CHINA AND INNER ASIA SESSION 142

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The monetary system of imperial China—especially its persistent reliance on low-value bronze currency rather than coining silver and gold—has long bedeviled Western analysts and theorists. While the latter (and some scholars of China) have often concluded that the Chinese monetary system simply defies the laws of economics, the real problem may be conventional monetary theory, which is primarily an artifact of the Western experience, especially the era of the gold standard and the formation of national currencies in the nineteenth century. The “peculiarities” of Chinese monetary history—for example, multiple currencies, overlapping zones of circulation, and use of different monies for different transactions—in fact reflect the historical norm, not only in non-Western societies but in premodern Europe as well. Spanning Chinese history from the Song dynasty to the twentieth century, the papers on this panel analyze the operation of multiple and concurrent currencies within regional and national monetary circuits and in so doing call into question the norms of conventional monetary theory. Kuroda’s paper sets the stage with an explicit challenge to the standard assumptions about the organization of trade that underlie conventional monetary theory. The other contributions draw on particular case studies—von Glahn on the monetization of silver in the Southern Song, Vogel on Yunnan’s salt currency, and Weiman and Zelin on the changing monetary standards in the Sichuan salt industry in the early twentieth century—to explicate the underlying economic logic of the Chinese monetary system.

Emancipating Chinese Monetary History from Aristotelian Postulates
Akinobu Kuroda, University of Tokyo
Since Aristotle, the invention of money has been attributed to the need to find a common measure of value for different goods in order to enable exchange between different parties. However, this assumption has prevented scholars from noticing that one person can trade in multiple markets simultaneously using different monies, raising the question of why plural monies co-existed in a complementary relationship. Recognition of the complementarity among monies enables us to better understand what appear to be the peculiar features of Chinese monetary history: the continuous use of a low-value, mono-unit currency; the precocious appearance of paper currency; the state’s reluctance to coin precious metals; measuring the value of silver by (sometimes imaginary) weight; and the use of various commodity monies. All of these phenomena can be explained by the tendency of monies to circulate with particular currency circuits and the balance that was achieved between a unified monetary standard administered by the court on a national scale and the diverse adaptations of this standard in regional and local markets. The history of a quarter of humanity makes clear the principle that money is accepted neither due to its intrinsic value nor to the enforcement power of the state; instead, the acceptability of money must be analyzed in terms of currency circuits based on agreements among local traders seeking stable means of transactions in their immediate markets. Chinese monetary history provides crucial clues for conceptualizing the operations of money and markets in a different way from the conventional framework that began with Aristotle.

A Reassessment of the Role of Silver in the Multiple Currency System of the Southern Song
Richard von Glahn, University of California, Los Angeles
The monetary system of the Southern Song period was characterized by distinctive regional monetary circuits and multiple currencies, including iron coin, paper money, and silver. Although bronze coin remained the standard unit of account in government finance and private trade throughout the Song, silver developed into a key component of the Southern Song fiscal system, especially after the introduction of the huizi paper currency. This study analyzes the monetization of silver in the context of the Southern Song’s multiple currency system. The severe decline in the output of state mints after 1100 forced the court to find substitutes for bronze coin. Silver acquired particular importance as the hard currency reserve that backed the qianyin paper currency circulating within Sichuan. Similarly, when the court at Hangzhou launched the huizi paper currency in the 1160s, it also relied on silver rather than bronze coin as the hard currency reserve for its paper notes. Thus, by the beginning of the 13th century, silver had begun to usurp the place of bronze coin as a store of value. Bronze coin remained the standard unit of account, but its circulation diminished over the course of the Southern Song period. Indeed, the substitution of paper money and silver for many of the functions once performed exclusively by bronze coin may have been the catalyst for the massive export of Song coin to Japan during the 13th century and paved the way for the creation of a purely paper currency monetary system by the Mongol-ruled Yuan dynasty.

Salt Money in Yunnan: Marco Polo Went to China
Hans Ulrich Vogel, University of Tuebingen
This paper will discuss Marco Polo’s references to the administration, production, transportation, consumption, and use of salt in China during the Yuan period. First, it will start with a short critical discussion of the passages on salt in Frances Wood’s book. This will be followed by an investigation of the references to salt both in Marco Polo’s Il Milione as well as in Chinese sources, concentrating on salt production in Yunnan and the use of salt currency there and in Tibet, in comparison with the production of salt in Changlu in southern Hebei. The results of this systematic investigation will provide further strong evidence for the camp of those scholars that are of the opinion that Marco Polo went to China. The salt currency in southwestern China is an interesting case in monetary history relating to such concepts as multiplicity of and competition between currencies, the importance of small currencies, and the interrelationship between monies, markets, and finance. Various forms of salt currency were used in Yunnan, Guizhou and Tibet until the late imperial period, in some places even up to the twentieth century. The monetary functions of salt currencies will be elucidated, as well as its role in the exchange of salt and fuel between the salt works and the indigenous population. Moreover, it is interesting to take a closer look at the role of the state and the market in the production, distribution and control of salt currencies.

Monetary Arrangement in Sichuan in the Late Qing and Republican Periods: A View from Zigong Contracts
David Weiman, Barnard College and Columbia University; Madeleine Zelin, Columbia University
Instead of presuming the “universality” of money here conceived as a unit of account, we document the historical evolution of monetary standards in Zigong, Sichuan from the late Qing to the Republican period. We hypothesize that the prevalence of multiple standards and the convergence to a single or common standard will reflect the spatial patterns of the city’s dominant salt industry, both its factor and product markets. As evidence we analyze the monetary terms in nearly 700 contracts, mainly lease agreements, that span the period. Our analysis clearly shows the shift from a variety of copper and silver standards to silver-based standards after 1900, and finally to a single Yuan silver and then paper standard after 1926. The first corresponds to a decisive shift in the city’s trade from reliance on a variety of local markets within Sichuan and adjacent regions to increasing dependence on imported technologies indirectly via Shanghai. The second shift followed the independent impact of policy changes dating from the mid-1920s, especially Guomidang currency reforms in 1935. Finally, our data show the monetary disarray arising from the late 1940s hyperinflation.