anhui salt area, the adoption of the ticket salt system in the early nineteenth century, which embodied a spirit of free competition, was unique in Qing history.

Interventionist Policies in the Self-Strengthening Period In contrast with the abrupt acceptance of the merchant operation of several important economic activities in the early nineteenth century, the late nineteenth century had an interventionist bent.

management of enterprises There were few national modern enterprises in early nineteenth-century China, yet the government managed most modern enterprises in the late nineteenth century. From 1872 to 1895, industries managed by officials and those managed jointly by officials and merchants accounted for 64.56 percent of the total capital of native modern industry; private industry constituted 33.01 percent, and joint Sino-foreign concerns 2.43 percent. This situation did not undergo significant changes until 1895.15 In 1825, when 1,500 privately owned vessels were used to ship the tribute grain from Jiangsu, there was no official intervention besides granting them subsidies.16 The maritime transport of the tribute grain ————— 13. Li Lin, “Qingchao Jia-Dao shiqi xingqi de yizheng gaige zhifeng.” See also Bao, An Wu sizhong, 7.3a–10b. 14. Wei Yuan, Guweitang neiwai ji, waiji, 7.23b–24a. 15. Yan, Zhongguo jindai jingjishi tong ji ziliao xuanji, 2: 94–95. Between 1896 and 1911, privately managed industry accounted for 57.88 percent of the total capital of native modern industry, joint Sino-foreign concerns 17.12 percent, and the officially managed and joint official-merchant industries only 27.42 percent. 16. Wei Yuan, Guweitang neiwai ji, waiji, 7.33a.

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continued up to the Xianfeng and Tongzhi periods, but without leaving any room for China’s private entrepreneurship.17 The China Merchants’ Steam Navigation Company (Zhaoshangju ዧࣾ෱), established in 1873 to compete with foreign shipping interests, was a private company in name only. Liu Kunyi ۸੽Ω (1830–1902), who had been governorgeneral of Jiangsu-Jiangxi-Anhui and of Guangdong-Guangxi, explained why: Were this company known as an official enterprise, the response to calls for shareholders would be cold. If officials openly monopolized the company, business circles would not cooperate. The officials had no choice but to use the name “Merchants’ Company.” Yet, in fact, “Personnel will be hired and fired, and accounts will be checked, by officials.” Merchants were ordered to manage, but officials exercised overall control.18

According to an 1852 note by Wei Yuan, the Taipings had halted the reform of the salt trade in Anhui to favor free competition.19 In an attempt to obtain military funds to suppress the Taipings, both salt tickets for small merchants and monopoly systems for big merchants were suggested in the Xianfeng and Tongzhi periods. The policy adopted by Zeng Guofan in 1863 as governor-general of Jiangsu-Jiangxi-Anhui tended toward the monopoly system, making it mandatory for merchants with salt tickets to buy at least 6,000 catties per purchase. In 1865–66, while Li Hongzhang ᙅ㻨Ⓞ (1823–1901) was serving as governor of Jiangsu, he decreed that the privileges of salt merchants ready to pay the lijin for incoming purchased salt and to make other donations could become hereditary. This policy sustained the monopoly system.20 In addition to the salt administration, other enterprises with heavy government involvement after around 1853 tended to be monopolistic enterprises. When the Shanghai Filature Factory was erected in 1878, no ————— 17. The occupation of areas by the Taipings, the ravages of Yellow River floods, and the convenience of maritime steamers prompted arguments for coastal transportation; in particular the great famine of 1867–68 in the north proved that sea transportation was more efficient in carrying southern grain to the famine area. See M. C. Wright, The Last Stand of Chinese Conservatism, pp. 175– 76, 361; and Jones and Kuhn, “Dynastic Decline,” p. 125. 18. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 2: 38. 19. Wei Yuan, Guweitang neiwai ji, waiji, 7.23b. 20. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 1: 246.

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other similar factories could be set up.21 The Telegram Bureau of Tianjin and Shanghai also enjoyed a monopoly.22 Zhang Zhidong ရϢ᪙ (1837–1909), an important provincial official advocating these policies, regarded official authority in the new enterprises as a means of preventing deception of shareholders, fraudulent brand names, and strikes by craftsmen and workers.23 In this period, lower-level officials with more access to Western knowledge, including Guo Songtao 㗺໌Ṓ (1818–91), Ma Jianzhong 㲃࿲ႚ (1845–1900), and Wang Tao ᾄ㬺 (1828–97), developed the idea of promoting civilian industries.24 Yet most such concepts were voiced late in the Self-Strengthening Movement, after most official undertakings had become bogged down by financial difficulties.25

pursuit of economic interest Before 1853, financial sufficiency was a basic concern of all statecraft thinkers. However, scholars such as Wei Yuan, Lin Zexu, and Gong Zizhen had a subtle understanding of the spontaneous and mutual benefit of the public and private sectors in developing private interest. Between 1860 and 1895, the leaders of the Self-Strengthening Movement also emphasized the pursuit of economic interest. By “economic interest,” however, they meant mainly the state’s economic interest. Zeng Guofan interpreted “the management of wealth” as increasing financial resources for military and official needs to remedy the difficul————— 21. Ibid., 2: 39; Feuerwerker, China’s Early Industrialization, p. 9. 22. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 2: 40. 23. Hou Houji and Wu Qijing (ibid., 2: 111) also point out that when Zhang Zhidong defended the stance that railroads had to be managed by officials, his reasoning was that railroads entailed a profound knowledge that merchants could not be expected to command. Also, the purchase of land and tombs from local residents for the rail lines required government assistance. Yet when cotton mills were being established, Zhang Zhidong supported cooperative management by officials and merchants. Hence Zhang proposed state management for industries regardless of whether they needed more capital and knowledge or not. 24. Ibid., 2: 91–96, 259, 264. Hou and Wu also claim that Guo did not object to the coexistence of government and private enterprise. According to Guo, the telegraph system needed to be managed by the state. But railroads, which required vast amounts of capital, could not be managed solely by the state. 25. Wu Chengming, “Economic Thought in Late Imperial China,” unpublished paper, pp. 28, 30. I am grateful to Dr. Lai Chikong for sending me this paper.

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ties of the time. 26 What Li Hongzhang, Zhang Zhidong, and others fought for in the 1890s was still wealth pursued by the state as a collective entity, not wealth created by private interests. 27 Even though Li Hongzhang had earlier stated that wealth lay in improving people’s livelihood, officials strictly supervised all enterprises related with people’s livelihood such as clothes industries.28

change of monetary ideologies Many scholar-officials in the late Daoguang period could not accept Wang Liu’s inflationary monetary proposals. Yet Wang’s work was included in statecraft anthologies published in 1850, 1882, and 1888, compiled in the style of the 1826 edition by He Changling. The proposals of Wang’s chief opponent, Xu Mei, did not appear in any of these collections.29 Before 1853, as we have seen, proposals to issue inflationary paper notes and big coins to increase the state’s revenues at the expense of the people were repeatedly turned down. Even copper coins, which represented the sovereignty of the state, failed to replace silver, which stood for market forces. Silver dollars, which were also suggested as a representation of the sovereignty of the state, were cast sporadically on a local basis only. However, inconvertible paper notes and big coins were issued from 1853 to 1861, following the exhaustion of revenues due to the Taiping Rebellion. Even copper coins, which were not deployed as a fiscal tool before 1853, became somewhat inflationary.30 In addition, silver dollars began to be cast in Guangdong province in 1890, and thirteen other provinces soon followed suit. The Qing court set up a mint in Tianjin in 1905, vigorously started to mint silver dollars in 1909, and promulgated a statute to change from using silver ingots to using silver dollars as unit in 1910 (see Fig. 8.1).31 In 1904 the Bank of the Board of ————— 26. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 1: 335. 27. Schwartz, In Search of Wealth and Power, p. 123. 28. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 2: 59, 62. 29. Compare the table of contents of each edition in Kindai Chşgoku kenkyş iinkai, Keisei bunpen sŇ mokuroku, vol. 1. 30. Yang Duanliu, Qingdai huobi jingrong shigao, pp. 101–2, 108. 31. Zhang Huixin, “Qingmo huobi biange,” and Professor Yeh-chien Wang’s comment on this paper, ibid., pp. 344–45, 380.

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Fig. 8.1 Silver coins cast by the Qing government from 1890 to 1911. The silver coins cast by the provincial mints and in the national mint at Tianjin still used liang as the unit. These silver coins without holes in the center weighed 0.72 liang based on the treasury scale (ྵ྇Ϋ㞨Ѓ‫)ڗ‬. In 1911, Chinese mints switched to dollars.

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Revenue, China’s first government bank, was established, followed in 1908 by the Bank of Communications. In 1908 the two were reorganized into the Bank of the Great Qing. Unlike Germany’s state bank of the same period, which provided industrial loans, these banks’ main purpose was to transfer government funds from the provinces to Beijing.32 The unification of the silver coinage by the government eliminated the profit the Shanxi banks could earn by arbitrage through exchanging silver minted in various places with minor variations in weight and quality.33

Changes in Intellectual Currents The shift in political-economic policies around 1850 was accompanied by a shift in intellectual currents. In the Daoguang period, “The Tongcheng scholars were regarded by society as weak and sterile.”34 Wang Liu also deplored the contemporary decline of the Tongcheng school, which had prospered at the time of Yao Nai (Fig. 8.2). Another Tongcheng essayist also said that his contemporaries failed to appreciate the Tongcheng branch of ancient-style prose.35 The preface to the sequel of Yao Nai’s Categorized Anthology of Prose in the Ancient Style said: “ In the late years of the Daoguang reign, a great number of scholars made much ado about the Qin, Han, and Wei dynasties and shunned unadorned essay writing. It is through the cultivation and teaching of Mei Zengliang and Zeng Guofan that such a tradition, started by Yao Nai, still survives.”36 After the Taiping Rebellion, the main branch of the Tongcheng school arose, and New Text studies declined. In an obituary Zuo Zong————— 32. Feuerwerker, The Chinese Economy, p. 62. 33. Zhang Huixin, “Qingmo huobi biange,” pp. 325–61. Compared to Vietnam, China was late in initiating the minting of Western-style silver dollars, and whether vested interests gaining from the exchange of various kinds of silver ingots and silver dollars hindered this change is a question to be explored further. 34. ZG, Yao Ying. The original Chinese reads κц⫳မᚎᲆᵱൟᜍૂ⢧. 35. Zhang Jiliang, Zhang Heng fu quanji, 2.1. 36. Wang Xianqian, Xu Guwen cilei zuan, preface. The original Chinese is 㕿‫ؗ‬ᘩ㕝䐶ஐம㵪 ンࡐɌ␝Ɍ᰹Ɍ㶿, ⳿᭘ᬻ▨ᡪϢᓾᵱβ㍮ᵱ䐶ᜱ㗝όɌᘉᓾᤵϢԼ䐶⇽⨰ԏ㕿Ⓗᓛɍ ᅟዄ㖝⛝䐶㋗цβଢ଼ɍ

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Fig. 8.2 Ancient-style prose in the early nineteenth century. This passage in Wang Liu’s Huozhouyuan chugao (“Yu Zhang Lujiang xiansheng shu”) in Wang’s own handwriting pointed out that talents arise at their particular time. People like Wang Chang (1725–1806), Yao Nai (1731–1816), Yun Jing (1757–1817) and Wang Liu’s cousin Wang Qisun ᾄ⪛ൕ (1755–1817) had become famous successively. The ancient-style prose also prospered for a while. With these scholars passing away one by one, few people talked about ancient-style prose (here, Wang Liu was referring particularly to the Tongcheng branch that Yao Nai represented). (Image courtesy of Beijing Library.)

tang wrote for a native of Tongcheng, the father of a subordinate who died fighting the Taipings, he attributed the martyrdom of a great number of Tongcheng people in the struggle against the Taipings to the worship of Zhu Xi by the Tongcheng school headed by Yao

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Nai.37 For the Nanjing Academy in Jiangsu, which Zuo Zongtang helped build in 1883 by raising governmental funds, Zuo wrote an essay to be inscribed above the academy gate in which he reminded students to keep in mind Fang Bao’s intention to convey the teachings of Confucius and Mencius through the commentaries of the Cheng brothers and Zhu Xi.38 In the Self-Strengthening period, there was a general rise in Song Learning owing to the efforts of Zeng Guofan, who established academies in various provinces for that purpose.39 Meanwhile, the New Text school, which gained in popularity in the early nineteenth century, lost its earlier vitality with the rise of the Taiping Rebellion and did not regain its vigor until the time of Kang Youwei. After the Taiping turmoil, Cheng-Zhu philosophy carried the day for quite some time.40 Even Kang Youwei’s teacher Zhu Ciqi ᘮᤃῳ (1807–81) was a Zhu Xi scholar.41 The shift in intellectual trends was in part related to exacerbation of the silver–copper coin crisis and its subsequent outcomings.

The Currency Crisis and the Accommodationist Inclination The early nineteenth century was a time when rampant market forces overwhelmed people and the state lost control over society as a whole. These circumstances explain why a philosophy stressing individual initiative and the existence of powers checking the monarch met with wide acceptance. At this time, respect for trade increased even among the accommodationists. Both Bao Shichen and Lin Zexu thought at first that foreign trade was encouraged only by foreigners and proposed that Chinese merchants go abroad for that purpose. 42 By 1841, Bao Shichen had changed his opinion, asserting that China must learn weapons and shipyard technology from Western countries through trade contacts.43 ————— 37. Zuo, Zuo Wenxianggong quanji, 1.7. 38. I am grateful to Barry O. Keenan for informing me about and sending me a copy of Zuo Zongtang’s essay. Professor Keenan copied it from Nanjing: School Yearbook for 1925. It can also be found in Zuo, Zuo Wenxianggong quanji, 2.9–10. 39. Elman, From Philosophy to Philology, p. 242. 40. Tang Zhijun, Jindai jingxue yu zhengzhi, pp. 126–51. 41. Beppu, “Shinmatsu ni okeru SŇju gakufş no saikŇ.” 42. Teng and Fairbank, China’s Response to the West, p. 25; Bao, An Wu sizhong, 26.6a–b. 43. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 1: 98–99.

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With the exacerbation of the silver–copper coin crisis, Lin later welcomed foreign trade other than that in opium by saying, “Silver gained in transactions with foreigners can be used for defense against foreigners.”44 Bao Shichen also changed his view about commerce and market forces. Although officials had often referred to his four essays discussing the silver–copper coin crisis, Bao finally said in 1846, “I have not fixed my opinion about this problem. If silver prices are allowed to fluctuate in the market, they will gradually be adjusted to achieve equilibrium between the rich and the poor. If they are set by force, I am afraid that there will be deviations from regulations and thereby many complications.”45 Bao also observed, “When the government mandated that one liang of silver be exchanged for 1,000 wen of copper coin, markets exchanged it for 1,500 wen of copper coin. . . . Can market forces be changed by human effort?”46 The silver–copper coin crisis led people to be more aware of the intractability of market forces even at the hands of the state. The opening of the salt market to smaller merchants after 1832 was actually prompted by decline in salt revenues due to the silver–copper coin crisis. An 1837 official report said, “For every [salt] merchant prosecuted in court, the state loses a taxpayer.”47 Few people would assume this dreadful position after the silver–copper coin crisis sapped the profits to be earned in the salt trade. Even though the private transport of tribute grain had been proposed for over a century, the unprecedented use of private vessels to transport the grain did not start until 1825, when the silver–copper coin crisis was getting worse. During the crisis, the bannermen responsible for transporting the tribute grain along the Grand Canal had often resorted to strikes when they were not paid in silver, which had doubled in value during this period. 48 During the late Daoguang period, the ————— 44. Teng and Fairbank, China’s Response to the West, p. 20; See also Wu Baosan et al., Zhongguo jing ji sixiang, p. 69. 45. Bao, An Wu sizhong, 7 xia.3b. 46. Wang Liu, Qiangbi chuyan, “Xuke,” p. 14b. Bao’s letter to Wang Liu. 47. DXTGZY, DG 17 ( Jing’ebu, Zhongling), p. 403. 48. Miao Zi, Miao Wuliegong yiji, 1.21a.

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Fig. 8.3

Silver–copper coin ratios (1,000 wen/liang) in the Qing dynasty, 1814–56 (source: Fig. I.1).

Qing state commanded less revenue. The lack of government capital was a reason why maritime transportation of tribute grain by merchants was encouraged.49 This lack of capital was also one reason why the private opening of silver mines was encouraged.50 As discussed above, it took about 30 years (1808–38) for the silver– copper coin ratio to increase 600 wen from 1,040 to 1,637 and about another 10 years (1839–1849) to increase another 600 wen from 1,679 to 2,355 (see Fig. 8.3). The silver–copper coin crisis started locally in the late Jiaqing period and became nationwide by 1820 at the latest. Beginning in 1822, eleven provinces petitioned the government to decrease or stop minting copper coins on the grounds that this currency had depreciated relative to silver so much that no one would accept it. It was in the 1820s that the entrepôt of the opium trade moved away from areas within Qing jurisdiction, such as from Canton to Huangpoa and then to Lintin, which was completely outside the government’s control.51 The annual average value of opium imported into China was $3 million in 1814–23, $5.8 million in 1824–33, $9.1 million in 1834–43, and ————— 49. Wei Yuan, Shengwu ji, 14.34a. 50. Lin Zexu, Lin Wenzhonggong zhengshu, bingji, “Yun-Gui zougao,” 9.21b. 51. Man-houng Lin, “Yin yu yapian de liutong.” See The Cambridge History of China, 10: 186, for a clear map of the Pearl River delta in the nineteenth century.

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Fig. 8.4

275

Quantity of opium imports into China, 1814–56, in 1,000 piculs (source: Fig. 2.1).

Fig. 8.5 Total silver outflows from China, 1814–56, in millions of silver dollars (source: Table 2.5).

$20.7 million from 1844 to 1856 (Fig. 8.4). The annual net average outflow of silver from China was $3.01 million silver dollars in 1814–23; $5.06 million in 1824–33; $5.85 million in 1834–43; and $17.56 million in 1844–56 (Fig. 8.5). In 1833, the British East India Company’s monopoly of the China trade ended. From that point on, private traders greatly

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Fig. 8.6Temporal distributions of monetary proposals, 1814–54. Notes: Scholar-officials with dated monetary proposals (PN represents a proposal to issue paper notes, BC to issue big coins, GC to use grain and cloth instead of silver, PM to use precious metals, and CS to use cooper coins instead of silver; * = scholar-officials below rank two, who were not able to submit official reports directly to the emperor. The following scholars made proposals: in 1814: Cai Zhiding (PN); 1818: *Ding Luheng (PM, BC); 1833: *Wu Ting (GC); Lin Zexu (PM); Tao Shu (PM); He Changling (PM); 1837: Wang Liu (PN); *Bao Shichen (CS); *Wei Yuan (PM); 1837: *Gong Zizhen (PM); Liang Zhangju (BC); 1842: Lei Yixian (BC); 1843: Zhang Xiuyu (BC); 1844: Funiyang’a (BC); *Miao Zi (CS); Wu Wenrong (CS); 1845: *Wu Jiabin (CS, BC); Liu Liangju (CS); 1846: *Cheng Yi (BC, CS); Xu Mei (PM); Wang Zhi (BC); Zheng Zuchen (PM); Zhu Zun (CS); 1848: Jiang Hongsheng (BC); 1849: Wang Qingyun (CS); *Yang Xiangji (BC); 1850: Zeng Guofan (CS); Wang Maoyin (PN); 1852: Huashana (PN); He Shaoji (BC); Qi Junzao (PN); 1853: Wang Yide (PN), Li Jiyun (PN); *Zhou Tenghu (PM).

expanded their trade with China, tremendously increasing the silver outflow.52 Also, in 1834 the United States’ export of silver to China decreased drastically as the United States used more silver to exchange for gold.53 Proposals for dealing with the silver–copper coin crisis increase considerably in the 1830–50 period (Fig. 8.6). Furthermore, more and more high-ranking scholar-officials raised these matters at court as the ————— 52. See also Hamashita, “Foreign Trade Finance in China, 1810–50,” p. 394. 53. Schell, “Silver Symbiosis,” pp. 110–11.

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crisis worsened. The New Text study of classics grew simultaneously with the exacerbation of the silver–copper coin crisis. In 1801, Ruan Yuan had established an academy at Hangzhou called Refined Study for Interpreting the Classics (Gujing jingshe ギ⚰☑⨶); the ancient masters to be worshipped there were Zheng Xuan 㘲ώ (127–200) and Xu Shen ィᆸ (58–147), two interpreters of the Old Text classics. However, when Ruan set up the Hall of the Sea of Learning (Xuehai Academy ൟ᫡૫) in Canton in 1820, even though Zheng Xuan was still worshipped, this academy was named in honor of He Xiu җѤ (129–182; literary name Xuehai), the foremost adherent and expositor of the Gongyang Commentary of the New Text school.54 A note by a scholar in Canton in 1837 also pointed out that the Gongyang Commentary was the main classic taught in Xue Haitang academy.55 Gong Zizhen and Wei Yuan studied the Gongyang Commentary under Liu Fenglu in 1819–20 and turned New Text studies from a local into a national phenomenon.56 Moreover, although Zhuang Cunyu took up his New Text studies in the late eighteenth century, his works were not published until 1827. In spite of his New Text propensities, he still accepted the Old Text classics. The collected works of Liu Fenglu, much more critical of Old Text classics than Zhuang, were not published until 1830.57 At a time that the market rate for the exchange of silver and copper coins diverged more and more from the official rate, a cluster of ideas that underscored plural centers of power understandably gained in appeal. ————— 54. Elman, “The Hsueh-hai T’ang”; and Huang Kewu, “Gujing jingshe,” pp. 259, 262. Steven B. Miles (The Sea of Learning, pp. 99–100) notes that, although the name of the academy refers to He Xiu, the academy’s curriculum was by no means an exclusively “New Text” one. In fact, Zheng Xuan was the Han Confucian most often honored by Xuehai Academy scholars. 55. Liang Shaoren, Liangban qiuyu’an suibi, 1.12a, notes that Xuehai Academy was built in 1824. And other than the Gongyang Commentary, Sima Qian’s Records of the Grand Historian; General Meaning of the White Tiger, a compilation of Han Dynasty thought about the relations of beings in the universe; and Liu Xie’s Mind of Literature and Carving Dragons, the classical models for parallel-style essays, were also studied in this academy, as highlighted in the scrolls written by Ruan Yuan pasted on doorposts of the Xuehai Academy. Meanwhile, poems, ancient-style prose, and lyric poems were also taught here. The Chinese original is: 㧼⪿⨥ඈԃ䐶‫ⶢڶ‬ᎬԳ㯒㩰ɍ㕿‫ؗ‬ਣྈ䐶ᔦ࿢ ᙝが㭊บ࿲ൟ᫡૫䐶і᫉᧺ギ⚰☑⨶Ӈϱɍ. . . ᦉᘐ㩱ᘆ㨦䐶₟ⓇЅᤶ䐶ヿヌߢᓾヅ ᶭɍඈԃ⨙ᑜ៥༿Ї䐶‫ذ‬⡃֦⚰䐶ߴ㲃ゕ߯䐶↦⶛ၾㄚ䐶㩾䂭ᓾႇɍ 56. Wei Yuan and Wei Qi, “Shaoyang Weifujun shilue,” in Qi Sihe et al., Yapian zhanzheng, p. 438; Gong, Gong Zizhen quanji, 1:603. 57. Hummel, Eminent Chinese, p. 519.

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The Late Nineteenth-Century Crisis and the Interventionist Bent The situation in the late nineteenth century, however, was very different. On one hand, security problems became more pressing. Local gazetteers for eleven lower Yangzi counties or prefectures show the drastic population decline of these places due to the devastation of the Taiping Rebellion. The average rate of decrease was 75 percent from 1850 to 1865.58 It is also estimated that China’s population decreased by 112 million from 430 million in 1850 to 318 million in 1865 during the Taiping, Nian, and Muslim rebellions. 59 If correct, this estimate would mean that civil war extinguished about one-fourth of China’s population. If following the figure given by contemporary Western observer W. W. Rockhill (20 million) or Baron Ferdinand von Richtofen (47.7 million), the Taiping Rebellion extinguished about one-twentieth or one-ninth of China’s population. 60 The growing peril posed by alien powers was also unprecedented, as Li Hongzhang sighed: “Our reign has encountered a crisis unheard of in thousands of years.” 61 Since state power tends to be reinforced when public security is threatened, it is quite logical that the Tongcheng emphasis on absolute loyalty to the monarch should have had its heyday at this juncture. On the other hand, the Qing state also gained access to new financial resources. When building the Nanjing Academy, established to promote the Tongcheng school, Zuo Zongtang had raised governmental funds. As a result of the silver outflow and social unrest, the impoverished Qing state lacked the funds to pay salaries for officials and sol————— 58. Ho, Studies on the Population of China, p. 241, table 40. 59. Ge, Zhongguo renkou fazhanshi, p. 253. Ge used the population figures of 1911 and an estimated population growth rate of 5 percent to get a population figure for 1865 of 318 million, and since the population of 1851 is estimated as 430 million by most studies, he then obtained this estimate. (I am grateful to Professor Ge for sending me this book.) On July 1, 2004, this author consulted with Professor Cao Shuji at Fudan University’s library about this estimate. Professor Cao calculated population figures in a different way to arrive at a similar final estimate. He reviewed the national census of the Jiaqing period and the record of Board of Revenue for the provincial population, the local gazetteers of prefectures and districts. He also took into consideration the Shanxi famines and the alarming incidence of fatal contagious diseases at the time of the rebellions. 60. Ho, Studies on the Population of China, p. 247. 61. Cited from Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shi gao, 1: 54.

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diers in 1853 to pacify the internal disturbance.62 How was it that there were financial sources for building academies afterward? The number of academies increased dramatically. In Taiwan, for example, the annual rate of the establishment of new academies in the period 1860–93 was three times that of 1683–1860.63 It is worth noting that after $384 million in silver flowed out of China in 1808–50, $691 million in Mexican silver dollars flowed into China between 1856 and 1886, and the Qing government tapped this revenue through several kinds of commercial taxes. Hu Linyi’s remark describes the situation: “Military administration has been tied up with the lives of millions of people. . . . The disadvantages of not feeding the soldiers and losing territory are much greater than those of sharing the merchants’ profits to ease the present difficulties.” 64 Commercial taxes played a crucial role in late Qing China in comparison with the early Qing (see Table 8.1).65 In the early Qing, the government would ask for contributions when unexpected warfare or flooding or other natural disasters occurred. From the Kangxi reign to the Daoguang reign, a surplus still remained in the Board of Revenue’s coffers. But the 8 million liang of surplus of the Daoguang reign, in contrast to the 50 to 60 million liang surplus left by the previous reigns, was exhausted within three years after the Taiping Rebellion erupted, and the Qing could not avoid increasing commercial taxes such as lijin.66 It was also at this time that Zhang Zhidong commented that “the New Text study of the classics is not appropriate for society at present.”67 It was not until the end of the Sino-French War of 1884–85 that the New Text Movement regained its vigor after its decline following the Taiping Rebellion. 68 Also, Xu Mei’s monetary proposals, which ————— 62. Peng Zeyi, “Shijiu shiji wushi zhi qishi niandai Qingchao caizheng weiji,” p. 131. 63. Li Guoqi, Qingdai Taiwan shehui zhi zhuanxing. 64. Hou Houji and Wu Qijing, Zhongguo jindai jing ji sixiang shigao, 1: 310. The original Chinese is 㑌ᓈ❎‫⯯ף‬₟㫖Ϣࡠ. . . . ⨰‫ظ‬㯶㑌⢫ヷ੝ᔤ䐶᷀⫤ߘࣾ㊸Ϣ‫ڱ‬цᏍவ෱. 65. Yeh-chien Wang, Land Taxation, p. 80, table 4.8, shows a similar transformation from 1753 to 1908. 66. Peng Zeyi, “Shijiu shiji wushi zhi qishi niandai Qingchao caizheng weiji.” 67. Tang Zhijun, Jindai jingxue yu zhengzhi, p. 226, citing Zhang Zhidong’s “Exhortation to Study,” interior chap. 5: “The Worship of Classics.” 68. Ibid., pp. 156–215.

Salt tax _________________

Lijin _________________

Customs revenues ________________

Total _________________

note: The original unit was the liang, which have been converted into silver dollars. source: Deng Shaohui, WanQing caizheng yu Zhongguo jindaihua, p. 99, cited from Feng Xiaocai, Zai shang yan shang, p.32.

1776 $42,771,300 73% $8,208,200 14% 0 $7,722,000 13% $15,930,200 27% 1842 42,293,282 76 7,124,038 13 0 5,906,551 11 13,030,589 24 1885 49,829,423 48 11,387,111 11 $19,730,030 19% 22,288,060 22 53,405,201 52 1890 51,999,675 44 11,438,527 9 21,010,385 18 33,874,188 29 66,323,100 56 1894 50,310,392 43 10,375,702 9 20,461,697 18 34,686,352 30 65,523,751 57 1903 57,269,194 38 20,097,000 13 25,029,146 17 47,017,276 32 92,143,422 62 1911 74,076,073 27 71,321,027 26 66,508,129 24 64,894,502 23 202,723,658 73 _________________________________________________________________________________________________________________

Year Amount % Amount % Amount % Amount % Amount % _________________________________________________________________________________________________________________

Land taxes __________________

Table 8.1 Land and Commercial Tax Revenues, Selected Years, 1776–1911 (in silver dollars and as percentage of total tax revenues) _________________________________________________________________________________________________________________ Commercial taxes _____________________________________________________________________________

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harshly criticized Wang Liu’s inflationary monetary proposals in the late Daoguang period, were not included in the series of collected works of statecraft essays until the 1898 edition compiled by Sheng Kang, a native of Changzhou. A Tongcheng scholar and a good friend of Zeng Guofan, Wu Jiabin was exiled to a military camp in 1847 due to some problems after his appointment as a Hanlin Academy compiler in 1838. A shrine was set up to worship him in 1864 when he died helping pacify the Taipings.69 At a time when public security was threatened, it is quite natural that statist ideas would rise in prominence. This particular shrine showed that there were also funds available to promulgate these statist ideas.

Conclusion The rise of interest in statecraft thought was marked by the publication of He Changling’s compilation of works on statecraft in 1826, followed by about ten similar anthologies in the late nineteenth and early twentieth centuries. Scholars have therefore perceived statecraft ideas as continuous throughout the modern period. In fact, however, the shift to a more accommodationist bent from the 1820s to 1850 and then to a more interventionist inclination in the Self-Strengthening period shows some discontinuity in these ideas. The interventionist shift in Chinese statecraft thought in the late nineteenth century stands in contrast to newly introduced British ideas with their strong preference for private entrepreneurship. Both China’s own reformers and foreigners viewed this interventionist trait in the late nineteenth century as Chinese tradition. For example, Karl Marx wrote in 1858, based on the reports of Russian diplomatic officials in Beijing, about the punishment inflicted by the emperor on Vice Minister of the Board of Revenue Wang Maoyin for Wang’s proposal to issue convertible paper notes.70 Richard Simpson Gundry (1838–?), a British commentator, reported to the West in 1895 that the Chinese government had tended to intervene so greatly in enterprise that it had ————— 69. Xu Shichang, Qingru xuean xiaozhuan, 18:007.378. By contrast, Wei Yuan was dismissed from his post as a magistrate in 1853 after incurring the displeasure of high officials; he retired soon thereafter and died in 1857 (Hummel, Eminent Chinese, pp. 850–51). 70. Yang Duanliu, Qingdai huobi jinrong shigao, pp. 111–12.

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seriously hindered China’s progress.71 Late Qing reformers often complained about this interventionist tendency.72 These impressions of late nineteenth-century observers, Chinese and Westerns alike, may well have frozen into “ideal type” models of China during the twentieth century. Shen Yao’s remark about the more prestigious social status of merchants relative to scholar-officials in early nineteenth-century China is in stark contrast with Mary C. Wright’s perception of China’s anticommercial tradition. 73 On one hand, what Shen Yao observed may have been a result of a long-term development of respect for commerce and merchants. On the other hand, it may simply have been a phenomenon particularly reinforced in the early nineteenth century. In comparing the remedies that scholars proposed for the seventeenth-century versus the early nineteenth-century silver–copper coin crises, one great difference is apparent. The proposal to abolish silver in the latter case came from the interventionist group, including Wang Liu, Wu Jiabin, Xu Zi, and Sun Dingchen, and was vigorously contested by the accommodationist group. In the seventeenth century, however, the appeal for the abolition of silver use, particularly for tax payments, came from “enlightened” scholars, including Huang Zongxi 䀋൳⡡ (1610–95), Gu Yanwu (1613–82), Wang Fuzhi ᾄஸϢ (1619–92), Tang Zhen ࣗ₋ (1630–1704), Wang Yuan ᾄᯀ (1648–1710), and Li Gong ᙅସ (1659–1733).74 Although granting greater legitimacy to commerce, as seen in their greater acceptance of silver, the early nineteenthcentury scholars shared with their seventeenth-century counterparts a dual emphasis on agriculture and commerce.75 Yet the late nineteenth century actually witnessed a drastic move away from the traditional Chinese focus on both agriculture and commerce toward an economy ————— 71. Gundry, China Present and Past, p. 112. 72. Wang Ermin, “Shangzhan guannian yu zhongshang sixiang,” p. 235. 73. Shen Yao, Luofanlou wenji, fan 24: 11b, 12a–b: “In ancient times, only scholar-officials’ sons could be scholar-officials, as there existed a rigid social stratification. Today, only merchants’ sons can be scholar-officials, as merchants are more able to provide money and leisure than scholar-official families whose incomes have decreased to a level much lower than those of scholar-officials prior to the Song dynasty (960–1279). Furthermore, as society looks so highly upon merchants, there are many capable and wise people who are not willing to become scholarofficials and who would rather remain merchants.” 74. Ye Shichang, “Mingzhongye zhi yapian zhanzheng shiqi yixie sixiang jia fandui yongyin de qingxiang.” 75. Lin Liyue, “Shilun Ming Qing zhiji shangye sixiang de jige wenti,” pp. 711–33.

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that was centered mainly on commerce and manufacturing. For people of this period, modern industries would save China’s foreign exchange and help defend the country by paying more taxes, and the state intervened to a great extent in these enterprises.76 In addition to these continuities and discontinuities, the vivid changes seen in mining policies, the open-franchise salt system, maritime transport of tribute grain, and the increased appreciation of trade, merchants, and market forces with the exacerbation of the silver– copper coin crisis show some rupture, particularly for early nineteenthcentury China. The accommodationist economic proposals, the Yanghu branch of ancient-style prose, and the New Text studies arose in the late Daoguang period, when state power was much threatened by market forces in the silver–copper coin crisis. After 1850, the Tongcheng branch of ancient-style prose and Song philosophies emerged just as public security was imperiled by civil strife and foreign invasion, and the Qing government commanded new financial sources. The New Text scholars who stressed plural centers of power tended to perceive the intractability of market forces during the silver–copper coin crisis more than the Old Text scholars. Furthermore, the silver–copper coin crisis developed simultaneously with New Text studies and the Yanghu school. Even accommodationist scholars were increasingly aware of market forces with the exacerbation of the silver–copper coin crisis. Grand Councilor Muzhanga rejected any monetary proposal to extend the state’s power, which indicated that the state no longer believed in itself. Also, as seen in the inflationary monetary policies that had to be resorted to in 1853–61 when the Taiping outbreak threatened to overthrow the Qing regime, the interventionist school replaced the accommodationist intellectual school when pacification of the Taiping Rebellion, which broke out partly because of the silver–copper coin crisis, desperately required a centralization of power. Financially, this statist shift was made possible by the Qing government’s control of more commercial revenues when the silver outflow that caused the silver– copper coin crisis was replaced by silver inflow. Even academies to ————— 76 . Wang Ermin, “Shangzhan guannian yu zhongshang sixiang,” p. 235; Wu Zhangquan, “Yangwu yundong zhong de shangwu sixiang—yi Li Hongzhang wei zhongxin de tantao.”

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promulgate statist ideologies were built with this newly obtained money. Both the accommodationist intellectual trend in the early nineteenth century and the interventionist intellectual trend in the late nineteenth century reveal, in Maurice Godelier’s words, that “thought is not only reflecting but is vividly interpreting reality.”77 The variety of intellectual inclinations in nineteenth-century China demonstrates the flexibility of Chinese culture in facing various historical realities.

————— 77. Maurice Godelier, “Infrastructures, Societies, and History.”

Z Conclusion

As the president of the Economic History Association proposed in 2000, research should pay more attention to shocks than the normal changes that have so far preoccupied our intellectual endeavors.1 The ways in which the economic and then the social, political, and mental spheres were shocked by the silver–copper coin crisis in early nineteenth-century China are cases in point. In this final chapter, I shall first elaborate further on the seriousness of the silver outflow that prompted this crisis by comparing it with situations in other periods and in other countries in the same period. Then I shall draw implications for larger topics such as the world economy and China’s dynastic decline, statecraft thought and social reality, and the question of “aborted capitalism.”

The Seriousness of the Silver Outflow In comparison with other periods in which silver was used, the early nineteenth century suffered the most serious outflow of silver in Chinese history. Milton Friedman has given the highest estimate to date for the silver outflow from China in 1930–35, proposing a drop of 9–11 percent in the money supply, including the decrease in specie, banknotes, and deposits in banknotes.2 For 1814–56, the crude estimate for the outflow is about 19 percent of China’s total silver supply. Although the latter figure is a percentage of the total silver supply and the former ————— 1. Neal, “A Shocking View of Economic History.” 2. Friedman, “Franklin D. Roosevelt, Silver, and China,” p. 77.

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the share of the total money supply, the silver outflow in the 1930s lasted only five years, whereas the silver outflow in the nineteenth century persisted for around forty-eight years. A nationwide, long-term silver outflow did not occur at any other time between the seventeenth century and 1921. During the seventeenth century, when silver was in short supply, especially as a result of the ban on maritime trade in 1661–83, the basic problem was a slowdown in silver imports, not a growth in silver exports. Some $384 million flowed out of China between 1808 and 1856, whereas about $173 million flowed into China from 1721 to 1800 and $691 million from 1857 to 1886. Between 1888 and 1898, China’s trade balance turned unfavorable, but remittances from overseas Chinese offset this deficit, and the net silver flow was still positive. Between 1899 and 1921, in addition to overseas Chinese remittances, foreign loans and investments allowed by the Treaty of Shimonoseki offset the trade deficit.3 The Qing government of the early nineteenth century commanded few policy tools to deal with a decrease in the currency supply. The Republican government of the 1930s was able to stimulate the economy by supporting government enterprises.4 Increased spending on the military can also ease a scarcity of money. For example, in seventeenthcentury China, the conflict between Ming and Qing forces around 1644 pumped a large amount of silver into the market. In contrast, military spending was lower in early nineteenth-century China than in the late Qianlong period.5 The monetary structure of China was also more vulnerable in the early nineteenth century than in later periods or in contemporary England. From 1905 to 1911, silver appreciation occurred, but it was local————— 3. Remer, The Foreign Trade of China, pp. 222–25; the year 1885 on p. 223 of this book has been changed to 1887 based on more sophisticated statistics in Liang-lin Hsiao, China’s Foreign Trade Statistics, pp. 268–69. 4. Brandt and Sargent, “Interpreting New Evidence About China and U.S. Silver Purchases.” 5. Kishimoto-Nakayama, “The Kangxi Depression”; Matsui, ShinchŇ keihi no kenkyş, p. 104. Between 1796 and 1808, 33.90 million liang were allocated for military expenses (for an annual average of 2.61 million liang); between 1825 and 1848 the figure was 28.30 million (for an annual average of 1.79 million liang). From 1767 to 1794, however, 97.53 million was spent on the military (for an annual average of 3.48 million liang).

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ized in north and central China.6 The impact on China’s economy was not as great as that of the silver outflow of the 1808–56 period, because copper coins were less important than they had been in the past. More paper notes were in circulation, and the Qing government started to mint silver dollars around this time.7 Since both silver and copper coins were less important in the 1930s, banknotes had become a crucial component of the whole money supply and thus minimized the repercussions of silver outflow.8 When England experienced a shrinkage in its money supply in the early nineteenth century due to the worldwide decline in silver production, it compensated by issuing modern banknotes.9 Additionally, England did not rely heavily on copper coins and did not undergo the intense silver–copper coin crisis that China experienced. India had silver appreciation relative to copper coins and deflation from around 1820 to the early 1830s. Other than domestic reasons, the decreased inflow of American silver could also be a cause. But, India’s situation improved greatly in the mid-1840s due to the drastic increase in opium exports to China.10

The World Economy and China’s Dynastic Decline world silver supply, opium, and silver outflow Six years before the Opium War broke out, Lin Zexu encouraged cultivation of the opium poppy to keep silver in China; thus, the reason for the Opium War was essentially silver. Opium has long been used to explain the silver outflow and the silver–copper coin crisis of the early nineteenth century. China did use more opium than England. For England, consumption in 1827–39 is estimated at 1.62 piculs of opium per 100,000 people.11 Dividing opium imports into China during the same ————— 6. Wang Hongbin, Wan Qing de huobi bijia yanjiu, chap. 6. 7. Yu-kwei Cheng, Zhongguo jindai duiwai jingji guanxi yanjiu, p. 124 8. T. Wright, “Coping with the World Depression.” 9. Gayor et al., The Growth and Fluctuation of the British Economy, pp. 656–57. 10. Richards, “The Opium Industry,” pp. 65–66, 68. 11. Berridge and Edwards, Opium and the People, table 2; the original unit is the pound.

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period (see Fig. 2.1, Table 2.7) by China’s population of 412 million12 yields a figure of 5.48 piculs for every 100,000 people. Per capita consumption of opium in China was thus about 3.4 times that in England. Yet, notwithstanding the doubling of the value of imported opium, the total influx of silver between 1856 and 1886 was $691 million due to the favorable market for China’s silk and tea; in contrast, $384 million of silver flowed out in the years between 1808 and 1856, when opium imports were lower than they were in the late nineteenth century. As the present study has shown, without the slowdown in global demand for China’s silk and tea in the early nineteenth century, the silver scarcity would not have occurred; thus, even if China had imported more opium, there would have been no “Opium” War. The opium trade acted to absorb China’s silver due to a worldwide decrease in the total production of silver and gold of about 50 percent between the decades 1790–99 and 1820–29, stemming from the Latin American independence movements and the Spanish government’s inability to support the silver-mining industry in Mexico due to the Napoleonic Wars. Although world silver production gradually recovered after these political shocks, it did not return to the production levels of 1800 until 1850. From around 1775, China, except for Yunnan and Guangxi, imported almost 100 percent of its silver from Latin America through European countries and was thus directly affected by the decrease in production of American silver. It was not until the recovery of the global silver supply in the late nineteenth century that England resumed supplying silver to India. The Jardines and the Mathesons and many Spanish merchants abandoned the Latin American silver trade after the outbreak of the independence movements and entered the opium trade. The year the West started to shift from being a net supplier of silver to the East, 1808, was also the year China saw the silver– copper coin ratio rise above the official ratio, and at least from 1809, China’s officials noticed the silver outflow. The year 1814 saw an abrupt decrease in Western supplies of silver to the East; it was also the year the London customs first reported a silver flow from China to India. In 1833, England stopped supplying silver to India; instead, British sales of ————— 12. Paul Liu and Kuo-shu Huang, “Population Change and Economic Development,” p. 82.

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cotton absorbed India’s silver. It is also in this year that Lin Zexu said, “We must grow opium to keep silver home.” The statistics provided in this study depict the deteriorating situation in China after 1833, the final year of Morse’s study. In 1856, the West resumed its supply of abundant silver to the East, and Feng Guifen exclaimed about the sudden return flow of silver and the easing of the silver–copper coin crisis. When silver became globally scarce in the early nineteenth century, the high silver prices found in China relative to those in Europe in the seventeenth and eighteenth centuries disappeared, and less silver came to China for arbitrage. China’s early nineteenth-century silver–copper coin crisis started around 1808, grew worse from 1820 on, and reached a peak in 1854–56; when silver began flowing back into China, the exchange rate fell and remained at a moderate level until the end of the dynasty.

the nationwide influence of silver China’s reliance on silver for both governmental finances and general economic transactions was akin to a human body’s reliance on blood: a significant decrease is detrimental to the whole body. The early nineteenth-century silver outflow impoverished all of China. Many scholars believe that the silver problem affected mainly the southeastern area of China. Although various currencies were used to different extents in the various regions of China, every place used silver. In the early nineteenth century, for exchanges of small value, paper notes denominated in copper coins were used more in the north and copper coins were used more in the south, because the south had more water routes that could transport the heavy copper coins. For exchanges of greater value, silver ingots were used more in the north and foreign silver dollars more in the south. For the southwestern provinces and some of the peripheral areas within the core provinces, silver ingots were used more than copper coins, again because of transportation costs. Qing China at this time had various local economies, like the organs of the body, but silver, like the circulatory system, integrated these local economies. What is clear is that copper coins were not used in the interprovincial trade, with the exception of some provincial mints’ provisioning of

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neighboring provinces or the interprovincial circulation of copper coins along some waterways. Silver’s high economic value relative to copper coins (around 150 : 1 in the early nineteenth century), helped it overcome high transportation costs to reach faraway markets. Within a province, the main cities supplied silver; the financial commissioner in the provincial capital provided copper coins for the whole province. Other than the mountainous provinces, which relied on the lighterweight silver, the amount of silver relative to copper coins dwindled as one moved down the hierarchy of urban centers, but every place was affected by silver supplied from the cities, for several reasons. First, the bank shops in the cities set the exchange rate between silver and copper coins to reflect supply and demand. Because the economy had been using silver for value calculations since the late eighteenth century, in the early nineteenth century the supply and demand for copper coins was affected by the supply and demand for silver. Second, even though 80–90 percent of the common people paid taxes in copper coins, taxes were calculated in silver and hence affected by the market exchange rate. Third, the Shanxi merchants reinforced the nationwide circulation network of silver, particularly from the late eighteenth century on. When silver flowed out of China, even peripheral areas were affected through the nationwide trading network, which had actually been expanded due to imports of opium. Fourth, given the smaller stock of silver in peripheral areas than in core areas and the same obligation to pay taxes calculated in silver or to exchange silver for necessities, some peripheral areas suffered even more than their core counterparts. Fifth, the trend of ever-increasing silver prices in terms of copper coins was common across the provinces. Even a region as peripheral as Xinjiang was afflicted with this problem in the 1840s. Evidence shows that land tax receipts for Henan and Shandong, like those for the most seriously affected areas in the southeast, dropped by one-third. Salt tax receipts in the northern and southwestern regions of Gansu, Hedong, Changlu, Shandong, Yunnan, Sichuan, and Guangxi dropped the same amount as they did in the southeastern regions of Lianghuai, Liangzhe, Guangdong, and Fujian. Soldiers felt the dire effects of the silver–copper coin crisis in core provinces such as Zhili,

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Hunan, Jiangsu, Shanxi, Fujian, and Jiangxi as well as in peripheral provinces such as Guizhou, Shaanxi, and Xinjiang. The upsurge in thievery and banditry occurred everywhere, from the northern provinces of Zhili, Shandong, and Henan to the southern provinces of Hubei, Hunan, Zhejiang, Guangdong, and Guangxi.

institutional crisis, rebellion, and restoration By the late Qianlong period, not only had silver use expanded, but China’s land area and population had also doubled. Nevertheless, the extended use of silver, which came mainly from outside China, formed a kind of Achilles’ heel for this growing empire. The imperial state had little control over the silver supply. Even though government mints did cast copper coins for the use of the common people and the government regulated the units and forms of silver ingots, imported silver dollars could be circulated and even used to pay taxes. Except for the silver in the government’s coffers, most silver was in the hands of commoners, particularly merchants, because almost all silver came from the international trade, which was carried out by merchants. Bank shops rather than a government treasury monitored the flow of currency. When the silver outflow resulted in the doubling of silver prices in terms of copper coins in the early nineteenth century, it presented the Qing regime with a sudden crisis in both the command and the market sectors. In contrast to what had occurred during the silver increase in late eighteenth century, the Qing monarchy’s control over the military, the bureaucracy, finance, and society seriously declined. The officially cast copper coins entered the market primarily through payments to soldiers and public expenditures. The official rate of 1 liang of silver for 1,000 wen of copper coins was designed to be favorable for soldiers and was set at a time when 1 liang was exchanged for only about 800 wen on the market. During the silver–copper coin crisis, the market rate increased to around 1,500–2,500 wen, but soldiers continued to be paid the official rate of only 1,000 wen. With the soldiers suffering greatly from this economic hardship, the state’s military power naturally declined. Although officials were paid in silver and therefore did not suffer a decrease in their regular salaries, their total income might decrease if

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they had invested in land or commerce, which brought in smaller returns as money became scarce. In addition, officials were often obliged to make up for taxes that were in arrears. In the eighteenth century, when the market exchange rate had been 1 liang of silver for about 800 wen of copper coin, officials had been able to use the remaining 200 wen (from the 1,000 wen official rate of exchange for 1 liang of silver) that they collected to pay transportation, melting, and administrative fees involved in forwarding taxes. During the early nineteenth-century silver– copper coin crisis, obtaining these funds by setting exchange rates higher than the market rate (as high as 2,500 wen of copper coin per liang of silver) only increased the burden on taxpayers and resulted in tax deficits. Also, as the officials’ wealth worsened in general due to falling income and greater tax arrears, their bureaucratic vigor sagged. The scarcity of money, which lowered incomes for many people, and the increase in the tax burden, which had to be paid in the more expensive silver, decreased every kind of tax revenue, including those from land taxes, tariffs, salt taxes, and miscellaneous taxes. Most governmental expenditures were also paid in silver, but since officials had to exchange this silver for copper coins at the bank shops, the amount of copper coins needed also doubled. With lower revenues and greater expenditures, the financial deficit expanded. The decreased revenue also encouraged corruption and a slackening in administration, which further worsened confidence in the state. The scarcity of money itself brought the agricultural and commercial sectors to a new low. Unemployment gave rise to an abrupt increase in the number of vagrants. Salt merchants and topsoil landlords, in particular, suffered from receiving their incomes in copper coins while paying their taxes in silver. Increased unemployment, economic conflict between people of different social statuses, and the deficiencies in tax payments all reinforced the tension between officials and commoners and resulted in a large number of riots. All these problems and tensions, together with other reasons, culminated in the Taiping Rebellion in 1850. Some studies attribute the series of rebellions extending from the White Lotus to the Taiping to population pressures.13 Other scholars have suggested that the early nineteenth————— 13. Ho, Studies on the Population of China, pp. 63–64, 226, 236–56, 270–75.

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century economic recession was a key variable. Opium imports have also been pinpointed as the main cause of this recession, which in turn brought about the Taiping Rebellion.14 In fact, the main causes of the money scarcity were the population increase, the drop in world demand for Chinese products, and the global silver scarcity, not merely the increase in opium imports. The silver–copper coin crisis was more significant than the economic recession in the growth of social conflict. The Taiping Rebellion almost succeeded in overthrowing the Qing regime. Due to the tremendous military expenditures needed to pacify the uprising, the silver remaining in the Board of Revenue treasury in 1853 was insufficient even to pay the salaries of the bannermen and officials. The lack of funds to pacify the rebellion facilitated the “commoditization” of official positions to such an extent that another basis of the Qing monarchy, the instilling of the state’s ideology through the examination system, was almost destroyed. The monetary policies of issuing large-denomination copper coins and paper notes were fruitless. But the lijin system was set up in 1853, and many other commercial taxes were created or increased. Increased foreign purchases of China’s tea and silk and increased remittances from overseas Chinese helped create a flow of silver back into China ($691 million in 1857–86). Other than ideological reasons, many military leaders encouraged growing tea and silk to raise revenues for wars. Just as the world economy had almost overturned the Qing regime, so the world economy aided the Qing restoration. In the late Ming period, taxation had been based on land, and commercial taxes were negligible. When the government levied more land taxes, a series of rebellions erupted that eventually overthrew the Ming dynasty.15 Yet the Qing regime was able to implement many new commercial taxes from the silver inflow to raise funds with which to pacify the Taiping Rebellion. After 1775, when the Qing economy was already based on silver from the Western world, the Qing empire’s destiny was more closely tied to the global silver supply than had been the case under the Ming regime. ————— 14. Yeh-chien Wang, “Evolution of the Chinese Monetary System,” p. 445. 15. See Zhao Yifeng, “Shilun Mingmo caizheng”; R. Huang, Taxation, chap. 6, details the trivial role of commercial taxes in this period.

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divergence between china and japan Qing China survived the Taiping Rebellion, but at the expense of its position in the East Asian order relative to Japan. China suffered not only from the Opium War but also from the silver–copper coin crisis and civil wars; Japan had no similar experiences. Japan’s monetary sovereignty, due to its domestic supplies of precious metals, isolated it more from the world economy than China from the eighteenth to early nineteenth centuries. From the mid-twelfth century to 1600, Japan had mainly used China’s copper coins as currency. After 1600, the deterioration in China’s copper coins, its closed-door policies, and Japan’s domestic production of silver and gold led Japan to seek monetary independence. With coins in gold, silver, and copper, Japan started to develop its own money. When Japan’s silver and copper were exported to China from the sixteenth to the eighteenth centuries and Japan’s supplies of metal for making money gradually became insufficient for domestic use, a kind of managed monetary system developed as the bakufu issued coins with face values above their intrinsic value and the daimyos issued convertible paper notes.16 In contrast, the international economy had a great impact on China’s money supply from the late eighteenth century on. Some theories propose that trade promotes international peace. Actually, only trade in which both sides rely on each other helps international relations.17 On the eve of the Opium War, the tea and rhubarb that China provided was, contrary to Lin Zexu’s claims, not “indispensable” for international trade.18 The silver that international trade provided was, in contrast, indispensable for China, particularly from the late eighteenth to the early and mid-nineteenth century. Such a profound but unbalanced interdependence in economic matters can breed mutual conflict.19 ————— 16. Miyamoto and Shikano, “The Emergence of the Tokugawa Monetary System.” 17. Hirshman, “Rival Interpretations of Market Society,” p. 1465. 18. Rao, Huangchao jingshi wenbian xuji, juan 83, bingzheng 14, haifang shang, Lin Zexu, “Niyu Yinjili guowang xi,” 10–11. 19. Hoffman, “Foreword,” p. ix.

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It is well known that even though the Opium War involved China, Japan was more shocked and responsive to it than was China.20 At the time of the Opium War, Chinese scholar-officials were overwhelmed with monetary issues. When they discussed the silver–copper coin crisis, they often cited the eight administrations mentioned in the Zhou Institutions in which economic issues ranked the most important and diplomatic and military issues last. Shen Yao (1798–1840), Wang Liu (1786– 1843), and Wu Jiabin (1803–64) all expressed the opinion that they had lived in a peaceful time.21 Judging from the military expenses of the Daoguang period, which were only seven-tenths of those of the early Jiaqing period and half of those of the late Qianlong period, 22 we could understand why early nineteenth-century scholar-officials in China did not find the military and diplomatic threat of Western imperialism around the time of the Opium War as overwhelming as that of Qing empire’s late eighteenth-century military expansion. The silver– copper coin crisis worsened after the Opium War, which was one of the causes of the Taiping Rebellion. The pacification of this conflict and the subsequent civil wars overlapped the establishment of the Meiji regime following a relatively short and minimally destructive civil war in Japan.23 From the sixteenth to eighteenth century, Japan’s trade with China and Korea had given Japan the know-how for developing Japan’s ————— 20. Cf. Wang Xiaoqiu, “Yapian zhanzheng dui Riben de yingxiang”; Wakabayashi, “From Peril to Profit.” I am grateful to Pär Cassel and Evan Dawley for this reference. 21. Wang Liu, Qianbi chuyan, “Qianchao yi,” 8a–b; the original Chinese is ྋ₟ஷ྇ ᷀ЂϢᖈ. Wu Jiabin, HCJSWXB, 58 huzheng, qianbi shang.45a (Wu Jiabin, “Nishang yinqian bingyong yi”); the original Chinese is ᔜᖈ੄ඍ᷀Ђ䐶⢫ྱᒼ༨်⑿Ⓥ䐶༱ό 㜯‫כ‬ᕃᕙ. Shen Yao, Luofanlou wenji, fan 10.4a used the term haiyu qingyan ᫡൩᭘ᖐ to describe his times, which he did not understand to be so immoral. 22. Calculated from Matsui, ShinchŇ keihi no kenkyş, p. 104. 23. According to the data provided by Yasukuni Shrine, around 3,500 died in the campaign of June 1869 for restoring the emperorship. Yasukuni Shrine now worships 2.46 million Japanese who died from the late Bakufu rebellions, 1869 campaign, Saga rebellion, Satsuma-ChŇsu rebellion, first Sino-Japanese War of 1894–95, World War I, Mukden Incident, Second Sino-Japanese War, and the Pacific War. See: Li Chongyao, Cong Riben shenshe tan Taoyuan shenshe xiujian, pp. 56–57. The Q&A section of Yasukuni Shrine’s home page http://www.yasukuni.or.jp/annai/qanda.html has similar and simpler descriptions.

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import-substitution industries. This laid the groundwork for Japan’s external trade dominance over China in the late nineteenth century.24 Following the sluggish demand for China’s tea and silk in the early nineteenth century, the increasing sales of these products in 1850–70 led to Chinese complacency. Chinese and Western contemporaries often remarked that even without technological improvements, China’s products sold well. Japan, however, in order to squeeze into the world markets, embarked on a program of technological improvements in the 1870s and left China behind in the late 1880s. Many scholars who have studied the role of silver in China have emphasized the prosperity silver brought to China. China’s use of silver, however, structurally changed its position in the international monetary order. Japan, Korea, and Vietnam used the copper coins of Song China. In China’s early modern period, Song coins were a strong East Asian currency. From the twelfth century to 1600, China was the center of the monetary order in East Asia. 25 However, China’s position in the world monetary order shifted due to its use of Western silver from the late eighteenth century. The difference between Qing China’s desperate reliance on a strategic good such as silver and that of the previous dynasties contrasts vividly with Qing China’s firmer control of another strategic good: the horse. More of the horses used by the Qing rulers were domestically supplied than had been the case during the Ming. Manchu rulers made marital alliances with the heads of Mongol tribes to secure a supply of Mongol horses throughout the early Qing period. The Qianlong emperor’s expansion into Xinjiang added a further supply of horses not only from Xinjiang itself but also from Central Asia. The early Qing emperors’ success in controlling the horse supply was instrumental in the glory of the early Qing empire.26 Yet, the Qing dependency on foreign supplies of another strategic good, silver, from the late eighteenth century on foreshadowed the Qing’s drastic decline relative to Japan in the East Asian order in the modern period.

————— 24. Lee, “Trade and Economy in Preindustrial East Asia,” p. 11. 25. Miyamoto and Shikano, “The Emergence of the Tokugawa Monetary System.” 26. Lin Zhiwei, “Qing Qianlong chao de guanma.”

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Statecraft Thought and Social Realities This heavy reliance on the external supply of silver led not only to the Qing’s dynastic decline in the early nineteenth century but also to its turn to greater statism in the late nineteenth century. This was the result of interactions between statecraft thought and social realities. Statecraft thinking became vigorous in the early nineteenth century, when the social order of China was extremely threatened. Its rise was marked by the 1826 publication of He Changling’s Collected Writings on Statecraft of the Reigning Dynasty, which was followed by about ten similar anthologies in the late nineteenth and early twentieth centuries. In contrast with previous intellectual studies on particular statecraft scholars such as Wei Yuan or Gong Zizhen, James M. Polachek has reminded us of the relation between the statecraft thought and social realities. He perceived a power struggle between the New Text statecraft group and the Manchu Grand Councilor Muzhanga. Benjamin Elman also traced the rise of New Text studies as an ideological check against Heshen, the Qianlong emperor’s powerful favorite. This study goes further, not only finding an intimate relation between statecraft thought and social realities but also highlighting some of the complexities of that relationship. The competition between the statecraft scholars and high Manchu officials was not as intense as that among the statecraft scholars themselves, and the lines of the competition formed more along intellectual inclinations than power struggles or self-interest. The fluctuations of the various strands of statecraft thought in the nineteenth century reflected a broader social reality, in which the exacerbation and easing of the silver–copper coin crisis was critical, as various actors perceived it at the time.

competition among the statecraft scholars Political cliques sometimes emerge and sometimes disappear in policy proposals. Anti-Heshen elements can be seen in the policy disputes that arose over the issue of the maritime transport of tribute grain. The anti-Heshen high official Yinghe, who assumed power in the Jiaqing and Daoguang periods, supported the proposals of Wei Yuan, Bao

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Shichen, Tao Shu, and He Changling. However, even with the conflict between Muzhanga and Lin Zexu in the late Daoguang period, Muzhanga was supportive of the open-franchise salt system and the replacement of silver with copper coins that Bao Shichen advocated. Rather than seeing policy disputes in the nineteenth century as a product of either struggle or cooperation between the statecraft scholars and powerful Manchus, and rather than accepting the previous monolithic view of the statecraft scholars, I argue that they formed groups among themselves and with high officials according to the issues at stake. They associated with one another generally because they possessed a shared interest in statecraft. Ancient-style prose, which emphasized simple and fluent writing, was another common interest. The books of model ancient-style prose also contained many previous works on statecraft. Statecraft scholars might join the Xuannan Poetry Club. They were all concerned about the state. Association and division within the circles of statecraft scholar-officials are most vividly seen in correspondence prompted by Wang Liu’s Preliminary Remarks on Copper Coins proposing the issuance of inconvertible paper notes. Even though their mutual friend Zhang Jiliang sent Wang Liu’s book to Bao Shichen, it invited harsh criticism not only from Bao Shichen but also Chen Shan, Wei Yuan, Xu Mei, and Xu Lian. Lin Zexu showed interest in Wang Liu’s ideas on several occasions, but he eventually rejected Wang’s proposals. Even though Gong Zizhen was one of the few friends that Xie Jieshu made while at the Hanlin Academy in Beijing, Xie Jieshu published a book in 1844 opposing Gong Zizhen’s opinions. Statecraft scholars of the early nineteenth century shared with scholars of Song Learning an interest in moral principles, and they shared with scholars of Han Learning an engagement in evidential research on the classics. Yet different groups of statecraft scholars selected different historical precedents and philosophical knowledge to express their opinions on the early nineteenth-century silver–copper coin crisis. One social theory, advocated by the interventionists, condemned human selfishness for leading to commercialization and market failure. Adherents of this theory expected the state, which they saw as omnipotent, to steer society in the right direction. They thought that the state should prohibit people from moving, trading, and spending. They also

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expected the state to issue either copper coins or paper notes. Since neither of these forms of money needed to come from merchants— especially foreign merchants—the state’s power to control money would not be threatened. Furthermore, the state could use this money to build dikes, develop land, and assist in all sorts of agricultural projects. This money could also be used to pacify riots and to reduce the bureaucratic corruption prevalent during the silver–copper coin crisis. The accommodationists supported a peaceful agricultural society, an ideal also advocated by the interventionists. Gong Zizhen’s essay “Agricultural Patrilineage” drew plans for such an ideal society. However, the spirit behind Gong’s ideal diverged greatly from the rationale of the interventionists. Gong proposed the principle that “each person is entitled to the fruits of his own labor.” Each person was to live by his own efforts. Aside from a small tax to sustain the government, which would be required to play only a minimal role, the government would take nothing else from the people. The money that the interventionists proposed that the state issue would, the accommodationists believed, take wealth from the people. They thought of money as a convenient medium for people to create wealth, rather than as a tool for the state to wield in extracting wealth from people. If the state did not take wealth from people by issuing fiat money and if taxes were kept light, how would it be able to tackle China’s enormous social problems? The accommodationists would say, “Let the people do it. They can carry tribute grain, sell salt, and open mines much more efficiently than the government or monopoly merchants.” The debate between the two groups continued approximately as follows: Interventionist: “Why should people occupy themselves with things other than agriculture?” Accommodationist: “Because agriculture, commerce, and industry can actually benefit one another.” I: “How can you talk about benefits when all those who grew cash crops such as cotton in the Jiangsu area lost so much when foreign cloth was imported?” A: “In that case, what we should do is to learn about foreign technology to make our own cloth as good as theirs.”

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I: “Don’t you see that the development of commerce and trade moves wealth from one person to another and makes income distribution even more unequal?” A: “Not exactly. Trade can bring mutual benefits. The unequal distribution of wealth is something we human beings cannot help. It is a kind of natural order. Furthermore, the rich can motivate the poor to catch up.” I: “Natural order. Are you saying that it is natural for human beings to keep wealth only for themselves?” A: “It is. Man differs from animals in his concern for himself and his family.” I: “How can society be maintained by people who know only themselves and their own families?” A: “If their private interests seriously transgress the public interest, taxation or punishments can be used as a check. But they will learn that only when they are honest and progressive can their self-interest best be achieved. Honesty and progress will be beneficial for society.”

grouping on an intellectual basis rather than self-interest Benjamin Elman’s study of the Evidential Research school of Jiangnan has emphasized the leading role played by Hunan and Guangdong rather than Jiangnan in the rise of the statecraft school in the early nineteenth century. The regional distribution of scholar-officials who spoke out on the silver–copper coin crisis, however, reveals that Jiangnan still led in both number and importance. Regional interest could not limit nationwide communication among the same group of scholars. They wrote letters, printed books for their fellow scholars, and sent books to one another across the provinces. Li Zhaoluo, a famous statecraft scholar and bibliophile, pointed out, “Whenever an author writes a readable essay, he thinks it very unusual. Therefore, every author has collected works ( ji 㩱), and everyone publishes books.”27 ————— 27. Guo Shaoyu, Zhongguo wenxue pipingshi, p. 399. In regard to printing, another example is Hu Diaoyuan, a Jiangsu candidate circuit intendant, who was quite likely a

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Due to the printing industry, regional boundaries in the Qing were not confining. Nor can we find any anti-Manchu ethnic element. On the coins that the accommodationists proposed casting, the Manchu imperial symbol was still a sign of respect, as seen also on the paper notes preferred by the interventionists. Even though the accommodationists proposed a greater role for merchants and some had family relations with merchants, their opinions were based more on the incapacity of the impoverished state to handle the crisis than on class interests. This was a society in which scholar-official lineages had long been intertwined with merchants; not only the accommodationists but also the interventionists had some merchant connections. More predictive of policy differences was intellectual disposition. Many of the scholar-officials of the accommodationist group were scholars of the New Text classics and the Yanghu essay school. Many of the interventionists were scholars of the Old Text classics and the Tongcheng essay school. The New Text school of classics stressed a gentleman’s independence, the evolutionary process of social change, and Heaven’s and the Sages’ check on the monarch’s power. The Old Text school of classics focused on absolute loyalty. The Yanghu school of essay writing emphasized rhetoric and creativity. The Tongcheng school of essay writing focused on the imitation of previous masters, didacticism, and the structure of essays. In the early nineteenth century, both the New Text school of classics and the Yanghu school of essay writing gained in vigor. In the late nineteenth century, however, the Old Text school of classics and the Tongcheng school of essay writing came to the fore. Differences in the two groups’ social theories also corresponded with differences both in their approach to the classics and in their essay-writing styles. Both the accommodationist group and New Text scholars tended to cite Heaven and the Sages to check the state’s power. The accommodationists’ greater awareness of the uncontrollability of market forces was also in keeping with the New Text school’s tendency ————— merchant, and who printed a “proposal for issuing paper notes” (Chaobi binggao 㛧ེ ␌⑙) by himself (ZJHSZL, p. 332).

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to regard monarchical power as limited. The Yanghu school’s emphasis on rhetoric, a technical change of sorts, was similar to the accommodationist group’s attention to technological improvement. The accommodationists’ preference for gradual change also coincided with the New Text’s inclination for reform. The New Text emphasis on the Confucian gentleman’s independence was compatible with the accommodationists’ emphasis on individual initiative. The Old Text’s emphasis on loyalty was compatible with the interventionists’ view of the state’s omnipotent power and with the Tongcheng school’s emphasis on the imitation of previous masters. The Tongcheng school’s emphasis on the structure of essays also paralleled the interventionists’ suggestions for a structural change of the entire monetary system. The Tongcheng school’s emphasis on the didactic purpose of essays matched the interventionists’ eagerness for social teaching. (See Table C.1 for a summary of the contrasts between the interventionists and the accommodationists.) The dividing lines in the economic debate corresponded to a great extent to the dividing lines among different literary or philosophical groups. Chen Shan, who was the first scholar to criticize Wang Liu’s proposal to issue inconvertible paper notes, was a student of Zhang Huiyan, the Yanghu master. Xu Mei and Xu Lian, who harshly criticized Wang Liu, were students of Ruan Yuan, whose teacher was an examination disciple of the founder of New Text school, Zhuang Cunyu. In the areas of philosophy and writing style, the two groups actually fought severely. Jiang Xiangnan, a student of Ruan Yuan, said that among his contemporaries, he respected most the New Text scholars Liu Fenglu, Gong Zizhen, and Wei Yuan, who were “good at the pedagogic principles of New Text studies of the classics” and “able to manifest the true ancient-prose style to society.” Jiang further said that the Tongcheng adherents’ writings did not represent the true ancientprose style, because they were following the “false eight masters.” Conversely, Shen Yao, a Tongcheng scholar, in a letter to a friend living in the countryside, criticized Gong Zizhen’s essays as depicting ghosts, whereas their Tongcheng group was depicting men and should be seen as superior.

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Table C.1 Contrasts Between the Intellectual Groups ____________________________________________________________________ Commonalities

Political-economic thought: statecraft, legitimating the changing of society to some extent; included more nationalism, though still keeping property rights intact. Writing style: preferred more communicable ways of expression; changed writing forms according to topic. ____________________________________________________________________ Variances Interventionist Accommodationist ____________________________________________________________________ Human nature

Human nature inherently evil; needs to be transformed by education.

State power

Omnipotent power.

Commerce

Human selfishness and greed lead to commercialization, which widens the gap between rich and poor; loss of control over markets; engenders unemployment and social conflict. Society’s wealth is fixed; merchants simply move wealth from one party to another.

Merchants’ role

Private property

[No discussion]

Money

Issuance of inconvertible paper notes or copper coins with face value higher than one wen or than intrinsic value.

Human nature neutral; evil comes from outside influences such as bad institutions; human feelings need to be acknowledged. State’s power is limited by market forces, Heaven, or the Sages. Commerce could bring more honesty and technological progress through competition; market failures will be compensated by market forces. Merchants can create more wealth for society; without merchants some economic resources might not be developed. Man is entitled to the fruits of his own labor; light taxation. Maintaining the status quo—merchants provide the most valuable currency or assist it with state-issued coins made of precious metals.

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Table C.1, cont. ____________________________________________________________________ Variances Interventionist Accommodationist ____________________________________________________________________ Writing style

More emphasis on the structure of chapters and sections; moral implications; imitation of previous masters.

More emphasis on rhythm and rhetoric; no moral implications; encouragement of individual creativity. Classics study Tended to follow the Tended to follow the Old Text interpretation New Text interpretaof the classics, which tion of the classics, underscores the absolute which underscores a power of the secular broad range of ruler; sought more powers, such as transformative changes. Heaven or Confucian teachings to check the secular ruler; sought more gradual change. ____________________________________________________________________

the rise of the accommodationists in the early nineteenth century Even though the Qing state was in desperate need of money in the early nineteenth century, suggestions that the state issue paper notes or big coins with face values much higher than their intrinsic value were turned down by the state itself before 1853, partly out of fear that people would counterfeit them. The impoverished state was also incapable of supervising trade, the movements of people, and spending. Finally merchants were allowed greater freedom to seek some amelioration of the situation, a policy advocated mainly by the accommodationists. The rise of the New Text and Yanghu school corresponded with the exacerbation of the silver–copper coin crisis. Although this crisis started to develop locally in the late Jiaqing period, it was not until 1820 that it spread nationwide. It was only in 1820 that Qing scholar-officials explicitly noted the silver–copper coin crisis. The New Text school did not emerge as a national phenomenon until two nationally known proponents revived it in 1819–20. Even the accommodationists also reinforced their market-oriented ideas with the exacerbation of crisis from the 1820s onward. Gong Zizhen changed from criticism of cash crops

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in 1823 to acknowledgment of them in 1836 and changed from putting food above money in 1815–16 and again in 1823 to emphasizing both food and money in 1836 and 1838. Bao Shichen also changed his views on market forces. Although officials often referred to his four essays discussing the silver–copper coin crisis from the 1820s, Bao finally said in 1846 that market forces could not be changed by human effort, and he finally decided to let the market achieve equilibrium. The simultaneous growing influence of the New Text classics can be observed in Ruan Yuan’s partial change in academic preferences: in 1801 he established an academy at Hangzhou that worshipped two ancient interpreters of the Old Text Classics, but in 1820 he set up a new academy in Guangzhou named in honor of the foremost adherent and expositor of the New Text school, although one of the ancient interpreters of the Old Text Classics was still worshipped. When the silver–copper coin crisis worsened between the 1820s and 1850, more works of the New Text school were published. Although Zhuang Cunyu and Liu Fenglu took up New Text studies in the late eighteenth century, it was not until 1827 and 1830 that their works on New Text were respectively published. In the late Daoguang period, the leaders of both the New Text school and the Yanghu school ranked high throughout the country. At this time, the Tongcheng scholars were regarded as “weak and sterile.” Like Grand Councilor Muzhanga’s admission that the state had been too impotent to adopt an interventionist monetary policy, only the perception that the state power was limited by other powers carried meaning for people of this period.

the upsurge of the interventionist group after the taiping rebellion A drastic change was seen in this trend beginning in 1853 and continuing for the following decades. The state issued inconvertible paper notes and big coins in 1853–61. Silver dollars began to be cast in Guangdong province in 1890, and the practice spread to thirteen other provinces. The Qing court set up a mint in Tianjin in 1905, started to cast silver dollars in 1909, and promulgated a statute in 1910 to begin using silver yuan (dollars) rather than liang. The government’s modern bank for collecting taxes was established in 1897. Together with these monetary changes, the state began to intervene in the operations of indus-

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tries and companies. The theoretical underpinnings of these policies held that economic pursuits were for the benefit more of the state than of the private sector. All these developments can be summarized as the rise of the interventionist stance. Together with this shift, other intellectual currents also changed. Many of the academies promoting the Tongcheng and the Old Text schools were built with funds from the commercial taxes made possible by the favorable trade balance from the early 1850 onward. Moreover, the security threat of the Taiping Rebellion was used to justify the use of this new private money to reinforce state ideology. The New Text school, which stressed multiple centers of power, suddenly disappeared. Xu Mei’s writings criticizing Wang Liu were not included in the collected works of statecraft essays of late nineteenth century, whereas Wang Liu’s proposal was turned into policy in the 1853–61 period and included in the late nineteenth-century statecraft collected works.

erosion from outside and the shift of mental models In contrast with previous views of statecraft ideas as essentially monolithic across the nineteenth century, this study perceives the rise of ideas favoring pluralism with the threat of the silver–copper coin crisis to the state’s power, followed by their decline with the outbreak of the Taiping Rebellion and the supply of more silver for the state to build academies. This transformation resembles Michel Foucault’s description of “discontinuity”: “the fact that within the space of a few years a culture sometimes ceases to think as it had been thinking up till then and begins to think other things in a new way—probably from an erosion from outside.”28 The erosion that early nineteenth-century China experienced was economic—namely, since China’s economic structure became highly dependent on the world supply of silver from the late eighteenth century, when the global silver supply shrank in the early nineteenth century, China suffered an overwhelming threat. This is why scholar-officials perceived the overarching importance of money in the Qing administration. ————— 28. Foucault, The Order of Things, p. 50.

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By defining his times as chaotic, Gong Zizhen claimed that food and money were a higher government priority than religion, education, law, and public works, which would have more importance in peaceful times, as well as relations with vassals and military affairs, which were suitable for even more ideal times.29 To judge from Gong Zizhen’s ranking of diplomacy and military affairs much lower in administrative priority, “chaotic times” for him denoted economic rather than military chaos. The structural change of the loss of China’s position at the center of the East Asian monetary order as it became subordinate to the world monetary order paved the way for the structural change of China’s order of knowledge. Intellectual historians of China, following a unilinear perspective of historical processes, have long been puzzled by the sudden appearance and disappearance of “enlightened” or “modern” ideas in the nineteenth century.30 During the early nineteenth-century silver–copper coin crisis, the government had absolutely no banking facilities to ease the situation. The monetary problems reinforced competition between the state and society, resulting in the state’s inability to support a more statist politicaleconomic ideology. It is no wonder that ideas calling for pluralism, such as those of the New Text school, which had been subdued for some sixteen hundred years, were suddenly extracted from China’s historical repertoire in an effort to comprehend and tackle the crisis. The increased economic resources the state obtained to bolster more statist ideas after 1853, during a time of unprecedented devastation of life, is, on the other hand, a reason for the sudden disappearance of the New Text school. The particular dominance of New Text ideas in early nineteenth-century China is a symbol of the structural problem of this society at this particular period of time. The connection between social conditions and intellectual outlooks tells us that intellectual activity was concerned more with interpreting the times than with searching for the ontological goals of “enlightenment” or “capitalism.”

————— 29. Gong, Gong Zizhen quanji, 1: 46; the original Chinese is 㯵㊜⢧, ᑽϻ⢫Ҟ; ⎢ ϱ䐶ߴၠ䐶ߴ඙䐶ߴ⑿ϱ䐶ᩆ‫྇ݴ‬ϢЂ; ㊾དྷϝᓾ⨠ஷ྇ϢЂ. 30. Hou Houji and Wu Qijing, Zhongguo jindai jingji sixiang shigao, 1: 305.

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“Aborted Capitalism?” Nonetheless, the question of Chinese capitalism is unavoidable. Mao Zedong famously claimed in 1939 that capitalism had been developing in China but was suppressed by imperialism. The widespread use of silver certainly indicates China’s high degree of commercialization. But was China really developing capitalism? Max Weber famously argued that commercialization should not be identified as capitalism. As Weber noted in 1904, commerce had existed in China, India, Babylon, Egypt, and the Mediterranean in antiquity and during the Middle Ages. Modern Western capitalism differed from these earlier commercial systems in its dependence on “the peculiarities of modern science, especially the natural sciences based on mathematics and exact rational experiment.”31 Along this line of thinking, we would add: even though Qing China had cash crops like tea and silk, it did not have experimental laboratories for developing new varieties of these crops. Modern agricultural science would have developed and distributed new agricultural products at a much faster pace than the incidental improvements of some Chinese peasants and their casual distribution in the Qing period.32 The link between China’s commercialization and silver subjected China to the world economy, which in turn brought both economic prosperity and downturn. Pace Mao, this cannot be boiled down to “imperialism” and treated as a purely negative factor. Even without searching for the rise of capitalism, some scholars would deem Qing China’s market-initiated social arrangements with plural centers of power and gradual change as still related to the development of capitalism. In the early nineteenth century, China’s debate over the silver–copper coin crisis stimulated both extreme statist and the extreme market-oriented approaches, as we have seen. Yet the particular dominance of market-oriented approaches in the early nineteenth century has not re-emerged so far in China’s modern history. In many ways, early nineteenth-century China’s theories about the market could be compared with similar theories in the West. Yet ————— 31. Weber, The Protestant Ethic, pp. 19, 24. 32. Perkins, Agricultural Development in China, p. 37.

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although China was subject to the world economy in the early nineteenth century, Western ideas had almost no influence on Chinese scholar-officials’ perceptions of the monetary crisis. As Western influence on Chinese knowledge at this time was limited mostly to geography, religion, and history, the scholar-officials of the early nineteenth century searched various dynasties to find historical precedents. Unlike later periods, when Western economic concepts had become available, the early nineteenth century marks the last time when only traditional ideas were available to deal with a monetary crisis. This provides us with a panoramic view of China’s traditional attitudes toward authority, historical change, and state-market relations.

dominance of market-oriented ideas in the early nineteenth century “Economic liberalism” is a difficult term to define because its meaning has changed over time. According to one definition, as long as a government is a representative one, whether it espouses interventionist or laissez-faire policies, it is compatible with economic liberalism. For example, the Victorian era has been described as a period of economic liberalism.33 But it is in this period that the parliament passed the personal income tax and endorsed the Opium War to solve a commercial conflict. Clearly, China in the nineteenth century did not have representative government.34 However, if we reduce the concept of economic liberalism to what Adam Smith implied—that the private sector is more responsible for economic activity and that private interests are allowed to promote public interests rather than relying on the government— then this line of thinking became dominant in early nineteenth-century China. Overall, the less interventionist strand, which won out in the early nineteenth century, contrasts vividly with the more interventionist ideas that gained the upper hand after the 1850s with calls for building a strong, modern state. From the Self-Strengthening Movement of the late nineteenth century to the reformist New Policies of 1901, to the ————— 33. Grampp, Economic Liberalism, 2: viii, 82, 87, 95, 99. 34. Kuhn, Origins of the Modern Chinese State, p. 117: “We search Wei Yuan’s writings in vain for any institution through which literati participation might be exercised.”

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Conclusion

grassroots movement for political-economic control during the revolutionary movement, and finally to centralized economic development after 1949, never again was an insistence on the limits of the coercive power of the state in the economic sphere expressed as vigorously as in the early nineteenth century. The increasingly interventionist trend in modern China after the late nineteenth century can also be seen in the contrasting intellectual responses toward the market failures of the 1930s and those of the early nineteenth century. In the 1930s, when China confronted economic downturn, scholars such as He Lian җ࿋ (1895–1975), Chang Kia-Ngau ရ঒‷ (1889–1977) and Fang Xianting ᔤ㮟࿱ (1902– ) attributed it to monetary decreases caused by silver outflows and proposed the establishment of a central bank to control the money supply and exchange rates. Scholars such as Ma Yingchu 㲃඗‫( ڪ‬1882–1982) and Gu Chunfan ㉆ᕵ༵, who attributed the whole problem to trade deficits, proposed a protective tariff to limit imports and stimulate exports. Marxist scholars such as Chen Hansheng 㨴⢕ⓨ (1897–2004) and Feng Hefa 㲅࡫ᩝ called for resistance to foreign products that had underpriced domestic products. All these groups of commentators asked for more state intervention. Such a yearning to reinforce state power paved the way for the final establishment of a central bank in 1935.35

comparisons with western ideas on money shortages The scholars of the early nineteenth century did not base their argumentation on mathematics, another crucial modern element, used by both Keynes and Hayek. But their heated debates developed much like those between Keynes and Hayek. Although still not conceiving of a central bank, one line of thinking, represented by Wang Liu, proposed that the imperial state retrieve the power over money issuance to lead to a Keynesian result: increased public works to counteract unemployment, corruption, and administrative negligence. The opposing group, represented by Xu Mei, proposed to have private banks compete with one another to provide society with currencies based mainly on noninfla————— 35. Li Yuping, “Yijiusanling niandai.”

Conclusion

311

tionary precious metals and to let the market coordinate its own intraand intertemporal rhythms, just as Hayek proposed. Early nineteenth-century China encountered a money scarcity, as did seventeenth-century England. China’s early nineteenth-century discussions and the historical precedents cited during this debate disclose that China had a clearer tradition of warning against the fiscal abuse of money than seventeenth-century England inherited from Western economic thought. Even though they were as concerned with the international balance of payment as the bullionists of seventeenth- and eighteenth-century Europe, the early nineteenth-century Chinese scholar-officials did not deem precious metals as the only form of wealth; they also emphasized the common people’s use of natural resources to produce goods as another form of wealth. The noninterventionist strand of Chinese traditional ideas shared the contemporary Western neoclassical insight on the impact of the continuous interaction between the government and the people on the outcome of economic policy.

flexible ways for choosing historical precedents The historical precedents and the way the early nineteenth-century scholar-officials cited them reveal more flexibility in traditional arrangements of state-economy relations than the usual image of the dominance of the interventionist inclinations of the Salt and Iron Discourses. Both statecraft groups cited the Zhou Institutions, which ranked food and money as the first two priorities of the eight administrations. Yet, when citing this authority, some suggested casting coins in precious metal, which would limit the monarchical use of currency to obtain revenue, and others suggested extending the use of copper coins cast by the monarch. Different applications of the same historical authority can also be seen in the various interpretations of the monetary stance encapsulated in Duke Shan Mu’s “heavy money” theory. Some interpreted “heavy money” as more valuable money and thus proposed the casting of coins of precious metals. Some interpreted “heavy money” as coins with greater denominations but without proportionally increased intrinsic values. Also, scholars arguing for private mining policy pointed out that since 1133, private mining coexisted with state mining.

312

Conclusion

The sudden flourishing of interest in the market and in pluralism in the early nineteenth century and their sudden disappearance around 1850 also reveals a nonlinear choice of theoretical precedents. “Tradition” is thus a fluid medium from which later generations can draw concepts with which to address the concerns of their own times, rather than a series of fixed templates advancing some predetermined order. Since ideas and socioeconomic conditions are always in dialogue, China’s flexible tradition in political-economic thought provides many cultural alternatives for its future, particularly at a time when China is again more involved with the world economy.

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———. “Qingdai Qianlong chao qiangui shiqi zhi siqian zhengce” ᭘фϹ㩁 ᘟ㞨㊥ᖈᘠϢ␇㞨ᓈ┘ (The private coin policies of China at the time of copper coin appreciation, ca. 1736–70). Ph.D. Diss., Graduate Institute of History, National Taiwan Normal University, 2005. ———. “Qingdai Qianlong nianjian de siqian liutong yu guanfang yinying zhengce zhi fenxi: yi siqian shoumai zhengce wei zhongxin” ᭘фϹ㩁ྈ㦇 ↫␇㞨᪸㕗⨰൴ᔤਧሐᓈ┘Ϣ‫—ᙷڗ‬ц␇㞨ᓁ㊨ᓈ┘ᵱόႇ (The circulation of private copper coins and the official reaction in the Qianlong period, with particular emphasis on the purchase of private copper coins). Guoli Taiwan Shifan daxue lishi xuebao ੄Ⓗ⨥ᴶདྷ╣வൟ᤾߯ൟଐ (Historical bulletin of National Taiwan Normal University) 25 ( June 1997): 235–86. Zhi Weicheng ᒼՐቄ. Qingdai puxue dashi liezhuan ᭘фᡪൟவདྷ‫( ֦ڤ‬Biographies of evidential research scholars of the Qing dynasty). In QDZJCK 012. Shanghai: Taidong tushu, 1925. Zhongyang yanjiuyuan, Jindaishi yanjiusuo, Shehuijing jishizu ό஻⋏⑻㨦㔘 ф߯⋏⑻ቪ⎠ᘍ⚰᳐߯♷, ed. Caizheng yu jindai lishi lunwenji ㊖ᓈ⨰㔘ф ᤾߯ㄚᓾ㩱 (Collected essays on public finance and modern history). Taipei: The editor, 1999. Zhou Yutong ࡐЀࠂ. Jing jinguwen xue ⚰вߢᓾൟ (Study of the New and Old Text classics). Taipei: Shangwu yinshuguan, 1967 (1926). ———. Zhongguo jingxue jiangyi ό੄⚰ൟㅔ⡛ (Lecture drafts on the history of the Chinese classics). Shanghai: Wenyi chubanshe, 1998. Zhu Lian ㄶ⣮. Mingzhai xiaoshi ᕥ䁶ෑㆅ (Notes from the Bright Study). 1821. Zhu Weizheng ᘮ⛀㞡, comp. Zhou Yutong jingxueshi lunzhu xuanji ࡐЀࠂ⚰ൟ ߯ㄚⰒ㖛㩱 (Selected anthology of Zhou Yutong’s works on the study of classics). Shanghai: Shanghai renmin chubanshe, 1996. Zhuang Jifa ⭪߿↥. Gugong dang’an shuyao ᓋඈᢪᜅ㔳〧 (An outline of the Palace Museum Archives). Taipei: Gugong bowuyuan, 1983. ZJHSZL: Zhongguo renmin yinhang, Zonghang canshishi, Jinrong shiliaozu ό੄Хᦾ㜯⼾✫⼾ߏЂൿ㚷⺨߯ᔉ♷, ed. Zhongguo jindai huobishi ziliao ό੄㔘ф㊜ེ߯㊷ᔉ (Materials on the history of currency in modern China). Series 1, vol. 1: Qing dynasty. Beijing: Zhonghua shuju, 1964. Zuo Zongtang ༟൳᝴. Zuo Wenxianggong quanji ༟ᓾ⿻‫حذ‬㩱 (Complete works of Zuo Zongtang). 1890. Reprinted in JDZGSLCKXB 646. Taipei: Wenhai chubanshe, 1964.

Z Index

Academic institutes: academies (shuyuan), 21, 272, 278–79, 283, 306; Hall of the Sea of Learning (Xuehai Academy), 277; Refined Study for Interpreting the Classics (Gujing jingshe), 277 Accommodationist group: ambivalent about the relation between self and Heaven, 223; argued for light tax, 220; concerned also with the loss of state power, 210; considered human nature as neutral, 206–7; contrast with late Ming scholars, 282; deemed Heaven as above the emperor, 212; different from late Qing interventionist mercantilist approach, 282–83; emphasized technology, 217; exalted the sages, 213; in relation to New Text school and Yanghu school, 257–59; noted the self-regulating tendency of the market, 214; operational definition, 203, 226; popularity in the early nineteenth century, 262–65, 272–77 passim; preferred small government, 211; put stress on commerce, 217; representative scholars, 204–5; sought gradual change, 221; thought that trade

would create wealth, 216; underscored the benefits of the market, 212; understood the positive function of consumption, 218 Ancient Prose (guwen), see Tongcheng school Banks, Chinese modern: Bank of the Board of Revenue, 268, 270; Bank of Communications, 270; Bank of the Great Qing, 270; Central Bank, 8, 145, 149, 152, 194, 199, 310 Bank shops (qianzhuang or qiandian): and landlords, 237–38; agent to give the silver–copper coin market ratio, 12, 150; cast silver ingots with the name of bank shop rather than the reign name, 50–51; deposit officials’ money, 48; double profits in exchanging copper coins for silver, 6, 12, 56; increased in the late eighteenth century, 56; issuing convertible paper notes, 7–8, 36; issuing drafts cashable in other places, 55; nodes for interregional trade, 11; possible to buy private coins, 35; provided silver for local officials to forward taxes, 11, 41; main services, 56; relations with

348

Index

private secretaries, 138; sometimes forwarding the taxes in silver to Beijing, 42 Bank shops, in scholar-officials’ minds: for Ding Lüheng and Lin Zexu, 174; for He Changling, 214; for Hu Diaoyuan, 173; for Wang Liu, 151–52, 154, 156, 158; for Xu Mei, 160, 214 Banks, Shanxi: comparison with Western banks, 182n7; forwarding taxes after the Taiping Rebellion, 41–42; in Feng Guifen’s proposal, 170; nationwide network, 55; profits from inter-provincial arbitrage, 270 Bao Shichen: and his age cohort, 231; and Manchus, 234; and the New Text school, 251–52; books most familiar with, 186; debate with Wang Liu, 148, 152, 154, 157, 164, 166; earliest scholar to stress the external cause for the silver problem, 206; for convertible notes, 157; for market rate in the replacement of copper coins with silver, 169–70; influence, 169, 231; maternal grandfather as merchant, 36, 238; on commerce, 217; on corruption, 208; on higher silver prices in poorer areas, 118; on interregional transactions, 170, 216; on maritime transportation of tribute grain, 235, 237, 264; on open-franchise salt system (or ticket salt system), 265; on sluggish market, 133; on technology, 223, 272; on trade, 272; on vagrants, 125; on the vital impact of silver price upon governmental revenues, 235; realization of market forces, 173, 259, 273

Capitalism, Chinese: burgeoning of, 23–25, 262, 285, 307–8; Mao Zedong, 23–24, 308 Commodities, see Copper coins; Opium; Silk; Silver; Tea Contemporary scholars: Joyce Appleby, 189n35, 218n70, 228n1; William S. Atwell, 23, 66; David Bello, 24, 113; W. E. Cheong, 113; Yu-kwei Cheng, 94; Louis Dermigny, 113; Eiguchi Hisao, 250n80, 251n95; Benjamin Elman, 233, 297, 300; Dennis O. Flynn and Arturo Giraldez, 66, 107; Andre Gunder Frank, 1; Milton Friedman, 285; Michel Foucault, 25, 306; Richard von Glahn, 17n59, 66–67; Maurice Godelier, 284; Guo Shaoyu, 241n38, 243, 248n71; Ping-ti Ho, 278n58, 278n60, 292n13; Hou Houji, 16, 220; Hu Jichuang, 16, 18; Frank King, 90; Kishimoto Mio, 142; Philip A. Kuhn, 21, 127, 198, 309n34; Kuroda Akinobu, 115; F. W. Mote, 141; neo-classical economists, 199; Douglass C. North, 18, 20; Peng Xinwei, 16; James M. Polachek, 257–58, 297; Kenneth Pomeranz, 1; John F. Richard, 74, 83, 88, 287; William Skinner, 117; Frederic Wakeman, 23; Immanuel Wallerstein, 6; Wang Hongbin, 73n7, 198n62, 199; Yeh-chien Wang, 49n81, 115n1, 120n23, 293n14; Mary Wright, 161n1, 282; Ye Shichang, 16–17, 20; Yu Yingshi, 161n3; Zhou Yutong, 225n104, 245n59, 246n62, 247n63, 248n70; Zhao Jin, 16 Copper coins: alloy, xxv, xxvn12, 168; baiqian, xxv, baoquanju, 5; baoyuanju, 5; Beijing mints, 5, 31, 35, 53; cast

Index in the provincial capital, 115; long Chinese tradition of, 31; coins of previous dynasties, 33, 70; comparison with Tokugawa and Western Europe for usage, 4, 4n9, 69; cost for casting, 10, 151; decrease of silver from Japan and the boom in copper coinage, 68; deterioration, 73n6; for local largescale transactions, 6; hand-made mold, 34; heiqian, xxv; imperial penetration below the xian, 31; inadequate supply, 73, 126; Japanese copper coin, 35–36; main currency of Korea, 69; Manchu script, xxviii; mao, xxiv, 32 Table 1.1 notes; mints, 5; of previous dynasties, 33, 70; Oriental and Occidental systems, 31; private mintage, 34–35, 198; process to circulate to the market, 5, 5nn14–15; provincial mints, 5, 31, 33, 83, 174, 289; pul copper coin, 119, 180, 210; reflecting small-scale mode of production, 4, 31; share in money, 7; sold to Japan, 61; trend of coinage, 31– 33, 68; used to pay wage earners and its depreciation, 10, 124; Vietnamese copper coin, 35–36 Cultural history, see Academic institutes; Deities for money; Interregional networks; Mail communications; Mental models; Order of knowledge; Printing; Travel; and Zhu Xi Daoguang emperor: and silver mining, 236; and the tribute grain, 21, 237n, 264; aware of the silver– copper coin crisis in 1822, 83; aware of the taxes paid with foreign silver dollars, 46; being fru-

349

gal, 9; concerned with the HanMiao conflict, 216; most concerned with the silver appreciation issue, 22; prohibited opium imports in 1819, 90 Deities for money: Discourse on the God of Money (Qianshen lun), 14n46; Gazetteer of the Money God (Qianshen zhi), 14; using deities to secure confidence in paper notes, 151 Ding Lüheng: against merchants’ manipulation of silver price, 9, 267; and his age cohort, 231; and New Text school, 251; citing Zhou Institutions, 184; for purchasing metals from the market, 172; intention to reinforce the state’s power over currency, 210n27; liberal interpretation of Duke Shan Mu, 185; very early scholar for casting coins in precious metals, 171 Dynasties and historical periods, Chinese: Han, 17, 181, 183, 188, 198, 246; Jin, 188–90; Jurchen Jin, 187– 91, 209; Liu Song, 240; Liang, 188; Lu kingdom, 246; Northern Wei, 240; Qi, 190; Qin, 19, 246, 270; Song, 15, 20, 39, 183, 188, 224–25; Spring and Autumn, 245–46, 251; Tang, 188, 198; Yuan, 213; Zhou, 30, 185, 187, 190. See also Ming dynasty Economic concepts, Chinese traditional: Duke Shan Mu, 185, 190, 197, 311; economic liberalism, 309; eight administrations, 15, 183–84, 295, 311; Guanzi, 186, 186n21, 198, 198n63; hiding wealth among the people (cangfu yumin), 191; luxurious consumption, 93, 209, 218,

350

Index

225, 258; managing wealth (lichai ), 166, 184, 263; muzi xiangquan, 185; Salt and Iron Discourse, 17, 181, 198, 311; talking about interest ( yanli ), 263 Economic policies, Qing: China Merchants’ Company (zhaoshangju), 266; the initiative of the state in maritime transportation of tribute grain, 237; maritime ban policy, 61; maritime transportation of tribute grain, 213, 252, 264, 274; migration, 215–16, 220, 226, 251, 258–59; mining policies, 236, 262–63, 283; open-franchise salt system, 236, 252, 254n113, 262, 264, 283, 298; policy-making process, 229 Emperor: and the official report system, xxv, 16, 29n2; Emperor Wen (r. 179–157 bce), 198; Emperor Wu (140–88 bce), 188, 190; early Ming emperors, 61n121, 189; Jiaqing emperor, 234, 235n12, 263; Kangxi emperor, 33; Qianlong emperor, 21, 33, 43, 296–97; Vietnamese emperor, 14, 58n104; Xianfeng emperor, 177. See also Daoguang emperor England (United Kingdom): banks, 182; China’s chief trading partner, 64, 75; Chinese silver inflow, 84– 85; confronting the early nineteenth-century currency shortage, 287; less fiscally noninterventionist tradition, 191, 198, 311; luxury concept, 218; opium usage, 287; same silver price as Canton, 108; seventeenth-century coin shortage, 181; sovereign on currency, 50; supply of silver to India, 112–13, 288–89

Feng Guifen: against inflationary big coins, 167; and his age cohort, 231; and Xie Jieshu, 257–58; as Lin Zexu’s private secretary, 137; deemed decreased income as reason for corruption, 208; for gradual change, 221n89; from Hanlin Academy, 229; on the decreasing purchasing power of the state, 136; on the doubled tax burden, 132; on the prevalence of silver use in the wholesale trade, 46; on the recession around 1852, 128; on Shanxi banks, 55, 170; on the superiority of foreign silver coins over domestic ones, 47; on the vicious circle of the currency crisis, 136; noticed the backflow of silver and ending of silver– copper coin crisis, 98, 100; partly agreeing with copper coin replacement with silver by following the market rate, 170; strong supporter for the external explanation for the currency crisis, 206, 207n11; study with Li Zhaoluo, 253 Fiscal system, Qing: Board of Revenue, 5, 229, 234, 264, 279, 281; Board of Works, 5; commercial taxes, 140–41, 262, 279, 293, 306; contribution ( juanshu), 7; customs revenue, 141, 177; lijin, 141, 266, 279–80, 293; military expenses, 22, 126, 188, 286n5, 295; native tariff, 141; opium tax, 141; public expenditures, 5, 12–13; public expenses increased with silver appreciation, 135–36, 168–69, 188, 196, 291; put self-wrapped tax money into the tax box (zifeng tougui), 11n36; revenue surplus of early Qing, 279;

Index salt tax, 129, 134, 141, 170, 177, 280, 290; share of taxes in national income, 133; silver in tax payment, 39–42; surplus of conversion rate for administrative expenses, 130; tax burden doubled, 132; tax shortage due to silver appreciation, 133 Gold: discovery in California and Australia, 109; in Ding Lüheng’s proposal, 171n108; in early Ming, 187; in Hayek’s view, 193; in Heshen’s property, 49; in Japanese money, 69; in Locke’s view, 190; in Wei Yuan’s view, 186; in Western monetary system, 17, 31; in Xu Lian’s discussion, 161–62; in Zheng Zuchen’s proposal, 164n71, 171–72; in Zhou, 188; ingots cast in Vietnam, 50; more obtained by the United States with silver in 1834, 276; silver-gold arbitrage, 64–65, 68, 87n28, 107–8; world production, 108–11, 114 Gong Zizhen: ability principle, 219; “Agricultural Patrilineage” (Nongzong), 217, 219–20, 222, 299; and Ding Lüheng, 252; and his age cohort, 231; and New Text theories, 18, 245–52, 277; and Shen Yao, 248, 256; and Xuannan poetry club, 255; and Yanghu branch, 19, 239, 245, 252, 277; changed to be a strong advocate of private property, 219; for money in precious metals, 171–72, 190, 210; low income and bad official, 130–31; “man is the master of the world,” 223; monetary affairs in his order of knowledge, 15, 307; on income distribution, 212; on the similarity

351

of scholars and servants, 208; view on ancient period, 222 Gongyang interpretation: and Gong Zizhen’s economic theory, 18; and Gongyang Gao, 246; and He Xiu, 277; and Xuehai Academy, 277, 277n55; comparison with other interpretations of the Annals, 246; Ding Lüheng learned it from the son of Zhuang Cunyu, 251; Gong Zizhen and Wei Yuan learned it from Liu Fenglu, 245, 252; Li Zhaoluo learned it from Liu Fenglu, 251; Zhuang Cunyu’s emphasis, 245 Guan Tong: against trade, 215; and his cohort, 231; complaint about the money worship and flattery of his period, 137, 139; denounced imports, 206; essays collected in the Collected Writings on Statecraft, 255; the extreme moral degeneration among all existent dynasties, 208; main disciple of Yao Nai, 249 Guangxi: affected by the silver crisis even as peripheral provinces, 119; private mintage zone, 35; silver supply did not meet the demand, 58, 170; Vietnamese silver’s main market, 57–58 He Changling: and his age cohort, 231; and his group, 257, 259; and the Manchus, 236, 297; and merchants, 236; and Wang Qingyun, 253; and Wei Yuan, 253; belief in market force, 214; for coins cast in white copper, 171; for unequal distribution of wealth, 212; his collected works on statecraft, 281, 297; on interregional migration,

352

Index

216; on the relation between the Han and the Miao peoples, 216 Heaven (tian): “all under Heaven” as a contrast with the state power, 195, 211–12; and New Text school, 247; five metals it created have fixed value, 161; in the mind of accommodationists, 213, 223, 224, 247, 249, 259 Historical Materials: biographical archives, xxvi; literati’s collected works (wenji), xxv; London Customs records, 74; Maritime Customs publications, xxvi, 113; palace museum archives, xxv Historiography: Annales school, 24; the historical and economics approaches to economic history, 16–19, 25, 25n77; ideological approach, 18, 20; isomorphism, 21; “NaitŇ thesis,” 29; shocks in history, 194, 285, 288; total history, 24 Human nature: crucial for ideological study, 20; not all good, 226; two groups’ views, 206, 303; Wang Liu’s view, 204 India: commercialization without capitalism, 308; currency situation on the eve of 1863, 111–12; government cast silver coins, 69–70; London customs report, ix; more imports from Manila, 64; no hole in silver coins, 211; silver import from China, 74–85, 88; silver use different from China, 6 Inherent concepts: confidence in the state, 214, 292; Guojia, 209; holistic institutional change (bianfa), 221–22; human feeling (renqing ), 207, 249; nationalism, 47, 209–11, 226, 247; self, 223; Tianxia, 2, 88, 209. See

also Heaven; Human nature; State power Intellectual groups: contrast between the two groups, 303; “False eight masters” (wei bajia), 248, 302; ideas and group formation, 228, 260; pseudo teacher-disciple relationships, 137; spectrum in grouping, 20; Wang Anshi’s decentralization of tea monopoly, 20; Xuannan Poetry Club (Xuannan shishe), 255, 258, 298. See also Accommodationist Group; Interventionist group; New Text School; Tongcheng School Intellectual history, Chinese: Cheng brothers, 224–25, 241, 272; Four Books, 186, 225; Gong yang Commentary, 18–19, 245–46, 251–52, 277; Guliang Commentary, 246; Han learning, 241, 244, 298; Interpretations of the Great Learning (Daxue yanyi), 224; Legalists, 186, 197; Mencius, 186, 208, 272; Mozi, 208; six classics, 246; Song learning, 244, 272, 298; statecraft and the study of rites, 186, 188, 239; Supplement to Interpretations of the Great Learning (Daxue yanyi bu), 224; Zhou Institutions, 15, 157, 183–84, 218, 295, 311; Zuo Commentary, 245– 46 Interregional networks, 138, 153, 178, 234 Interventionist group: desire for a big government, 211; against commerce, 215; overall contrast with the accommodationists, 303; approaches to the causes of silver problem, 206; comparison with Keynesian economics, 193; conventional view of Chinese state-

Index craft thought, 181; great confidence in the state, 214; relation to Legalists, 186; neglect of interprovinical trade, 216; not to change landownership, 218; operational definition, 203; perception of wealth, 215; prefer currency issued by the state, 212; related with Old Text school, 259; related with Tongcheng school, 221, 249–50; representative scholars, 204–5; seek for more drastic change, 221; stress on education more than technology, 217, 224; ups and downs around 1850, 21, 22, 262–66 passim, 278–80 passim, 305–9 passim; Wang Anshi as an example, 20; Wang Liu’s case, 20, 178; Wei Yuan as a contrast, 21 Japan: and Dutch traders, 61–62; and Portuguese traders, 61; and Zheng family, 61–62, 67; circulation of silver, 59– 60; consumption of Chinese silk and other goods, 61; copper merchants and salt merchants, 236n18; currency and East Asian order, 295; developed modern silk trade, 105; eclipsed by American silver, 66; entrepôts for silver, 61–62, 67; forced Korea to open, 69; introducing European mining technology, 59; maritime ban and smuggling, 61; modern silver dollar, xxiiin4; monetary and trade controls in Tokugawa period, 35–36, 49–50; selling copper to China, 62, 236; the share of copper coin in money, 4n9; the silver weight, xxiv; trend toward silver exports, 63; use of paper notes noted by Qing people,

353 180n1; use of lead in silver mining, 59; war calamity for population as recorded by Yasukuni Shrine, 295n23

Korea: forwarding Japanese silver to China, 62–63; lack of silver use, 68–69; provide ash-blowing technology to Japan, 59; used Chinese copper coins in eleventh century, 296; the year to start import of American silver, 68 Liang Zhangju: and his age cohort, 231; and Wang Liu, 168; and Xuannan poetry club, 255; attitude toward agricultural wealth, 218n72; big coin to replace foreign coins, 210; biodata, 205; denounced imports in general, 206, 206n4; different interpretation of Duke Shan Mu, 185; disparaged luxuries, 207; first for big-coin proposal, 167; opposing trade, 215; referred to Xinjiang’s use of big coins, 180 Lin Zexu: and his age cohort, 231; and Manchus, 234–36; and merchants, 236, 258; and opium, 206, 214, 287; and Wang Liu, 152–53, 234, 256; attitude on trade, 191, 272; “civil ban is stricter than the official ban,” 47; currency mission at Canton, 15; for official mintage of silver coins, 171, 174; for private opening of silver mines, 172, 213; group association, 252, 255, 259; his nationalism, 210; in Hanlin Academy, 229; laughs at a magistrate, 137, 208; perspective on foreign coins, 46–47; upset with the bank shops, 174; view of

354

Index

tea and rhubarb, 294; Western work passed to Wei Yuan, 182 Mail communications, 154, 160, 234, 257 Measures, conversions for: British pounds, xxivn8; customs liang, xxiv; kan, xxiv; liang (taels), xxiii, xxiv, xxivn5; mao, xxiv, 32 (Table 1.1 notes); Mexican dollars, xxiv; shillings, xxivn8; rupees, 83n24; Spanish dollars, xxiv; treasury liang (kuping yin), xxiii Mental models: core concept in various groups’ thinking, 258–59; definition, 18; implicit in politicaleconomic approaches, 200; metaphors, rationales, and details as illustration, 203; shift in mental models, 270–72, 277, 281, 305–7 Merchants, Chinese: and promerchant arguments, 236–38; as intermediaries of copper coins and silver, 6, 128; brokers ( yahang ), 9, 56; cast silver coins in Tibet, 54; control the inter-provincial flow of silver, 56; control the monetary power, 2, 6, 9, 41, 69, 210n27; decline of long-distance trade merchants in recession, 128; entered the silver trade between Japan and China, 62; hong merchants, 41; in Song period, 190n38; in Zhang Zhidong’s view, 267n23; “it was more important to learn from the merchants,” 173; less inclined to invest in recession, 128; merchant/government and peddler/bandit relation in opium trade, 92; mines opened by, 191n40, 263; mountain areas relied on merchants to bring silver for

use, 107; need silver for longdistance trade, 10–11, 44; peripheral area had fewer big merchants, 119; power of merchant guilds, 46; recast ingots from silver dollars, xxvii; rich merchants in northwest China purchased goods from southeast, 93; salt merchants, 129, 264–66; Shanxi merchants opened banks in Fentian, 54–55; sharing merchants’ profit in late Qing, 279; silver code for small merchants, 47; supplier of paper notes and silver, 8, 30, 36, 56; transportation of tribute grain by merchants, 264; vivid change of views toward merchants around 1850, 282–83 Merchants, non-Chinese: international merchants using drafts for the triangular trade, 79; Japanese merchants’ Southeast Asian trade in sixteenth century, 61; Jardines and the Mathesons, 110, 288; Napoleonic War reduced Spanish merchants’ investment in Mexican silver mining, 108; the Spanish merchants helped the start of the opium trade, 110 Metaphors: a style and birds for the precious metal, 210; Achilles’ heel, 291; Age of the Three Sage Kings (Sandai ) 205, 222–23, 227; barbarian coins, 44; bloodstream, 115–17; Buddha heads ( foutou), 44, 70; the butterfly effect, 1; Churen wanggong, Churen degong, 209n25; decorated edges (huabian), 44; fensui zhi huang, 126; global erosion 23–24; grandsons beat their grandfathers, 13; greedy drinker, 207; imperialist rupture, 23–24; liquan daozhi, 2;

Index rice plant and rice, 224; Sanyang, 137; snowball effect of paper notes issuance, 195n54, 298; spilled jug, 207; taie daochi, 2; Taixing, 137; transform “stone” into “gold,” 159; uncrowned king, 247, 259; upside down (daozhi), 1, 2; vicious circle, 136; what rice grains are to cooked rice, 135 Ming dynasty: banned maritime trade, 61; commercial taxes could hardly be raised, 293; copper coin system deteriorated, 40; currency system in nineteenth-century scholar’s citations, 148, 183, 188; extent of centralization, 29; fall of the empire and silver, 23; growing materialism, 14; increased silver use, 188; issued inconvertible paper notes, 40, 187–88; less control over horses than Qing, 296; loyalists’ offspring opened silver mines, 57n102; military conflict pumped silver into society, 286; policy toward coins of previous dynasties, 33; revived the ancient-prose style, 239; silver crisis extended to peripheral provinces, 119n19; silver– copper coin ratio, 4n7; tariff continued by Qing, 141n155; used lead in silver mining, 59; Zhu Gui and forbidden late Ming books, 235 Monetary sovereignty: lack of sense, 33, 45; less for Qing empire, 27, 30, 50, 70, 150; Tokugawa Japan’s, 294; two groups’ approaches, 226; Wang Liu’s lament, 149 Monetary system: cartelist, 17; difficulty in money supply calculation, 83; gold-standard, 109, 193; managed monetary system, 7, 17, 158,

355

294; metallist, 17; of Japan, 49–50, 294; of Vietnam, 50; rare precedents for coins in precious metals in Chinese history, 190; regional distribution in early nineteenthcentury China, 37–39 Money material: jade, 17–18, 148, 159, 212; sea shells, 17–18, 148, 159, 212, 221n86. See also Copper coins; Gold; Silver New Text school: and Old Text school, 246–47; and political cliques, 21n70; and statecraft school, 227–28, 251–59 passim, 301–3; and Wei Yuan, 18, 18n64; and Yanghu branch, 245, 248n70; concomitant with the silver crisis, 277–79, 283, 304; decline with the Taipings, 270–72; radical or gradual reform, 222; sixteen hundred years since Zheng Xuan, 247, 247n68 Officialdom, Qing: battalions, 170; Beijing Gazette, 14, 58n104; bribery, 137, 139; capital officials, 137; contributions, 7, 134–35, 137, 155, 169– 70, 279; corruption, 116, 137–38, 208, 208n16; Eight Banners, 130, 170; financial commissioner, 5, 11, 41; Green Standard, 130, 170; Hanlin Academy, 124, 148, 229, 257, 281, 298; Manchus, 48, 234, 298; perspective of Vietnamese emperor, 14; private secretaries (Shaoxing shiye), 137–39, 169, 229– 30, 234; salaries of officials and soldiers, 129–30; Six Boards, 183; treasury private secretaries (zhangfang shiye), 138; the vocal census, 14. See also Soldiers

356

Index

Opium: and draft, 79; and peddlers, 90, 92–93; and silver outflow, 22, 24, 71, 95, 106–7, 114, 274–75; and Singapore, 85; entrepôt moved, 274; import, 76–79, 83, 88–90, 95–98, 102, 104–5; Lin Zexu’s encouragement of native cultivation, 94, 287; more possible to sustain the transportation cost, 92; named as “Canton imported goods,” 92–93; per capita consumption in England and China, 287–88; share in imports, 95; sold even in Mongolia, 92; stimulus from global silver shortage, 109– 12; used in all provinces, 90–93; years for drops in import, 90 Opium War: and opium, 27; and silver, 93, 287–88 passim; and silver– copper coin crisis, 72 passim; and Victorian era, 309; differences in reaction in China and Japan, 294– 95; indemnity, 87n28; its military threat to China, 295 Order of knowledge: economic issues become the most pivotal, 15, 15n52, 183–84, 295, 311; more concern with statecraft from 1820s, 14–15, 19 Paper notes: Cai Zhiding’s proposal in 1814, 148; controlled by merchants, 8; convenience of use, 39, 39n32; convertible in Yuan and Jurchen Jin, 187–88; copper-coin paper notes ( qianpiao), 7, 38; easy to counterfeit, 173; first appeared as receipts, 39; in the form of bamboo sticks, 36; issuance during Shunzi reign in 1651–61, 40; issued by Cai Jing, 190n38; Japan’s use, 180; Japanese merchants’ is-

suance, 180n1; Korean merchants’ issuance from around 1786, 69; long use in Chinese history, 187; more moderate proposals than Wang Liu’s, 165–66; not enough to ease the currency shortage, 8; regional distribution of use, 37, 39, 58, 162; silver paper notes ( yinpiao), 7, 37; snowball effect, 195, 195n54, 208; start of paper notes issued by merchants, 36; that issued by private banks are convertible, 7 Printing: Daoguang period printed official writings, 15, 240; helps interregional communications, 234; ideas get printed when the society needs them, 14, 254, 268, 277, 281, 305, 306; moral teachings on notes to prevent counterfeiting, 38; official printing, 253; print scholar-officials’ portraits, 230; print Zhu Xi’s teachings on paper notes, 20, 224; private printing, 148, 153, 153n23, 158n44, 160–61, 240, 300, 300n27; publication of late Ming forbidden books, 235; Qianlong-Jiaqing period printed poem anthologies, 14 Provinces or places, Chinese: Amoy, 61, 92, 128; Canton, 64, 110, 181, 274, 277; Changzhou, 245, 251–52, 254, 256, 281; Fuzhou, 39, 104, 129; Jiangnan, 233, 300; Lintin, 274; Macao, 61, 92; Taiwan (in Qing period), 105, 117, 127–28, 250, 279; Tibet, 53–55, 58, 92, 180, 190, 210– 11. See also Guangxi; Xinjiang; Yunnan Scholar-officials, Ming and earlier: Cai Jing, 190; Chen Zilong, 183;

Index Emperor Wen, 198; Gu Yanwu, 126, 188, 197, 282; Gui Youguang, 248; Han Yu, 19n66, 183, 240–41, 244; He Xiu, 277; Huang Zongxi, 223n94, 282; Jia Yi, 183, 198, 208; Li Gong, 282; Li Shixiong, 14n46; Liu Bei, 198; Lu Bao, 14n46; Qiu Jun, 224; Ouyang Xiu, 19n66, 241, 244; Su Shi, 19n66, 249; Tang Zhen, 282; Wang Anshi, 19n66, 20, 190; Wang Fuzhi, 282; Wang Yuan, 282; Xin Qiji, 198; Ye Shi, 190n38; Zhang Jiulin, 198; Zhen Dexiu, 224; Zheng Xuan, 187, 247, 277; Zhu Xi, 20, 224–25, 241, 251, 259, 271–72; Zhu Yongchun (Bolu), 158n44 Scholar-officials, early Qing: Fang Bao, 239; Heshen, 21, 48, 138, 234, 297; Li Daonan, 253; Liu Daqui, 241, 243, 248; Liu Fenglu, 245; Wang Huisheng, 241; Wang Huizu, 44; Xu Qianxue, 33; Yao Nai, 19n65, 241, 243–44, 248–51, 270; Yuan Mei, 138; Yun Jing, 241, 244–45, 251, 271; Zhang Huiyan, 241, 244–45, 251–53, 302; Zheng Guangzu, 107; Zheng Xie, 138; Zhu Gui, 234; Zhuang Cunyu, 245, 251, 253, 277, 302, 305 Scholar-officials, 1808–56 (B–G): Cai Zhiding, 148, 276; Chen Luan, 256; Chen Shan, 154, 164, 239, 253, 257, 298, 302; Chen Yongguang, 152n20, 255nn118–19, 256; Cheng Enzhe, 255; Cheng Yi, 167, 238, 251, 276; Fang Dongshu, 249. See also Bao Shichen; Ding Lüheng; Feng Guifen; Gong Zizhen Scholar-officials, 1808–56 (H–L): He Shaoji, 168, 233n7, 255, 258, 276; Hu Diaoyuan, 165–67, 172,

357

300n27; Hu Peihui, 218n72; Huang Juezi, 9, 46, 129, 133, 255n119; Huashana, 140, 165–67, 212n35, 232, 276; Jiang Hongsheng, 168, 276; Jiang Xiangnan, 93, 247– 49, 302; Lei Yixian, 168, 173, 215, 276; Li Zhaoluo, 152, 154, 181, 239, 245, 251–53, 300; Liang Tingnan, 75, 79; Liu Liangju, 169–70, 231, 257, 276; Long Qirui, 255n118; Lu Fuen, 256; Lü Huang, 255n118. See also He Changling; Guan Tong; Liang Zhangju; Lin Zexu Scholar-officials, 1808–56 (M–T): Mei Zengliang, 249–50, 254–55, 258, 270; Miao Zi, 71, 117, 131–34 passim, 169–70, 176n133, 184, 257; Muzhanga, 118, 173, 232, 236, 283, 297–98, 305; Peng Yi, 164; Ruan Yuan, 253, 277, 302, 305; Shao Yichen, 248n70, 255n118; Shen Weiqiao, 250, 257; Sun Dingchen, 167, 231, 249–50, 258, 282; Sun Xie, 248; Tang Peng, 218n71, 220n82, 254–55, 255n119; Tao Shu, 171, 233n7, 236–37, 252, 255, 258, 276. See also Shen Yao Scholar-officials, 1808–56 (W): Wang Maoyin, 165–67, 177, 224–25, 233n7, 276; Wang Qingyun, 72, 88, 135, 168–70, 209n24, 253, 276; Wang Zhi, 125, 168, 173, 232, 276; Wu Dexuan, 255n118; Wu Ting, 218n71, 239, 276; Wu Wenrong, 169–70, 230n3, 234, 276. See also Wang Liu; Wei Yuan; Wu Jiabin Scholar-officials, 1808–56 (X–Z): Xie Jieshu, 216, 229, 251, 255, 257–58, 298; Xu Zi, 207, 214–16, 229, 231, 250, 258, 282; Yang Xiangji, 164, 164n71, 209n22, 250; Yao Ying, 250, 254–55; Yao Zhuang, 250–52;

358

Index

Yiliang, 256; Yinghe, 88, 223, 232, 234–36, 263, 297; Zhang Jiliang, 250, 252, 255, 257, 298; Zhang Lü, 153–54, 248, 250; Zhang Xiuyu, 168, 276, 212n35, 215; Zheng Zuchen, 164n71, 171–72; Zhou Tenghu, 171, 276; Zhou Yuerang, 164; Zhu Zun, 136n93, 169–70, 231, 257; Zhuo Bingtian, 173, 197, 232. See also Xu Mei and Xu Lian Scholar-officials, late nineteenth and early twentieth centuries: Chang Kia-Ngau (Zhang Jiaao), 190, 310; Fang Xianting, 310; Gu Chunfan, 310; Guo Songtao, 267; He Lian, 310; Kang Youwei, 221, 230, 272; Li Hongzhang, 266, 268, 278; Liang Qichao, 222, 252n98; Ma Jianzhong, 267; Ma Yingchu, 310; Sheng Kang, 254; Wang Tao, 241, 244–45, 251, 267; Zhang Zhidong, 267–68, 279; Zhu Ciqi, 272. See also Zeng Guofan Shen Yao: a militarily peaceful time, 295; and his age cohort, 231; and Tongcheng essay group, 240, 248; and Wang Liu, 153n23; discussion with Gong Zizhen, 256; harsh criticism of Gong Zizhen, 248; moral decay complaint, 14, 208; status of merchants, 282 Seventeenth-century crisis, 23, 23n73, 119n19, 286 Silk: and international balance of payments, 102–7, 207n11; domestic silk market, 187–88; exports to Japan, 61–62; exports to Spanish America, 64; in ancient China, 222; less important than tea, 64– 65, 105; price, 90n31; production in Taiping area, 106; share of exports increased, 96

Silver, as money: books to differentiate between real and false foreign coins, 47; forwarding to central government, 41; furnace for melting ingots, 41; ingot quality of various provinces, xxiii; Mexican dollars, xxiii, 112n89; more possible to sustain the transportation cost, 64; Qing mandated its use, 6, 40; ridged outer edge helpful for circulation, 45; single whip taxation policy, 6; Spanish dollars, xxiii, 44, 50, 112–13, 112n89 Silver, entrepôts and countries: Annamese (or Vietnamese) silver, 57–58, 58n104, 68, 70n165; Burmese silver, 27, 57–58, 63, 70; cupellation method (haifuki ho), xxviii; Dutch coins and traders, 44, 61–62, 64; French, 24, 50, 279; Hong Kong, 111; Japanese silver, 59, 61–62, 66–70; Latin American silver superseded Japanese silver, 67; lead in Japanese mining technology, 59, 59n11b; Manila, 63–64, 66–67, 110; mercury in American mining technology, 59, 61; Spanish, 49, 63–64; Taiwan (in Dutch and Zheng periods), 61, 67; Tsushima, 62–63, 67; Ryukyu Islands, 62, 67, 83. See also England (United Kingdom); India; Japan; Korea Silver outflow: Chinese Maritime Customs’ change of statistics, 94–95; comparison with land taxes or total revenues, 133; from northwest China, 75; international balance of payments, 22, 87–88; northern Fujian illustrates the situation, 107; share of silver outflow in national income, 114;

Index noted by the Vietnamese emperor, 14; “silver is controlled by cunning merchants abroad,” 210 Silver, regional distribution within China: animals to carry silver ingots, 48; boundary for the use of silver and copper coins, 115, 197; crisis in southeast, 117, 126, 128, 134–35, 140, 289–90; flow from northwest to southeast, 93; interprovincial flows, 10–11, 55, 69, 115–16, 163, 289–90; interregional flows, 54, 115, 117, 216, 220, 253; regional distribution of ingots and dollars, 47–49; silver dollars mainly used in Fujian and Guangdong in the early eighteenth century, 46; use in mountainous area, 48, 107, 116, 290; use in peripheral areas, 47, 69, 116, 118–19, 142, 289–90; use in southwest, 116, 289, 290 Silver–copper coin ratio, market rate: correlation with silver supply to India, 112–13; for various provinces, 75, 120–23; fluctuations hard to follow, 174; official control in the eighteenth century, 9; people’s ignorance about causes of the fluctuating rate, 13, 113; set by the bank shops, 9, 12, 55–56, 150; silver–copper coin crisis, 101– 2; speculation by merchants, 118; stopping of trend in Qing, 3, 86, 274; trend in Chinese history, 4n7 Silver–copper coin ratio, official rate: paying in official rate meant to benefit the soldiers, 130; set in early Qing, 3; soldier’s salaries paid at official rate, 12; surplus of market rate over official rate for the administrative use, 131

359

Social conflict and restoration: disturbance of social values, 13–14; riots, 116, 132, 139–40, 142, 292, 299; strike of silk weavers, 125; Zhong Renjie, 119; Tongzhi Restoration, 22, 26, 261. See also Taiping Rebellion Socio-economic conditions, Qing: core-peripheral differentiation, 47, 120n23; cost of various forms of transportation, 39; customary economy, 6; Grand Canal, 136, 264, 273; horses, 18, 44, 128–29, 131, 296; junks, 67, 128; lineages, 222, 258, 301; national economy, 294; partnerships (hegu), 238; regional distribution of various currencies, 39, 58; tenancy, 25, 126, 217, 219–20; topsoil landlords, 126–27, 142, 292; vagrancy, 125 Soldiers: during silver crisis, 129–30, 290; change their pay to other forms of money, 170–72; desperate need to feed soldiers, 279; less demand for copper coins, 176; paid at official rate, 12, 12n39; paid in silver and copper coins, 5, 5n15; selling opium, 92 State power: controlled by merchants, 2, 12–13; divergent views, 209, 211–12; inferior to market forces for currency control, 47, 273; market enhances honesty and technology better than state power, 213; merchants rather than the state control the interprovincial flow of currency, 56; New Text studies arose when state power was threatened by market forces, 272–83 passim; penetrated to lower than xian level through copper coins, 31;

360

Index

state could not force people to accept its money, 197; tends to be reinforced when public security is threatened, 21 Statecraft thought: and ancient prose style, 239–41; and Confucianism in New and Old Texts studies, 228, 245–60 passim; and social realities, 297; continuity and discontinuity, 281; development in Chinese history, 15; previous monolithic view, 16; regional development, 232, 234; relation with self-cultivation, 20, 204, 206; rise in the Daoguang period, 14–15 Taiping Rebellion (or Revolution): and academy, 278; and the inflationary policy, 268; and the interventionist bent, 21, 177, 270–72, 305–6; and merchants’ forwarding revenues from the local government to Beijing, 41–42; and the silver–copper coin crisis, 13–14, 125, 140; and the shrine to worship the loyalists, 281; commoditization of official position as a reason, 14, 137; impact on China’s disadvantage to Japan, 294; its threat to overthrow the Qing regime, 177; population devastation of, 278–79; population explanation for, 292; recession explanation, 293; silver backflow and its pacification, 22, 293–95; why more exports of tea and silk in its duration, 102–6 Tea: a lower silver–copper coin ratio in tea-producing areas, 120; and international balance of payment, 98, 102, 112n89, 207n11; British Commutation Act, 65; British ex-

change with opium, 110; changes in the price of tea, 106; detailed reasons for export fluctuations, 109; more silver to buy in late nineteenth century, 109; not indispensable to West, 294; tea drinking in England, 64, 106; tea dominance in exports in eighteenth and nineteenth centuries, 64–65, 96, 105; tea exports (1825–86), 96, 98, 100–101, 106; production in Taiping areas, 104; share of China’s tea in world market, 105; shift of dominance from silk to Latin America to tea to England, 111; situation in Fujian, 44n61, 106–7 Tongcheng school: ancient-prose style, 239, 241, 245, 248; and economic opinions, 249–51; and official documents, 240; and Old Text school, 247–48; and Yanghu school, 241–44; decline in Daoguang period, 270–71; development in Qing, 239; eight masters, 19, 19n66, 239, 248, 302; Gui Youguang, 248; parallel-prose style as a contrast, 239, 244–45; rose with the Taipings, 270, 278, 281, 283; sections ( pianfa), 243, 259; structure of chapters (zhang fa), 243, 259; writing style as a field, 240; yifa, 241, 258 Travel: 153, 163, 234n11 Wang Liu: and his age cohort, 231; and Tongcheng branch, 250, 270– 71; being revolutionary, 199, 221– 22; big coin proposal, 167; Board of Revenue to exercise the state’s full monetary power, 149; compared with the central bank arrangement, 152; compared with

Index Keynesian ideas, 195–96, 199; compared with late Ming antisilver scholars, 188, 282; created trust in the paper notes, 151; criticism from Wei Yuan and Xu brothers, 159–64; crueler than Shang Yang, 186; difference with Bao Shichen, 154–56; general response, 152, 164–67, 229n3, 256– 58, 268; goods also constitute wealth, 191; influence from his father, 148; less concerned about interregional trade, 216; mentioned Japan’s paper notes, 180; omnipotent state power view, 211; Preliminary Remarks on Copper Coins, 148, 153, 185, 298; quantity of notes, 152; similarity with monetary policy of 1853–61, 177; source of knowledge, 183; stress on agriculture, 216; yearning for the state to teach, 20, 158, 158n44, 224 Wei Yuan: and He Changling, 253; and his age cohort, 231, 258–59; and the New Text studies, 245, 247, 248n69, 277; and Western economic ideas, 182; and Yanghu branch, 245, 248, 252; attitude toward the legalists, 186; contrast with scholars of Zeng Guofan’s period, 267; external approach to the currency crisis, 206; for gradual change, 221n88, 222, 227; for jade and seashell money, 17; Illustrated Treatise on the Maritime Countries, 182; Jin-Song relation as precedents for international issues, 189; lack of discussion on parliamentary politics, 309; on the abrupt hike in the silver price between 1830 and 1850, 83; on the

361

benefit of liberalization, 213; on casting silver coins, 210–11; on the importance of small landlords, 127; on money in Xinjiang and Tibet, 180, 198; on private mining, 263; on trade, 192; on rich people, 212, 214, 217; on the state initiative for the maritime transport of tribute grain, 237; on Wang Anshi, 190, 190n38; quoted Zhou Institution, 184; retirement, 281n69; selfselected Four Books, 225, 225n104 Westerners, earlier: Nicholas Barbon, 218; bullionists, 181, 191, 199, 311; Richard Simpson Gundry, 281; Karl Gutzlaff, 182; Friedrich August von Hayek, 17, 145, 193–95, 199, 310–11; G. Jamieson, 94; J. M. Keynes, 145, 192–96, 199, 310; John Locke, 145–46, 189–91, 203, 219, 252; R. M. Martin, 70, 238; Karl Marx, 196, 281; John Ramsey McCulloch, 182; mercantilists, 191–92; H. B. Morse, 73–74, 79, 83, 85, 90, 114, 289; Robert Morrison, 182; C. F. Remer, 94; Baron Ferdinard von Richtofen, 278; Adam Smith, 19, 65, 309; S. Wells Williams, 30 World history: British East India Company, 22, 73–74, 96, 106, 113, 275; California gold rush, 109; galleons, 64; Great Depression, 16; imperialism, 141, 295, 308; Latin American independence movements, 71; liberalism in Victoria era, 309; Napoleonic Wars, 108, 288; triangular trade, 79. See also Opium War; Taiping Rebellion Wu Jiabin: against merchants’ control of currency, 2; against trade,

362

Index

191, 215; and his age cohort, 231; and Tongcheng essay group, 239, 250, 258; comparison with the seventeenth-century anti-silver group, 282; connected selfishness with crisis, 207; decrease the use of silver as currency, 231; died in Taiping campaign, 281; dreaming of ancient period without commerce, 222; for big coins, 167; Hanlin Academy association, 229; on human nature, 204, 206; militarily peaceful time, 295; state above Heaven, 211–12 Xinjiang: affected by the silver crisis, 119, 130; became Qing territory, 29n2; cast heavier copper coins with no holes, 53; example for big coin proposals, 168, 180, 210, 211; foreign opium came by 1840, 92 Xu Mei and Xu Lian: citing history for the superiority of precious metal money, 187–88; compared with Hayek, 195; different responses to their work in various periods, 254, 268; disagreed with Wang Liu even though from Jiangnan, 233; Discussion on Paper Notes (Chaobi lun), 159, 161; external approach to the silver crisis, 206; predicted market would solve the silver problem, 164, 196; Ruan Yuan’s students, 253; strong

awareness of people’s reaction to policy, 197; warn against the snowball effect of paper notes issuance, 160–64 Yunnan: a private mintage area, 35; main market for Burmese silver, 57–58; deterioration of the quality of copper from Yunnan, 180n1; foreign opium arrived by 1822, 92; had the same silver price as the lower Yangtze, 68; important domestic silver mines, 57; local silver could not meet demand, 58; only salt area managed by the government, 264; possible to have mines for white copper, 172 Zeng Guofan: against Yanghu group, 249; and Cheng Yi, 251; and monopoly of salt, 266; and Sun Dingchen, 250; and Wu Jiabin, 281; built academies, 272; for partly replacing silver with copper coins, 170; levied commercial taxes to ease crisis, 140; “management of wealth,” 267; relatives or neighbors jailed for tax delinquency, 13; rites as statecraft work, 239 Zhu Xi: put on, on money, 20, 38, 158n44, 224, 259; Zu Bolu’s homilies, 158n44