Silver and Gold: A Cycle of Sino-U.S. Monetary Interactions, 1873- 1937 DISSERTATION Presented in Partial Fulfillment of the Requirements for the Degree Doctor of Philosophy in the Graduate School of The Ohio State University By Austin Lewis Dean Graduate Program in History The Ohio State University 2016 Dissertation Committee: Christopher A. Reed, Advisor Ying Zhang Jennifer Siegel Steven Conn Copyrighted by Austin Lewis Dean 2016 Abstract This project examines the economic, political and diplomatic history of China and the United States by focusing on the monetary metals of silver and gold. In the 19th century, as many countries, including the United States, went on the gold standard, China remained one of the final places in the world that stayed on the silver standard. At the same time, the United States was a major producer of silver. From the end of the Qing dynasty (1644-1912), through the Beiyang period (1912-1927) and into the Nanjing Decade (1927-1937), various Chinese governments debated how to reform its monetary system: whether to stay on silver, to go on gold or to adopt some other monetary arrangement. This dissertation argues that the period between the 1870s and 1930s represents a cycle of monetary interactions between China and the United States. During this period, the chief issues was how to change the Chinese monetary system; after the mid-1930s, the chief issue became how to support and stabilize the new currency, the fabi. This project contributes, chronologically and thematically, to the growing but still small number of English-language works that focus on Chinese monetary history and addresses issues of interest to historians of China, historians of the United States and economic historians. ii Acknowledgments I wish to thank all of my teachers, most of all my parents. iii Vita 2006....................................................B.A. History, Grinnell College 2010....................................................M.A. History, Georgetown University 2010 to present ..................................Graduate Teaching Associate, Department of History, The Ohio State University Fields of Study Major Field: History iv Table of Contents Abstract ................................................................................................................... ii Acknowledgments.................................................................................................. iii Vita ......................................................................................................................... iv List of Tables ....................................................................................................... viii List of Figures ........................................................................................................ ix Introduction: Following the Money ....................................................................... 1 Chapter Outlines ................................................................................................ 14 Chapter 1: The Monetary System of the Qing Dynasty (1644-1912) ................... 25 The Importance of Silver and Copper ............................................................... 27 Financial Intermediaries .................................................................................... 38 Conclusion ......................................................................................................... 40 Chapter 2: The United States Trade Dollar and the Conundrum of 1873 ............ 44 The U.S. Monetary System and Early Trade with China .................................. 48 Silver and the Early China Trade ...................................................................... 56 v The Creation of the Trade Dollar ...................................................................... 60 The Circulation of the Coin in China ................................................................ 72 The Hinge Moment of 1876: The Circulation of Coins in the United States.... 78 Conclusion ......................................................................................................... 89 Chapter 3: Provincial Minting of Silver Coins, 1887-1900 ................................. 92 The Significance of the Coinage Press .............................................................. 94 Foreign Machines, The Leaky Wine Cup and Provincial Dragon Dollars ....... 99 The Ferracute Machinery Company and the Chengdu and Wuchang Mints .. 117 An Attempt to Consolidate Minting ................................................................ 129 Chapter 4: The Rise of Gold and Fall of Silver: The Jeremiah Jenks Mission to the Qing Court, 1903-1904 ................................................................................................... 142 The Worldwide Shift to the Gold Standard at the End of the 19th Century .... 146 The Boxer Rebellion Indemnity and Gold Price of Silver .............................. 155 The Commission on International Exchange .................................................. 163 Conclusion ....................................................................................................... 191 Chapter 5: The Currency Reform and Development Loan, 1910-1924.............. 194 The Chinese and American Background to the Currency Reform Loan ........ 197 The Currency Loan Negotiations .................................................................... 211 The Life of the Loan in the Early Republic .................................................... 221 vi The War Years and the Second Consortium ................................................... 235 The End of the Loan ........................................................................................ 249 Chapter 6: The Long and Winding History of the Shanghai Mint, 1920-1933 .. 253 The Political and Economic Background ........................................................ 255 The Early Years of the Mint ............................................................................ 265 The Early Nationalist Period and the Fall of Silver ........................................ 274 The Elimination of the Tael and the Opening of the Shanghai Mint .............. 287 Conclusion ....................................................................................................... 301 Chapter 7: The Silver Purchase Act of 1934 and The Creation of the Fabi ....... 303 The Silver Interests in the United States and the Rhetoric of China ............... 306 The Path Towards the U.S. Silver Purchase Act in the United States and China, March 1933- June 1934 ............................................................................................... 314 The Path Toward the Fabi ............................................................................... 329 Conclusion ....................................................................................................... 352 Conclusion .......................................................................................................... 355 Bibliography ....................................................................................................... 365 vii List of Tables Table 1. Comparison of Coin Weights ................................................................. 72 Table 2. U.S. Silver Production, 1870-1876 ......................................................... 81 Table 3. Production, Export and Import of U.S. Trade Dollar ..............................87 Table 4. Coinage Production for the Guangzhou Mint ........................................109 Table 5. Mexican Silver Exports, Fiscal Years 1881-82 to 1902-03 ..................153 Table 6. Boxer Indemnity Payments Allocated by Province ...............................159 Table 7. Annual Price of One Ounce of Silver in New York ..............................280 viii List of Figures Figure 1. : Silver-Copper Ratio ............................................................................. 31 Figure 2. Overview of the Silver-Copper Ratio in Qing Dynasty, 1644-1899 .... 36 Figure 3. Proposed U.S. Coin in Chinese Style .................................................... 53 Figure 4. A Chopped U.S Trade Dollar ............................................................... 78 Figure 5. The Unfortunate Trade Dollar ............................................................... 85 Figure 6. The Mint Facility in Guangzhou with inset of Silver dollar ............... 110 Figure 7. A Demonstration of Coinage Equipment (1897) ................................ 121 Figure 8. Mint Equipment Arriving in Chengdu (1898) ..................................... 124 Figure 9. Janvier Stares at Rusted Equipment (1898)......................................... 125 Figure 10. The Installed Coinage Presses (1898) .............................................. 127 Figure 11. Coin Made by the Central Mint in March 1933 .............................. 300 ix Introduction: Following the Money We currently live in a world in which one cannot use U.S. dollars at a shop in China or Chinese currency at a shop in San Francisco. Perhaps because “the power to become habituated to his surroundings is a marked characteristic of mankind,” we treat this state of affairs as natural.1 An economist may argue that “Money is like a flag; each country has to have its own.”2 But that has not always been the case. Before the middle of the 19th century, it was common for international monies, mainly Spanish and Mexican silver dollars, to circulate around the world, particularly