Financial History 144 Winter 2023 - Page 29

Failure and Success International Silver Coins in the China Trade

By Eric Brothers
From the 18th century until the 20th century , China employed silver coins from foreign lands as their de facto currency . The Spanish American coins issued during the reigns of Carlos III and Carlos IV , commonly called Carolus dollars , had a highly uniform standard of weight and fineness , and they became the standard means of exchange within China ’ s domestic economy during the 18th century . All foreign coins were judged against them .
However , over the years nations that engaged in trade with China attempted to have their own coins accepted at the same rate as the Carolus ( also known as 8 Reales , piece of eight or Spanish dollar ) and later the silver 8 Reales ( commonly called the Eagle dollar or Mexican dollar ).
Painting of the Silver Mint House in Calcutta (“ The Old Silver Mint ” by Thomas Prinsep , 1829 ), where British trade dollars were produced from 1895 – 1935 . They were also struck in Bombay and London .
Such coins were called yuan ( solid round coin ) by the Chinese , the name by which Chinese currency has come to be known . Some nations sent their domestic specie , while others developed their own trade coin specifically for use in the China trade . These silver coins were used to purchase tea , silk , porcelain and other goods , for the Chinese would only accept silver coins as payment . As instruments of commerce , many of these international coins were dismal failures , some were moderately successful and some became the standard coins of China .
From Bullion to Spanish Dollars
The Chinese state employed silver bullion , called sycee , as its unit of account . Imported silver coins were melted down and recast into ingots . This recasting was done by private assayers and moneychangers , resulting in a heterogeneous variety of silver ingots of varying shapes , weights and fineness generated throughout the expansive Chinese empire . Monetary scholars have documented 67 recognized standards of sycee .
The Spanish Carolus dollars began to flood Chinese port cities and work their way into mainland China . Gradually , these coins replaced the sycee bullion and were adopted as the de facto currency . Before 1772 , the Carlos III coins had a design on the obverse of the royal coat-of-arms topped off with the Spanish crown , while the reverse presented the dual hemispheres of the New and Old Worlds beneath a crown surrounded by the pillars of Hercules . Americans called them “ Pillar dollars ,” while in China these coins were called “ Double Pillar ” or “ Three Gongs ” ( for the “ III ” in Carlos III ).
In 1772 , the silver fineness was debased , and the design was changed . From 1772 to 1788 , the bust of Carlos III replaced the twin hemispheres on the obverse , which combined the pillars of Hercules with the Bourbon coat-of-arms on the reverse . The same design was found upon the coinage of Carlos IV from 1788 – 1808 . Such issues were called “ Buddha Head ” ( fotoumian ) in China .
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