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The Rise and Fall of the Fengtien Dollar, 1917—1928: Currency Reform in Warlord China

Published online by Cambridge University Press:  28 November 2008

Ronald Suleski
Ronald Suleski
Affiliation:
University of Texasat Arlington
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Extract

Financial chaos was the rule during China's warlord period from 1916 to 1928. The Central Government in Peking was often short of funds because the warlords who controlled the provinces refused to forward tax receipts to the capital. The effectiveness of the financial administrative machinery in each province varied greatly, and if careful accounts were kept by the provincial governments, they have not been made public. Most confusing of all was the assortment of currencies circulating in the provinces. A bewildering variety of coins and paper notes, generally issued by local banks and money-changing shops, were used in each province, though they would probably not be accepted at face value in the neighbouring province. In some areas foreign currency, such as Mexican silver dollars or Japanese gold yen notes, could also be found in the key market towns. So many currencies were in use that local chambers of commerce met daily to calculate the relative values of the currencies traded in their immediate area.

Type
Articles
Information
Modern Asian Studies , Volume 13 , Issue 4 , October 1979 , pp. 643 - 660
Copyright
Copyright © Cambridge University Press 1979

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References

I am grateful to Andrea McElderry of the University of Louisville for helpful comments regarding this article.

1 Some general remarks on the yang-ch'ien system are in Economic History of Manchuria (Seoul: Bank of Chōsen, 1920), 240–3;Google ScholarYü-ch'ing, Li (ed.), K'u-nan-te chiu-Chung-kuo (Bitter Old China) (Hong Kong: Ch'ao yang ch'u-pan-she, 1972), 122–7.Google Scholar On adopting the yang-ch'ien system in Manchuria see Hōten-hyō no hanashi (About Fengtien Notes), Chōsa hōkoku, No. 61 (Shenyang: Yokohama seikin ginkō, 1926),Google Scholar 1. Photos of the early small-coin notes are in Hōten-hyō to Tōsanshō no kin-yū (Fengtien Notes and the Currency of the Three Eastern Provinces) (Dairen: Minami Manshū tetsudō kabushiki kaisha, 1926), following page 4 and following page 6.Google Scholar

2 In this paragraph the yüan is calculated according to the one yüan = ten chiao formula, which was still sometimes used as late as 1927 (see: Manshū nichinichi shimbun (Manchuria Daily News), 8 July 1927 (Hereinafter referred to as MSNN)), although by that time the official rate had changed to one yüan = twelve chiao. This is discussed below.

3 Some wages and prices for Shenyang in 1921 are given in China Year Book, 1925, (Tientsin, 1925), 541 and 543.Google Scholar Other lists of some food and commodity prices in Manchuria during the 1920s are in Hōten-hyō ni tsuite (Concerning Fengtien Notes), Shiryō ihō, No. 283, Series Otsu (Tokyo (?): Mitsubishi goshigaisha, 1926), 30–2.Google Scholar

4 Various estimates of the total amount of small-coin notes issued by Chinese authorities are given in Hōten-hyō ni tsuite, 4–5; Economic History of Manchuria, 254;Google ScholarHōten kyūginkōgō kaheishi (A History of the Currencies of the Old Fengtien Banks) (n.p.: Manshū chūō ginkō, 1930), 13–20.Google ScholarAn estimate of 60,000,000 yüan worth of small-coin notes in circulation by 1921 is given in Records of the Department of State Relating to Internal Affairs of China, 1910–1929 (Microfilmed. U.S. Government) (Hereinafter RDS), Reel 27, Item 4081.Google Scholar

5 Fengtien authorities had also issued convertible notes in yüan denominations, upon which much pressure for conversion also fell. Both the yüan denomination notes and the small-coin notes are discussed here under the general term of small-coin notes.

6 On the Bank of Chōsen gold yen note see Economic History of Manchuria, 260–1. The use of Chinese yüan currency in Dairen is mentioned in Lee, Frederic E., Currency, Banking and Finance in China (Washington, D.C.; Government Printing Office, 1926), 40.Google Scholar

7 A photo of the early (1905–1906) issue of the silver notes put in circulation by the Official Bank is in Hōten-hyō to Tōsanshō no kin-yū, following page 4.Google Scholar

8 This incident, only one of many during the period, is given in Hōten-hyō to Tōsan-shō no kin-yū, 56–60. For other comments on the problem see Hōten-hyō no hanashi, 2–7; Chia-hsiang, Chang, Chung-hua pi-chih shih (A History of Chinese Currency) (Peking: Min-kuo ta-hsüeh ch'u-pan-she, 1926), Section Two, 155.Google Scholar

9 The 1916 bank loan is recorded in Matsuzaki and Watanabe, Tai Man-Shijikyoku sanjūnenshi (Tokyo: Shimbun hyōronsha, 1938), 35.Google Scholar The values of the fluctuating small-coin notes used here are taken from Araki, Mitsutaro, Report on the Currency System of China (Tokyo: Japan Council of the Institute of Pacific Relations, 1931), 36.Google Scholar During this period the small-coin notes fluctuated in a manner roughly parallel with the silver yüan notes which were not as widely circulated. I am here stressing the pressure on the small-coin notes. Compare the charts in ibid., 35–6.

10 For the announcement of the adoption of the silver yüan standard see Shengching shih-pao (Shenching Times) (Shenyang), 18 08 1917.Google ScholarThe change is also mentioned in Economic History of Manchuria, 253; Hōten-hyō hanashi, 13. An incorrect date of 1916 for the change is given in Hōten-hyō ni tsuite, 4; Hōten-hyō to Tōsanshō no kin-yū, 240.Google Scholar

11 The word ‘Mukden’ (meaning Shenyang) was added to the inscription on the Fengtien dollar notes issued after January 1919. Photos of the early exchange notes issued between 1918 and 1923 are in Hōten-hyō no hanashi, and in Hōten-hyō to Tōsanshō no kin-yū, following page 86. A description is in ibid, 84–5; Economic History of Manchuria, 254–5. At some point before 1930, fifty and one hundred yüan exchange notes were also printed. For estimates of the amounts issued and in circulation see Hōten kyūginkōgō kaheishi, 24–30.

12 See Araki, , Report of the Currency System of China.Google Scholar

13 The 1918 loan is recorded in Matsuzaki and Watanabe, Tai Man-Shi jikyoku sanjūnenshi, 39. An estimate of the number of Fengtien dollar notes in circulation as of 1920 is given in Economic History of Manchuria, 255. The chart in Araki, Report on the Currency and Banking System of China, 36, includes, I assume, exchange notes as well as convertible yüan notes. An estimate of 3,000,000,000 yüan worth of notes in circulation by 1929 is given in Pinnick, A. W., Silver and China (Shanghai: Kelly and Walsh, Ltd, 1930), 37.Google Scholar This figure coincides with a Japanese estimate of 4,986,256,418 yüan circulating by 1929 which is in Hōten Kyūginkōgō kaheishi, 28–9. An estimate is also given in Nishimura Shigeo, ‘Senkyūhyaku nijūnendai Tōsanshō chihōkenryoku no hōkai katei’ (The Process of Collapse in Regional Power in the Three Eastern Provinces During the 1920s), Ōsaka gaikokugo daigaku gakuhō (July 1971), 139.

14 On post-1918 Japanese attempts to demand the conversion of Chinese paper currency see Hōten-hyō no hanashi, 7. The general Japanese practice of deriding the Fengtien dollar and pressures for conversion into coin is illustrated in Hōten-hyō to Tōsanshō no kin-yū, 84–103.Google Scholar

15 Treasury funds of 10,000,000 yüan for 1921 are recorded in RDS, Reel 26, Item 3875. A figure of 21,000,000 yüan by 1923 is in MSNN, 22 June 1924. This means that beginning in 1917 with a deficit in treasury funds, by 1923 an income of over 20,000,000 yüan was recorded. A figure of 30,000,000 yüan for 1922 is given in MSNN, 2 December 1922.

16 A list of eight of the most important outstanding loans can be found in Hōten-shō no zaisei; Sono ichi, saishutsu ron sainyū ron (Financial Administration of Fengtien Province; Volume One, On Expenditure and Revenue), Mantetsu chōsa shiryō, No. 74 (Dairen: Minami Manshū tetsudō kabushiki kaisha, 1928), 18.Google Scholar The loan from the Bank of Chōsen and the yearly deficits are in ibid., 19–20. Also in Ikki, Sonoda, Hōsten-shō zaisei no kenkyū (Research on the Financial Administration of Fengtien Province) (Shenyang: Saikyō jippōsha, 1927), 30–2.Google Scholar The loans are recorded in Matsuzaki and Watanabe, Tai Man-Shijikyoku sanjūnenshi, 35.

17 Specifics of the 1918 bond issue are given in Sonoda, Hōten-shō zaisei no kenkyū, 20.Google Scholar The emergency loan of 1918 is in ibid., 37–8; Matsuzaki and Watanabe, Tai ManShi jikyoku sanjūnenshi, 39.

18 Comments on the schedule of loan repayment given here is in Sonoda, Hōten-shō zaisei no kenkyū, 38. On the complete redemption of outstanding loans see RDS, Reel 26, Item 3875, Reel 27, Item 4081, Reel 31, Item 4653; Tōsanshō no zaisei (Financial Administration of the Three Eastern Provinces), Manshū mondai chōsa shiryō, No. 4 (Tokyo: Taiheiyō mondai chōsakai, 1928 (?)), 30–3.Google Scholar It should be noted that an anti-Chinese source such as Matsuzaki and Watanabe, Tai Man-Shi jikyoku sanjūnenshi, which recorded all of the Bank of Chōsen loans to the Fengtien Provincial Government, failed to record when those loans were repaid by the Chinese.

19 Accounts of the history of the Official Bank can be found in Hōten-hyō to Tōsanshō no kin-yū, 8–22; Hōten-hyō ni tsuite, 2–4; Hōten-shō no zaisei, 111–19; Chang, Chung-hua pi-chih shih, Section II, 210–11; The Manchuria Year Book, 1931, 236; Hōten kyūginkōgō kaheishi, 1–2; MSNN, 14 October 1922.

20 The name of this bank should be more literally translated as ‘Bank of the Three Eastern Provinces.’ I have adopted the translation ‘Bank of Manchuria’ to avoid confusion with the Official Bank of the Three Eastern Provinces which is also discussed.

21 Early information on plans to establish the Bank of Manchuria and on the progress in collecting its capital can be found in MSNN, 21 November 1919; RDS, Reel 23, Item 3372, Item 3438, Item 3452; Reel 24, Item 3501, Item 3541. It was said that Chang Tso-lin also planned to invest 1,000,000 yūan in the venture. See RDS, Reel 25, Item 3667; Hōten-hyō to Tōsanshō no kin-yū, 112; ‘Tōsanshō sandaiginkō gōhei mondai’ (On the problem of Amalgamating the Three Large Banks of the Three Eastern Provinces), Mantetsu chōsa geppō, August 1924, 45.

22 An historical account of the Fengtien Industrial Bank is in Hōten-hyō to Tōsanshō no kin-yū, 38–42. Its 1924 profits are listed in Ibid., 125.

23 On the currency and note standardization plans of the reorganized Official Bank see Hōlen-hyū to Tōsanshō no kin-yū, 123–7; MSNN, 15 March 1924. Paper notes issued prior to this time had been printed in Peking (see Hōten-hyō no hanashi, 12) or in Shanghai (see MSNN, 12 November 1922). Comments on the various locations where Chinese paper notes used in Manchuria were printed are in Hōten kyūginkōgō kaheishi, 25. Discussions of the new series of Fengtien dollar notes printed in the United States are in ibid., 24–30; Hōten-hyō no hanashi, 12–13. A photo of the new notes can be found in ibid.

24 Amounts of Fengtien dollar notes issued between 1921 and 1924 are given in Nishimura, ‘Senkyūhyaku nijūnendai Tōsanshō,’ 139.

25 The amount of notes issued in 1925 and their decline in value is given in ibid., 139, 144.

26 On these 1928 shop closings and layoffs see MSNN, 17 February 1928, 18 February 1928, 19 February 1928; RDS, Reel 82, Item 3; Matsuzaki and Watanabe, Tai Man-Shi jikyoku sanjūnenshi, 145.

27 The decline in the value of the Fengtien dollar notes measured against the Japanese gold yen note is listed in Nishimura, ‘Senkyūhyaku nijūnendai Tō sanshō,’ 145, 147. Comments on this decline as measured against silver yüan coin are in The Manchuria Year Book, 1931 (Tokyo, 1931), 322–9; RDS, Reel 82, Item 5, Item 6.Google Scholar