Misplaced Pages

#742257

198-652: Over the course of its 268 years, the central government of the Qing dynasty (1644–1912) issued traditional Chinese paper money (vertically printed) only twice. The second time was included the second series of the Hubu Guanpiao which was introduced under the Xianfeng Emperor in response to the high military expenditures there government had to spend during the Taiping Rebellion , this second series

396-555: A Rubik's cube look like mere child's play." As the commodity of salt was not uniformly distributed throughout Chinese territory, China was divided into many districts in an attempt to equalise natural conditions in various places. A timetable of tax collection was composed such as the Chinese salt traffic would bear. Consumers near the sea were taxed much higher, for example, this fact would be motivational to everyone to inspire them to evaporate their own salt, while in places where no salt

594-405: A bill ( North American English ), paper money , or simply a note  – is a type of negotiable promissory note , made by a bank or other licensed authority, payable to the bearer on demand. Banknotes were originally issued by commercial banks , which were legally required to redeem the notes for legal tender (usually gold or silver coin) when presented to the chief cashier of

792-411: A creditor on a schedule with a maturity date specified in written contractual terms . Law 122 stipulated that a depositor of gold , silver , or other chattel/movable property for safekeeping must present all articles and a signed contract of bailment to a notary before depositing the articles with a banker , and Law 123 stipulated that a banker was discharged of any liability from

990-480: A fiat currency . According to Frank King the Hubu Guanpiao tael notes were still theoretically convertible into copper-alloy cash coins and Great Qing Treasure Note cash notes, this convertibility could not actually be enforced. There is in reality very little evidence which suggests that the Hubu Guanpiao was actually used in any private transactions for business, they were even likely to have ever been used in retail transactions which were dependent on cash coins. At

1188-514: A Hubu Guanpiao bill was confined to its province of issuance and provincial governments were further prohibited from returning the banknotes back to Beijing as a part of the payment of their yearly tax quotas. These policies all led to a humongous confusion over what should actually be done with the Hubu Guanpiao. Provincial governments refused to follow the stipulations set by the imperial Chinese government, provinces like Jiangsu and Zhejiang paid parts of their taxes using Hubu Guanpiao banknotes and

1386-465: A central bank in 1791 and 1816 , but it was only in 1862 that the federal government of the United States , began to print banknotes. Originally, the banknote was simply a promise to the bearer that they could redeem it for its value in specie, but in 1833, the second in a series of Bank Charter Acts established that banknotes would be considered as legal tender during peacetime. Until

1584-454: A central bank was in 1661 by Stockholms Banco , a predecessor of Sweden's central bank, Sveriges Riksbank . Napoleon issued paper banknotes in the early 1800s. Cash paper money originated as receipts for value held on account "value received", and should not be conflated with promissory "sight bills," which were issued with a promise to convert at a later date. The perception of banknotes as money has evolved over time. Originally, money

1782-528: A climax around the year Xianfeng 3 (1853). By this time the rebel armies of the Taiping Heavenly Kingdom had conquered the city of Nanjing and established their capital there. Which called for measures beyond traditional solutions. By the time of this occurrence, the imperial Chinese treasury was as good as empty. Zeng Guofan realized that his army could not survive off the land in rebel infested Anhui, Jiangsu, and Zhejiang provinces. Since

1980-437: A compelling issue. In the 18th century, banknotes were produced mainly by copper-plate engraving and printing , and they were single-sided. Note-making technologies remained largely unchanged during the 18th century. The first banknotes were produced by intaglio printing : this involved engraving a copper plate by hand and then covering it in ink to print the bank notes. Only with this technique, at that time, could one force

2178-439: A contract of bailment if the notary denied the existence of the contract. Law 124 stipulated that a depositor with a notarized contract of bailment was entitled to redeem the entire value of their deposit, and Law 125 stipulated that a banker was liable for replacement of deposits stolen while in their possession . Carthage was purported to have issued bank notes on parchment or leather before 146 BC. Hence Carthage may be

SECTION 10

#1732776763743

2376-514: A currency based on any intrinsic value, for this reason the Mongols allowed their subjects to continue using copper-alloy cash coins and issued new ones every now and then. During the last few decades of the Yuan dynasty the inflation caused people to lose their trust in paper money and barter became the most common means of exchange. During the beginning of Manchu rule over China in the year 1644,

2574-462: A depreciation of more than 60% on the market. Furthermore, in the year 1859 Hubu Guanpiao tael notes depreciated to only 5% of their nominal value. As the amount of inflation affecting the bills increased, more pressure was placed to help enforce the Ministry of Revenue's stringent policies. If after an investigation irregularities were discovered, then the government would issue a punitive action as

2772-539: A discount), and they would later use them as part of their payment of taxes or for other things like title purchases. However, the difficulty of paying taxes with the Hubu Guanpiao tael notes would further undermine their credibility on the market. This made sure that they depreciated quickly in the exchange market: by the end of the year 1856 a 1 tael Hubu Guanpiao note could be exchanged only for an amount between 800 and 900 wén in Zhiqian, this meant that they had suffered

2970-431: A few. Operating a business was taxed. There was a mining tax mining, a butcher tax, a pawnshop tax, and a fishing tax. In reality, only very little has actually changed over the years. Duties were levied on goods such as grain, silk, cattle, wagons, oil, cotton, camels, bamboo, sulfur, cloth among others. Despite the large range of the above taxes and duties, each tax in and of itself was very minor and of small consequence to

3168-417: A form of legal tender for the payment of salt taxes, tea taxes, and customs as these taxes usually involved larger sums of money, but the domain of the tael notes would be severely limited by this step. The practice of office selling was still mostly done using Hubu Guanpiao tael notes and to purchase offices using them remained very secure, this made office selling contributions the most reliable way to withdraw

3366-479: A general looseness of administration encouraged all sorts of irregularities across the country. During the course of the Taiping Rebellion China would see ⅓ of its people die utterly devastating its economy in the process. Of China's 18 wealthiest provinces 12 were left in ruins, this would put a heavy strain on the resources of the government of the Qing dynasty putting it near breaking point as

3564-438: A gold- or silver-backed national paper currency standard, which changed the geographic restriction. The range of varying values for these banknotes was perhaps from one string of cash to one hundred at the most. Ever after 1107, the government printed money in no less than six ink colors and printed notes with intricate designs and sometimes even with mixture of a unique fiber in the paper to combat counterfeiting. The founder of

3762-408: A medium for exchange. This was advertised by the imperial government as a necessary evil because of a shortage of bronze which meant that the production of cash coinage had to be heavily scaled doen. The pauperised Chinese public was for centuries uncompromisingly minded against the idea of paper money emissions in any way, shape, or form and would not accept it for any reason. Half a century earlier in

3960-497: A more conservative note issuing policy. The criticism put forth by Wang Maoyin was notably mentioned in Karl Marx ' Das Kapital . The newly introduced Hubu Guanpiao tael notes circulated alongside preexisting local currencies as well and was traded with them from the beginning, this changed after 5 months when the imperial Chinese government decided to suspend making them convertible into real silver sycees effectively making them

4158-592: A part of the Chinese monetary system since around the Tang and Song dynasties , but due to the natural scarcity of silver in China were rare and the use of silver currency was limited to the upper classes of Chinese society and their use was to be given as tribute, to pay bribes, to give away as gifts, silver sycees were also used as a method of transporting large funds over long distances as well as for hoarding wealth, and

SECTION 20

#1732776763743

4356-476: A person may go throughout the Great Kaan's dominions he shall find these pieces of paper current, and shall be able to transact all sales and purchases of goods by means of them just as well as if they were coins of pure gold In medieval Italy and Flanders , because of the insecurity and impracticality of transporting large sums of cash over long distances, money traders started using promissory notes . In

4554-431: A precise amount and issued on deposit or as a loan. There was a gradual move toward the issuance of fixed denomination notes, and by 1745, standardized printed notes ranging from £20 to £1,000 were being printed. Fully printed notes that did not require the name of the payee and the cashier's signature first appeared in 1855. The Bank of Scotland was established in 1695 to support Scottish businesses, and in 1696 became

4752-464: A rope. Merchants found that the strings were too heavy to carry around easily, especially for large transactions. To solve this problem, coins could be left with a trusted person, with the merchant being given a slip of paper (the receipt) recording how much money they had deposited with that person. Their coins would be restored when they went back and gave that person the paper. True paper money, called " jiaozi ", developed from these promissory notes by

4950-579: A travelogue of a visit to Prague in 960 by Ibrahim ibn Yaqub , small pieces of cloth were used as a means of trade, with these cloths having a set exchange rate versus silver. Around 1150, the Knights Templar would issue notes to pilgrims. Pilgrims would deposit valuables with a local Templar preceptory before embarking for the Holy Land and receive a document indicating the value of their deposit. They would then use that document upon arrival in

5148-572: A trend present until the fall of the Qing dynasty. Empress Imperial Noble Consort Noble Consort Consort Concubine First Class Attendant Enthroned in 1626 as Khan , Hong Taiji changed the dynastic name to "Great Qing" in 1636 and claimed the title of emperor. In 1644, the Shunzhi Emperor began to rule over China proper , replacing the Ming dynasty . Paper money A banknote  – also called

5346-433: A very small proportion of the "money" that people think that they have, as demand deposit bank accounts and electronic payments have negated much of the need to carry notes and coins. Banknotes have a natural advantage over coins in that they are lighter to carry; but they are also less durable than coins. Banknotes issued by commercial banks had counterparty risk , meaning that the bank may not be able to make payment when

5544-478: A virtual currency account (usually a coin no longer physically existing), was used more often. All physical currencies were physically related to this virtual currency; this instrument also served as credit. The shift toward the use of these receipts as a means of payment took place in the mid-17th century, as the price revolution , when relatively rapid gold inflation was causing a re-assessment of how money worked. The goldsmith bankers of London began to give out

5742-454: A weight of 80 to 90 grams per square meter. The cotton is sometimes mixed with linen , abaca , or other textile fibres. Generally, the paper used is different from ordinary paper: it is much more resilient, resists wear and tear (the average life of a paper banknote is two years), and also does not contain the usual agents that make ordinary paper glow slightly under ultraviolet light. Unlike most printing and writing paper, banknote paper

5940-499: A weight used to represent one pure ounce of commercial silver. As China was a rather large country where local customs tended to vary widely, an ounce would oftentimes in one place not necessarily be an ounce in another part of China. Consequently, a large variety of different scales were employed all over China by different trades, each of these scales varying somewhat from the other scales that were used in different fields of commerce. The Xianfeng Emperor can't be completely blamed for

6138-579: A while it seemed that Beijing would fall next; but the Taiping northern expedition was defeated and the situation stabilized. The Xianfeng Emperor dispatched several prominent mandarins , such as Zeng Guofan and the Mongol general Sengge Rinchen , to crush the rebellions, but they only obtained limited success. The biggest revolt of the Miao people against Chinese rule in history started in 1854, and ravaged

Hubu Guanpiao - Misplaced Pages Continue

6336-404: A written order to pay the amount to whoever had possession of the note. These notes are credited as the first modern banknotes. The first short-lived attempt at issuing banknotes by a central bank was in 1661 by Stockholms Banco , a predecessor of Sweden's central bank, Sveriges Riksbank . These replaced the copper-plates being used instead as a means of payment. The peculiar circumstances of

6534-415: Is a simple-looking security component found in most banknotes. It is, however, often rather complex in construction, comprising fluorescent, magnetic, metallic, and microprint elements. By combining it with watermarking technology, the thread can be made to surface periodically on one side only. This is known as windowed thread and further increases the counterfeit resistance of the banknote paper. This process

6732-434: Is also a chance for banknotes to have printing errors. For U.S. banknotes, these errors can include board break errors, butterfly fold errors, cutting errors, dual denomination errors, fold over errors, and misalignment errors. Prior to the introduction of banknotes, precious or semiprecious metals minted into coins to certify their substance were widely used as a medium of exchange. The value that people attributed to coins

6930-592: Is applied as a portrait window for the higher denominations of the Europa series (ES2) of the euro banknotes. Windows are also used with the Hybrid substrate from Giesecke+Devrient which is composed of an inner layer of paper substrate with thin outer layers of plastic film for high durability. When paper bank notes were first introduced in England, they resulted in a dramatic rise in counterfeiting. The attempts by

7128-483: Is infused with polyvinyl alcohol or gelatin, instead of water, to give it extra strength. Early Chinese banknotes were printed on paper made of mulberry bark. Mitsumata ( Edgeworthia chrysantha ) and other fibers are used in Japanese banknote paper (a kind of Washi ). Most banknotes are made using the mould-made process, in which a watermark and thread are incorporated during the paper forming process. The thread

7326-487: Is known posthumously as Empress Xiaoquancheng . Yizhu was reputed to have an ability in literature and administration which surpassed most of his brothers, which impressed his father, who therefore decided to make him his successor. Yizhu succeeded the throne in 1850, at age 19, and was a relatively young emperor. He inherited a dynasty that faced not only internal but also foreign challenges. Yizhu's reign title , "Xianfeng", which means "universal prosperity", did not reflect

7524-480: Is mostly because historians tend to be more interested in a theoretical understanding of how money worked rather than how it was produced. The first great deterrent against counterfeiting was the death penalty for forgers, but this was not enough to stop the rise of counterfeiting. Over the 18th century, far fewer banknotes were circulating in England compared to the boom of bank notes in the 19th century; because of this, improved note-making techniques were not considered

7722-409: Is not always the case, and historically, private banks frequently handled all of a country's paper currency. Thus, many different banks or institutions may have issued banknotes in a given country. Commercial banks in the United States had legally issued banknotes before there was a national currency; however, these became subject to government authorization from 1863 to 1932. In the last of these series,

7920-433: Is simply a reflection of the supply and demand mechanism of a society exchanging goods in a free market, as opposed to stemming from any intrinsic property of the metal. By the late 17th century, this new conceptual outlook helped to stimulate the issue of banknotes. The economist Nicholas Barbon wrote that money "was an imaginary value made by a law for the convenience of exchange". A temporary experiment of banknote issue

8118-405: Is the basis for the history of central banks backing their currencies in gold or silver. Today, most national currencies have no backing in precious metals or commodities and have value only by fiat . With the exception of non-circulating high-value or precious metal issues, coins are used for lower valued monetary units, while banknotes are used for higher values. Counterfeiting , including

Hubu Guanpiao - Misplaced Pages Continue

8316-615: The Battle of Palikao , Sengge Rinchen's 10,000 troops, including his elite Mongol cavalrymen, were completely annihilated after several doomed frontal charges against the concentrated firepower of the Anglo-French forces, which entered Beijing on 6 October. On 18 October 1860, British and French forces sacked and burnt Old Summer Palace . Upon learning about this news, the Xianfeng Emperor's health quickly deteriorated. During

8514-661: The Convention of Peking was negotiated in his absence. His health was already in rapid decline in the face of mounting Qing losses. He died in 1861 in Jehol at the age of 30 and was succeeded by his six-year-old son, who assumed the throne as the Tongzhi Emperor . On his deathbed, the Xianfeng Emperor appointed eight men to a regency council to assist his young successor. A few months later, Empress Dowager Cixi and Empress Dowager Ci'an along with Prince Gong instigated

8712-717: The Nian Rebellion started in North China . Unlike the Christian-influenced Taiping rebels, the Nian movement lacked a clear political program, but they became a serious threat to the Qing capital, Beijing , with the mobility of their cavalry-based armies. The Qing imperial forces suffered repeated defeats at the hands of both rebel movements. In 1853, the Taiping rebels captured Nanjing and for

8910-582: The Tang dynasty ; however, these bills of exchange could in no way be considered to be a form of paper money as they weren't meant to be a medium of exchange and were only negotiable between two distant points. The first true paper money in the world was issued under the Song dynasty , these were promissory notes issued by merchants in Sichuan known as the Jiaozi , under the reign of Emperor Zhenzong (997–1022)

9108-812: The Xinyou Coup and ousted the regents. Cixi ultimately rose to sole power and consolidated control over the Qing government. Yizhu was born in 1831 at the Old Summer Palace , eight kilometres northwest of Beijing . He was from the Manchu Aisin Gioro clan, and was the fourth son of the Daoguang Emperor . His mother was the Noble Consort Quan , of the Manchu Niohuru clan, who was made Empress in 1834, and

9306-514: The Yuan dynasty , Kublai Khan , issued paper money known as Jiaochao . The original notes were restricted by area and duration, as in the Song dynasty, but in the later years, facing massive shortages of specie to fund their rule, the paper money began to be issued without restrictions on duration. The fact that the state was guaranteeing the Chinese paper money impressed Venetian merchants. According to

9504-531: The first European bank to issue banknotes in fixed values. It continues to issue banknotes and is the longest continuous banknote issue in the world. The Scottish economist John Law helped establish banknotes as a formal currency in France, after the wars waged by Louis XIV left the country with a shortage of precious metals for coinage. In the United States , there were early attempts at establishing

9702-407: The forgery of banknotes, is an inherent challenge in issuing currency . It is countered by anticounterfeiting measures in the printing of banknotes. Fighting the counterfeiting of banknotes and cheques has been a principal driver of security printing methods development in recent centuries. Code of Hammurabi Law 100 ( c. 1755–1750 BC) stipulated repayment of a loan by a debtor to

9900-474: The money supply in 1921. At the same time, the Bank of England was restricted to issue new banknotes only if they were 100% backed by gold or up to £14 million in government debt. The Act gave the Bank of England an effective monopoly over the note issue from 1928. Today, a central bank or treasury is generally solely responsible within a state or currency union for the issue of banknotes. However, this

10098-510: The state's four constituent countries ( Scotland and Northern Ireland ) continue to print their own banknotes for domestic circulation, even though they are not fiat money or declared in law as legal tender anywhere. The UK's central bank, the Bank of England , prints notes which are legal tender in England and Wales ; these notes are also usable as money (but not legal tender) in the rest of

SECTION 50

#1732776763743

10296-425: The 11th century, during the Song dynasty . By 960, the Song government was short of copper for striking coins, and issued the first generally circulating notes. These notes were a promise by the ruler to redeem them later for some other object of value, usually specie . The issue of credit notes was often for a limited duration, and at some discount to the promised amount later. The jiaozi did not replace coins but

10494-480: The 1760s, these bills of credit were used in the majority of transactions in the Thirteen Colonies. The first bank to initiate the permanent issue of banknotes was the Bank of England . Established in 1694 to raise money for the funding of the war against France , the bank began issuing notes in 1695 with the promise to pay the bearer the value of the note on demand. They were initially handwritten to

10692-510: The 18th century and that their presence would become very common by the 1820s. The Xianfeng era Hubu Guanpiao (戶部官票) tael-based banknotes were created out of the same situation that created the Great Qing Treasure Note (大清寶鈔) cash coins-based banknotes, with the main difference being in what form of currency these banknotes could be redeemed in. The precursor of paper money (紙幣) known as " flying cash " were issued by

10890-491: The Bank of England and the Royal Mint to stamp out currency crime led to new policing strategies, including the increased use of entrapment. The characteristics of banknotes, their materials and production techniques (as well as their development over history) are topics that are not usually thoroughly examined by historians, even though there are now a number of works detailing how bank notes were actually constructed. This

11088-593: The Bark of Trees, Made into Something Like Paper, to Pass for Money All Over his Country ". All these pieces of paper are, issued with as much solemnity and authority as if they were of pure gold or silver... with these pieces of paper, made as I have described, Kublai Khan causes all payments on his own account to be made; and he makes them to pass current universally over all his kingdoms and provinces and territories, and whithersoever his power and sovereignty extends... and indeed everybody takes them readily, for wheresoever

11286-405: The Chinese government exercised with the land tax. In September 1853 an event happened which would change the way these customs were collected forever, and in the process this event resulted transforming the Chinese maritime customs into a competent and highly efficient force for acquiring tax revenue for the Chinese government. In September of the year 1853 the Taiping rebels, fighting their way down

11484-472: The Chinese government was reduced in some areas where necessary as a result of natural disasters such as floods and earthquakes and human disasters such as rebellions and insurrections. The Chinese provinces most devastated by the Taiping Rebellion which were Anhui , Zhejiang , Henan , Jiangxi , Jiangsu , Guizhou , and Sichuan enjoyed a governmental sanctioned "tax break" for decades due to

11682-402: The Chinese people started to distrust it as a valid medium of exchange . In response to the ever more expensive military expenditures because of the Taiping Rebellion the government started producing more and more high denomination banknotes which were not convertible causing hyperinflation , in the year Xianfeng 8 (1858) the government completely depreciated the Hubu Guanpiao series in favour of

11880-434: The Chinese people. The introduction of the Hubu Guanpiao tael notes largely followed the original proposal set forth by Huashana , the original government tael notes were issued in smaller denominations and their distribution was handled by paying 20% of the salaries of civil officials using them. While both the Hubu Guanpiao and Great Qing Treasure Note were introduced in 1853, the Hubu Guanpiao would be discontinued earlier in

12078-421: The Chinese provinces a greater flexibility in raising revenues than before, mainly by greatly expanding office selling , a time-honored Chinese fiscal emergency measure of the Ministry of Revenue in the capital city but this was never used on such a scale by provincial and military administrations. The offices being sols were those of jiansheng (監生) and gongsheng (貢生). Silver ingots known as sycees have been

SECTION 60

#1732776763743

12276-574: The European powers. He delegated Prince Gong for several negotiations but relations broke down completely when a British diplomat, Sir Harry Parkes , was taken hostage by Chinese forces during negotiations on 18 September. Anglo-French forces clashed with Sengge Rinchen's Mongol cavalry on 18 September near Zhangjiawan before proceeding toward the outskirts of Beijing for a decisive battle in Tongzhou District, Beijing . On 21 September, at

12474-506: The Great Qing Treasure Note cash notes, the actual value of the Hubu Guanpiao was severely discounted on the market. In the year Xianfeng 3 (1853) the Ministry of Revenue gave authorisation to the local provincial governments of China to directly issue banknotes denominated in copper-alloy cash coins and silver taels, these banknotes bore its official seal and were valid throughout the empire. Rather than showing restraint

12672-552: The Great Qing Treasure Note. By the year Xianfeng 9 (1859) the Great Qing Treasure Note had also become completely depreciated and was ultimately abolished. During the transition from Ming to Qing the Manchu government issued banknotes known as Hubu Guanpiao (戶部官票) or Shunzhi Guanpiao (順治官票) or Shunzhi Chaoguan (順治鈔貫) which were first issued in the year 1651 on initiative of the Minister of Revenue, Wei Xiangshu (魏象樞) during

12870-524: The Holy Land to receive funds from the treasury of equal value. In the 13th century, Chinese paper money of Mongol Yuan became known in Europe through the accounts of travelers, such as Marco Polo and William of Rubruck . Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo , titled " How the Great Kaan Causeth

13068-416: The Hubu Guanpiao by the government after they came into circulation via salaries. The Hubu Guanpiao banknotes tended to be heavily discounted in exchange due to their inability to be redeemed and would eventually be entirely repudiated by the Chinese government. At their inglorious end, the Hubu Guanpiao banknotes became completely worthless and disappeared completely from the market by the year 1863. Up until

13266-459: The Hubu Guanpiao tael notes being depreciated more rapidly ultimately leading to their abolition. In the year 1856 the Great Qing Treasure Note cash notes had replaced the Hubu Guanpiao in land tax payments, this was done in order to avoid exchange rate losses for poorer peasants as generally their tax obligations were often calculated to only be fractions of taels making the Hubu Guanpiao disadvantageous for them to use. The Hubu Guanpiao would remain

13464-454: The Hubu Guanpiao tael notes through their services. The Shanxi banks were often active in the assigned treaty ports cultivating the business of both Chinese merchants and foreigner traders alike. The Shanxi banks tended to be very competitive in their nature and cooperated extensively with other branches of banking corporations within their own sphere, they would often send crucial banking-related news to member banks by carrier pigeon . Prior to

13662-506: The Hubu Guanpiao was extended to all other government expenditures in order to replace actual silver. The Regulations for the Trial Introduction of Guanpiao (試行官票章程) stated that the Hubu Guanpiao banknotes were redeemable in specie in both silver sycees or copper-alloy cash coins (or banknotes denominated in cash coins) at local banks. When the Hubu Guanpiao tael notes were first used to pay the salaries of government officials in

13860-555: The International Settlement were quick to realise that their country would benefit if China was to follow the West's example. These impressions of foreign business acumen gained during this era, together with cooperation arising out of need in this chaotic time in Chinese history, would lead to the creation of the first native Chinese modern shipping companies and similar business enterprises. The Imperial Maritime Customs

14058-664: The Manchu rulers of the Qing were very much atavistic towards the inflationary pressure that the earlier Jurchen Empire experienced after they had abused their ability to print Jiaochao banknotes. Modern scholars argue that the banknotes issued during the Shunzhi period, while only brief, likely entrenched the reluctance of the Qing dynasty to issue banknotes because this issue also proved inflationary confirming their fears. It has been suggested by Taiwanese economic historian Lin Man-houng that Chinese money shops did not start with

14256-463: The Ministry of Revenue was attempting to get their hands on ⅓ of these reserves, factually borrowing against the predicted income of the provincial Jiansheng silver funds which was feeding these reserves. This scheme was only functional if the imperial Chinese government had status awards (which were symbolic capital) which people would actually want to purchase using real economic capital, the imperial government would have to be able to arbitrarily dictate

14454-442: The Ministry of Revenue would utilise the services of special banks which were specifically appointed by the government for the purpose of bringing them onto local markets. Because of the paramount importance of the " Shanxi banks " to the Chinese economy the Ministry of Revenue decided to use these banks for the purpose of handling the silver tael-based Hubu Guanpiao banknotes and the transactions made using them. The third and final way

14652-456: The Ministry of Revenue, this was a change from the failed plan by the Ministry of Revenue to borrow the silver against provincial contribution funds. The new plan was to use the silver saved by not paying out portions of the statutory salaries, this would serve as a cash reserve to back the Hubu Guanpiao. The Hubu Guanpiao banknotes rather than being smoothly introduced to the local markets were "dumped" (Lanfa) on purveyors of goods and services to

14850-436: The Ministry of Revenue. Some critics suggested that the Hubu Guanpiao should be forcefully introduced to the people as tax bonds, which would be repayable by the Chinese government over a few years in the form of discounts on the land tax. Many of these officials also stated their disapproval of the circulation of private cash shop notes and that this practice must cease to prevent the general over-circulation of paper currency. At

15048-580: The Qing dynasty was forced to open more ports following the Opium Wars . Since the circulating silver sycee in China was rarely of the same degree of fineness, a standard unit of account had to be devised, this unit of exchange for accounting silver came to be known in English as the " tael " (which is pronounced the same as the English word "tail"). The tael itself was not a form of currency, but rather

15246-476: The Qing throne stated that the Ministry of Revenue was too undecided on their monetary policies and that they came too late. Many critics demanded that government-issued banknotes would be made fully convertible in specie and that they should be treated as legal tender in 100% of all government transactions and could circulate throughout the Qing Empire without the restrictions that were currently set on them by

15444-447: The Qing to exchange the Hubu Guanpiao tael notes. However, these official government banks refused to exchange these notes for any real silver. Instead, the official banks would exchange the Hubu Guanpiao tael notes, as well as Great Qing Treasure Note cash notes, for Daqian and their own banknotes. During the ninth month of the year 1853, a 1 tael Hubu Guanpiao note could be exchanged at these banks for 200 specimens of 10 wén Daqian. On

15642-609: The Shanghai banks. However, at this time the Second Opium War was being fought with the United Kingdom and France in the northern parts of China. The tribute junks were sunk on their voyage back to Shanghai. Had bullion in precious metals such as gold and silver have been demanded immediately to cover the loss that had occurred during this crisis, then the Shanghai banks would have gone bankrupt. Being allied with

15840-537: The Shanxi banks under normal circumstances was that to send currency to more distant places in payment for traded goods and services . For this service the remittance banks charged a fee which ranged from 2% to 6%. During the usual course of business, these banks also held Qing Chinese government funds for disbursement. As the Shanxi banks were strongly represented in the north of China, the Chinese government saw it as only natural that these banks would be chosen to disburse

16038-413: The Shanxi group, the local Shanghai banks were given time by the holders of the notes to obtain the necessary funds from other Chinese cities and the crisis which could have severely affected the economy of Shanghai negatively was thereby averted. The Taiping Rebellion had caused the government of the Qing dynasty to fall into an extreme debt spiral which forced it to reconsider introducing paper money as

16236-506: The Song government was amassing large amounts of paper tribute . It was recorded that each year before 1101, the prefecture of Xin'an (modern Shexian , Anhui ) alone would send 1,500,000 sheets of paper in seven different varieties to the capital at Kaifeng. In 1101, the Emperor Huizong of Song decided to lessen the amount of paper taken in the tribute quota because it was causing detrimental effects and creating heavy burdens on

16434-506: The Swedish coin supply were what led to this banknote issue. Cheap foreign imports of copper had forced the Crown to steadily increase the size of the copper coinage to maintain its value relative to silver . The heavy weight of the new coins encouraged merchants to deposit it in exchange for receipts. These became banknotes when the manager of the bank decoupled the rate of note issue from

16632-411: The Taiping Heavenly Kingdom payments of salaries in the city were referred and a debate began to rage within the Ministry of Revenue, speculations began to spread about the implementation of an imminent prohibition of convertible cash banknotes issued by private banks from Nanjing (錢票) and the creation of a shop tax (鋪稅). Sojourning merchants, and especially the merchant Shanxi banks, which tended to handle

16830-642: The Taiping Rebellion broke out in southern China and rapidly spread, culminating in the fall of Nanjing in 1853. Contemporaneously, the Nian Rebellion began in the north, followed by ethnic uprisings (the Miao Rebellion and the Panthay Rebellion ) in the south. The revolts ravaged large parts of the country, caused millions of deaths and would not be quelled until well into the reign of the Xianfeng Emperor's successor. Qing defeat during

17028-685: The Tang dynasty (618–907), as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions. Although government issued centralized paper money did not appear until the 11th century, during the Song dynasty . In Europe, cloth banknotes were in use in Praga in 960 and as part of the banking scheme of the Knights Templars around 1150. The first short-lived attempt at issuing banknotes in Europen by

17226-750: The UK (see Banknotes of the pound sterling ). In the two Special Administrative Regions of the People's Republic of China , arrangements are similar to those in the UK; in Hong Kong , three commercial banks are licensed to issue Hong Kong dollar notes , and in Macau , banknotes of the Macanese pataca are issued by two different commercial banks. In Luxembourg , the Banque Internationale à Luxembourg

17424-406: The Xianfeng Emperor had summoned Sushun and his supporters to his bedside and gave them an imperial edict that dictated the power structure during his son's minority. The edict appointed eight men – Zaiyuan , Duanhua , Jingshou , Sushun , Muyin , Kuang Yuan, Du Han and Jiao Youying – as an eight-member regency council to aid Zaichun, who was later enthroned as the Tongzhi Emperor . Xianfeng gave

17622-756: The Xianfeng Emperor's reign, China lost part of Manchuria to the Russian Empire . In 1858, according to the Treaty of Aigun , the territory between the Stanovoy Range and the Amur River was ceded to Russia, and in 1860, according to the Treaty of Beijing , the same thing happened also to the area east of the Ussuri River. After that treaty, the Russians founded the city of Vladivostok in

17820-569: The Yangtze valley while leaving a lot of destruction in their wake, threatened the port city of Shanghai . The loyal Chinese government officials lost no time in fleeing to Shanghai's International Settlement which was protected by guns of foreign warships stationed there. The Customs House of Shanghai by this time had been abandoned. Foreign traders and businessmen, refusing to pay duties to unauthorized Chinese officials, came to declare their imported goods instead to their representative consulates in

18018-558: The architect of eventual victory over the Taiping Heavenly Kingdom , was given unprecedented powers in this pursuit. By January of the year 1862 conditions had worsened. Zeng's troops now only received 40% of their pay, and even so, payment fell as much as 15 months behind. Desertions now began occurring for the first time in 9 years of fighting. The government withdrew from conventional modes of centralised war financing as it has been proven ineffective. In turn, it allowed

18216-414: The area they had annexed. While negotiations with British, French and Russian officials were being held, the Xianfeng Emperor and his imperial entourage fled to Jehol province in the name of conducting the annual imperial hunting expedition. As his health worsened, the emperor's ability to govern also deteriorated, and competing ideologies in court led to the formation of two distinct factions — one led by

18414-433: The around the end of the year 1858 Jiangxi province had been molested very little by the Taiping rebels, Zeng became dependent upon the province of Jiangxi for his military supplies and made its defense an essential part of his counter-rebellion strategy. The main sources of income of the province at the time were agriculturally based; however, the collection of statistical data collected by the bureaucratic apparatus upon which

18612-499: The bank currency reserves. Three years later, the bank went bankrupt after rapidly increasing the artificial money supply through the large-scale printing of paper money. A new bank, the Riksens Ständers Bank , was established in 1668, but did not issue banknotes until the 19th century. The idea that social and legal consensus determines what constitutes money is the foundation of modern banknotes. A gold coin's value

18810-430: The banknotes were non-redeemable. The Hubu Guanpiao were issued in the denominations of 1 tael , 3 taels, 5 taels, 10 taels, and 50 taels. Despite their face value, the Ministry of Revenue prohibited provincial governments from paying out actual silver for the Hubu Guanpiao. Only military officers and civilian employees at military headquarters were actually allowed to exchange their tael notes for silver. The circulation of

19008-457: The banks to refine the technologies employed. In 1801, watermarks, which previously were straight lines, became wavy—an idea of William Brewer, a watermark mould maker. This made counterfeiting bank notes harder still, at least in the short term, and in 1803 the number of forged bank notes fell to just 3000, compared to 5000 the previous year. Banks asked skilled engravers and artists to help them make their notes more difficult to counterfeit during

19206-406: The beginning, these were personally registered, but they soon became a written order to pay the amount to whoever had it in their possession. These notes are seen as a predecessor to regular banknotes by some but are mainly thought of as proto bills of exchange and cheques. The term "bank note" comes from the notes of the bank ("nota di banco") and dates from the 14th century; it originally recognized

19404-423: The bureaucracy of the Qing government and were not as easily accepted back in tax payments to the government by these same purveyors. In the Qing dynasty capital city of Beijing the circulation of these banknotes was extensive and the government used three different channels to distribute them into the market namely the already existing Beijing Metropolitan District and the newly established provincial treasuries and

19602-489: The capabilities of the copper-alloy cash coins-based currency system of China. During this period imperial Chinese revenues had to be remitted to the capital city of Beijing and provisional salaries paid. At the time the transportation of large sums of precious metal bullion was both expensive and risky to undertake. However, with the outbreak of the Taiping rebellion the business of transacting funds and revenue became even more dangerous. In order to overcome these new difficulties

19800-411: The circulation of a paper money. The Jiaqing Emperor was not fully without justification in asserting his stance against paper currency, as the era Ming banknotes from their introduction had been inconvertible into metal currencies. With no government backing into any other forms of currency these banknotes were swiftly depreciated. While this may seem only logical today the Chinese had to learn this lesson

19998-623: The city until the Chinese Customs House could be reopened. This resulted to a considerable amount of workload for these foreign consulates, as the funds raised through customs duties were based upon a 5% ad valorem tax on all imports and exports in Shanghai. The foreign consular officials, who were unable to cope with this high volume, set up the Maritime Customs Service to be run by British , American , and French consular representatives and gave this office

20196-476: The copper supply dependent on the copper mines of Yunnan which had been interdicted by the rebels. Secondly, the Chinese silver sector, with its system of Loofang (which was the private smelting of sycees), was never able to adequately fulfil the demands of Chinese commercial sector; and thirdly, the Qing dynasty was ruled by a government which proved incapable of enforcing the monetary policy which had worked so well for previous dynasties. All these factors reached

20394-407: The cost of this material. The lijin tax limited the amount collected in any one province to 10%. The tolls collected on passing commodities substantially slowed the flow of business within China. The lijin system would survive the fall of the Qing dynasty as it was a major source of revenue. The lijin tax would constitute the principal source of income for the Chinese provinces and was most essential to

20592-716: The decrepit state of the Chinese military. Near the end of the year 1851, the Ministry of Revenue in Beijing promulgated the Statutes for Raising Military Funds (餉事例). After repeated defeats on the field of battle suffered by the Chinese government, new armies and new types of armies had to be raised. For this task, the Emperor was forced to turn to the provinces. Eventually, the imperial Chinese government had no recourse other than to place full responsibility in these newly formed units led by local warlords and aristocrats. Zeng Guofan ,

20790-451: The destruction that was wreaked upon them by the Taiping Rebellion. This "tax break" accounted for much loss of imperial government revenue which it had previously gained from those provinces. The proceeds of the land tax money collected during this era at the provincial level were substantially decreased. Severe irregularities and mass extortion commonly took place on the part of local tax collectors. The second most important tax collected by

20988-500: The effects around the introduction of these many new types of monies and what effect they had all played into the new monetary system, however, while the Great Qing Treasure Note cash notes and Hubu Guanpiao tael notes weren't actually convertible into hard currency they had a fixed rate to each other and did circulate throughout the Machu Empire. During the ninth month of the year 1853, official government banks were established by

21186-423: The eight men the power of regency, but their edicts would have to be endorsed by Noble Consort Yi and Empress Consort Zhen. By tradition, after the death of an emperor, the emperor's body was to be accompanied to the capital by the regents. Noble Consort Yi and Empress Consort Zhen , who were now known as Empress Dowagers Cixi and Ci'an travelled ahead to Beijing and planned a coup with Prince Gong that ousted

21384-578: The eight regents. Empress Dowager Cixi then effectively ruled China over the subsequent 47 years as a regent. The Xianfeng Emperor was interred in the Eastern Qing Tombs , 125 kilometres/75 miles east of Beijing , in the Ding (定; lit. "Quietude") mausoleum complex. The Qing dynasty continued to decline during the reign of the Xianfeng Emperor. Rebellions in the country, which began the first year of his reign, would not be quelled until well into

21582-535: The empire-wide remittance business, left Nanjing. This resulted in people attacking local banks to withdraw their savings in a run on the banks resulting in many of them going bankrupt. During this time a contribution campaign was stated among local Chinese banks as well as major silk and tea merchant houses in July of the year 1853. Until the end of the year, this campaign yielded 339,000 taels of silver and more than 190,000 strings of copper-alloy cash coins. In response to

21780-407: The end of 1853 the Ministry of Revenue introduced the non-convertible Great Qing Treasure Note cash notes in order to meet the demand for small denomination banknotes in salary payments, to use at central government construction sites, and to ensure that the Hubu Guanpiao tael notes had the opportunity to be redeemed in cash notes which was pegged at fixed parity of 1 tael to 2000 wén . However, like

21978-402: The end of 1853, the private banks in the city of Beijing had ceased paying out copper-alloy cash coins for the Hubu Guanpiao; the effect this had on those that had received these banknotes as a part of their salaries in Beijing was completely devastating. A contemporary observer of the situation at the end of the year 1853 said of it: "Among families in Beijing who have received government notes,

22176-560: The establishment of diplomatic relations as an offence. When the Europeans introduced the long-held concept of an exchanged consular relationship, the Xianfeng Emperor quickly rebuffed the idea. At the time of his death, he had not met with any foreign dignitary. Despite his tumultuous decade of reign, the Xianfeng Emperor was commonly seen as the last Qing emperor to have held paramount authority, ruling in his own right. The reigns of his son and subsequent successors were overseen by regents,

22374-475: The existing Shanxi banks (票号, "draft banks" or "remittance banks", which had earned this nickname as most remittance banks were owned and operated by merchants from the province of Shanxi , meanwhile, foreigners in China called these institutions "native banks" to describe both the Shanxi banks and large money lenders whose businesses had accumulated a sufficient of capital to make loans) were greatly expanded to accommodate this demand. The principal function of

22572-517: The financing of World War I by the Central Powers (by 1922 1 gold Austro-Hungarian krone of 1914 was worth 14,400 paper Kronen), the devaluation of the Yugoslav dinar in the 1990s, etc. Banknotes may also be overprinted to reflect political or economic changes that occur faster than new currency can be printed. In 1988, Austria produced the 5000 Schilling banknote ( Mozart ), which

22770-481: The first phase of the Second Opium War led to the Treaty of Tientsin and the Treaty of Aigun , the latter of which resulted in the cession of much of Manchuria to the Russian Empire . Negotiations broke down and hostilities resumed soon after, and in 1860 Anglo-French forces entered Beijing and burned the Old Summer Palace . The Xianfeng Emperor was forced to flee for the imperial estate at Jehol , and

22968-427: The government of the Qing dynasty distributed the Hubu Guanpiao tael notes into general circulation were the various commissary departments of the Chinese military as these institutions were responsible for paying the salaries of the army and navy. As soldiers and marines were paid partially using the Hubu Guanpiao this ensured that at the places where they were stationed these banknotes would see greater circulation, this

23166-439: The government of the Qing dynasty had ordered larger denomination banknotes to be produced to match their towering expenditures. Both Great Qing Treasure Note cash notes and Hubu Guanpiao tael notes were increasing forced upon the provinces of China proper in growing numbers until the point that they were circulating in most of the provinces of this region. Some people were actually willing to purchase Hubu Guanpiao tael notes (at

23364-523: The government of the Song dynasty granted a monopoly for the production of Jiaozi notes to sixteen wealthy merchants in Sichuan, as these merchants were slow to redeem their banknotes and inflation started affecting these private banknotes the government nationalised paper money in the year 1023 under the Bureau of Exchange. As these paper notes were backed by the government they were instantly successful and

23562-411: The hard way. The first radical change to the Chinese monetary system involved the authorization and introduction of "big cash coins" (大錢 - known today as multiple cash coins). This measurement was seen as one of the only remaining options left, and simultaneously the Qing government decided to reintroduce paper currency. Xianfeng's paper money consisted of two types of paper bank notes, the first of which

23760-456: The imperial Chinese government introduced to raise funds was to allow provincial governments to sell Imperial Academy degrees, the profits from this were collected into a fund known as the jiansheng silver fund (監銀). Under the reign of the Daoguang Emperor , provincial treasuries kept approximately 48% of the money made from this scheme in provincial grain reserves known as Changpingcang (常平倉) and provincial silver reserves known as fengzhuyin (封貯銀),

23958-429: The imperial Chinese government planned to appropriate one-third to finance these emissions. At the time the bank deposits of provincial governments in China proper amounted to 6,114,000 taels of silver and 710,110 strings of standard cash coins in total (⅓ of this would be 1,833,000 taels of silver and 213,033 strings of standard cash coins). He was expeditiously moved to the Ministry of War for his suggestions for enforcing

24156-577: The imperial Chinese government was the grain tribute. Yearly quotas were set, but these quotas were limited to only the 15 provinces with fertile soil which were all situated along the basin of the Yangtze River. The quotas set up by the Imperial Chinese government were assessed based upon local grain productivity in these provinces. The Chinese government levered duties on customs and goods which entered China since ancient times dating to

24354-625: The individual in China, however in the aggregate, it was of great significance to the Chinese government. Collecting and accounting for this diverse revenue constituted a real nightmare of administration for imperial Chinese government tax agencies. As a way to enhance the revenue the Chinese government introduced the Lijin tax (釐金, "a contribution of a thousandth" in Mandarin Chinese, or 1‰) which would prove to be very successful; however, this tax severely hampered trade and commence. The lijin

24552-479: The introduction of the railroad to China, the Chinese economy relied heavily on Shanxi banks to finance inter-city commerce. In Northern China the preferred method of land transportation was the camel due to the fact that these animals could cope with the conditions of Northern China while many other animals could not, and the Shanxi banks employed camels in the north for transportation. The Shanxi banks and other Chinese banking companies were essential in connecting

24750-506: The issuing bank would stamp its name and promise to pay, along with the signatures of its president and cashier on a preprinted note. By this time, the notes were standardized in appearance and not too different from Federal Reserve Notes . In a small number of countries, private banknote issuing continues to this day. For example, by virtue of the complex constitutional setup in the United Kingdom, certain commercial banks in two of

24948-489: The land tax system, the grain tribute, the imperial customs revenue system, the tax on the salt monopoly, lijin, and miscellaneous taxes and duties imposed on the people. From ancient times the land tax had produced up to ⅔ of the Chinese government's total revenue. In China, historically all land within its territory was considered to be the property of the Emperor , the monarch having acquired it through conquest. How this land

25146-400: The local provincial treasuries to defray provincial military expenses. To make up in part for these losses, the lijin tax was introduced. During the entire Taiping Rebellion there were never sufficient funds to run the Chinese government and pay the army to crush the rebellion. These taxes collected by the imperial Chinese government took many different forms; the most important of which were

25344-399: The mid-nineteenth century, commercial banks were able to issue their own banknotes, and notes issued by provincial banking companies were the common form of currency throughout England, outside London. The Bank Charter Act of 1844 , which established the modern central bank, restricted authorisation to issue new banknotes to the Bank of England , which would henceforth have sole control of

25542-490: The military commissary. By utilising the already existing bureaucracy of the Beijing Metropolitan district, the new banknotes were more easily and swiftly introduced into the Beijing market, this way all government officials in the city and private contractors operating there would receive a percentage of their pay in the Hubu Guanpiao tael notes. To distribute these banknotes into the provinces outside of Beijing

25740-417: The military operations conducted by Zeng Guofan. The Ministry of Revenue assigned which funds had to be sent to the central government in Beijing and which could be retained for local provincial use. The fact that, at times, the military payment of provincial troops was 8 to 9 months in some areas established that the money more often went to Beijing than to the coffers of the provincial governments. One scheme

25938-402: The monetary crisis the Qing dynasty experienced during this era. The monetary policy of the Qing government had been effective for over 160 years, yet under the Daoguang Emperor 's reign, which preceded that of Xianfeng, inherent problems to the system were becoming evident. 3 principal issues with the system arose. First, cash coinage became debased due to dishonest officials and the failure of

26136-516: The new currency laws that were more in the Manchu military tradition than that of the Chinese civil authorities of the Qing dynasty. However these enforcements which were done when the Chinese public refused to accept the banknotes happened without correcting the root cause of the problems and prove to only hasten the weakening and eventual abolition of the Great Qing Treasure Note and Hubu Guanpiao banknote series. Government-issued banknotes and other currencies would continue to lose their market value to

26334-784: The note was presented. Notes issued by central banks had a theoretical risk when they were backed by gold and silver. Both banknotes and coins are subject to inflation . The durability of coins means that even if metal coins melt in a fire or are submerged under the sea for hundreds of years, they still have some value when they are recovered. Gold coins salvaged from shipwrecks retain almost all of their original appearance, but silver coins slowly corrode. Other costs of using bearer money include: The different advantages and disadvantages of coins and banknotes imply that there may be an ongoing role for both forms of bearer money, each being used where its advantages outweigh its disadvantages. Until recently, most banknotes were made from cotton paper with

26532-602: The oldest user of lightweight promissory notes. In China during the Han dynasty , promissory notes appeared in 118 BC and were made of leather. Rome may have used a durable lightweight substance as promissory notes in 57 AD, which have been found in London . However, the first known banknotes were first developed in China during the Tang and Song dynasties, starting in the 7th century and were called " flying money ". Its roots were in merchant receipts of deposit during

26730-421: The ongoing turmoil the Xianfeng Emperor issued a degree which made three promises, the first promise was that all debates about implementing merchant contributions (商捐), a merchant tax (商稅), or issuing levies per household (按戶收錢) should cease, the second point stated that middle- and low ranking officials should continue to receive their salaries, and thirdly that government paper money (鈔) should be issued, while at

26928-596: The originating bank. These commercial banknotes only traded at face value in the market served by the issuing bank. Commercial banknotes have primarily been replaced by national banknotes issued by central banks or monetary authorities . National banknotes are often, but not always, legal tender , meaning that courts of law are required to recognize them as satisfactory payment of money debts . Historically, banks sought to ensure that they could always pay customers in coins when they presented banknotes for payment. This practice of "backing" notes with something of substance

27126-492: The paper into the lines of the engraving to make suitable banknotes. Another difficulty in counterfeiting banknotes was the paper, as the type of paper used for banknotes was rather different from the paper commercially available at that time. Despite this, some forgers successfully forged notes by dealing with and consulting paper makers, in order to make a similar kind of paper themselves. Furthermore, watermarked paper has also been used since banknotes first appeared; it involved

27324-593: The pattern of the Great Ming Treasure Note issued by the Ming dynasty, but as historiographical sources about the early Qing era paper money are scarce, not much can be known about them. After the Hubu Guanpiao it was only rarely suggested by court officials to reintroduce paper money to the Qing Empire, among these were Cai Zhiding (蔡之定) in 1814 and Wang Yide (王懿德) in his treatise on money known as Qianbi Chuyan (錢幣芻言). Peng Xinwei suggested that

27522-405: The people of the region. However, the government still needed masses of paper products for the exchange certificates and the state's new issuing of paper money. For the printing of paper money alone, the Song government established several government-run factories in the cities of Huizhou , Chengdu , Hangzhou , and Anqi. The workforce employed in these paper money factories was quite large; it

27720-706: The people regarded them to be equally trustworthy as cash coins , other types of paper notes issued under the Song dynasty include the Huizi and the Guanzi . Before the Mongol Empire conquered China the Jin dynasty also issued paper money. Before the establishment of the Ming dynasty the Mongol Yuan dynasty had suffered from a severe case of hyperinflation which made the paper money issued by them worthless. Under

27918-448: The plan by the Ministry of Revenue to take funds from the jiansheng silver fund (監銀) early in 1853, his largest objection was the lack of control the ministry had over the contributions which would later be necessary to refund the capital. The total emission of Hubu Guanpiao tael notes proposed by the Ministry of Revenue was 2,000,000 taels. The majority of the appropriated funds would come from bank deposits of provincial governments of which

28116-404: The point that the government itself started to refuse accepting Hubu Guanpiao tael notes as a form of tax payment for the land tax and grain tribute payments, although the Hubu Guanpiao were still accepted in customs and salt taxes as well as a form of payment for office selling and they continued to be issued as part of government salaries and stipends in the city if Beijing. This policy resulted in

28314-406: The port, would return with shipments of oil, peas, bean cakes, and other products for trade. In the year 1858 a crisis occurred when the Shanghai banks would let the merchants borrow money to pay for the import of various foreign products and merchandise with the expectation that the tribute junks would return with oil and foodstuffs with a value that would be sufficient to offset the advance paid by

28512-416: The prices for these symbolic awards, and would also have maintained complete control over the selling process for these awards. Chinese censor Huashana (花沙納) was highly critical of the Ministry of Revenue's profit-generating plan to start selling provincial examination degrees and titles (舉人), this had in the history of China never been allowed to be sold before showcasing how desperate the Ministry of Revenue

28710-530: The production of their own private banknotes until the end of the Qianlong period , these shops were very likely to have been more developed in Northern China , where these money shops produced banknotes which were mostly denominated in cash coins while banknotes from Southern China tended to be denominated in taels of silver. It is also possible that private-order banknotes could have emerged earlier in

28908-484: The province of Fujian allowed them to be redeemed in silver specie within its borders. Not all exceptions were positive for the people, while in theory, 50% of all taxes could be paid using Hubu Guanpiao tael notes, some provinces and some local magistrates accepted only 30% or would even reject payments made in Hubu Guanpiao altogether. In the summer of 1853 the military headquarters and various provincial treasures were given 2,000,000 taels in Hubu Guanpiao banknotes from

29106-431: The rather daily exchanges. Furthermore, they were not backed by any actual silver which meant that they were not convertible into actual silver money. The Great Qing Treasure Note cash notes and Hubu Guanpiao tael notes were not the only solutions the Chinese government offered to fix its financial crisis, but the actual implementation of these solutions varied greatly from province-to-province. Scholarly studies surrounding

29304-532: The rebellion had sown the seeds for further calamities which would hurt the economy of China even more and ultimately led to the downfall of the Qing dynasty during the next century. The main source of income for the government of the Qing dynasty was taxation. The Taiping Rebellion was the largest civil war that China had experienced up until that point. The Qing dynasty Army of the Green Standard and its bannermen had long since fallen into decay, revealing

29502-445: The receipts as payable to the bearer of the document rather than the original depositor. This meant that the note could be used as currency based on the security of the goldsmith, not the account holder of the goldsmith-banker. The bankers also began issuing a greater value of notes than the total value of their physical reserves in the form of loans, on the assumption that they would not have to redeem all of their issued banknotes at

29700-606: The region until finally put down in 1873. In 1856, an attempt to regain Nanjing was defeated and the Panthay Rebellion broke out in Yunnan . Meanwhile, an initially minor incident on the coasts triggered the Second Opium War . The British and French, after engaging in a number of minor military confrontations on the coast near Tianjin , attempted to start negotiations with the Qing government. The Xianfeng Emperor believed in Chinese superiority and would not agree to any demands from

29898-670: The reign of Kublai Khan the Zhongtong Jiaochao (中統交鈔) was issued whose value was based on the fabric silk . Under the reign of Külüg Khan in the year 1308 the Zhiyuan Baochao (至元寶鈔) was issued which was supplemented with the silver-based Zhida Yinchao (至大銀鈔), but these circulated only for a year. The final series of paper money issued by the government of the Yuan dynasty from 1350 were the Zhizheng Jiaochao (至正交鈔). A major difference between how paper money

30096-470: The reign of the Tongzhi Emperor and resulted in millions of deaths. The Xianfeng Emperor also had to deal with the British and French and their ever-growing appetite to expand trade further into China. The Xianfeng Emperor, like his father, the Daoguang Emperor , understood very little about Europeans and their mindset. He viewed non-Chinese as inferior and regarded the repeated requests by the Europeans for

30294-407: The reign of the Yuan dynasty copper cash coins remained in circulation with the inscriptions Zhida Tongbao (至大通寶), Dayuan Tongbao (大元通寶), and Zhizheng Tongbao (至正通寶) forming the majority of the circulating issues and " strings of cash coins " remaining a currency unit. Silver then started to occupy a paramount place in the Mongol economy and was supplemented by government issued paper money . Under

30492-468: The result. After corruption among the note issuing banks was discovered by Sushun , who was the president of the Ministry of Revenue in the year 1859, 100 arrests of corrupt notables and wealthy merchants were made. That year a fire at the offices of Ministry of Revenue offices destroyed most of the records. As it was suspected that corrupt officials complicit, the government arrested more people. There were measures taken and police actions were made to enforce

30690-461: The right of the holder of the note to collect the precious metal (usually gold or silver) deposited with a banker (via a currency account). In the 14th century, it was used in every part of Europe and in Italian city-state merchants colonies outside of Europe . For international payments, the more efficient and sophisticated bill of exchange ("lettera di cambio"), that is, a promissory note based on

30888-524: The same day, the market exchange rate for a real silver sycee against standard copper-alloy cash coins was 1 tael of silver for 2,500 wén in Zhiqian . Additionally, at this point the Daqian had already depreciated by more than 40%. Some officials working for the Ministry of Revenue has argued that the government should be very conservative with issuing the Hubu Guanpiao into circulation, as they claimed that

31086-460: The same era as the land era. With the forced opening of the Qing dynasty's doors after the Opium Wars and the following increase in maritime trade with foreign nations, the customs duties took on a vastly expanded level of importance in the Chinese taxation system. Before the year 1854 the same rather lax administration and sleight of hand was practiced with the collection of the import customs as

31284-422: The same time period, which historians refer to as "the search for the inimitable banknote." During this time, bank notes also began to be double-sided and have more intricate patterns. The ease with which paper money can be created, by both legitimate authorities and counterfeiters, has led to a temptation in times of crisis such as war or revolution, or merely a spendthrift government, to produce paper money which

31482-481: The same time privately produced banknotes would continue to be accepted. The silver sycee-based Hubu Guanpiao were introduced alongside the copper-alloy cash coins-based Great Qing Treasure Note by the Chinese government during the third year of the Xianfeng era (1953) with their main difference being into what they could be converted. Because of this, they were also referred to as "Yinpiao" (銀票, "silver notes") by

31680-403: The same time there were fears that the banknotes which were issued by private companies would become a threat to the credit of the government issued Hubu Guanpiao tael notes, in the case that the private banks would go bankrupt. Lastly, some government officials urged that the circulation of Hubu Guanpiao should be confined only to the capital city of Beijing. Wang Maoyin , an imperial censor who

31878-461: The same time. This was a natural extension of debt-based issuance of split tally sticks used for centuries in places like St. Giles Fair, however, done in this way, it was able to directly expand the expansion of the supply of circulating money. As these receipts were increasingly used in the money circulation system, depositors began to ask for multiple receipts to be made out in smaller, fixed denominations for use as money. The receipts soon became

32076-539: The second month of the year 1853, the government of the Qing dynasty had made the promise that, after a period of six months, people could take the Hubu Guanpiao tael notes to the imperial Treasury to have them redeemed for their stated value in silver. Apparently by the eighth month of the year 1853 this promise by the government had not been kept. This did not turn out to be enforceable as official money shops in Beijing refused to pay out in silver, and merchant banks could not be forced to pay either. This effectively meant that

32274-627: The senior official Sushun and the princes Zaiyuan and Duanhua , and the other led by Noble Consort Yi , who was supported by the general Ronglu and the Bannermen of the Yehe Nara clan . The Xianfeng Emperor died on 22 August 1861, from a short life of overindulgence, at the Chengde Mountain Resort , 230 kilometres northeast of Beijing . His successor was his surviving five-year-old son, Zaichun . A day before his death,

32472-436: The sewing of a thin wire frame into paper mould. Watermarks for notes were first used in 1697, by Rice Watkins, a Berkshire paper maker. Watermarks and special paper made it harder and more expensive to forge banknotes, since more complex and expensive paper-making machines were needed. In the early 19th century (the so-called Bank Restriction Period , 1797–1821), the dramatically increased demand for bank notes slowly forced

32670-503: The situation. In 1850, the first of a series of popular rebellions began that would nearly destroy the Qing dynasty. The Taiping Rebellion began in December 1850, when Hong Xiuquan , a Hakka leader of a syncretic Christian sect, defeated local forces sent to disperse his followers. Hong then proclaimed the establishment of the Taiping Heavenly Kingdom and the rebellion spread to several provinces with amazing speed. The following year,

32868-649: The task of collecting all customs duties on traded goods. As at the time only the British inspector was able to speak Mandarin Chinese , he was handed the office of the Inspector General. It was very rare for contemporary Chinese merchants who came into the Shanghai International Settlement to have had any prior contact with Western people. These people now could now observe western business practices and their administration at very close quarters. Some of these refugees who fled into

33066-415: The taxation system was based was often completely disrupted during Taiping incursions into the area, thus depriving the Ministry of Revenue of its base upon which to collect these taxes. This resulted that land taxes and grain tributes which were the 2 principal sources of revenue, were in large measure not paid to the central government in Beijing. additionally, taxes that were collected were often diverted to

33264-540: The total imperial revenues of the Qing dynasty were an approximated 30,000,000 taels . Imperial Government expenditures at the time were correspondingly modest. During the balanced periods in Qing dynasty history of the 17th and 18th centuries imperial revenue consistently exceeded government expenditures, which resulted in a tidy cash surplus in the Imperial Chinese Treasury. The vastness of China created poor communications across government offices and

33462-426: The usage of the Hubu Guanpiao tael notes stated that 80% of all government expenditures should be paid using real silver while 20% was to be paid out using the Hubu Guanpiao tael notes. This rate was later adapted to 50/50 somewhere in late 1853. The Hubu Guanpiao tael notes saw limited circulation on the Chinese market, this was largely because of their high nominal values, which meant that they proved inconvenient for

33660-462: The use of silver-based banknotes as a means of overcoming the shortage of silver due to the ongoing war with the Taiping rebels was effective as long as the banknote issue was limited to only 20% of all payments conducted by the government of the Qing dynasty, a notable exception was made for people like the generals and the imperial princes who traditionally received their payments entirely in silver. Critics who supported paper money in their memorials to

33858-423: The various monetary systems that circulated in China at the time by facilitating interregional trade and commerce, providing credit for merchants, and cooperating in times of crisis. It was customary for example for the Shanghai banks to make advances to junk owners who were engaged in the trade of carrying tribute rice to the north, holding their vessels as collateral. These junks after having unloaded their rice in

34056-478: The war with the remnants of the Ming dynasty to cover the more immediate expenses of the Manchus as the finances of the Qing during this period were in dire distress, these banknotes were declared void only a decade after their issued. An annual amount of 128,000 guàn (貫) were issued, with a total sum of 1.28 million guàn being produced before they were abolished. The denominations of the Hubu Guanpiao followed

34254-570: The wealthier ones have already paid them as contribution [i.e. bought offices], the poorer families hold the bills in their hands without a place to exchange them into copper cash, so they are forced to sell them at discount prices to treacherous dealers who have monopolized the acquisition of contributions and in this way return the bills [to the Treasury]." - Extract from Zhou Yumin (周育民). Wan-Qing caizheng yu shehui bianqian (晚清財政與社會變遷) ( Shanghai : Shanghai renmin chubanshe, 2000). p. 196. Near

34452-550: The year 1814, when Cai Zhiding (蔡之定, Ts'ai Chih-Ting), who was a high official in the Ministry of State, petitioned to the court of the Jiaqing Emperor advocating the resumption of a paper money currency, this request was denied. Cai was later severely rebuked in the Jiaqing Emperor's memorial in which he pointed out that neither the Chinese government nor any individuals in the past had experienced benefits from

34650-402: The year 1858 (Xianfeng 8) with some denominations being discontinued before the series ended starting in 1856 (Xianfeng 6). The Hubu Guanpiao were originally intended to be used to pay the salaries of government officials, this was because the Ministry of Revenue reported that its actual silver stock in its vault was too low for these immediate payments. In the summer of the year 1853, the use of

34848-428: The year Xianfeng 4 (1854) many endorsements were made on the reverse side of Hubu Guanpiao tael notes confirming the fact that they were still generally accepted by the Chinese public as a form of payment. However, by the year Xianfeng 5 (1855) it appeared as if the Chinese people had turned against them as a valid bill of exchange due to inflation as banknotes produced after this period had fewer and fewer endorsements, by

35046-514: The year Xianfeng 9 (1859) people would refuse to accept these tael notes altogether. By the spring of the year 1859 their value had fallen to only 5% of their face value . At the end of their official circulation period, the leftover Hubu Guanpiao banknotes were being traded on the streets of Beijing at a 99% loss compared to their face value. Xianfeng Emperor The Xianfeng Emperor (17 July 1831 – 22 August 1861), also known by his temple name Emperor Wenzong of Qing , personal name Yizhu ,

35244-414: Was a strong proponent of this more reserved policy in circulating paper money, he feared that the private banks would be forced to continue to make payments on the interest on the government deposits while not being able to recoup the actual silver needed for the reserves. Wang did not know that the Chinese provincial contribution funds would not stay as predictable as time went by. Wang Maoyin also criticised

35442-442: Was a tax imposed upon traded commodities. Lijin collection points were established along all highways and waterways in China. Additionally, the lijin tax was collected at every border crossing between Chinese provinces and at all city gates. Lumber originating on the upper Yalu River and bound for the capital city of Beijing has to pass through no less than 68 inspection stations to be taxed. The lijin collected added no less than 17% to

35640-417: Was at the time for generating money to continue fighting the expensive war. Huashana praised the idea of producing paper money as a far better alternative to selling offices and degrees, but despite his anti-office selling stance he did not advocate for it to be abolished. During the 19th century, Chinese trade in commodities such as tea, silk, and grain was of such a large volume that this trade actually taxed

35838-441: Was based on precious metals . Banknotes were seen by some as an I.O.U. or promissory note : a promise to pay someone in precious metal on presentation (see representative money ). But they were readily accepted—for convenience and security—in London , for example, from the late 1600s onwards. With the removal of precious metals from the monetary system, banknotes evolved into pure fiat money . The first banknote-type instrument

36036-526: Was carried out by Sir William Phips as the governor of the Province of Massachusetts Bay starting on December 20, 1690, to help fund the war effort against France . The other Thirteen Colonies followed in Massachusetts' wake and began issuing bills of credit , an early form of paper currency distinct from banknotes, to fund military expenditures and for use as a common medium of exchange . By

36234-425: Was denominated in qian, or copper cash; and the second type, in silver taels. After the Taiping rebels had captured Nanjing the Qing government realised how big the rebellion had become and started issuing new currencies including the Hubu Guanpiao tael notes. The decision to introduce the Hubu Guanpiao was made in a rush during the spring of 1853 due to the enormous shock of losing Nanjing. Because Nanjing fell to

36432-646: Was entitled to issue its own Luxembourgish franc notes until the introduction of the Euro in 1999. As well as commercial issuers, other organizations may have note-issuing powers; for example, until 2002, the Singapore dollar was issued by the Board of Commissioners of Currency, Singapore , a government agency that was later taken over by the Monetary Authority of Singapore . As with any printing, there

36630-513: Was especially true for the areas surrounding the Grand Canal as one of the primary military strategies employed during the war with the Taiping Heavenly Kingdom was to hold this waterway at all costs as it was extremely vital for warfare. The Hubu Guanpiao tael notes were sent from Beijing to the other provinces of China as a method to pay for imperial government expenditures on military or construction projects. Government regulations regarding

36828-400: Was introduced alongside the copper-alloy cash coins-based Great Qing Treasure Note (大清寶鈔) banknotes. However, the government did not keep adequate reserves of hard currency to back the new banknotes up and many provincial governments didn't allow for taxes to be paid using paper money, after a few years the government started refusing to convert the new paper money into hard currency and

37026-495: Was invented by Portals, part of the De La Rue group in the UK. Other related methods include watermarking to reduce the number of corner folds by strengthening this part of the note. Varnishing and coatings reduce the accumulation of dirt on the note for longer durability in circulation. Another security feature is based on windows in the paper, which are covered by holographic foils to make it very hard to copy. Such technology

37224-902: Was not supported by precious metal or other goods; this often led to hyperinflation and a loss of faith in the value of paper money, e.g. the Continental Currency produced by the Continental Congress during the American Revolution , the Assignats produced during the French Revolution , the paper currency produced by the Confederate States of America and the individual states of the Confederate States of America ,

37422-462: Was organised so well that it would become a model of efficiency, so efficient in fact that the British would never relinquish their control of this system during imperial China, the Manchus would continue this arrangement to the end of the Qing dynasty. Since ancient times in China the salt trade was treated as a government monopoly. John E. Sandrock described the administration of this commodity to be "so complicated, that by comparison, it would make

37620-404: Was originally based upon the value of the metal unless they were token issues or had been debased. Banknotes were originally a claim for the coins held by the bank, but due to the ease with which they could be transferred and the confidence that people had in the capacity of the bank to settle the notes in coin if presented, they became a popular means of exchange in their own right. They now make up

37818-511: Was produced too high a tax would drive consumption down thereby reducing the revenues made. By this act of fine-tuning the Chinese salt tax, the Imperial Treasury of China kept up a steady flow of income of significant proportions. The 5th of the imperial revenue sources was also by far the most diversified. These were the "miscellaneous taxes and duties", this category included everything imaginable to be taxed. There were separate taxes on deeds, wine , tobacco , tea , sugar , and timber to list

38016-425: Was recorded in 1175 that the factory at Hangzhou alone employed more than a thousand workers a day. However, the government issues of paper money were not yet nationwide standards of currency at that point; issues of banknotes were limited to regional areas of the empire, and were valid for use only in a designated and temporary limit of three years. Between 1265 and 1274, the late southern Song government introduced

38214-463: Was the ninth emperor of the Qing dynasty , and the seventh Qing emperor to rule over China proper . During his reign, the Qing dynasty experienced several wars and rebellions including the Taiping Rebellion , the Nian Rebellion , and the Second Opium War . He was the last Chinese emperor to exercise sole power. The fourth son of the Daoguang Emperor , he assumed the throne in 1850 and inherited an empire in crisis. A few months after his ascension,

38412-496: Was used alongside them. The central government soon observed the economic advantages of printing paper money, issuing a monopoly for the issue of these certificates of deposit to several deposit shops. By the early 12th century, the amount of banknotes issued in a single year amounted to an annual rate of 26 million strings of cash coins. By the 1120s, the central government started to produce its own state-issued paper money (using woodblock printing ). Even before this point,

38610-399: Was used by the government to pay military expenses. This all changed when the Ming dynasty started trading with the Portuguese during the 16th century, large amounts of European silver would enter the trading port of Guangzhou leading to a large surplus of the metal in China as merchants began using silver to pay their taxes with. The amounts of silver flowing in increased dramatically after

38808-407: Was used in China in the 7th century, during the Tang dynasty (618–907). Merchants would issue what are today called promissory notes in the form of receipts of deposit to wholesalers to avoid using the heavy bulk of copper coinage in large commercial transactions. Before these notes, circular coins with a rectangular hole in the middle were used. Multiple coins could be strung together on

39006-543: Was used under the Mongols and under the Song dynasty was that, in certain regions of the Yuan dynasty, paper notes were the only acceptable form of currency and could not be exchanged in either copper cash coins or silver sycees . Exchanging paper money into copper or silver was known as duìxiàn (兌現, "convert into specie") which was the main reason why earlier forms of paper money were deemed reliable. As these regions were completely dependent on paper money inflation hit them more severely as their notes could not be converted into

39204-420: Was used, however, was left to those that occupied and lived on it in return for a yearly tax based upon the rental value of the land in question. In the year 1713 the Kangxi Emperor had fixed the rent collected by the imperial Chinese government at ¾ tael per 6 mou (or 1 acre) of land and issued a decree that this ratio should stand for all time unchanged. From time to time however the actual land tax collected by

#742257