^m
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THE CURRENCIES OF CHINA.
Left: Gold Bar, Nearly 1000 Fixe for Goldsmiths' Use.
Bight: Shanghai Gold Bar, 0.978 Fine.
Each weighing 10 Chauping tacls.
[Facing Title Page]
THE
CURRENCIES OF CHINA
AN INVESTIGATION OF SILVER & GOLD TRANSACTIONS AFFECTING CHINA
WITH A SECTION ON COPPER
BY EDUARD KANN
Second Edition — Revised with A Map and Xine Illustrations
515136
\a. \a.Bo
SHANGHAI
KELLY & WALSH, LIMITED MCMXXVII
copyright, 1926, by kelly & walsh, limited, (translation rights reserved by the author).
First Printing, January, 1926. Second Edition, Revised, January, 1927.
provisionally registered in the shanghai bureau for the registration of trade marks.
HC.
K35 1927
printed at the press of KELLY & WALSH, LIMITED, SHANGHAI, CHINA
PREFACE TO THE SECOND EDITION.
The present enlarged and revised edition of "The Currencies of China" makes its appearance not because of any changes in the monetary system of the country —since none such have taken place— but for the simple reason that the first issue of the book was exhausted Hght months after date of publication. This fact en- courages me in the belief that its contents have found the approval of a public interested in the affairs of China.
Although three chapters (dealing with the mining of metals in China) have been eliminated, as being not strictly relevant, and only one new chapter has been added to the second edition, the latter appears actually in en- larged form. In revising the volume I have devoted special attention to subjects which deal with the practical side of China's currency system. Numerous additions have been made in this direction, as for instance, with regard to outturns of bullion shipments, parity tables, etc. The statistical material contained in this volume has been brought up to the end of 1926, wherever this was feasible. Errors which have been detected in the first edition na- turally have been corrected.
The second edition of "The Currencies of China" ap- pears at a time when the country's future, after years of desperate struggle, is about to be definitely shaped. Kaleidoscopic changes are likely to bring stability and, as a logical sequel, reforms in many directions. Foremost amongst these are essential reforms in China's currency system — the pulse of the sorely-tried country. As soon as these changes will have occurred, they are likely to have a far-reaching influence on the entire structure of the country's economic life and on the individual well- being of its citizens. May the day of fulfillment be near — for the sake of China.
E. KANN.
Shanghai, February, 1927.
PREFACE TO THE FIRST EDITION.
China, for centuries past, has been a most interesting field for research in every branch of science. By virtue of its enormous size, the high degree of its civilisation — dating from prehistoric times — its attainments in the fine arts and the characteristic industry and culture of its people, the country has been made the subject of close investigation. There is scarcely a branch of science which has not been minutely examined and described by the investigator of things Chinese. Reference works have been written in almost all foreign tongues, on the literature, the language and the arts of China. Publications setting forth the country's mineral resources, its means of com- munications and its trade, are numerous and often of a high standard of merit. But there is a noticeable lack of authoritative literature on China's currency — a subject which is equally important to the country and to the world at large, and which compensates for its many intricacies by the very great interest and practical value attaching to so fascinating a topic.
InA.D. 1868, Baron F. von Richthofen set out on a journey of investigation which took him through the entire length and breadth of China and her outlying dependencies. The results of his discoveries, extending over years, have been laid down in a book which has since become a standard reference work on China. Although the purpose of his journey was mainly one of geological investigation, von Richthofen has availed himself of the opportunity to record his impressions of every phase of the life of the Chinese people. There is probably no single aspect of China and her enormous population which has not been treated except the one which plays so important a role, viz., money. In fact there would appear to be a tendency on the part of most of the writers on subjects concerning China, to avoid the discussion of the country's currencies.
Authoritative literature on China's monetary system is not altogether wanting. H. B. Morse's writings on Chinese currency are of the highest standard and have become dictum. But they are too much condensed and are intended principally to serve historical purposes. The changes in China's monetary system, consequent upon the establish- ment of the Republic, are of a far-reaching nature and have not yet found a place in Mr. H. B. Morse's standard work. The various foreign publications on the world's monetary systems have reserved but little space for that of China, in spite of its genuine interest ana importance to the commerce of the entire world.
viii PREFACE TO THE FIRST EDITION
It is therefore with the firm conviction of an existing want, and the sincere attempt of filling the need, that 1 have undertaken the task of writing a book on the currencies of China. It is a work intended, above all, to serve the requirements of the practical banker and merchant, and, incidentally, to answer the requirements of the historian, the statistician and the general student of matters relating to China. The book is the result of my twenty-five years of experience with practical banking in many parts of China. It discusses solely the metallic currencies of the country, not only for the reason that these are the backbone of China's monetary system, but also because of the fact that metallic currencies alone lend themselves to direct international arbitrage transactions. The history of banknotes in China is a long one and could not possibly have been embodied in this volume.
My book is divided into three sections: gold, silver, and copper currency. Undoubtedly the question of silver as currency is of paramount importance to the country's foreign trade. Yet gold for currency purposes has begun to play a role in China, the importance of which is not yet generally recognised; its connection with international arbitrage is a most intimate one. It is my belief that this endeavor is the first attempt to coherently describe the functions of gold in China as a medium of international arbitrage.
I have thought it useful to include in my work a chapter on the currency system of Hongkong, owing to the latter port's proximity to China, and on account of the intimate relations of the respective monetary systems.
My sources of information have been clearly mentioned, mostly in the text itself. Regulations, proclamations, historical items, etc., are often quoted verbatim, so as to make my study more composite and authoritative. I have purposely refrained from tendering advice and from sug- gesting how things ought to be; instead, I have endeavored to present a description of China's metallic currencies as they have been in the past, and especially how I found them at the present time. I have not had the good fortune of personal consultations with experts during the compil- ation of my book, which in consequence is likely to be open to the charge of omissions and errors, such as are probably inherent in most first editions of works of a technical nature. Friendly criticism will therefore be highly appreciated and turned to good account.
E. KANN. Shanghai, February, 1926.
TABLE OF CONTENTS.
SECTION 1 SILVER AND SILVER TRANSACTIONS.
Chapter I.
BAR SILVER AND CHINA
Import of Silver from United States
The American Silver Market .
Shipping charges on Silver
American Silver Invoices
Conversion of American Bar Silver into Shang
Taels
New York and London Quotations compared
Shanghai Tael-Dollar-Silver Parities
Bar Silver from London ....
The London Bar Silver Market
English Bar Silver Shipped to China
Conversion of English Bar Silver into Shangha
Taels
Import of Bar Silver from France . Import of Bar Silver from British India . The Indian Bar Silver Market . Hamburg Silver .....
Standarding ......
Export of Bar Silver ....
„ „ „ „ from Shanghai to Tientsin „ „ » „ „ „ Hong Kong
& Canton „ » » „ „ „ Yunnanfu
„ „ „ „ „ „ Mukden
„ „ „ „ „ „ „ India
„ „ „ „ „ „ „ Dutch East
Indies
II. TAELS
Tael Coins
The Weight Tael
The Money Tael
Simple Truths ?
The Regulations for the new Tael Currency
An Attempt to Explain ....
Theoretical and Practical Parities .
Classification of Taels ....
Principal Taels current in China
Haikwan Taels .....
Comparative Value of Shanghai Tael
Taels Parity Table
Page 1-58
1
4 12 15
16 19
22 25 27 29
31 36 38 42 43 44 47 48
51 54 54 55
59-86 60 63 65 67 70 74 77 78 82 84 84 85
TABLE OF CONTENTS
Chapter Page
III. TRANSACTIONS WITH SYCEE . . 87-103
Export of Shanghai Sycce to Tientsin . . 87
Outturn of Shanghai Sycce shipped to Tientsin . 89
Export of Shanghai Sycce to Chefoo . 90
„ „ „ Hankow (outturn) 90
„ „ „ Manchuria . . 92
„ „ „ H'kong& Canton . 92
„ „ „ Bombay . . 93
„ „ ,, London (outturn) 96
„ Sycec from Tientsin to Changchun . 99
Import of Sycee into Shanghai . . . 100
IV. FOREIGN EXCHANGE IN CHINA . . .104-125
Official Exchange Bulletin .... 105
The Shanghai Exchange Market . . . 112
Bar Silver as Cover for Forward Transactions . 115
Options 116
Cross Transactions ..... 118
Exchange Quotations at other Ports in China . 123
V. SILVER DOLLARS 126-176
Varieties of Dollars in China .... 126 Foreign Dollars:
The Carolus Dollar 126
Bolivean, Children and Peruvian Dollars . 130
The American Trade Dollar . . . 130
The Saigon Dollar 133
The Japanese Silver Yen . . . . 136
The British Dollar 139
The Mexican Dollar 143
Chopped Dollars ..... 147
Chinese Dollars: .
Formosan and Fukien Dollars . . . 149
Dragon Dollars ...... 150
Lack of Uniformity of Dragon Dollars . . 151
A Chinese Standard Dollar .... 153
Regulations for the National Coinage . . 155
The Yuan Shih Kai Dollar .... 159
Debasing the Yuan Shih Kai Dollar . . 162
The Genesis of the Yuan Shih Kai Dollar . 163
National Currency Regulations . . . 163
Chinese Dollars versus Sycee . . . 167
Cost of Producing Dollars .... 168
Transactions with Dollars . . . . 171
Other Republican Dollars .... 174
VL SUBSIDIARY SILVER COINS . . . .177-198
Classification of Subsidiary Coins . . . 179
Quotations for Subsidiary Coins . . . 185
TABLE OF CONTENTS
XI
Chapter
Yl.—cont.
Cost of Producing Canton Subsidiary Coins Nickel Coins ......
Debasing and Counterfeiting Subsidiary Silver Coins ......
VII. SILVER PRODUCTION AND DISTRIBUTION Where Silver is Found .... World's Consumption of Silver World's Production of Silver since 1493 . Silver Prices during the Middle Ages The Depreciation in Value of Silver
The Pittman Act
After-war Effects ..... Imports of Silver into India Highest, Lowest and Average Price of Silver About Silver in China .... Movements of Bar Silver in China . Import of Bar Silver into Shanghai . Export of Bar Silver from Shanghai Movement of Silver from and to China (Imports)
(Exports)
VIII. SILVER AS CURRENCY . In the Occident In. the Orient . In China
Silver as Currency in Modern China Silver as Tribute in China
IX. HONG KONG'S CURRENCY
Historical Retrospect
Hong Kong's Subsidiary Coins
Hong Kong Parities
T.T. parity London-Hong Konj
Parity New York-Hong Kong
„ India-Hong Kong Export of British Dollars from Hong Kong Banknotes Issue in Hong Kong
199
Page
188 190
190
-225
199 208 209 210 211 213 214 218 220 220 224 224 224 226
097
228-242 228 231 234 238 241
243-256 243 245 246 250 250 250 251 252
SFXTION 2 GOLD AND GOLD TRANSACTIONS.
X. GOLD AS CURRENCY IN CHINA In Ancient Times . In Modern Times .
.259-283 259 263
Xll
TABLE OF CONTENTS
Chapter
X. — cont.
Chinese Gold Coins Sun Yat Sen Commemorative Coins The Nyi Tsyic Ch'ung Medallions Hsii Shih Chang Medallions The Tsao Kung Medallions Yuan Shih Kai Medallions Manchu Gold Medallions Taiping Tael Gold Coins Turkestan Gold Tilla Tibetan Gold Coins The Yuan Shih Kai Gold Dollars Yunnan Gold Dollar Coins Gold Bars .... Imports and Exports from China of Gold Movements of Gold to and from China (Imports) „ „ „ „ (Exports)
Official average £ value of Haikwan Tael . Import and Export of Treasure and Merchandise
XI. THE VARIOUS SHAPES IN WHICH GOLD IS USED IN CHINA Foreign Gold Coins TecLnicalities Gold Yen Coins Jewellery Gold Dust Gold Leaves . Industrial Uses
XII. GOLD BARS Description
Legitimate Transactions in Gold Bars Speculative Transactions in Gold Bars Terms relating to the Gold Bars Market Transactions in Gold Bars Gold Bars from Peking and Tientsin Relation between Gold Bar and T.T. Quotations Gold Bar— Yen Parities (Tables)
Page
264 265 266 266 267 267 269 270 270 271 271 272 275 276 280 281 282 282
XIII. EXPORT AND IMPORT OF GOLD BARS Export to Japan
„ ,, Germany
„ „ France
„ „ British India
„ „ England .
„ „ America . Import of Gold Bars into China
284-297 285 286 288 290 291 291 295
298-318 298 299 301 303 306 312 313 316
319-338 320 321 322 324 327 331 337
TABLE OF CONTENTS
xui
Chapter XIV.
THE SHANGHAI GOLD STOCK EXCHANGE
Historical Notes ......
Transactions of the Gold Stock Exchange
Real Gold Bars
Fictions Gold Bars .....
The Influence of the Shanghai (iold Stock
Exchange .......
The Constitution of the Shanghai Gold Stock
Exchange .......
By-Laws of the Shanghai Gold Stock Exchange Balance Sheet ......
Page
339-355
339 341 342 344
348
351 352 354
XV. A GOLD STANDARD FOR CHINA
. 358-395
The First OflScial Proposal for a Gold Standard Currency ......
Sheng Kung Pao's Scheme
The English Monetary System for China .
1900 and After
The Example Given by Other Countries .
The Chinese Memorandum
Sir Robert Hart's Scheme
Hu Wei-te's Proposal ....
Professor Jenks' Gold-Exchange Standard Scheme ......
New Reform Plan of 1905
The Gold Standard Scheme of 1907 .
Dr. G. Vissering's Scheme
Tsao Ju-lin's Gold-Standard Scheme of 1918
Final Attempts .....
356 357 358 358 360 362 368 369
377 382 384 386 391 395
SECTION 3 COPPER AND COPPER COINAGE.
XVI. OLD CHINESE COPPER COINAGE . . .399-412
Introductory ....... 399
Origin of Metallic Money in China . . . 400
Uninscribed Barter Money .... 402
Inscribed Early Coins ..... 403
Copper Coinage since the Beginning of the
Christian Era ...... 407
Other Base Metals used for Coinage . . 411
XIV
TABLE OF CONTENTS
Chapter Page
XVII. MODERN CHINESE COPPER COINAGE .413-435
The Authorities determine to discontinue the
Ancient Coinage ...... 413
Disadvantages of tlie antiquated Copper-Cash . 414 The Reginning of Modern Copper Coinage in
China 417
The Government's Part in the new Coinage 418
The Depreciation of Copper Coins . . . 422
Classification and Denominations . . . 426
Composition and Debasement .... 432
XVIII. MINTS IN CHINA 436-464
In Ancient Times ...... 436
Introductory ...... 436
Casting and Moulding ..... 437
Government assumes the Coinage Monopoly . 439
Minting Statistics of Copper "Cash" . . 440
In Modern Times ...... 443
Output of Mints 460
Date and Mint Inscriptions .... 462
APPENDICES.
I. WORLD'S PRODUCTION OF GOLD SINCE THE
DISCOVERY OF AMERICA .... 465-466
II. SOME AUTHORITIES ON THE TAEL
. 467-510
III. REPORTS ON SILVER DOLLARS AND SUB-
SIDIARY COINS 511-521
IV. PRACTICAL SUGGESTIONS FROM FOREIGN
AND CHINESE BANKERS REGARDING THE INTRODUCTION OF A UNIFORM DOLLAR . 522-531
V. REPORTS ON MODERN COPPER COINS OF
CHINA 532-550
VI. OFFICIAL BANK'S SELLING RATES FOR
TELEGRAPHIC TRANSFER ON LONDON . 551
GLOSSARY OF BANKING TERMS .... 552
ADDENDA AND CORRIGENDA ..... 561
SUBJECT INDEX.
America, import of gold bars from Shanghai
— , quotations at Shanghai American bar silver converted into Shanghai taels
— „ ,, exports
— „ „ invoices
— „ „ market
— „ „ parity with Shanghai taels
— ,, „ shipping expenses Assayers for bar silver .... Authorities on copper coinage in China
— „ silver ,, „
— „ tael „ „ Average banks selling rates (Shanghai)
— silver production ....
— ,, quotations .... - — sterling quotations for Haikwan taels
Bank of China . Bank of Communications . Banknotes issue at Hong Kong Banks at Shanghai, Chinese
— „ „ , Foreign
— buying rates
— selling rates . . Bar Silver, American (see also Silver) . 2, 3, 4, 17-19,
'ions
PAGE
331-336
18,102,112
.16,19
. 1,19
15
4, 16, 20
17,21-24
. 8-12
29
532-550
511-519
467-510
. 551
. 199
. 220
. 282
160,394,530
160,394,530
252-256
. 113
. 113
. 105
. 105
27,104,225
115-116
29
. 6,8
13,14,30
8,40
as cover for forward exchange operat assaying in London . „ „ New York brokerage in London
,, ., New York
constant . 17,33,34,35,37,39,41,46,47,49,52,53,55 conversion into Shanghai taels 16-19, 31, 33-39, 104, 225
English 26,28-35,104,224,225
export from Shanghai .... 47-58, 225
fineness of ..... 6, 28, 36, 104
for coinage purposes _ . . . . 54, 225
|
freight New York-San Francisco |
12 |
|
„ Shanghai-Hong Kong and Canton |
.51.52 |
|
„ Shanghai-Tientsin . |
49 |
|
„ to China from Pacific ports |
.10,12 |
|
imported from British India |
.38-42 |
|
„ „ France |
.36-38 |
|
„ Great Britain . 27, 29- |
-35, 104, 225 |
|
„ U.S.A. . . 4,19, |
27,104,225 |
|
„ into China . . 1, 58, 1 |
104, 221-225 |
|
„ „ Turkestan . |
43 |
|
invoices ...... |
15,16,30 |
|
markets for . . . 4-12, 13, 20, 1 |
>7-29, 42, 43 |
|
minting Chinese dollars from |
48, 225 |
|
movement from and to U.S.A. |
2, 3, 4, 27 |
|
outturn, American . . . 16-1( |
), 35, 78, 104 |
|
„ , English . . . 32-3, |
3,56,78,104 |
|
„ , French .... |
36-38 |
|
„ , from Bombay |
38-42, 78 |
|
„ , „ Shanghai to Bombay |
55-57 |
|
„ , M „ „ Hong Kong |
51-54 |
|
„ , „ „ „ Mukden |
54-55 |
XVI
SUBJECT INDEX
3,4
PAGE
Bar Silver outturn, from Shanghai to Tientsin . 48-50
— „ , „ ,, » Yunnanfu ... 54
— parity with Shanghai taels 17-19, 21, 24, 31, 33-35, 37,
39,53,56,57,104,106
— , payment for in New York ..... 7
— . premium on
— price at Shanghai
— quotations in London and New York
— shipping charges from England
— „ „ „ U.S.A.
— „ from U.S.A.
— „ points from U.S.A.
— standarding
— „ tables
— storage in America
— , volume of New York market
— , weight Barga .... Barter money . Batavia, quotations at Shanghai
— , shipment of bar silver from Shanghai Bell money Big money
Bimetallic standard . Boxer indemnity — movement Boyeki Gin Bridge money . British dollar (see Dollars)
— India's imports of silver
— — currency reform
— — monetary standard
— percentage gold production Brokerage ....
■ — on bar silver Brokers for bar silver
— ,, exchange at Shanghai
— „ gold bars
Bronze .....
17,33,47,48,50,51
31-35, 78, 104
6,7,14.19,28
30, 32, 39
9-12, 40
5. 8-12, 42
5
44-47
45
5
4
27,51,56,58
44
402, 404
. 109
57,58
. 403
185,187,431,517
. 228
.356, 368
358, 453
. 137
. 403
55-57 217,232,324 232, 233, 324 . 466 114,345,353 8,13,14,30 . 8,29 . 114 345 352 400, 40i, 403,405, 437^438
183,184
Candareens .... Canton ..... — - coinage
— currency
— Mint {see Mints)
— tael (see Taels) Carolus dollar (see Dollars) Cash (see Copper Cash) Casting of money in China Central Bank for China Central Mint (see Mint) Ch'ang Chi Tung Chang Tso Lin .... Charges on American bar silver .
— - „ bar silver from Bombay
— ,. „ „ „ England
— ., dollar shipments Chartered Bank of India, Australia and China Chauping tael (see Taels) Chen Chen-hsiang .....
67, 107, 469, 494
. 126
177,178,181
. 127
150,400.405,437 . 388
150, 151, 382, 413, 444, 453
395
8-12,15*16,18
. 39, 40, 42
. 30, 32, 34
. 172
252, 253
. 395
SUBJECT INDEX
XV 11
PAGE
Chia Ching 262
China, and bar silver ...... .1-58
— approaches U.S.A. regarding silver situation 362-366
coinage laws . . 70-74,155-159,163-167,183
„ of Carolus dollars . . 128,129,147,148
154
-159
„ gold . ...
„ „ silver in ancient times
„ „ .. >' ." '
„ „ „ „ modern times
foreign coins circulating „ exchange
imports of silver „ per capita .
introduction of dollars into
legal tender in
Mexican dollars in .
Mints in .
silver in . „ minting
Spanish dollars in .
tribute in
uniform currency plans
varieties of dollars . Chinese Bankers Association
— Brokers „
— dollars
— Native Bankers guild
— Rupee . Ch'ing dynasty . Ch'ing Prince . Chokseys .... Chopped dollars {see Dollars) Ch'ou dynasty . Chu Hung Chu .
Circulation of banknotes in Hong Kong Classification of coppers in China
— „ dollars „ ,,
— „ subsidiary coins in China
— „ taels in China . Coinage fees on British dollars .
— in China from base metals
— monopoly in China
— of dollars not uniform .
— of dragon dollars .
— on the decimal system .
— ratio .... bar silver for coinage in China beginning of coinage in the Occident bronze coinage in China copper „ ,, free coinage in China .
„ ,, of silver discontinued
independent coinage of China's provinces Indian coinage Act K'uping taels coinage . .; military interfering with
old Chinese copper coinage Republican coinage in China
264
235
abandoned 235
70-74, 155-159
. 259
104-125
222-224
. 364
. 126
71,156,164
143-147
436-464
. 1-58
. 470
126-130
241,262
163-167, 392-395
. 126
13,527,529
. 114
26,149-171
. 106
. 143
. 144
. 367
42
403, 404, 406, 407, 462
. 369
. 253
426
126,148
179-185
78
139,141
166,190,411,412
. 406
. 152
150-155
164,167
228, 229, 390, 455
54,189
. 4.02
400,401-412
166, 399-464
73,166,231,529
. 232
. 152
232, 233
62, 70-74, 79
178,193
399-412
165-167, 417-435
XVlll
SUBJECT INDEX
Coinage, silver coinage a luxury in Europe .
abandoned in ancient China based on the gold standard
„ for China „ U.S.A. „ „ in Tibet .
„ ,, in Turkestan .
„ „ of inferior fineness
„ „ resumed in Europe
„ ,. to be discontinued in India
1914-1923 T'a Ching copper coinage „ „ gold coinage silver taels coinage Coins, Commemorative coins First coins in China
„ foreign coins current in China Iron coins in China Nickel „ ,, „ Silver coins converted into sycee White metal coins in China Copper cash ....
— banknotes
— currency
— from modern Mint .
— in strings
— melted down . , quotations for
— , spurious Copper Coins in China
— „ „ analysed
— „ „ ancient
— at a premium
— , casting in moulds ■ — , classification
— , commemorative .
— , composition
— , cost of production
— , counted as "big money"
70-74,
PAGE
. 229
. 236
. 379
55-159, 235
. 231
(50,61,236
62,63
129,178,192-198
229
234
231
383, 426, 463
. 383
70-74,153,154,159
60-63, 68-74, 382
174-176,179,265-270
401,404
126,128,259
412,430
155,164,167,190,457
. 101
235
400,402,439-441,469
416,432,542,543
. 414
150,410,430,431
. 414
411,432,532,541
. 186
400,415,416
164, 183, 399-435, 532-550
. 485
401-412,413,416
419,420,533
150, 400, 413, 437-439
406, 426, 427
426 429
421,428,432, 434' 435
. 434
183
, denominations 155, 164, 421, 426, 452, 534, 543, 554 , depreciation of 167, 382, 420, 422, 423, 424, 426, 432, 433, 434, 449, 450, 452, 454, 459, 513, 532, 550 , design 165, 406, 407, 429, 430, 431, 458, 459, 543
, early inscribed .... 402, 403, 404
, embargo on import .... 423, 449
, imperial series ...... 428
.inscriptions . 404,405,407,409,411,418,427,
428, 429, 430, 431, 449, 463, 464
, legal tender .... 156,165,423
, melted down . 411,417,432,532,536,538,545
, modern .... 156,183,410,413,435
, minting of 150, 156, 183, 405, 410, 413, 436, 439, 547 , on decimal basis . . . 156,183,426,431,543
, output . 382,383,422,423,424,433,434,461
, profit from coinage . . . 166, 434, 533
, provincial series . . 419, 426, 427, 428, 429
, quotation for 186, 188, 424-425, 533, 534-550
, remedium ....... 165
size 408, 418, 428, 429
, uninscribed ...... 402
SUBJECT INDEX
XIX
PAGE
Copper Coins, weight and fineness . 164, 421, 429, 434, 435, 448,
450, 454
Copper minting in China .... 444-464, 532-550
Cost of producing silver dollars in China . . 168-171, 520
— ., „ subsidiary coins . . . 188-190
Counterfeiting of coins in China 61, 129, 162, 163, 190-198, 235,
236, 388, 406, 415, 447, 518, 520 Cross-rates . . 48,53,57,104,118,173,233,324,331,491
Cross transactions ....... 118-122
Currency Commission, Royal Indian in China on decimal basis reform loan of 1911
„ proposals in China
by Prof. Jenks Dr. Vissering
Shan
ghai
217,232,233 155-156, 163-167 . 386 70-74, 195, 357-395 377-382 386-391 India .... 232,233 — regulations in China 70-74,155,159,163-167,183-184,
383,392-393,528 Ban liang currency British Indian currency Copper cash currency Gold currency for China
„ Hong Kong „ „ „ Indo-China
„ „ „ Mexico
„ „ notes .
Hong Kong's currency Japan adopts gold currency Japanese currency depreciates
„ „ influenced by
Kwangsu currency Manchurian currency . Metallic currency abolished in China Origin of metallic currency in China Pearls, gems, cowries, etc., as currency Saigon dollar currency in Yunnan Silver currency abolished in India „ „ in ancient China
„ „ „ modern „
„ „ „ the Occident .
„ „ suggested by Ch'ang Chi Tung
„ yen currency in Manchuria Small coin dollar currency . Spanish dollar currency in China Taels as book currency Taels replacing dollar currency . Uniform national currency for China 62, 70-74, 163-167,
381,392-395,522 Unit of silver currency in ancient China . . 236
Value of Chinese silver currency to be fixed in gold
368, 388
Debasing Chinese coins . 129, 149, 152, 162, 163, 177, 179, 180, 190-198, 405, 432, 433, 445, 447, 459, 512, 518, 520, 532-550 Deliveries of bar silver . . . . . . 6, 14, 28
405,406
232, 233
402-412, 430
235, 356-395
. 244
. 133
. 147
. 392
243-258
137,233
. 289
. 350
238,271
. 517
. 263
235,401,436
235, 259, 405
. 134
. 232
234-238
238-240
228-231
. 382
. 138
. 179
120-130
73
129
Discounts ...
Documentary drafts . Documents against acceptance (D/A) — „ payment (D/P)
111
118 111 111 111
XX
SUBJECT INDEX
Dollars, assay of
— , adulteration of
American Philippine dollar (peso) Trade dollar
„ „ > origin
PAGE
161,162,163,523,524,525 129, 149, 150, 152, 162, 163, 512
Bolivian dollar British dollar.
composition current in Far East output withdrawn
Carolus dollar,
circulation , composition . , export from Hong Kong
legal tender minting of output total coinage
at a premium „ „ , currency in China
„ „ , demonetised in China
„ „ , made in China
„ „ , minting discontinued
„ „ , replaced by Shanghai tael
Chilean dollar ....
Chinese dollars .... „ „ , cost of production
Chopped dollars . . . 129, 147
„ „ classification
„ „ taken by weight
Classification of dollars
Commemorative dollars
Design of dollars .
Dragon dollars
„ „ , composition .
„ „ , inscription
„ „ , lack of uniformity
„ „ , production .
„ „ , taken by weight
Embargo on shipment of
Export of dollars from China „ Japan Mexico
143
130-133
. 131
131
. 131
. 132
131,132
. 130
139-143,244
140,142
139,245,248
139-140, 142,
244, 251
. 142
139, 244, 247
141,142
140,142,246
-130,511,514,516
128,129
127,514
129,511
128,129
. 128
. 129
. 130
106, 149-168
168-171
148,244,511,512
148,511
148,511
. 126
174-176
149,150,153,156,523,528
150-153,449,515
150
150
126
151-152 . 153 . 151 134,135,512 . 127 . 137 . 130
Fineness of dollars
Fixing rate of dollar exchange Foreign dollars Formosan and Fukien dollars Forward dollar transactions . German Trade dollar contemplated Gold dollar for China issued . „ „ „ „ proposed
„ „ weight and fineness
Imported into China Inscribed with tael weight
„ „ name of province
131, 134, 135, 136, 139, 143, 144, 146, 147, 150, 153, 154, 155, 159, 160, 161, 163, 245, 512, 515, 516, 523, 525, 528
106,171
126,134,136,139,143
149-150
. 171
. 131
. 272
149-150
273-275, 391, 393
126,127,137,145,239
. 152
. 152
SUBJECT INDEX
XXI
Dollars, Interport transactions in dollars .
Introduction of dollars in China
Japanese dollar (silver yen) .
„ „ , coinage discontinued .
„ „ , production and distribution
Li Yuan Hung dollar
Mexican dollar . . .
„ „ , circulation .
„ „ , composition
„ „ , export tax thereon
„ „ , intrinsic value
„ „ , legal tender in Orient
„ „ , standard in Hong Kong
Origin of Chopped dollars
Overproduction of Dollars
Peruvian dollars .
Pillar dollars
Premium on Dollars
Republican dollars
Saigon dollars (Piastres) „ „ , composition
„ „ , intrinsic value
„ „ , mint parity
„ „ , replacing Mexicans
Shipment of dollars
Silver dollars
Spanish dollars
„ Philippine dollars
Standard dollar for China
Straits dollars
Sun Yat Sen dollars
Szechuen dollar .
T'a Ching dollars .
Tai Fook dollars .
Transactions with dollars
Transfer of dollars
Tsao Kung dollar .
Uniform dollar for China . 15
U.S. standard dollar
Varieties of dollars
Weight of dollars
PAGE
171-174
. 126
3(5-139,516
. 137
136,137
. 175
128,130,143-147
128,145
131,144,146
. 130
. 147
. 134
243,469
. 129
. 151
. 130
129
128,129,140,171
145,159-167,174-176
133-136,512,513,514
. 134
. 136
. 135
133,134
. 127
126-176
127-130, 243
. 143
154-159
143,361
. 174
155,176,514
153,154,155,159
447,511
171-174
. 172
. 176
153-159, 393, 522-531
. 132
Yuan Shih Kai dollar
. 126 131, 134, 135, 136, 137, 139, 143, 146, 147, 149, 150, 153, 154, 155, 159, 161, 163, 245, 512, 515, 516, 524, 525, 528 159-171,449,512 commemorative . . .175
cost of minting . 168-171,526
debasing of . . 162, 163
Yunnan dollar Dutch East Indies and China Duty on the import of silver
design of
fineness and weight
origin
output
varieties
gold dollar
160,161
159,515
159,163
. 461
160,161
264,271,272,394
152,513
. 109
. 232
East India Company .
126,243
XXll
SUBJECT INDEX
Embargo on Export of dollars
— „ „ „ gold . . .
— „ „ „ silver . . . 134, English bar silver ......
— „ „ invoices . . . . Exchange based on Spanish dollars
— Brokers Association . . . .
— bulletin at Hankow . . . . ,— „ „ Hong Kong
— „ „ Shanghai . . . .
— „ „ Tientsin . . . .
— market at Shanghai . . . .
— speculators at Shanghai
— transactions at Shanghai Commission on international exchange Foreign exchange in China .
Gold exchange standard
for China 368- Official rates of exchange . .104,
Speculative exchange transactions Export duty on Mexican dollars ....
— of dollars from Hong Kong
— „ „ „ Mexico . . . . ■ — „ silver from Shanghai ....
PAGE
134,141,142,172
289, 446
141,142,222,446
25-29, 106
30
. 127
. 114
. 124
. 123
105,186
. 125
112-122
114,115,340,349
. 113
366, 367
104-114
232, 233
369, 387, 388, 392
105,186,282,551
114,340,349
. 130
141,142
130,146
. 48-58,224
Feng P'iao
Fineness of bar silver
— ,, copper coins
— „ gold bars
— „ silver dollars
taels
516
6,28,36,104 164, 421, 429, 434, 435, 448, 450, 454 286,298,309 131, 134-136, 139, 143-147, 150, 153-155, 159-163, 245, 512, 515, 516, 523, 525, 528 subsidiary coins 155, 156, 164, 177-179, 182, 184, 185, 189-191, 245, 444, 445, 518, 520, 524 59, 61, 66-79, 81-88, 470, 472, 474, 478, 480-486, 491-500 . 174 29
Fixing tael-dollar rate
— London silver prices Foreign Banks in Shanghai
— gold coins in China Formosa .... Forward market for bar silver
— „ „ dollars
Four Powers Group , France, export of silver
, quotations at Shanghai Freight on silver
113,187,522
. 285
127,128,149
. 6, 28, 106
. 171
. 387
36-38
. 108
9, 10, 11, 12, 13, 15, 16, 18, 30, 32, 37, 40,49,51,52,54,55,56
Glossary of banking terms ...... 552-559
Gold, an article of trade in China ..... 284
— as currency in China during the 12th century . 259, 262
— „ „ „ in ancient times . 236, 259, 260
— „ „ ,. „ modern times . 263,356-395 for Hong Kong ..... 244
„ medium of barter B.C. 2255 bullion standard currency notes for China . dealers in Shanghai . dust ....
. 260
217,233,325,331,337
385, 392
114, 300, 339-341
. 291
SUBJECT INDEX
XXlll
Gold, embargo on Export from Hong Kong and Canton „ „ Japan
Exchange Exchange-standard .
„ „ for China
exports from China 1890-1925 . extraction by native methods imports to and exports from China
„ China 1890-1925 in the shape of coins in China A.D. 1130
„ „ medallions in China
invisible imports to China jewellery in China . mint figures for France
„ Germany . „ ,, ,, Great Britain .
„ Japan
„ ,, ,, i^.o./^,
movements to and from China . peso .....
ratio to silver .... refining charges at Hong Kong . reserve for China suggested
„ of European banks in 1926 „ „ India shipped New York-India . , shipping charges from New York , sources of production standard for British India „ „ China .
„ „ „ rejected
„ Germany „ ,, Mexico
„ in England „ „ Japan
„ „ Netherlands Indies
„ „ Philippine Islands
„ „ Russia
,, ,, Siam
„ Straits Settlements unit for China .... Price of gold in China olden times Red gold ....
Shanghai Gold Stock Exchange, Ld. Bourse
PAGE
. 446
. 289
114,299,339-351
139, 232, 325, 360, 361, 385, 388
368, 369, 385, 387, 393
277,281,438
. 296
279,280,281,282
277-280
. 260
Shapes in which gold is dealt in at the Shanghai Gold
277,
264-
270
277
290-291
. 322
. 322
327-329
. 289
286, 287, 322
276-281
. 147
228, 261, 262, 390
293
380, 381, 388, 392
. 230
. 233
. 326
326-327
. 466
212,232,233,325,360
260, 263, 264, 356-395
. 382
. 321
212,361
. 331
233, 350, 359
. 234
233,360
212,228
212,361
. 212
389, 392
261,262
388.
114,299,338-355 . 306
303-
304 383
Exchange T*a Ching gold coinage Value of gold imported to and exported from China
277,281,282
World's gold production ..... 465, 466
Gold Bars, arbitrage transaction . 299, 300, 309, 313, 316, 318
— , as cover for yen transactions . . . 310,311
— , as merchandise .... 300,319,325
— , brokerage on transactions . . . 345, 347
— , "cash bars" . . 304, 305, 342, 343, 346, 347
— , claims re deficiency ...... 334
— , delivery of . ' . . . 304, 308, 306, 346
— , description of 298, 343
XXIV
SUBJECT INDEX
Gold Bars, export of .
„ to France
„ ., Germany
„ „ Great Britain
„ „ India
„ „ Japan „ U.S.A. factors influencing quotations fictitious . . . . -
fineness ..... 286,
„ guaranteed by seller forward contracts from foreign gold coins
„ Japanese gold yen
„ Peking and Tientsin .
„ U.S. gold dollars hedging against foreign currencies
„ „ goods
import of ...
in North China
„ Shanghai
influencing the silver market ,, foreign currencies
, manufacture in Szechuen . , margin on transactions
market in Shanghai . , melting in U.S.A.
mint par . . . 287, 290, 305,
, mint regulations in England , outturn of shipments to France , „ „ „ „ Germany
„ India , „ „ „ „ Japan
packing for export .
parity 287
, „ tables
, "Ping" of
, postal charges on exports
, prices and cotton yarn
quotations
„ in relation to T.T. rates „ the yen
"red" gold bars , setting-off transactions
settlement day , speculative transactions , terms relating to market . , transactions , turnover in Shanghai , weight of . Gold coins, charges for importing to China
PAGE
319-337, 344 322-323 . 321 327-331 324-326, 438 . 320 331-336 . 307 305,341,344-348 298,309,342,343 333 305 285 343 299,312-313 . 285 306, 308, 310-312, 344 . 306 337-338
298, Z99 . 298
299,301,302,349 301,302,308,350 . 296 301,352 299-313, 341-348 333
316-318,320,321 330 323 321 325 320 319
290, 305, 320, 321 317,318 304-343 . 335 . 307 304,317-318,347 313-316
303, 306
304, 342 305, 306. 346-347
299, 343 301-303, 306
303-306, 342-348
299-303,306-313
. 351
. 299
. 289
melting U.S. coins at Hong Kong
English, weight and fineness foreign in China
„ converted into bars French, mint parities
„ , weight and fineness German, mint parities
293
75, 327-329 259, 285 . 285 . 322 . 322 . 322
SUBJECT INDEX
XXV
Gold Coins, German, weight and fineness
— imported through Shanghai Gold Exchange
— , imports into China from abroad
— , „ „ „ Japan
— , „ „ „ U.S.A.
— in China during Middle Ages
— „ since A.D. 1850 .
— , Indian, mint parities
— , „ , weight and fineness
— , Japanese, export prohibited • — , „ cost of shipping
— , „ , weight and fineness .
— , recommended for China
— , Taiping tael
— , Tibetan .
— Turkestan
— , U.S.A. mint parities . - — , „ turned into gold leaf
— , „ weight and fineness
— , Yuan Shih Kai dollar
— , Yunnan ......
Gold Exchange (see Shanghai Gold Stock Exchange) Gold Leaves, at Canton .....
— , at Hong Kong ....
— , cost of manufacture
— , employment in olden China .
— , ,. „ „ interdicted
— , export from Hong Kong
— , made from American coins , manufacture of .
— , „ „ "joss" gold
— , quotations .....
260,
264,
264, 264,
293, 285,
PAGF,
. 322
. 304
285, 288
288-290
285, 288 261,262
. 264
324, 326
. 324
. 289
. 289
. 289
356-395
264,270
264,271
270,271
286, 332 . 285 . 286
271,272 272-275
291,292 . 293 . 292 . 261 . 261 294,295 291,292 . 291 . 297 . 292
Haikwan tael (see Taels)
Hamburg Silver
Han dynasty ....
Han Wu Ti .
Hart, Sir Robert, proposes gold-exchange standard
Hong Kong .......
— . currency ....
— embargo on bullion
— , imports of silver
— , issue of banknotes .
— , legal tender ....
— , mint .....
— , quotations at Shanghai
— , subsidiary coins Hong Kong & Shanghai Banking Corporation Hongping Hua Pao Hsia dynasty Hsia Wu Ti' . Hsiao Tsung Hsien Feng Hsinkiang Hsuan Te Hu Chu-fen
Hu Wei-te, currency reform proposals Hung Wu Hunchur Fair .
43-44
236, 260, 405, 406, 407, 462
. 439
368-369
140,243
140,243-258
141,142,251,446
51-54
252-256
243,245
136,141,244
. 108
244,245,246,516
252, 522
48,88,494
235,260,401
260,411
. 236
409,411,412
63
262,412
. 356
369-376
. 262
44
XXVI
SUBJECT INDEX
Hsu Shih Chang
Imports of bar silver into Shanghai India, currency reform
— quotations at Shanghai Indian Currency Commission Indo-China .... Interhank transactions Interest ..... Invisible exports from China Iron .....
Japan adopts the gold standard .
— , import of gold bars from China
— , mints silver yen
— , purchases Hong Kong Mint
— , quotations at Shanghai Japanese currency declines in value Japanese Trade dollar {see Dollars) Jehks, Jeremiah W., Professor .
— , his exchange-standard scheme
Kashgar .
Kien Feng
King
Kiukiang Road
Knife money
Kublai Khan
Kung-ku-chu
Kung Sun Shun
K'uping tael (see Taels) coins
Kwang Hsu
Kwangsu currency .
60, 66, 470, 482, 485
Lacouperie, Terrien de
Latin Convention
Legal tender in China
Li "Yuan Hung .
Li Yuan Hun dollar {see Dollars)
Liang ....
Liang dynasty .
Liang yindze
Lockhart, Sir James Stewart
London and New York silver quotations
— as silver market .
— exports of bar silver
— imports of bar silver
— quotations at Shanghai Loofang ....
IMace ....
Mackey Treaty
Manchu ....
— gold medallions Manchuria
Mangu .... Margin on exchange contracts Maria Theresia Thaler Market rate
PACK
. 266
217,224
217,232,324
. 56,94,107
217, 232, 233
. 133
113,114
. 107
223,278
412,437,430
234, 359 . 320 . 136
136,141 . 109 . 289
366, 369 377-382
63,237,411,492 . 408 . 401 . 341 400, 401, 403, 404, 407 65, 24 489,491,501,507-510 . 412
238,271,427 . 427
236,259,400,401,439
. 324
1,71,234,390,520
. 175
. 59
. 412
59
. 400
13
27-29
26, 27, 29-36
26
107,111
16,35,65,101,103,489,492
469, 494
360
409,427,428,432,462
. 269
138,492
. 241
. 303
. 143
. 107
SUBJECT INDEX
XXVll
Markets for silver ..... Melting of silver coins .... Mercantile Bank of India .... Mexican dollar (see Dollars) Mexico . . . . • • . •
— requests inquiry into silver situation Mint at Amoy
PAGE
8-12, 25-29
65
252, 253
128,147,202,361
. 363
448
Anking 162,234,454,538
output 454 455, 538
Canton. . .54,151,152,177,180,181,182,234,245,
413, 417, 440, 444-446, 519, 532 181,444,518 431,454 458, 543, 544 458 543 182, 185, 234, 447, 448, 511, 518^ 540 160, 162, 182, 224, 448, 449, 540 . 461 . 459
„ output Changsha Chengtu Chungking Foochow Hangchow
„ output
Kaifengfu Kalgan . Kwangtung . Lanchoufu Mukden Nanking . 160,162,175,184,224,429,
„ output Nanchang Nanning Osaka Shanghai
, capacity
„ , seigniorage Sianfu .
Soochow Szechuen Taiyuanfu Tientsin
„ „ output
„ Tsinanfu
., Tsingkiangpu . . . .
;, Wuchang .... 151, 162,
„ ,, output
., Wuchow .
,, Yunnan ..... 182,
assaycr ....
estimate re cost of minting dollars
in British India
in Mexico
inscriptions .
loan
parity . shops and sycee Central Mint
first Chinese government Mint foreign Mint expert Hong Kong Mint erected
„ „ sold to Japan
list of old Mints in China . „ ,, modern Mints in China
449,450,519 450, 461
195
136
168,450,451,522,526
168,450,523
524
175 176,458 459 151, 152, 160, 175, 183, 184, 367, 430,431,444,451,515,532
457 450
175,429,453 461 195
190,456,457
139,141 128 462 451
. 460 444-446 . 237 460 539 539 455 458 320 -531 530 529 460 539 543 541 383, 533 461 532 539 536 536 459 513 444 170 212 144 463 526 109 505-510
368,383,451
368, 523 140 141 441
153,154
452 151 530 244 244 442 443
XXVlll
SUBJECT INDEX
Mint, Peyang Mint ......
provincial Mints 152, 153, 177, 178, 179, 441,
„ „ discontinue coinage .
supervision by government suggested
Minting cost of subsidiary coins
- — fee .......
— of Carolus dollars . . . .
— „ „ „ discontinued
— „ copper "cash" . . . 400, 405,
— „ „ coins . . 183,400,419,
— „ Yuan Shih Kai dollars 162, 168-171,
— profits. . 166,177,178,419,420,
— statistics . . . 440, 441, 450, Miskal ......
Morse, H. B. .
Moulding of coins ....
Na Tung
National coins .....
— , design of . National currency Regulations 163-167, 183, 383, Native bankers guild Native interest ..... Newchwang ..... New York and London quotations compared
as market for silver . — - brokerage rates Nickel coins in China . . . 155, 164,
Nyi Tsye Ch'ung ....
Official rate of exchange .
Option of delivery ....
Origin of chopping dollars
— „ metallic money in China Ounces in China ....
— standard ....
— troy ..... Outturn of bar silver from America .
— „ „ „ „ France
— „ „ „ „ Great Britain
— „ ,, ., „ India Overproduction of copper coins
— of subsidiary coins .
PAGE
153,453
442,443-464,518
152,421,422
368,369,381,
420, 434, 523
188-190
139,141,524
. 128
128
430,431,438,439
449, 450, 530-550
449,452,453,455
432,434,528,533
461,518,524,536
63
. 467
150, 400
152, 392-393,
80, 167,190,
. 367
183, 392
152,184
515,528
. 174
. 106
138,492
19,20
. 4,12
. 8,40
381,457
. 266
er and Shanghai tael
P'ao
Parities at Hong Kong
Parity of American bar silv
— ,, Bombay „
— „ English „
— „ French „
— „ Hong Kong dollar and Shanghai tael
— „ „ „ „ gold currencies
— „ New York-London, based on bar silver
— „ official rates at Shanghai Peking currency .....
Peso .......
Philippine Islands adopt gold standard Pittman Act ......
104,105,282,551
116-118
129,148
. 401
59,494
31,98
17,31,52,98,329
16-19
36-38
31-35
38-42
444-461
177,180,181
548-549
52, 53, 248-250
16,19,21-24
38-42, 56
31-35
36-38
53
249, 250
46
104,106
548-550
144
. 360
. 213
SUBJECT INDEX
XXIX
Premium on bar silver
— „ sycee .
Production of gold (world)
— „ silver Pu money Pul
Quotations for copper cents
— „ dollars
— „ small coin dollars
Regulations, Shanghai Gold Exchange, Ld. Remedium in China .... Republican dollars .... Reserve against banknotes in Hong Kong Rupee, exchange value of . Russo-Japanese war ....
Saigon piastre (see Dollars)
Sakatani, Dr.
Sanpin
Sar .
Sassanian coins
Seigniorage
Sexagenary Cycle
Shang dynasty .
Shanghai convention ratio
— Exchange Broker's Association
— exchange market
— foreign bankers' Association — - Gold Stock Exchange, Ld. .
— „ „ „ , constitution
— Tramway Co Sheng Kung Pao Snerman Act
Shipping charges on bar silver . . 9-1
Shroffs
Siam, gold standard . Silver (see also Bar silver)
— , appeal for its use in U.S.A.
— as currency in ancient China .
— „ „ „ modern China .
— „ „ „ the Occident
— „ „ „ the Orient
— „ hedge for forward transaction
— „ medium of barter in China .
— „ tribute in China . assavers and assays
— .Average prices 1833-1926
— , Australia's production
— Brokers .....
— , Canadian production . . 4,
— , Central American production
— , China's import and exports
— , „ uses for
— coinage . . .56, 70-74, 155
— , coinage of ... .
coins based on gold standard .
— „ in Europe after World War
PAGE
17,33,47,48,50,51 . 66,88,173 . 465 20, 25, 199-225 400,401,404 271,492
186,424,425 171,186 . 186
351-354 156,528 159-171 252,253,256 232, 233 . 138
. 395
. 307
63, 492
. 259
247,248,524,529
. 463
235, 436
75,76,81,88
. 114
112-122
113,522,526
114, 299, 339-351
351-354
424,434
357, 386
212, 229, 232
8, 32, 47, 40, 49, 51-56
42
. 361
. 230
. 234
221, 238-240, 382
215, 228-231
231-240
. 115
. 260
. 241
,29,470,524,525
. 220
199-202, 204, 205. 207
. 8,29
199, 200, 201, 205, 207
199, 204
221,234
51
1-159,179-185,231,239
54,229,236
379-380
215,229
XXX
SUBJFXT INDEX
141,212
131
71,
299, 1,19,20,
Silver coins melted in China
— „ in Thibet
— ,, in Turkestan . collapse in prices constants consumption of cost of production . depreciation of prices duty on import into India embargo on the export of
„ ,, „ import of
employment for currency purposes export from China . fall in prices .... fineness of British coins reduced hoarding of . Hong Kong's imports of . imports into China . „ India . „ U.S.A. in China ....
invoices ....
legal tender .... market conditions in Bombay . ,, ,, ,, London .
„ U.S.A. . „ influenced by gold bars markets for mining in Africa „ ,, Asia „ „ China „ „ Europe „ U.S.A. movements in China not standard in China ornaments
parity with Shanghai tael points quotations prices and China
., during the Middle Ages „ in London and New York, 1833-1926 ratio to gold .... ready and forward . refining fees .... reserves in Europe in 1926 rise in the price of . roubles ..... rupees withdrawn . settlements in India smelting in China . sources of production South America's production standard fineness in England . „ „ „ France
„ for British India „ ,, China
,, in France . „ for Netherlands Indies
1,208
207
131,211-213,214,217,233
17
PAGE
101,102,103
. 237
237-238
212,214,233
17, 19, 33, 34, 35, 37, 41
232
213, 222, 234, 436
222, 234
215,216,238,239
47-58, 221
212,214-218,233
. 215
. 207
51-54,247
1,27-42,221,222
3,218,219
2
. 1-58
15,16,30
156,164,233
42, 43, 93
13, 27-29
4-12, 13
301,302,249
27-29, 42, 43
206
206
470
206
1,2
226-227
1
207, 221
19, 31, 33-35, 37, 39, 78
35, 87
6,7,20,28,106
239-240, 364, 366
210,211
. 220
228, 229, 261, 262, 390
6, 28, 106
. 102
. 230
212,213,215
102,103
. 232
43
65,66
25,26,199-207
199,200,201,207
28
36-37
471
382
36
234
SUBJECT INDEX
XXXI
PAGE
Silver standard in U.S.A. ....... 229
— standarding ........ 45
— storage in New York ...... 5
— , uses for ......... 221
— yen 236-239
bar silver . . . . . . . . 1, 58
British India's import duty on silver . . . 232
„ silver imports . . . 3,4,42,218,219
„ „ „ markets .... 42-43, 93
Broken Hill silver mining districts .... 205
Brokerage on silver .... 8, 13, 14, 30
China requests inquiry into silver situation . 362-3G6 Cobalt silver mines ....... 205
Countrv silver ...... 93, 94
debasing China's silver coins . 129, 149, 152, 192-199, 234 export of silver from France .... 37-38
„ „ „ „ Great Britain . . .26, 27, 224
. „ „ „ „ Shanghai 47-58,87-100,224-225
„ „ „ „ U.S.A. 2,3,4,17-19,27,208,217,224
Hamburg silver
imports of bar silver into Shanghai .
„ „ ., „ „ Turkestan London as silver market .... Mexico requests inquiry into silver situation Mexico's production of silver . Mukden's import of silver New York as silver market origin and destination of bar silver in China reasons for decline of silver prices . resumption of silver coinage in Europe share in production of silver . shipments from U.S.A. shoe of silver ..... standard of fineness for silver . T'a Ching silver coinage . total world's production of silver
U.S.A. production of silver Small coin dollars . . .
Spade money ..... Spanish dollars (see Dollars) Speculators in Exchange . Speculative exchange transactions Straits dollars {see Dollars) Straits Settlements quotations at Shanghai
adopt gold standard Subsidiary silver coins in China
43,44
27,217
43
1,27,29
. 362
4, 199, 200-202
55
1,4-12,20,207
224,225
212,214,217,228
. 216
25. 26
3, 4, 8-12, 42
65
28, 44-46, 66
154-159, 383
199-203,209-210
1, 4, 199, 200-204 425,446,517 402, 404
114,115 114,115
. 110 142,361 146,155,177-198,452, 516-521,524 classification ...... 179-185
commemorative issues . . . . .179
cost of minting ...... 188
debasing. . 177,178,180,190-198,444,518-521
denominations fineness and weight
— , full value
— , legal tender
— , of Hong Kong
155,164,178,180,184
155, 156, 164, 177, 178, 179, 182,
184, 185, 189, 190, 191, 245, 444,
445,518,520,524
. 155,164,180,183-185,452.
457,513,515,518,524
156
244-246,517
XXXll
SUBJECT INDEX
Subsidiary, overproduction
— , output
— , passing by weight
— , provincial issues
— , quotations for
— , varieties of Sui dynasty Sun Yat Sen Sung dynasty . Sycee, actual lineness
assay of .
Bai-bao .... circulation to be abolished conventional fineness conversion from bar silver
„ „ silver coins
derivation of the word employment of export to Bombay .
„ „ Changchun
„ „ Chefoo
„ „ Hankow .
„ ,, London
„ „ Manchuria
„ „ South China
„ „ Tientsin . fineness . . . 59, 66
from melted coins .
import into Shanghai
K'uping .
manufacture of
origin of
outturn of shipment
premium on . . . 66,
standard for taels
transactions weight of
T'a Ching Bank T'a Ching Ti Kuo T'a Ching Yen Pi T'a Han Yen Pi Tael, abolition .
— , assaying .
— , authorities on
— , classification
— , coins
— , conversion from bar silver
— , definition of term
— , derivation of term
— , during Southern Sung dynasty
— etimology
— , fineness .
PAGE
177,180,181,452
. 461
. 517
177,179,180-182,445,449,
513,516,518
185-188
179-185,186
. 408
174,175,179,182,265
65, 236
68,501
66,470,510
. 169
369,522,529,530
470,480,508,510
65, 482, 506
. 65,92,482
59,238,239,470
87, 92
93-96,471,473,508,509
99-100
90
90-91
96-100
92
92
87-89
,68,75,98,470,474,487,491,
501,502,506,508,509,510
65,101,482
100-103
79
65
59 65
89, 90,' 91, 92, 95, 98, 470
88,97,471,472,479,481,483,
486,493,502,507,508,509
68,98,501
238,510
87-103
68,98,510
157,533 . 153 . 154 155 369,391,522,530 60, 66, 470, 499 68, 467-510 78 60, 63, 70, 74, 237 65 68 59 60 59 59, 61, 66, 68, 70, 71. 73, 75, 77, 78, 79. 82, 83, 86, 88, 470, 472, 474, 478. 480, 481, 482, 484, 486, 491, 493, 495, 496, 499, 500
SUBJECT INDEX
XXXIU
Tael
genesis of
minted in Changsha „ Hong Kong „ „ Osaka „ „ Tientsin „ „ Turkestan
origin of .
parity between taels table ,, with bar silver
subdivisions of
convention
weight
48, 83, 84,
PAGE
65,67
62
61
62
62
62-63, 237
67,75,81
85, 86, 89, 486, 488, 490
Canton tael Chauping tael
Chingping tael . Currency tael Customs tael {see Haikwan fixing dollar-tael rate Haikwan tael
86
48,77
67, 469
75, 76, 81, 88, 472, 480
59, 61, 62, 64, 66, 67, 68, 75, 78, 79, 88, 289,
469, 475, 476, 482, 483, 484, 485, 486, 490,
491, 493, 495, 496, 499, 500, 504
32,51,63-64,98,286,408,489,498
. 51, 64, 68, 74, 75, 88, 97, 478, 480, 482,
485, 486, 487, 488, 495, 496, 504
. 357
65,66,67,81,88,494,503
tael)
106,171
64,66,78,84,282,389,469.
475, 476, 482, 488, 494
Hankow tael 498
Hongping tael 48, 88, 494
Hupuh tael 62
Imperial tael ........ 62
Kuei-p'ing tael 478,480,481,487
K'uping tael . . .62, 66, 70-74, 79, 382, 389, 390,
475,477,484,488,496,500 Money tael . . 59,60-63,65,66,469,478,495,510
Peking tael 497
Pey-Yang tael 62
principals taels current in China . . . 82-85
regulations for taels currencv .... 70-74
Shanghai taels . . 17;61, 68, 75, 81, 84, 85, 97, 289, 468,
469, 471, 472, 475, 476, 481, 499, 504
„ „ from bar silver
,, „ replacing Carolus dollars
Sungkiang tael . Szechuen tael . Tibetan tael Tientsin tael Tsinan tael Transfer tael
Treasury tael (see K'ping tael) Tribute tael Tsaoping tael (see Chauping tael)
16-19, 31-38
. 61,81,129
66
64
. 60,61,237
48,88,494,497
. 1/3
80,492,493,501
74, 496
"Weight tael
Tahil
T'aiping rebellion
T'aiping tael gold coin
T'ang Chi Yao .
T'ang dynasty .
Tanga
Tchou dynasty
Tiao
17, 32. 51, 59, 63-65, 67, 68, 75, 468, 469, 482, 483, 487, 488, 489, 494, 500, 504
. 238
270,409,412
264,270
182,272,430,456,457
408,409,462
271.492
236, 259
414,532,533,549
XXXIV
SUBJECT INDEX
389, 390, 394,
Tibetan gold coins
— silver coins . Tidze .... Tientsin Hongping Hua Pao Token coins
Tola ....
Transfer tacl (see Taels)
Treasure and merchandise imports and exports Tribute in China Tsai Chen T'sai Tze, Duke Tsao Kung Tsao Yu Lin T'sin dynasty . Turkestan currency
— gold tilla
— silver coins
United States {see America)
Vissering, Dr. G.
— - , reform scheme .
Wang Mang Wang Ta Hsieh Weight of copper coins
— „ gold bars .
— „ silver dollars
60, 6r
409, 422, 38,238,
237, 264,
PAGE
264,271 236,237 414 48,88 432,433 325, 4o8
282-283
241,262
. 367
. 386
. 267
. 391
405, 4o6
411,492
270,271
237, 492
. 387 386-391
236,259 164, 421, 429, 434,' 435, 448, 450
— , subsidiary coins
— , taels
Wen yin .
World's consumption of silver
— production of gold
— „ „ silver Wu Tchu cash .
Yakub Beg
Yang Yi-chi
Yen ....
— , composition of .
Yh
Yokohama Specie Bank Yuan ....
Yuan Shih Kai .
— copper coins
— dollar
— ■ gold dollar .
„ medallions Yunnan gold dollar coins . province
— using Saigon piastre
131,134-139,143,146-149,
153-155,159,161,163,245,
515,516,524,525
155, 156, 164, 177-179, 182-185, 189
245,444,445,518,520
. 59, 61-68, 75, 78, 79, 88, 289, 469,
476, 482-500
238,470
for coinage
465
209
236, 406, 408
,407
384
,454
299
150,
512,
,528
191,
,524
475,
,504
,490
208
231
, 4()fi
-210
,438
237, 271
. 358
289, 302, 350, 395
. 289
. 259
. 138
154,163
382, 431
. 431
159-174
264, 271, 272, 394
267-269
264, 272-275
152,182,272.430
. 134
SECTION 1
SILVER AND SILVER TRANSACTIONS
SECTION 1
SILVER AND SILVER TRANSACTIONS
/
>T
u
' f
/ /
Dy courtesy of
Chinese Government Bureau of Economic Information.
\.
\3
THE CURRENCIES OF CHINA
CHAPTER I. BAR SILVER AND CHINA
THERE is no fixed standard of currency in the broad sense of the word within Cliina. The masses in the interior use, practically all through their lives, copper coins and although no law has defined hitherto the term of " currency " as applicable to China, it is beyond doubt that, by reason of its wide scope, the copper coin is the real currency of the country.
For international trade and exchange, silver is em- ployed, and although China is the second largest silver- using country in the world, it would be erroneous to assume that she has a silver-currency standard.
Silver as a medium of currency circulates in China in the shape of taels, dollars or small coin (the theoretical decimal of the dollar). As silver in quantity is not mined in China, it has to be imported from the world's silver markets. New York and London. Until recently London was the principal market for silver, but since the World War New York has become the chief centre of distribution. Practically all the taels, the dollars and the small coin circulating in China have had their origin, directly or indirectly, in imported bar silver, to which the following remarks are devoted.
Import of Bar Silver from United States.
The United States are producing from 60,000,000 to 70,000,000 ounces of silver each year, which is about one-third of the world's output. The consumption within the country for industrial purposes and in the chemical and photographic industries totalled 38,000,000 ounces in 1925. In addition to exporting the surplus production of the United States abroad. New York and San Francisco have become trading centres for the silver produced in
THE CURRENCIES OF CHINA
Mexico and Canada. New York is gaining fast on London in importance as the world's market for bar silver, many factors being in favor of the former place.
Since 1923 China and India have bought the bulk of their requirements in the United States instead of, as formerly, in London. The importance of the United States as a silver-producing country will be discussed in Chapter VII, "About Silver Production and Distribution." The following figures relate to the movements of bar silver to and from the United States and are meant to show the letter's importance as a distributor of the white metal. Year Total imports Total exports
1921 §63,242,000 $ 51,575,000
1922 $70,800,000 $ 64,607,000
1923 $74,454,000 $ 72,459,000
1924 $73,945,000 $109,891,000
1925 $64,595,000 $ 99,128,000'
The following table shows particulars regarding the principal sources of imports and the principal destination cf the United States exports of bar silver for the period of 1910 to 1925 inclusive:
Imports
(In Thousands of Dollars)
Exports
|
Calendar |
Fro 771 |
Total |
To India |
To China and |
Total |
|
Year |
Mexico |
Hong Kong |
|||
|
1910 |
27,040 |
45,878 |
— - |
5,619 |
57,361 |
|
1911 |
24,860 |
43,746 \ |
1,424 |
7,959 |
65,665 |
|
1912 |
29,697 |
48,401 1 |
1,840 |
9,580 |
71,962 |
|
1913 |
22,033 |
35,868 |
1,419 |
11,422 |
62,777 |
|
1914 |
14,871 |
25,959 |
121 |
6,039 |
51,603 |
|
1915 |
20,488 |
34,484 |
— |
8,372 |
53,599 |
|
1916 |
15,629 |
32,263 |
2,384 |
9,470 |
70,595 |
|
1917 |
31,986 |
53,340 |
24,392 |
20,624 |
84,131 |
|
1918 |
51,017 |
71,376 |
163,154 |
43,108 |
252,846 |
|
1919 |
63,303 |
89,410 |
109,181 |
87.828 |
239,021 |
|
1920 |
53,197 |
88,060 |
642 |
86,221 |
113,616 |
|
1921 |
41,250 |
63,242 |
3,233 |
23,191 |
51,575 |
|
1922 |
48,453 |
70,806 |
11,971 |
33,079 |
64,607 |
|
1923 |
50,049 |
74,454 |
23,721 |
38,311 |
72,459 |
|
1924 |
45,828 |
73,945 |
54,119 |
24,233 |
109,891 |
|
1925 |
37,883 |
64,595' |
42,375 |
30,522 |
99,128' |
* For the first 11 months.
BAR SILVER AND CHINA 3
In comparing the figures relating to the United States exports of silver, the tendency becomes at once apparent to increase direct shipments to consuming countries, instead of using intermediaries. Allowance should be made for the unit employed in the above table, v^here the dollar has been used and not the fine ounce, but nevertheless the trend toward direct shipments is mani- fest. It is especially India thai calls for comment. After the conclusion of peace, in 1920, she took only •'i?642,000 worth of silver from the United States. In 1924 the total value of her direct imports from the United States had reached $54,119,000 in value, representing 81.2 million ounces, as compared with 67.7 million ounces, exported from New York to India in 1925.
The following table, compiled by Messrs. Handy & Harman, New York, gives details regarding silver ship- ments from the Americas during recent years:
Shipments (In millions of fine ounces)
New York to England . New York to India . New York to China New York to Germany. San Francisco to China San Francisco to Japan San Francisco to India San Francisco to England San Francisco to Germany Halifax to England Halifax to India Vancouver to China Mexico to England Mexico to Germany Mexico to India Mexico to China
|
1925 |
192^ |
1923 |
1922 |
|
|
. . 9.7 |
30.7 |
9.7 |
16.3 |
|
|
67.7 |
81.2 |
36.7 |
18.2 |
|
|
4.5 |
1.7 |
.1 |
— |
|
|
5.8 |
.3 |
— |
— |
|
|
42.6 |
34.6 |
58.5 |
49. |
|
|
.7 2.5 |
2. |
— |
.1 |
|
|
4.1 |
z |
z |
||
|
y |
2. |
1. |
— |
— |
|
2.6 .6 4.2 |
5.4 |
3.6 |
4. |
|
|
2.8 |
3.9 |
2.6 |
||
|
15.7 |
— |
— |
|
|
|
6.7 |
— |
— |
— |
|
|
3.4 |
— |
— |
|
|
|
1.4 |
— |
|
|
170.1 163.8 112.5 90.2
4 THE CURRENCIES OF CHINA
The ratio between the total United States exports of silver, for the years 1921 to 1925 inclusive, and the shipments directed to India and China, is as follows: —
1921 1922 1923 1924 1925
to the Orient.
Procedure in dealings in silver in the United States differs considerably from the methods in vogue in Great Britain. Conditions prevailing in the United States silver markets have been described with rare precision by Mr. E. D. Kracht (of the firm of Kracht & Murphy, silver bullion and exchange brokers of New York). The terms cited in the report were substantially unchanged in the autumn, 1926. The following is a verbatim reproduction of the report referred to, except that a few passages have been deleted on account of their having become obsolete in the meantime.
The American Silver Market.
The following outline is believed to be of interest to foreign operators and intended to provide a better understanding of conditions and advantages of the New York silver market:
Yearly New Production:
United States . . . about 60,000,000 ounces fine
Mexico „ 80,000,000
Canada „ 15,000,000 „
about 155,000,000 ounces fine
Volume of the New York Market. — With negligible exceptions^ all of the above silver produced in Mexico, Canada, and the United States is sold in New York for delivery either in New York, San Francisco or London. This combined new production together with improved shipping facilities provide jointly an excellent, sound basis on which a considerably larger silver and silver ex- change business is transacted for any desired delivery. The scope of the New York silver market has broadened lately considerably,.
BAR SILVER AND CHINA 5
the volume has increased and will undoubtedly continue to do so in the future. It may be safely assumed that the total volume of the silver business transacted in New York may approximate any- where between three hundred million to five hundred million ounces annually.
Shipping Ports. — The two principal ports for export of the entire production of Mexico, Canada and United States are New York and San Francisco. Vancouver shipments originate either from New York or from Canadian Cobalt district. New York and San Francisco receive the silver by water and by rail. The larger or smaller volume coming to either of these ports is determined by the factor whether China or India is the main buyer for the time being. When London and/or India is the buyer, most of the silvei from Mexico and Canada comes to New York, and when China enters the market as the deciding buyer, most of the silver will go to San Francisco. Practically no silver reaches Indian ports at the present time directly from San Francisco (although silver may be shipped from there to China to be reshipped to India via Hong Kong or possibly by Manila or Singapore).
Silver Storage Facilities: in Neiv York. — All banks, silver dealers and mining companies holding a silver stock in New Y'ork, store same in the vaults of the United States Safe Deposit Company, 32 Liberty Street, in the heart of the New Y''ork financial district. This company does not buy nor sell silver for its own account, but specializes in silver storage and has the finest vaults and best facilities for handling in and out by electric elevator. The storage charge is 1 cent per bar per day, minimum charge 5 cents per bar. All silver in New York stored in the same vaults, delivery charges from vault to vault which would result othersvise, are eliminated. Delivery between banks is made "over the counter" by presenting a non-negotiable silver storage certificate of the United States Safe Deposit Company with the corresponding bar-list from the seller. Silver stored in these vaults often changes hands four, five times or even more often before it is moved out.
In San Francisco conditions are different. There, various banks use their own vaults, so that when delivery is made, it may entail the removal of silver from the vaults of one bank to the vaults of another with transfer expenses. The market rule is that the seller has to deliver to the order of the buyer, free of charge, from vault to vault. In addition to foregoing facilities, there are in New York, San Francisco and Cobalt large refiners or mining pompanies that agree to store the silver sold to customers for a few days (that is to say, until the time the buyer desires to ship the silver) in their vaults at the risk of the buyer. Where this storage is extended for any length of time a small charge is made. Leaving the silver in the vaults of these refiners or miners has
6 THE CURRENCIES OF CHINA
the advantage that same can be delivered from there directly to steamer or express connection saving drayage.
Assays. — There is no assay obligation or charge for the seller in New York, neither in San Francisco. All silver is purchased from large and reputable mining companies, banks or refiners, and delivered from refining companies which represent an absolute guarantee. Each bar bears marks of origin as well as bar number, and as the entire business is practically in the hands of the banks, refining and mining companies, there is no possibility that claims should arise in regard to unsatisfactory assays. To the writer's knowledge, no claim has ever been presented in New York in this regard. Silver shipped from Mexico to the United Stales after leaving the refinery, has to pass for assays through the Mexican Mint which issues the corresponding certification of assay; then it goes directly into the vault of the bank and docs not leave same until shipped abroad or used domestically.
New York Silver Quotations. — Unlike London there is no official quotation for New York on which orders can be automatically executed. Around noon time there is given out by a New York silver-dealing house of old standing a so-called "official" quotation for New York silver delivery. This quotation is never on the basis of the actual market price for silver in New York. It has therefore absolutely no value for the silver trader, except that silver mining companies have contracts running with silver re- fineries for liquidation on the basis of this so-called New York official price. As a rule this price is about V2% below the actual silver price in New York, and, when China is buying, about 1%% below San Francisco. The New York silver market is therefore an open market from morning to evening with price fluctuations according to demand and supply.
Silver Prices in New York — Are quoted for New York, San Francisco or London delivery from spot up to six months forward. New York and San Francisco deliveries are quoted in dollars per troy ounce 999 fine, w^hile London deliveries are invariably quoted in sterling 925 fine. New York and San Francisco transactions are either for immediate delivery, for delivery within a week or for delivery for the first half or second half of each month forward, the seller having the privilege to deliver at his option during the course of the delivery contracted. London deliveries are in accordance with London custom either for prompt delivery in London, for two months forward delivery in London according to date, or for prompt shipment from New York. Any other London delivery may also be contracted according to the market requirements. Silver dealers, miners, refiners and banks sell for various deliveries, so that there is a rather wide market for all deliveries.
BAR SILVER AND CHINA 7
Far Eastern silver buyers or sellers may have their silver business for London delivery executed in New York on a sterling basis without New York having to touch the London market at all. New York has the advantage of being the producer, and in case of need there is always the possibility of obtaining and shipping silver from New York to London v, ithin ten days. As a result at times considerable savings could be efTected by covering London short sales in the New York market, and making delivery in London either by the outright purchase of silver that New York banks or mining companies may be long in London or by shipping the silver from New York to London.
Shanghai, Hong Kong, Bombay and London silver quotations reach New York about 10 a.m. At the same time whoever is inter- ested in London deliveries, either the London or the New York dealer, will make firm bids or offers always on a sterling basis and for London delivery, prompt as well as forward. At times quite extensive trading takes place. As a rule, however, after the London official price has been established, London tries to buy below the official quotation or to sell above same. Cable service between New York and London requires about fifteen minutes for a reply.
New York enjoys the advantage of being the principal market of supply, and being able at the same time to trade with London in the morning, and with San Francisco in the afternoon, the large mining and refining companies that maintain offices in New York await usually market development before taking any action. Their business starts around 11 a.m. They may sell before that time, provided they find the price attractive enough. By far the larger part of the transactions is for 50,000 ounce lots. There are few refining or mining companies that feel inclined to sell silver in larger quantities on the same price basis. Therefore, where silver is to be bought in 100,000 ounce lots or more, it may be to ad- vantage to buy from various sources instead of trying to execute the order with one and the same seller. Since the buyer has always the privilege of having his silver delivered to vaults as specified by him, the procedure of buying from several sources does not entail any extra expenses nor any extra handling, except for making payments to different sellers.
Payments for Silver are made in New York funds for New York as well as for San Francisco delivery. These New York and San Francisco deliveries may also be paid for in bankers' check on London if transacted in sterling. Deliveries in London are against payment in London. Silver may also be bought in New York against Yen, Rupee or Tael cable transfer.
Mexican Mining Companies, before shipping their silver, find out whether the highest price is obtained in New York or San Francisco. They will then ship and consign to a banking corres-
8 THE CURRENCIES OF CHINA
pondent, and when selling directly through a broker, the banking correspondent will deliver the silver against payment and transfer the funds at niininuini charge.
Foreign banks may do business by cabling their buying and selling orders directly to a New York broker. After the order is executed arrangement may be made through New York banking correspondents to either receive or deliver the silver against payment, and/or arrange for shipment at a minimum of expense; or credit may be opened directly in favour of the "silver seller," which will either be a bank, a mining or refining company or silver dealer, with a minimum capitalization of one million dollars, payment against original bill of sale, bar-lists and delivery of the silver to the vaults or to steamer.
Silver Brokerage in New York amounts to ^s cent per troy ounce 999 fine, and is always payable by the seller. \Vhile in the distant past there were no Brokers specializing in silver and Far Eastern exchange exclusively — there being only silver Dealers and silver dealing banking institutions— the broker's service is now to the distinct advantage of all buyers and sellers alike, bringing the most favourable quotations into direct contact at a minimum of expense.
Banks' Shipping Commission on Silver varies according to the size and value of shipments between % per mil and Vs % .
Delivery to Steamer is made by responsible express companies who also supply the armed guard; the corresponding charge for New York is 25 cents per bar and has been included in the en- closed schedule of shipping charges. This charge can be saved if refining companies can deliver directly to steamer.
Shipping Charges. — See separate schedule.
Shipments New York-London. — Shipping charges are 1.05% including interest at 5% and ^2 per mil assay and adjustment of weight charged in London. Shipments go forward every Saturday by regular fast passenger boats, taking seven days to Southampton, the silver arriving in London over-next Monday, after nine days transit time. These Saturday boats of the White Star Line and others sail regularly throughout the year. In summer time regu- larly, in winter time irregularly, the Cunard Line has sailings from New York to Southampton on Tuesdays. These steamers are six- or seven-days boats, and the silver should reach London not later than over-next Wednesday. Both Saturday and Tuesday boats have ample time to make the over-next Friday's connections of the P. & 0. boats from London to Bombay wuth a total transit time New York-Bombay of five weeks.
While silver from New York is in transit to London for reship- ment to either Bombay, Hong Kong or Shanghai at the through
BAR SILVER AND CHINA 9
freight rate of 19c, instructions may be given to the steamship companies before the silver arrives in London, not to make a ship- ment as originally intended to Bombay, Hong Kong or Shanghai, but instead to have the silver delivered in London. This privilege ought to be of considerable advantage to any Bombay, Hong Kong or Shanghai silver operator who purchases forward silver in New York. He can decide a day or two before arrival in London in regard to final destination. Where the silver is not transhipped in London to a Far Eastern port, the difference between the freight rate New York-London and the through bill of lading rate New York-Far East, namely between %9c and 1%, or, Vi% difference will be returned to the silver shipper in New York upon instruc- tions to have the silver delivered in London instead of having it go forward to the Far East,
Shipment Xeiu York-Bombay. — Silver shipped directly from New York to Bombay can be laid down in Bombay at about the same price that silver would cost C.LF. London. These sailings from New York to Bombay, how^ever, are irregular, a steamer about every two or three weeks; the freight rate is only satis- factory if shipment is made of V2 million ounces or more. Silver from New York to Bombay is mostly shipped on through bill of lading via London, in which case the shipping charges New York- Bombay amount to 1%% against 1.1C% London-Bombay. Taking in consideration that silver can practically always be bought in New York 19c below the London quotation, these shipments from New York to Bombay either directly or via London leave a sufTi- cient margin that should be an inducement to every Bombay silver buyer to buy in New York directly instead of in London, provided the silver can be obtained in New York %% to 1% below the London price.
Shipments Xeiu York-Hong Kong. — When shipping silver from New York to Hong Kong, the following routes may be considered:
(a) From New York directly to Hong Kong at
a shipping cost of 1.84%
(b) From New York via London to Hong Kong
at a shipping cost of 1.95%
(c) From New York via Vancouver, Victoria or Seattle to Hong Kong at a shipping cost
of 2.04%
These charges compare with shipping charges from San Fran- cisco to Hong Kong of 1.02%. When money is cheap and the silver not needed, it may be profitable to have the silver shipped from New York directly to Hong Kong or via London.
Routing via Vancouver, Victoria or Seattle has the advantage, at a slightly higher shipping charge than directly or via London,
10 THE CURRENCIES OF CHINA
that silver will reach its destination within a month or less. Express charges from NEW YORK to SAN FRANCISCO, SEATTLE, VICTORIA or VANCOUVER are the same, and including interest at 5% amount to 1.18%. When silver is shipped from New York, the Northern route is usually preferred because that route affords quicker transportation facilities than shipment from New York via San Francisco to either Shanghai or Hong Kong.
In New York-Shanghai silver shipments we have to consider the following: The shipping charge from New York by direct steamer to Shanghai amounts to 1.84% which compares with the shipping charge from New York, via Vancouver, Victoria or Seattle of 1.97%, or via London of 2.09%. Unless money is cheap and silver little needed in Shanghai, the routing of the silver from New York via Vancouver, Victoria or Seattle will always be pre- ferred because it affords the quickest connection and consignees have expressed themselves always very satisfactorily in regard to the prompt manner in which the silver is being delivered at destination; in Shanghai or Hong Kong. Unless contracted for delivery in San Francisco, silver is hardly shipped from New York via San Francisco to the Far East because this procedure works out uneconomically.
There will seldom be occasion to ship silver from San Francisco via Seattle, Victoria or Vancouver to the Far East because charges for expressage from San Francisco to these northern points would become prohibitive, compared to any interest calculations. Where silver is bought partly for delivery in New York, and partly for delivery in San Francisco, and where it has to be shipped to either Hong Kong or Shanghai, it will in many cases be preferable to ship the New York silver via the northern route directly to destination and to ship the San Francisco silver on separate steamer, instead of trying to join both shipments in San Francisco. The slight saving that might be obtained in regard to the freight by increasing the shipment in San Francisco, will be offset through loss of interest and handling expenses on shipments from New York to the Far East via San Francisco.
Bullion from American Pacific Coast ports to China is subject to the following graduated freight rates:
Value $10,000 and under 1.00%
10,000 to $50,000 75%
50,000 „ 100,000 625%
100,000 „ 150,000 50%
150,000 „ 200,000 475%
200,000 „ 250,000 45%
250,000 „ 300,000 425%
300,000 „ 350,000 40%
350,000 and over 375%
BAR SILVER AND CHINA 11
China will always buy in San Francisco at the China silver price less actual shipping expenses. Under above schedule, a China buyer can pay for 50,000 ounces only less %% freight. A larger buyer may obtain freight at %%. The smaller buyer is therefore discriminated against to the extent of the difference in the freight rates. Since regular profits in these transactions do not exceed between ^% to V-l% at the very most, the difference in the freight rate is actually more than the profit involved and the average China bank drops out of the American market, because they can do their business in London without being penalized through graduated freight rates. They may buy and sell in London and in their calculations they need pay no attention just how much silver they are going to ship; the freight rate remains the same, no matter whether they ship 50,000 ounces or 500,000 ounces. Since there are in San Francisco always only a very few shippers who can ship at the minimum freight rate, the com- petition for silver shipments from San Francisco is very much restricted and as a result there are only few buyers. This would be entirely different, if ALL China banks could compete on EVEN TERMS. There are at least 20 banks in San Francisco and 50 institutions in New York which act for account of China banking institutions, and if a UNIFORM FREIGHT RATE of ¥2% should be quoted for any quantity of silver in excess of $20,000, the cause of "orderly marketing of silver" w'ould automatically be more ad- vanced than any centralized selling organization can accomplish. Instead of a stifled competition as at present, we would have a wide individual competition and each silver producer whether selling 30,000 ounces or 200,000 ounces at a time would be able to make his top price individually, directly and at no extra expense to him. The steamship companies would carry the same amount of silver as under present conditions, but the silver producer would obtain a better price. It is therefore up to the producer to use his influence to get the freight rates changed.
The freight rate on silver between NEW YORK and INDIA on direct steamers is at present %% : minimum $50,000. This minimum should be reduced to $25,000. India has entered the New York market during the last few weeks as an important factor for direct shipments in competition with London and as a result, since India can often pay better prices than London, the London quotations are no longer of as much influence in the New York market as they were formerly. ^Vhen buying, India can pay in New York the same price that they may pay in London; in other words, shipping charges New York-London need no longer be deducted from the London official price; the producer may receive approximately the FULL London equivalent for delivery in New York.
China and India being the principal buyers, and both buying and competing directly in San Francisco and New York, London
12
THE CURRENCIES OF CHINA
can buy here only when willing to pay more F.O.B. steamer New York than China or India are willing to bid.
Silver from territory adjacent to MEXICO CITY is at present being shipped to both New York and San Francisco BY RAIL at an express charge of about lliiTc, roughly. Producers should bear in mind that if they can arrange shipments VIA VERA CRUZ to NEW YORK and provided a freight rate of Vi% can be obtained as same was quoted before war time, the producer in Mexico can obtain a better net price by shipping by water to New York in- stead of shipping by rail. The express charge Mexico-Vera Cruz is approximately .35%, handling charges in Vera Cruz should under no circumstances exceed .ISS'r and a freight rate of .25% should make the business as attractive to steamship companies as before the war. It should be taken into consideration that a freight rate New York-India is quoted at .50% and from Pacific Coast port to China at %%. A freight rate of %% for Vera Cruz New York shipments is entirely out of proportion.
Shipping Charges on Silver
From New YorK —
to Bombay by direct steamer ] .05
to Calcutta I'ia Bombay steamer, .j .05 to Bombay via London on through
Bill of Lading 04
to Calcutta via London on through
Bill of Lading .04
to Shanghai, direct steamer or on through Bill of Lading by stea- mer via San Francisco ; .05
to Hong Kong by direct steamer or on through Bill of Lading byi
steamer via San Francisco .05
to Shanghai or Hong Kong by rail on through Bill of Lading via Seatle. Victoria or Vancouver . . ! . . to San Francisco by steamer via
Panama .05
to San Francisco by rail
to London from New York every
Tuesday and Saturday 04
From San Francisco —
to New York by rail
to New York by water via Panama
Canal 04
to Shanghai or Hong Kong 04
to India via Shanghai or Hong
Kong 04
From London—
to New York 04
to Bombay 04
to Calcutta 04
to Hong Kong 04
to Shanghai 04
:^
.50 .05
Min. .75
Min. .75
Min. 1.50
.38 1.10
1.10
.38 .38
1.25
.75 .75
.75
J:^
.10
.05
7i a>
35 55
34
40
20 40—50
50
13 22—28
16—24 5
16—24 22—28
—50
8 22 30 3fi 42
|
^ |
O-SO |
|
cS^ |
|
|
i'-'' H© |
|al |
|
i-i |
^ u |
|
.48 |
.06 |
|
.76 |
.06 |
|
.48 |
.06 |
|
.56 |
.06 |
|
.65 |
.06 |
|
.70 |
.06 |
|
.36 |
.06 |
|
.30 |
.06 |
|
.07 |
.06 |
|
.11 |
.06 |
|
.07 |
.06 |
|
.28 |
.06 |
|
.36 |
.06 |
|
.70 |
.06 |
|
.11 |
.06 |
|
.31 |
.06 |
|
.42 |
.06 |
|
.50 |
.06 |
|
.59 |
.06 |
osi HO
1.26 1.57
1.75
1.83
1.71
1.78
2.05
.89 1.23
1.01
1.23
.86 .97
2.30
1.01 1.21 1.40 1.54 1.64
BAR SILVER AND CHINA 13
With regard to the graduated freight rates from American Pacific coast ports it was ascertained upon in- quiring at the steamship company at Shanghai, that the same scale was still in force in 1926 without alteration.
As concerns the above table (Shipping Charges on Silver) it should be noted that (1) In September, 1924, the freight rale on bar silver from London to China and Japan has been reduced from %% to %%, in order better to be able to compete with the United States. Consequently the last item should now read " 1.52%." (2) Reduction in the freight rate from New York to India has been made simultaneously, viz., from %% to %%, so that the total charges should be changed accordingly. (3) The freight rates indicated in the schedule of shipping charges (for instance, San Francisco-Shanghai 0.375%) refer to quan- tities valued at $350,000 and over. If $100,000 worth of silver is shipped from San Francisco to China, the freight rate would be %%, — same as from London.
It will be noticed that conditions prevailing on the American silver market are somewhat peculiar; they differ from those in vogue at London in many respects, but notably in the following points: —
(1) The New York official silver quotation (per ounce fine) is hardly ever the price at which business is done in America, while the London official quotation (per standard ounce) represents the actual market price.
(2) The express and the steamer freight rates in and from America are not uniform, but subject to re- duction in the same proportion as the quantity increases in value. London quotes uniform freight rates for any quantity, instead of graduated rates.
(3) Transactions in bar silver in London are subject to the uniform rate of a brokerage of %% on the cost of the silver, always payable by the buyer.
Conditions are vitally different in New York, where the brokerage is not always uniform, but where it is always payable by the seller.
14 THE CURRENCIES OF CHINA
In the spring, 1923, the brokerage on bar silver sold in New York was ^ cent per ounce fine. In the autumn of the same year it was stipulated that " quotations should be understood silver delivered at banks' vaults per troy ounce 999 fine net to buyer and 1,000 fine net to seller — including brokerage."
In the spring of 1925 the same firm of New York bullion brokers announced that New York brokerage rates were $30.00 per 100,000 ounces of fine silver, any delivery.
In answer to an inquiry on the subject made in 1923, the following letter has been received from the Vernon Metal & Produce Co., Inc., New York: —
Regarding your question as to the silver prices which are cabled to you, the price which you apparently had in mind is the so- called "New York Official Price" quoted daily by Messrs. Handy & Harman, which as you correctly say, governs the price which the melters and refiners pay for silver. The actual market price of bars is usually higher, though rarely as much as you say in your letter. We would estimate that the premium above the New York Official price is approximately 3 cents per fine ounce on an average, but it fluctuates very considerably. We have seen bar silver sell below the New York Official Price and have seen pre- miums, of over 1 cent, while we would say that Vi cent to % cent is a normal premium.
The premium depends mainly on the supply and demand and from the above will note that there is no way for you to know what the premium was on each day, unless you make arrange- ments for somebody to cable you the actual rates at which business was done.
The difference between the San Francisco and the New York price of silver depends chiefly on the demand from China. The express rates on Bar silver from New York to San Francisco are now 812.47 per $1,000 for shipment up to $50,000 value and $11.09 per $1,000 for shipments of above $50,000 value. With silver at about 68 cents per ounce the latter figure would amount to a freight rate of about % cent per ounce, plus approximately five days interest charge. The San Francisco price will naturally not exceed the New York price plus freight and interest charges, unless there should be a keen demand for San Francisco silver for immediate delivery not leaving time to make shipment from New York, in which case a higher price might be paid at San Francisco than the New York price plus shipping charge and interest; such cases however are very rare.
BAR SILVER AND CHINA 15
On the other hand, when the demand from China is -weak silver at San Francisco might sell very near to the New York price, and we have occasionally seen San Francisco silver sell even slightly below the New York price. Such a condition, however, will hardly last for any length of time, because most of the "foreign" silver originates from Mexico, and inasmuch as the freight rate from Mexico to San Francisco is slightly higher than from Mexico to New York, silver producers will speedily divert their silver shipments to New York instead of to San Francisco if they cannot get a higher price at San Francisco than at New York.
American Silver Invoices.
The following are three examples of invoices for silver shipped from the United States to China. These invoices do not contain any provision for interest, which has to be added to the total, and which varies according to conditions prevailing on the money market. No account has been taken of landing charges and coolie hire at destination. These charges, though small, ought to be considered.
The price of bar silver in San Francisco is higher than in New York, the difference being accounted for by the cost of freighting from New York to San Francisco, in- clusive of interest. Proforma Notes No. 2 and 3 will illustrate what has just been said.
Invoice for 56 bars silver shipped from San Francisco to Hongkong: —
Proforma Note No. 1. 56 bars or 70,828 ounces at 72^ per
ounce $51,040.43
Cost of telegram to San Francisco . . .75
Premium on insurance 68.75
Cost of cable to Shanghai 14.10
Telegram to San Francisco .... 2.66
Drayage 13.12
Clearing and marking 7.63
Ocean freight 328.13
Our San Francisco correspondents' charge for handling, supervising and storing silver 32.52
Total U.S. $51,508.09
16 THE CURRENCIES OF CHINA
Proforma Note No. 2.
250,000 ounces silver shipped from San Francisco at 70 cents per ounce 999 fine San Francisco delivery . . . $175,000.00
Ocean Freight to Shanghai option Hong Kong $4.75 per $1,000 (on amounts of $150,001 to $200,000) 831.25
%% Insurance covering all risks on $179,500 223.13
Trucking, Cleaning and incidental char- ges 70.00
Total U.S. $170,124.38
Proforma Note No. 3.
250,000 ounces silver shipped from New York via San Francisco, Seattle, Van- couver or Victoria at cents 69.20 per ounce 999 fine New York delivery . $173,000.00
Expressage (New York to Pacific Port
$11.09 per $1,000) 1,918.57
Ocean Freight (Pacific port to Shanghai option Hong Kong) $4.75 per $1,000 (on amounts of $150,001 to $200,000) . 830.86
Vs% Insurance covering all risks at $178,500 223.13
Trucking, Cleaning and incidental char- ges 70.00
Total U.S. $176,042.56
N.B. — "When comparing cost of shipping from New York with that from San Francisco, it should be remembered that the former figures do not allow for additional loss of interest for the time the silver is in transit from New York to the Pacific Coast.
Conversion of American Bar Silver into Shanghai Taels.
If the bar silver imported from America is to be melted down in Shanghai, in order to be converted into sycee taels, the local smelting shops, called Loofangs (ilM)' ^^ill return to the bank 111 Shanghai taels (currency) for every 100 Canton taels weight of Amer- ican bar silver (0.999 fine). This proportion was fixed
BAR SILVER AND CHINA 17
in 1920. Before that year the outturn would have been 111.30 Shanghai taels. As a reason for the reduced result the smelters indicate the higher cost of labor and coal.
It ought to be borne in mind that, although the propor- tion of 111 Shanghai taels (currency) was officially still in force towards the close of 1926, it was then feasible to obtain at times a higher outturn from the smelting shops, say 111.20 Shanghai taels. In certain instances this was accomplished through bargaining, in others by bringing weighty influences to bear on the smelters. Taking these facts into account, it will be obvious that in the following formulae 1 and 2 the constant will have to be altered according to the outturn actually obtainable from the Loofangs.
It has happened in the j^ears 1922 to 1925 that Amer- ican bar silver was sold locally at premiums varying from 1/4% to 1%. In such cases the bar silver was not wanted for conversion into sycee, but for coinage pur- poses. Some of the provincial Mints thought that they could afford to pay a premium, as even under these cir- cumstances they made sufficiently large profits. Amer- ican bar silver was frequently sold at Shanghai during the period indicated at 111.50 and even as high as 112 Shanghai taels for every 100 Canton taels weight. 1 Can- ton tael weight is 579.84 grains, or 1,208 ounces troy.
100 Shanghai taels are 108.6212 ounces troy in weight. The parity between American bar silver and the Shanghai rate for telegraphic transfer on America can be established by means of the following: —
Formula 1.
? United States dollar =100 Shanghai taels currency
111 Shanghai taels currency = 100 Canton taels weight
1 Canton tael weight = 579.84 grains
480 grains = 1 ounce
1 ounce = New York silver price
100 X 100 X 579.84 ^ ^^^ ^^s 111 X 480
18 THE CURRENCIES OF CHINA
The figure of 108.828 is a constant. — It does not include charges and interest, which have to be added according to conditions prevailing at the time of making calcula- tions. These charges varj^ not only in the course of time, but their total is influenced by the rate of interest pre- vailing on the money market. The total is furthermore subject to a graduated scale of freight rates, according to the quantity shipped.
In the Autumn of 1926 the expenses for shipping United States ''?100,000 worth of bar silver from San Francisco to Shanghai would have been as follows:
Freight %% $625.00
Insurance Vs% 125.00
Bank's commission tJ^.% 62.50
1 b
Interest for 25 days at 5% (about) . . . 340.00
Landing expenses, coolie hire at Shanghai,
cable and incidentals 60.00
Cartage at San Francisco 25 cents per bar . 37.50
Total charges . .$1,250.00
or lVi%.
The constant is 108.828
Add lVi7c charges 1.360
llO.li
In order to obtain the parity of telegraphic transfer in Shanghai, multiply the constant, plus charges, by the price at which silver is actually obtainable at San Francisco.
If, for example, the actual price per ounce, 0.999 fine, is 70 cents, the parity for T.T. on America will be 110.188 X 70 = 77.1316 United States dollars.
Provided telegraphic transfer at Shanghai can be bought at say 77% United States dollars for 100 taels, it will be
19a
THE CURRENCIES OF CHINA— BAR SILVER AND CHINA
COMPARATIVE SILVER QUOTATIONS, NEW YORK— SAN FRANCISCO— LONDON— SHANGHAI THE FOLLOWING QUOTATIONS REPRESENT RELIABLY NEW YORK'S OPEN MARKET FROM 9:30 A.M. TO 4:30 P.M.
New York March 31, 1925.
AU following sliver quotations are per troy ounce 999 line sliver delivered at banks' vaults. London quotations represent the equivalent of the London ofQclal prices converted at cable exchange rates prevailing at the moment of announcement.
10 11 12 13 14 16 17 18 19
2(5 27 28 30 31
■ or — Price
New York— one week Low 6830 0845 6850 6823 6310 0820 6845 6820 6820 0800 0800 6800 6300 0800 6300 6800 6780 6763 6745 6722 6725 6744 6738 6750 6730 6720 High 6845 6855 6856 6840 6330 6840 6830 6830 0830 6790 6810 6818 6820 6840 6820 6820 6810 6785 0775 6738 0740 6758 6750 6760 6750 6740
Average 6838 6830 0853 6833 6820 6330 6347 6825 6825 6793 6305 6806 6810 6320 6810 6810 6795 6775 0700 6730 6733 6715 6747 6733 6740 6730
We Indicate below the corresponding points premium ( + ) and discount { — ) as compared to the New York prompt average price. Fluctuations of these points from day to day and their relation to each other indicate clearly valuable arbitrage possibilities.
New York— 2 mos. fwd.
-25 —40 —43 —50 —30 —25 —40 —33 —40 —35 —40 —50 —00 —40 —50 —50 —50 —50 —40 —30 —35 —50 —30 —20 —23 —30 —39
San Francisco— one week —40 —50 —50 —60 —45 —30 —40 —60 —40 —30 —30 —30 —40 —50 —40 —60 —45 —35 —30 —30 —35 —10 —10 —10 —15 —30 —36
San Francisco— 2 mos. fwd. —40 —60 —75 —70 —70 —30 —65 —80 —60 —53 —50 —60 —63 —70 —60 •
-70 —05 —50 —50 —55 —60 —30 —30 —25 —30 ^56
London offlcial— prompt +55 +46 +30 -r54 +70 +75 +62 +72 +75 +69 +79 +72 +74 +81 +81 +87 +88 +54 +09 +62 +64 +59 +65 +82 +88 +79 +70
London OfflciaI—2 mos. fwd. +69 +22 +20 +17 +35 +37 +24 +00 +25 +28 +42 +22 +20 +28 +28 +33 +34 +14 +29 +36 +24 +10 +37 +69 +62 +51 +32
Shanghai Tael T. T. parity
@ 111/8278/999 nne +30—12-19-51—11—12—29-66-76-59—65—04-00—70-43-68-53-56-39-00 +03—09 +13 +27 +42 +32—28
BULLION SHIPPING CHARGES, COMPRISING: FREIGHT, INSURANCE and TRANSIT INTEREST ® 4% p. a. (but not including storage, cartage and handling commission in N. Y . and S. F. for which .05% to .15% should be added when silver is purchased delivered at banks' vaults and when actual shipment has to be made)
From New York direct to. . From New York via London to. From San Francisco to From London to
BOMBAY
1.00% 1.30%
CALCUTTA SHANGHAI
1.20% 1.10% 1.40% 1.70% 1.25% .75% .93% 1.20%
LONDON
NEW YORK'S BROKERAGE HATES:
110.00 per 100,000 Yen or Rupees.
$23.00 per 100,000 Shanghai Taels or Hong Kong Dollars J30.00 per 100,000 ounces of line silver, any delivery. $62.30 per 100,000 pounds sterling.
BAR SILVER AND CHINA 19
remunerative to buy bar silver at San Francisco at a price of 70 cents an ounce and have it shipped to Shanghai.
Formula 2.
? United States dollar = 1 Shanghai tael currency
111 Shanghai taels = 100 Canton taels weight
82.7815 Canton taels = 100 ounces fine
1 fine ounce = United States dollar price
100 X 100 ^ ^^0882877
111 X 82.7815
To the constant of 1.08829 add the amount of charges and interest.
100,000 ounces of American silver (0.999 fine), if turned into Shanghai sycee, will produce:
Shanghai taels 91,887.27, at an outturn of 111.00, „ 91,970.25, „ „ „ „ 111.10, „ 92,053.03, „ „ „ „ 111.20.
New York and London Quotations Compared.
The comparative table of daily silver prices shown oppo- site is one of the monthly publications, issued by Messrs. Kracht & Murphy, Far Eastern Exchange and Bullion Brokers, New York City. It shows the daily quotations for bar silver for near and for\vard delivery at New York, San Francisco and London and means to prove that silver prices in the United States are almost invariably below London prices. The table referred to is also meant to indicate valuable arbitrage possibilities.
The table of comparative silver quotations is followed here by some general remarks, contained in a previous
20 THE CURRENCIES OF CHINA
circular issued by the same firm and containing some useful hints of intending operators in silver bullion.
Our comparative silver price quotation slicets show that New York and San Francisco prices are almost invariably — often con- siderably— below London prices. Our quotations are absolutely reliable. They represent actual figures at which business was done or could have been done in the open market in New York on the date given. There is hardly any transaction taking place of which we do not hear.
New York is not only an excellent buying market for silver; it is as well a reliable selling market for forward deliveries on a large scale. There are not enough selling orders for forward deliveries in this market; producers prefer to sell for spot delivery. The forward market is broad, deliveries up to 6 months are traded in regularly. They are not for a fixed date: always seller's option for the period contracted, either first or second half of the month, or, mostly, for the whole month.
New York and San Francisco deliveries are continually ex- changed against each other for all deliveries. This makes the market very broad and elastic. It permits regularly small arbi- trage profits, as soon as the buying trend changes from India to China, or from Europe to either India or China. London deliveries can be readily exchanged against New York or San Francisco, on dollar or sterling basis.
China buying orders can be most advantageously executed on a C.I.F. (cost, insurance, freight to destination) basis. In many cases we should be able to realize extra profits for our clients where their limit is C.I.F. Shanghai and/or Hong Kong and where we have time and occasion to exchange New York for San Francisco delivery or vice-versa. We might be able to first buy New York 1%% below San Francisco and later sell New York buying si- multaneously San Francisco or Vancouver delivery at a smaller difference than the original 1%%.
Estimating America's total production at about 150,000,000 ounces annually, conditions being about equal, 7,000,000 are likely to come monthly into New York and about 5,000,000 ounces monthly into San Francisco.
In most cases the banks effect shipment at iV9o commission. Where a bank should not be familiar with this shipping service, we gladly arrange for them, free of charge. Where they do not desire to attend to shipments, we arrange with one of the above banks to do so at tt% commission to the buyer.
Cartage is 25 cents per bar in New York and custom brokers charge $5.00 for attending to customs entry and making up of shipping documents.
BAR SILVER AND CHINA 21
American Silver Parities and Shanghai-New York T.T. Quotations.
The following excellent table has been compiled by Messrs. Kracht & Murphy, Far Eastern Exchange and Bullion Brokers, New York City. It shows the shipping points of United States silver, at five different percentages of charges and interest, as well as the theoretical par for rates ranging from United States dollars 65 to 85 per 100 Shanghai taels.
22
THE CURRENCIES OF CHINA
|
Shanghai Tael — Dollar — Silver Parities |
|||||||
|
111 |
Shaneh |
ai Taels |
= 100 Canton Weight |
||||
|
Cents |
Par |
82.78 Canton W |
eight = 100 Ounces Troy 999 Fine |
||||
|
per |
@ |
Deducting Shipping Ch |
irges: |
||||
|
Tael |
111.30 |
@111 |
.85% |
1% |
l.lO^c |
1 V4 % |
1 14 % |
|
6500 |
5989 |
5973 |
5920 |
5913 |
5907 |
5898 |
5883 |
|
65 Vs |
6000 |
5984 |
5931 |
5924 |
5918 |
5909 |
5893 |
|
65 y^ |
6012 |
5996 |
5943 |
5936 |
5930 |
5921 |
5906 |
|
65% |
6023 |
6007 |
5954 |
5947 |
5941 |
5932 |
5917 |
|
651/2 |
6035 |
6019 |
5966 |
5958 |
5952 |
5943 |
5928 |
|
65% |
6046 |
6030 |
5977 |
5970 |
5964 |
5955 |
5940 |
|
65% |
6058 |
6041 |
5988 |
5981 |
5975 |
5966 |
5951 |
|
6578 |
6069 |
6053 |
6000 |
5992 |
5986 |
5977 |
5962 |
|
6600 |
6081 |
6064 |
6011 |
6004 |
5998 |
5989 |
5973 |
|
661/8 |
6092 |
6076 |
6022 |
6015 |
6009 |
6000 |
5985 |
|
661/4 |
6104 |
6087 |
6034 |
6027 |
6020 |
6011 |
5996 |
|
66% |
6115 |
6099 |
6045 |
6038 |
6032 |
6023 |
6007 |
|
661/2 |
6127 |
6110 |
6057 |
6049 |
6043 |
6034 |
6019 |
|
66% |
6138 |
6122 |
0068 |
6061 |
6055 |
6045 |
6030 |
|
66% |
6150 |
6133 |
6079 |
6072 |
6066 |
6057 |
6041 |
|
6078 |
6161 |
6145 |
6091 |
6083 |
6077 |
6068 |
6053 |
|
6700 |
6173 |
6156 |
6102 |
6095 |
6089 |
6079 |
6064 |
|
671/8 |
6185 |
6168 |
6114 |
6106 |
6100 |
6091 |
6075 |
|
6714 |
6196 |
6179 |
6125 |
6118 |
6111 |
6102 |
6087 |
|
67% |
6208 |
6191 |
6136 |
6129 |
6123 |
6113 |
6098 |
|
671/2 |
6219 |
6202 |
6148 |
6140 |
6134 |
6125 |
6109 |
|
67% |
6231 |
6214 |
6159 |
6152 |
6145 |
6136 |
6121 |
|
67% |
6242 |
6225 |
6170 |
6163 |
6157 |
6147 |
6132 |
|
6778 |
6254 |
6237 |
6182 |
6174 |
6168 |
6159 |
6143 |
|
6800 |
6265 |
6248 |
6193 |
6186 |
6180 |
6170 |
6155 |
|
681/s |
6277 |
6260 |
6205 |
6197 |
0191 |
6181 |
6166 |
|
68 1/4 |
6288 |
6271 |
6216 |
6208 |
6202 |
6193 |
6177 |
|
68% |
6300 |
6283 |
6227 |
6220 |
6214 |
6204 |
6188 |
|
6872 |
6311 |
6294 |
6239 |
6231 |
6225 |
6215 |
6200 |
|
68% |
6323 |
6306 |
6250 |
6243 |
6236 |
6226 |
6211 |
|
68% |
6334 |
6317 |
6262 |
6253 |
6248 |
6238 |
6222 |
|
6878 |
6346 |
6329 |
6273 |
6265 |
6259 |
6250 |
6234 |
|
6900 |
6357 |
6340 |
6284 |
6277 |
6270 |
6261 |
6245 |
|
6978 |
6369 |
6352 |
6296 |
6288 |
6282 |
6272 |
6256 |
|
69% |
6380 |
6363 |
6307 |
6300 |
6293 |
6284 |
6268 |
|
69% |
6392 |
0375 |
6318 |
6311 |
6304 |
6295 |
6279 |
|
691/2 |
6403 |
6386 |
6330 |
6322 |
6316 |
6306 |
6290 |
|
69% |
6415 |
6398 |
6341 |
6334 |
6327 |
6318 |
6302 |
|
69% |
6426 |
6409 |
6353 |
6344 |
6339 |
6329 |
6313 |
|
6978 |
6438 |
6421 |
6364 |
6356 |
6350 |
6340 |
6324 |
|
7000 |
6449 |
6432 |
6375 |
6368 |
6361 |
6352 |
6336 |
|
7078 |
6461 |
6443 |
6387 |
6379 |
6373 |
6363 |
6347 |
|
707* |
6472 |
6455 |
6398 |
6390 |
6384 |
6374 |
6358 |
|
70% |
6484 |
6466 |
6410 |
6402 |
6395 |
6386 |
6369 |
|
7072 |
6495 |
6478 |
6421 |
6413 |
6407 |
6397 |
6381 |
|
70% |
6507 |
6489 |
6432 |
6425 |
6418 |
6408 |
6392 |
|
70% |
6518 |
6501 |
6444 |
6436 |
6429 |
6420 |
6403 |
|
70% |
6530 |
6512 |
6455 |
6447 |
6441 |
6431 |
6415 |
|
7100 |
6542 |
6524 |
6466 |
6459 |
6452 |
6442 |
6426 |
|
711/s |
6553 |
6535 |
6478 |
6470 |
6463 |
6454 |
6437 |
|
71 1^ |
6565 |
6547 |
6489 |
6481 |
6475 |
6465 |
6449 |
|
71% |
6576 |
6558 |
6510 |
6493 |
6486 |
6476 |
6460 |
|
7172 |
6588 |
6570 |
6512 |
6504 |
6498 |
6488 |
6471 |
|
71% |
6599 |
6581 |
6523 |
6516 |
6509 |
6500 |
6483 |
BAR SILVER AND CHINA
23
|
Shanghai Tael — Dollar — Silver Parities |
|||||||
|
111 |
Shangh |
ai Taels: |
= 100 Canton W |
eight |
|||
|
Cents |
Par |
82.78 Canton W |
eight = 100 Ounces Trov |
999 Fine |
|||
|
per |
@ |
Deducting Shipping Charges: |
|||||
|
Tael |
111.30 |
@ 111 |
.85% |
1% |
1.10% |
1%% |
11/2% |
|
71% |
6611 |
6593 |
6535 |
6527 |
6521 |
6510 |
6494 |
|
llVs |
6622 |
6604 |
6546 |
6538 |
6532 |
6522 |
6505 |
|
7200 |
6634 |
6616 |
6558 |
6550 |
6543 |
6533 |
6517 |
|
721/8 |
6845 |
6627 |
6569 |
6561 |
6554 |
6544 |
6528 |
|
721/4 |
6657 |
6639 |
6580 |
6572 |
6566 |
6556 |
6539 |
|
72% |
6668 |
6650 |
C592 |
6584 |
6577 |
6567 |
6550 |
|
721/2 |
6680 |
6662 |
6603 |
6595 |
6588 |
6578 |
6562 |
|
72% |
6691 |
6673 |
6614 |
6606 |
6600 |
6590 |
6573 |
|
72% |
6703 |
6685 |
6626 |
6618 |
6611 |
6601 |
6584 |
|
72 ys |
6714 |
6696 |
6637 |
6629 |
6623 |
6612 |
6596 |
|
7300 |
6726 |
6708 |
6649 |
6641 |
6634 |
6624 |
6607 |
|
73% |
6737 |
6719 |
6660 |
6652 |
6645 |
6635 |
6618 |
|
731/4 |
6749 |
6731 |
6671 |
6663 |
6657 |
6646 |
6630 |
|
73% |
6760 |
6742 |
6683 |
6675 |
6668 |
6658 |
6641 |
|
73 Ya |
6772 |
6754 |
6694 |
6686 |
6679 |
6669 |
6652 |
|
73% |
6783 |
6765 |
6706 |
6697 |
6691 |
6681 |
6664 |
|
73% |
6795 |
6777 |
6717 |
6709 |
6702 |
6692 |
6675 |
|
73% |
6806 |
6788 |
6728 |
6720 |
6713 |
6703 |
6686 |
|
7400 |
6818 |
6800 |
6740 |
6732 |
6725 |
6715 |
6698 |
|
74% |
6829 |
6811 |
6751 |
6743 |
6736 |
6726 |
6709 |
|
74 1^ |
6841 |
6823 |
6762 |
6754 |
6748 |
6737 |
6720 |
|
74% |
6852 |
6834 |
6774 |
6766 |
6759 |
6749 |
6731 |
|
74% |
6864 |
6845 |
6785 |
6777 |
6770 |
6760 |
6743 |
|
74% |
6876 |
6857 |
6797 |
6788 |
6782 |
6771 |
6754 |
|
74% |
6887 |
6868 |
6808 |
6800 |
6793 |
6783 |
6765 |
|
74% |
6899 |
6880 |
6819 |
6811 |
6804 |
6794 |
6777 |
|
7500 |
6910 |
6891 |
6831 |
6823 |
6816 |
6805 |
6788 |
|
75% |
6922 |
6903 |
6842 |
6834 |
6827 |
6817 |
6800 |
|
751/4 |
6933 |
6914 |
6854 |
6845 |
6838 |
6828 |
6811 |
|
75% |
6945 |
6926 |
6865 |
6857 |
6850 |
6839 |
6822 |
|
751/2 |
6956 |
6937 |
6876 |
6868 |
6861 |
6851 |
6833 |
|
75% |
6968 |
6949 |
6888 |
6879 |
6872 |
6862 |
6845 |
|
75% |
6979 |
6960 |
6900 |
6891 |
6884 |
6873 |
6856 |
|
75% |
6991 |
6972 |
6910 |
6902 |
6895 |
6885 |
6867 |
|
7600 |
7002 |
6983 |
6922 |
6914 |
6907 |
6896 |
6879 |
|
76% |
7014 |
6995 |
6933 |
6925 |
6918 |
6907 |
6890 |
|
76% |
7025 |
7007 |
6945 |
6936 |
6929 |
6919 |
6901 |
|
76% |
7037 |
7018 |
6956 |
6948 |
6941 |
6930 |
6913 |
|
7&1/2 |
7048 |
7029 |
6967 |
6959 |
6952 |
6941 |
6924 |
|
76% |
7060 |
7041 |
0979 |
6970 |
6963 |
6953 |
6935 |
|
76% |
7071 |
7052 |
6990 |
6982 |
6975 |
6964 |
6946 |
|
76% |
7083 |
7064 |
7002 |
6993 |
6986 |
6975 |
0958 |
|
7700 |
7094 |
7075 |
7013 |
7004 |
6997 |
6987 |
6969 |
|
77% |
7106 |
7087 |
7024 |
7016 |
7009 |
6998 |
6980 |
|
77% |
7117 |
7098 |
7036 |
7027 |
7020 |
7009 |
6992 |
|
77% |
7129 |
7110 |
7047 |
7039 |
7031 |
7021 |
7003 |
|
7 7 1/2 |
7140 |
7121 |
7058 |
7050 |
7043 |
7032 |
7014 |
|
77% |
7152 |
7133 |
7070 |
7061 |
7054 |
7043 |
7026 |
|
77% |
7163 |
7144 |
7081 |
7073 |
7066 |
7055 |
7037 |
|
77% |
7175 |
7156 |
7093 |
7084 |
7077 |
7066 |
7048 |
|
7800 |
7186 |
7167 |
7104 |
7095 |
7088 |
7078 |
7060 |
|
78% |
7198 |
7179 |
7115 |
7107 |
7100 |
7089 |
7071 |
|
78% |
7209 |
7191 |
7127 |
7118 |
7111 |
7100 |
7082 |
|
78% |
7221 |
7202 |
7138 |
7130 |
7122 |
7112 |
7094 |
24
THE CURRENCIES OF CHINA
|
Shanghai Tael — Dollar — Sil\-er P |
\RITIES |
||||||
|
111 |
Shanehai |
Taelsz |
= 100 Cai |
iton Weight |
|||
|
Cents |
Par |
82.78 Canton Wei |
ght=100 Ounces Troy 999 Fine |
||||
|
per |
@ |
Deducti |
ng Shipping Ch |
arges : |
|||
|
Tael |
111.30 |
(r? Ill |
.85% |
1% |
1.107c |
1 Vi 7o |
1%% |
|
~78^^ |
7233~ |
7213 |
7150 |
7141 |
7134 |
7123 |
7105 |
|
78% |
7244 |
7225 |
7161 |
7152 |
7145 |
7134 |
7116 |
|
78% |
7256 |
7236 |
7172 |
7164 |
7156 |
7146 |
7127 |
|
78% |
7267 |
7247 |
7184 |
7175 |
7168 |
7157 |
7139 |
|
7900 |
7279 |
7259 |
7195 |
7186 |
7179 |
7168 |
7150 |
|
79 Vs |
7290 |
7270 |
7206 |
7198 |
7190 |
7180 |
7161 |
|
79^.4 |
7302 |
7282 |
7218 |
7209 |
7202 |
7191 |
7173 |
|
79% |
7313 |
7293 |
7229 |
7220 |
7213 |
7202 |
7184 |
|
791/2 |
7325 |
7305 |
7241 |
7232 |
7225 |
7214 |
7196 |
|
79% |
7336 |
7316 |
7252 |
7243 |
7236 |
7225 |
7207 |
|
79% |
7348 |
7328 |
7263 |
7255 |
7247 |
7236 |
7218 |
|
79% |
7359 |
7339 |
7275 |
7266 |
7259 |
7248 |
7229 |
|
8000 |
7371 |
7351 |
7286 |
7277 |
7270 |
7259 |
7241 |
|
80% |
7382 |
7362 |
7298 |
7289 |
7281 |
7270 |
7252 |
|
80 ¥4 |
7394 |
7374 |
7309 |
7300 |
7293 |
7282 |
7263 |
|
80% |
7405 |
7385 |
7320 |
7311 |
7304 |
7293 |
7275 |
|
80% |
7417 |
7397 |
7332 |
7323 |
7315 |
7304 |
7286 |
|
80% |
7428 |
7408 |
7343 |
7334 |
7327 |
7316 |
7297 |
|
80% |
7440 |
7420 |
7354 |
7346 |
7338 |
7327 |
7308 |
|
80% |
7451 |
7441 |
7366 |
7357 |
7350 |
7338 |
7320 |
|
8100 |
7463 |
7443 |
7377 |
7368 |
7361 |
7350 |
7331 |
|
81% |
7474 |
7454 |
7389 |
7380 |
7372 |
7361 |
7342 |
|
811/4 |
7486 |
7466 |
7400 |
7391 |
7384 |
7373 |
7354 |
|
81% |
7497 |
7477 |
7411 |
7402 |
7395 |
7384 |
7365 |
|
81% |
7509 |
7489 |
7423 |
7414 |
7406 |
7395 |
7376 |
|
81% |
7520 |
7500 |
7434 |
7425 |
7418 |
7406 |
7388 |
|
81% |
7532 |
7512 |
7446 |
7437 |
7429 |
7418 |
7399 |
|
81% |
7543 |
7523 |
7457 |
7448 |
7440 |
7429 |
7410 |
|
8200 |
7555 |
7535 |
7468 |
7459 |
7452 |
7440 |
7422 |
|
82% |
7567 |
7546 |
7480 |
7471 |
7463 |
7452 |
7433 |
|
82% |
7578 |
7558 |
7491 |
7482 |
7474 |
7463 |
7444 |
|
82% |
7590 |
7569 |
7502 |
7493 |
7486 |
7474 |
7456 |
|
82% |
7601 |
7581 |
7514 |
7505 |
7497 |
7486 |
7467 |
|
82% |
7613 |
7592 |
7525 |
7516 |
7509 |
7497 |
7478 |
|
82% |
7624 |
7604 |
7537 |
7528 |
7520 |
7509 |
7489 |
|
82% |
7636 |
7615 |
7548 |
7539 |
7531 |
7520 |
7501 |
|
8300 |
7647 |
7627 |
7559 |
7550 |
7543 |
7531 |
7512 |
|
83% |
7659 |
7638 |
7571 |
7562 |
7554 |
7543 |
7523 |
|
831/4 |
7670 |
7649 |
7582 |
7573 |
7565 |
7554 |
7535 |
|
83% |
7682 |
7661 |
7594 |
7584 |
7577 |
7565 |
7546 |
|
83% |
7693 |
7672 |
7605 |
7596 |
7588 |
7577 |
7557 |
|
83% |
7705 |
7684 |
7616 |
7607 |
7600 |
7588 |
7569 |
|
83% |
7716 |
7695 |
7628 |
7618 |
7611 |
7600 |
7580 |
|
83% |
7728 |
7707 |
7639 |
7630 |
7622 |
7611 |
7591 |
|
8400 |
7739 |
7718 |
7650 |
7641 |
7634 |
7622 |
7603 |
|
84% |
7751 |
7730 |
7662 |
7653 |
7645 |
7633 |
7614 |
|
84% |
7762 |
7741 |
7673 |
7664 |
7656 |
7645 |
7625 |
|
84% |
7774 |
7753 |
7685 |
7675 |
7668 |
7656 |
7637 |
|
84% |
7785 |
7764 |
7696 |
7687 |
7679 |
7667 |
7648 |
|
85% |
7797 |
7776 |
7707 |
7698 |
7690 |
7679 |
7659 |
|
84% |
7808 |
7787 |
7719 |
7709 |
7702 |
7690 |
7671 |
|
84% |
7820 |
7799 |
7730 |
7721 |
7713 |
7701 |
7682 |
|
8500 |
7831 |
7810 |
7742 |
7732 |
7724 |
7713 |
7693 |
BAR SILVER AND CHINA
25
Bar Silver from London.
Facts and Figures.
Until the outbreak of the World War, London was the only market of importance for bar silver. During a certain period of the war exports of silver from England had to be discontinued. As New York was well able to take care of the silver market, matters developed rapidly, and since that time New York has not only held its own, but conjointly with San Francisco, has taken the lead.
The world's production of silver was:
In 1925 .... 240,000,000 ounces ^
|
„ 1924 . . |
. . 239,100,000 |
|
„ 1923 . . |
. . 242,418,000 |
|
„ 1922 . . |
. . 213,542,000 |
|
„ 1921 . . |
. . 171,286,000 |
|
„ 1920 . . |
. . 174,213,000 |
Since the beginning of the current century, i.e., during the years 1901 to 1925, the total of the world's silver pro- duction amounted to 4,864,471,000 ounces, which means an annual average of 194,580,000 ounces, for the first 25 years of the twentieth century.
Distributed as to the sources of production the averages for the same period are as follows (in million of ounces fine) :
United States 61.1
Mexico 63.8
Canada 18.6
South America 16.3
Total for the Americas . 159.8
Australasia 12.3
Other countries 22.4
Total average world's production . 194.5 million ounces.
The world's production of silver, divided as to percent- ages of producing countries, shows the following averages
1 Estimated.
26
THE CURRENCIES OF CHINA
for the years 1901 to 1925 inclusive:
United States 31.60%
Mexico 32.40%
Canada 9.60%
South America 8.40%
Total for the Americas . 82.00%
Australasia 6.40%
Other countries 11.60%
Total
. 100.00%
Practically all of America's silver production is now being sold in the United States. India and China, since 1923, are taking the bulk of their requirements from the United States direct, instead of from England, as was done formerly.
The figures contained in the following tables are meant to illustrate our statement.
(a) Export of bar silver from London to the Orient.
|
To China. |
To India. |
|||||
|
1916 .... £ 69,000 |
£4,799,0001 |
|||||
|
1917 . |
. . £ — |
£ |
-World War. |
|||
|
1918 . |
. . £ — |
£ — |
||||
|
1919 . |
. . £ 725,000 |
£ |
— |
|||
|
1920 . |
. . £4,928,000 |
£4,057,000 |
||||
|
1921 . |
. . £3,558,000 |
£6,368,000 |
||||
|
1922 . |
. . £3,320,000 |
£7,085 |
000 |
|||
|
1923 . |
. . £2,058,000 |
£8,562 |
000 |
|||
|
1924 . |
. . £ 368,000 |
£4,446,000 |
||||
|
1925 . |
. . £ 927,000 |
£5,012 |
000 |
|||
|
(b) Imports to and Exports from London o] |
*■ bar silver in troy |
|||||
|
ounces. |
||||||
|
Imports. 192i |
1925 |
|||||
|
United States .... 53,250,000 |
ounces |
29,859,000 ounces |
||||
|
Netherlands |
1,523,000 |
j> |
1,697,000 „ |
|||
|
Canada |
4,418,000 |
>> |
1,811,000 „ |
|||
|
Mexico . |
— |
14,885,000 „ |
||||
|
Russia . |
7,881,000 |
,, |
2,453,000 |
|||
|
Belgium |
1,387,000 |
„ |
1,671,000 „ |
|||
|
France . |
2,420,000 |
» |
6,881,000 „ |
|||
|
Other Countries . |
4,914,000 |
» |
3,688,000 „ |
|||
|
75,793,000 |
62,945,000 „ |
BAR SILVER AND CHINA
27
Exports. i92!t
British India .... 29,475,000 ounces
China 2,459,000 „
Russia 19,787,000 „
France 3,424,000 „
Germany —
Other Countries . . . 12,260,000 „
67,405,000 „
1925 34,706,000 ounces
6,493,000
5,240,000
3,798,000 11,409,000
9,250,000
70,896,000
(c) Direct silver exports from the United States.
(To London and to the Orient.)
To To To China &
London India Hong Kong
1913 $41,596,000 $ 1,418,000 $ 1,114,000
1922 $10,685,000 $11,972,000 $33,077,000
1923 $ 6,319,000 $23,721,000 $38,310,000
1924 $23,421,000 $54,119,000 $24,233,000
1925' $ 8,302,000 $42,375,000 $30,522,000
(d) Import of bar silver into Shanghai.
He-shipments Year From From from India, Total
United States London Japan, Hong Kong
1925 . . 43,000 bars 12,000 bars' 8,100 bars 63,100 bars
1924 . . 31,800 „ 10,600 „ 2,300 „ 44,700 „
1923 . . 50,200 „ 14,800 „ 6,400 „ 71,400 „
1922 . . 23,100 „ 17,500 „ 200 „ 40,800 „
Total . 148,100 „ 54,900 „ 17,000 „ 220,000 „
In spite of these facts the London silver market undoubtedly retains a good deal of its old glory and importance. It has served as a basis for quotations in silver-using countries for many decennaries, and it continues to exercise this function, notwithstanding the limitation of supplies and the occasional fluctuations in the value of the pound sterling.
The London Bar Silver Market.
Silver bars have the shape of bricks and weigh usually from 30% to 37 kilograms, i.e., 980 to 1,190 ounces troy.
^ For the first 11 months.
28 THE CURRENCIES OF CHINA
This description is applicable to English as well as American bar silver.
English bars, destined for export abroad, are 0.998 and 0.999 fine, but bars of a fineness of 0.996 and 0.997 are admissible and do occur, though in small proportions only.
The British standard for silver is 0.925, which means that in 240 parts of alloy 222 parts of pure silver are contained.
222 37
—- = ^ or 0.925.
240 40
As bar silver exported from London to China and India is usually 0.998 fine, it is 171/2 better than the English standard.
240 ~" 240 -"•^^^•
Bar silver is a comniodity in London, and its price subject to the proportion of demand to supply. All official transactions have to pass through one of the four old- established firms of bullion brokers who meet daily, in order to fix silver quotations in harmony with orders on hand.
There are two official silver quotations issued in London; one for spot delivery (which means within 7 days) and one for 2 months from date of making the contract. But unofficially it can be arranged that delivery is made at any particular day within 2 months, at a price to be specially arranged.
As there is a difference of 8 hours in time between Shanghai and London (Shanghai being earlier), China can only operate on London's quotations of the previous day.
Every bar of silver is clearly marked, so as to be easily identified. It shows the weight (within i/4 ounce), the
BAR SILVER AND CHINA 29
fineness, initials and numbers. It is accompanied by a chip (about ^i ounce in weight) and a testimony of assay. There are only four firms of silver brokers guiding the London silver market. All of them are old-established, of excellent standing and enjoying the confidence of all parties interested in silver transactions. These firms are: Messrs. Mocatta & Goldsmid ; Pixley & Abel ; Samuel, Montague & Co. and Sharps & Wilkins. They meet daily for the purpose of "fixing" the official price of bar silver. As a rule the four representatives of the firms of silver brokers will merely disclose the balance of their orders to be bought or sold, and not the totals. On the basis of those balances the official quotations are " fixed " daily at 1.45 p.m.
In order to safeguard the confidence placed in the assay of London silver all bars are assayed by one of the 4 official assayers of the Bank of England, and the Royal Mint, respectively, whose findings are indisputable. The following are the names of the four firms of official assayers: Messrs. Johnson & Sons, D. C. Griffith & Co., F. C. Claudet, and Johnson, Matthey & Co.
English Bar Silver Shipped to China.
English bar silver is bought by China either for export to this latter country or for forward delivery as cover for a purchase of sterling drafts or T.T., with the idea to reverse the transaction as soon as the parity will permit.
The import of bar silver into China serves entirely currency purposes, which means that the silver is melted after arrival in this country and then converted into sycee taels, or dollars, or subsidiary coins. Here is a copy of an invoice relating to a shipment of bar silver from London to Shanghai.
Invoice of 279 silver bars marked X.Y.Z. shipped per s.s. " "to Shanghai, optional Hong Kong.
30 THE CURRENCIES OF CHINA
Shanghai.
(Various numbers as per weight list herewith.)
Ounces 300/^55.50
ounces 284,830.50 .999 ounces standard 307,016.94 8,315.75 .998 „ „ 8,972.02
7,309.25 .997 „ „ 7,878.19
300,455.50 „ „ 324,467.15
Ounces Standard 32^,^67.15
12/11/1924.] at 33% pence . £45,459. 4. 0
Commission %% . . . . 56.16. 6
£45,516. 0. 6
Freight, £45,500 at %% . . . . 284. 7. 6
Dock Dues 3.15.10
Bill/Lading 2. 6
Insurance £48,300 at 2s. /(i% . . 48. 6. 0
Policy Duty .2
Marking, etc 13.19. 0
Value 12/1/1925 £45,866.11 6
E. & O. E. London, 16th January, 1925.
Contrary to established usage in America the brokerage on bar silver, amounting to %%, is payable by the buyer.
Other charges fluctuate. So, for example, has the freight from London to China been reduced in September 1924, from %% to %%, in order to be better able to compete with New York.
Insurance is now 1 per mille. Dock charges, marking, etc., at London and landing charges at Shanghai may be put at 14%.
Interest varies greatly and depends not only on the state of the money market, but also on the ability of the importer to finance the shipment (until arrival at Shang- hai) by means of sterling or by means of taels. In the former case the rate of interest will be much lower, as
BAR SILVER AND CHINA 31
money at Shanghai commands usually much higher rates of interest.
Bar silver is bought and sold in London in gross ounces, but quotations are in standard ounces (0.925 fine). One can have orders executed in standard ounces just as well, but this would have to be distinctly stated when placing the order. " Buy 100,000 ounces spot delivery, at best," means 100,000 ounces troy. Orders may also be placed for a specified amount in sterling: "Buy at a limit of . . .d., £25,000 bar silver, forward delivery."
Conversion of English Bar Silver into Shanghai Taels.
As already stated English bar silver imported into Shanghai is usually 0.998 and 0.999 fine, but some bars show a fineness of 0.997 and 0.996 only.
The smelting shops at Shanghai have agreed to return for each 100 Canton taels weight of bar silver 110.90 Shanghai taels currency, provided the fineness is 0.998.
For bars 0.997 fine the return will be Shanghai taels 110.80 (currency). For bars of a fineness of 0.996 the return will be 110.70 Shanghai taels currency.
There are two questions immediately connected with the conversion of bar silver into sycee taels: Firstly, how many Shanghai taels currency are 100,000 troy ounces of bar silver, 0.998 fine?
Formula 3.
? Shanghai taels = 100,000 ounces silver, 0.998 fine
1.208 ounces = 1 Canton tael weight
100 Canton taels weight of = 110.90 Shanghai taels (currency) bar silver, 0.998 fine
100,000 X 0.998 X 110.90
1.208 X 100 X 0.998 = 91,80iM Shanghai taels.
The second problem, which is of more importance, resolves itself in establishing a basis for the parity of the pound sterling and the Shanghai tael.
32 THE CURRENCIES OF CHINA
The constant derived from the following formulae, multiplied by the London price per ounce standard of bar silver, will give the theoretical par between London and Shanghai. The addition of charges and interest will produce the actual parity between the Shanghai tael and the pound. Charges fluctuate and may be considered (until further notice) to consist of the following items:
Freight— London-Shanghai 0.625%
Insurance 0.100%
Dock charges, marking, landing .... 0.250%
London brokerage 0.125%
1.10 %
Interest for 45 days to be added according to the rate at which one is willing to invest funds, or at which one can borrow money.
The origin of most of the links in the chain constituting the following formulae are plain, except perhaps the presence of the Canton tael weight. The reason why the Canton tael is introduced into our calculations is that, when foreign banks first entered the field at Shanghai, they brought along with them Cantonese Compradores, who were accustomed to the Canton tael weight. To this day the original standard has been maintained.
Another link in the chain probably needs elucidation, namely why 100 Canton taels weight of bar silver, 0.998 fine, equals 110.90 Shanghai taels currency. For some decades the constant has been 111.20 Shanghai taels, and only on the plea of higher workmen's wages and dearer coal prices the Shanghai smelters have created, in 1920, the reduced constant of 110.90. The original figure of 111.20 has the following origin:
In Shanghai bar silver is weighed by the Canton tael weight, which is converted into Chauping taels weight. When selling sycee the Chinese reckon 100 Canton taels
BAR SILVER AND CHINA 33
= 102.5 Chauping taels weight; when buying sycee they reckon only 102.4 Chauping taels = 100 Canton taels.
Formula 4.
? Shanghai taels currency = 100 Canton taels weight
100 Canton taels weight = 102.4 Chauping taels weight
930 Chauping taels weight = 1,000 Shanghai taels currency
X = 110.10 Add: 1% premium for fineness = 1.10
Shanghai taels = 111.20
The relation of 930 Chauping taels weight to 1,000 Shanghai taels currency represents sycee of a fineness of 0.98565.
As stated already the Shanghai smelters will pay 110.90 Shanghai taels for every 100 Canton taels weight of silver 0.998 fine. Sometimes provincial Mints will offer higher rates, as much as 111.50 taels. In such an event the premium has to be considered in the calculation.
The following are four formulae, built up somewhat differently, but identical in their results :
Formula 5.
? pence = 1 Shanghai tael currency
110.90 Shanghai taels = 100 Canton taels weight
1 Canton tael weight = 1.208 ounces, 0.998 fine
1 ounce, 0.925 fine = London price in pence
100 X 1.208 X 0.998 _
110.90 X 0.925 " ^-^^^^-^^
Formula 6.
? pence = 1 Shanghai tael currency
110.90 Shanghai taels = 100 Canton taels weight
82.7815 Canton taels = 100 ounces troy 100 ounces troy (of 17y2
betterness) = 107.8829 ounces standard
1 ounce standard = London price in pence
100x100x107.8829 ^ ....o- 110.90 X 82.7815 x 100 ~ ■'""•^^•^'^
34 THE CURRENCIES OF CHINA
Formula 7.
? pence = 1 Shanghai tael currency
110.90 Shanghai taels = 100 Canton taels weight
1 Canton tael weight = 579.84 grains
222 grains (of ll\-i betterness) = 239^2 grains standard silver
480 grains = 1 ounce
1 ounce = London price in pence
100 X 579.84 X 239.5 _ ^ ^75^35 110.90 X 222 X 480 ~ ■
Formula 8.
? pence = 1 Shanghai tael currency
110.90 Shanghai taels — 100 Canton taels weight
1 Canton tael weight = 579.84 grains
480 grains = 1 ounce, 0.998 fine
222 ounces fine = 240 ounces standard
1 ounce standard = London price in pence
100 X 579.84 X 0.998 x 240 _ ^ ^7533^ 110.90 X 480 X 222
The constant is 1.175. — Say the price of bar silver in London per ounce standard is 35%c?. for spot delivery: —
Multiply by the constant of 1.175. 35,625 X 1.175 = 41.859375d.
Add charges l.l'^c (variable) 0.460453c?.
„ interest for 45 days, 4% (variable) .... 0.231472d.
Parity . . 42.5513 d. for 1 Shanghai tael, or 3s./6fcd.
If, for example, T.T. on London is obtainable in Shang- hai at 3s. /7d. for ready delivery, it will be remunerative to buy T.T. in Shanghai, remit to London and purchase bar silver there for ready shipment. If, on the other hand, T.T. on London can be sold at Shanghai below the parity just demonstrated (3s./6%6^-)» say at 35./6d. for forward delivery, it will prove remunerative to sell sterling at Shanghai and cover by selling simultaneously silver in London, for forward delivery.
This means that if the rate for telegraphic transfer is above parity of bar silver, it induces purchase of silver in
BAR SILVER AND CHINA 35
London (import into China). If below parity, it favors sale of silver in London (export of silver from Shanghai).
It has been asserted that the Shanghai Loofangs have fixed the proceeds of bar silver according to the following scale :
Silver 0.999 fine will yield Shanghai taels 111.00 for 100 Canton taels.
Silver 0.998 fine will yield Shanghai taels 110.90 for 100 Canton taels.
These figures mean a reduction from the previous stand- ard, which used to be 111.30 and 111.20 taels respectively. In view of the fact that the provincial Mints have con- tinued to acquire bar silver at the original prices (and even higher), the Shanghai Loofangs have been forced to go back to the old limits, at least on occasions. This means that one has to bargain with the smelting shops (which are not controlled by the Government). If there are small stocks of bar silver at Shanghai and compara- tively many buyers, the Loofangs will have to revert to the old figures. If, however, stocks of bar silver are in excess of Mint requirements, the smelters will return no more than 111 and 110.90 Shanghai taels currency for 100 Canton taels weight.
It is essential to bear these eventualities in mind when making calculations and working on a " constant," which may easily prove to be rather fickle.
In summarising it may be stated that, if the smelters will return proceeds in Shanghai taels, for every 100 Canton taels weight of bar silver, the constant will be as follows :
|
Proceeds |
Constant |
|
|
Shanghai taels. |
with charges. ivi |
thout charges. |
|
110.90 |
1.188 |
1.175 |
|
111.00 |
1.187 |
1.174 |
|
111.10 |
1.186 |
1.173 |
|
111.20 |
1.185 |
1.172 |
|
111.25 |
1.184 |
1.1714 |
36 THE CURRENCIES OF CHINA
The charges are taken at 1.1%, but no provision has been made for interest.
Import of Bar Silver from France.
France is neither a silver-producing country, nor a market for bar silver. These facts did not prevent the said country from exporting, in 1920, considerable quan- tities of bar silver to China and to London. The source of the supply was French five-franc pieces, melted down and sold in bars, 0.900 fine. The principal reason which induced the Government to turn a seller of bar silver was the exceptionally high price which was then prevailing in the world's silver markets. Probably econoinic causes were also forming a lever towards the policy of selling silver.
The French five-franc piece is 0.900 fine and weighs 25 grams gross, or 22.5 grams fine silver. It is legal tender up to any amount.
The silver could not very well be shipped from France in its original shape of coins, owing to the fact that these had lost in w^eight through wear and tear, and also because of the legally permitted shortage under the style of remediiim. Therefore it was turned into bars before being shipped.
In England, French bar silver would be refined and remelted into bars 0.998 fine (for export to the Far East) or it would be turned into British standard silver (0.925 fine). The parity price of French and English standard silver can be established by means of
Formula 9.
? francs = 1,000 grams pure silver
31.1035 grams = 1 ounce
925 ounces = 1,000 ounces standard price
1 ounce = London quotation in pence
240 pence = francs cross-rate in £
London silver price X cheque cross-rate 6,905
BAR SILVER AND CHINA 37
In Shanghai, French bar silver will have to be refined and a good deal of alloy will have to be extracted before it can be converted into Shanghai sycee. This extra labor explains why the smelting shops at Shanghai will return for French bar silver, 0.900 fine, for every 100,000 ounces troy, only Shanghai taels 81,950, as compared with United States silver, 0.999 fine, Shanghai taels 91,887.27, and compared with English silver, 0.998 fine, Shanghai taels 91,804.04.
N.B. — Bear in mind what has been said regarding the temporary increase of these prices, when the demand for bar silver is large in Shanghai.
Formula 10.
? francs = 1 Shanghai tael currency
81.95 Shanghai taels = 100 ounces troy silver, 0.900 fine
32.1507 ounces troy = 1 kilogram
1 kilogram (1,000 fine) = Paris price for silver
100X0.900 ^,^Q^^,^8
81.95 X 32.1507
Multiply the constant of 0.034158 by the price of bar silver per kilogram at Paris, in order to obtain the Shanghai parity for T.T. on France. Add charges and interest.
Charges fluctuate and may be considered on the follow- ing lines:
Railway freight Paris-Marseilles about . . 0.550% Freight Marseilles-Shanghai . „ . . 1.200% Insurance „ . . 0.250%
Total . . 2.00 % Interest 60 days at 6% 1.00 %
Total expense 3. %
Outturn of a shipment of French bar silver, derived from melted five-franc poins, 0.990 fine.
38 THE CURRENCIES OF CHINA
169 bars of silver, weighing 5,000 kilograms
at say francs 360 per kilogram . . . = francs 1,800,000
Add charges 2% „ 36,000
„ interest 60 days at 6% „ 18,000
Total cost „ 1,854,000
Converted in Shanghai into sycee :
5,000 kilograms silver are 160,753.50 ounces troy, at taels 81.95 per 100
ounces Shanghai taels 131,737.49
Less: Wharfage dues taels 75.00
„ Compradore's commission . . „ 65.54
„ Coolie hire „ 10.00
150.54
Net proceeds . Shanghai taels 131,586.95 1,854,000 ^ 131,587 = francs U.09 parity per Shanghai tael.
Import of Bar Silver from British India.
The quotation for bar silver in India is in rupees for 100 tolas. 1 tola = 180 grains = %ths of one ounce or 11.66 grams; this means that 8 tolas equal 3 ounces troy.
Whenever Bombay exports bar silver to Shanghai, which is rarely enough the case, it becomes merely a question of arbitrage. India is not a silver-producing country, and the bar silver possibly finding its way into Shanghai from there is of American (0.999) or English origin (0.998).
In importing bar silver from Bombay, payment by Shanghai is to be rendered in rupees by cable transfer. The whole question therefore resolves itself as to whether or not the remitting rate to India in Shanghai is above silver parity. In order to test this, we refer to
BAR SILVER AND CHINA 39
Formula 11. ? rupees =100 Shanghai taels currency
110.90 Shanghai taels = 100 Canton taels weight
82.7815 Canton taels = ICO ounces
3 ounces = 8 tolas
100 tolas = Price of silver in rupees
100 X 100 X 100 X 8 cnnr'T * *
= 2.90'i7 as constant.
110.90 X 82.7815 x 3 x 100
Multiply same by the price of bar silver in Bombay in order to find the parity for cable transfer on India at Shanghai. Add charges and interest (variable). The price of bar silver (0.998) at Bombay is say 92 rupees per tola:
2.9047 X 92 = 267.23 rupees
Mint par works out at rupees 267.23
Add %% charges and insurance, say . „ 2.00
„ interest for 30 d/s at 6%, say . . „ 1.35
Total cost „ 270.58
It will pay to import bar silver from Bombay to Shanghai, at rupees 92 per tola, if one can obtain T.T. in cover at a rate above rupees 270.58.
Here is a practical example: Shanghai buys in India 800 bars of silver for delivery on settlement day in about a month. Each bar, for purposes of making the contract, is supposed to weigh 1,050 ounces troy and to be of a fineness of 0.998. The silver is acquired at varying prices, as follows:
200 bars = 560,000 tolas @ rupees 90.11.00 = rupees 507,850 100 „ = 280,000 „ @ „ 91.00.00 = „ 254,800 500 „ = 1,400,000 „ @ „ 91. 3.00 = „ 1,276,625
800 „ = 2,240,000 „ = „ 2,039,275
2,240,000 tolas = 840,000 ounces troy; at 91,804.64 per 100 ounces = Shanghai taels 771,158.98.
This means rupees 208.679 for 100 Shanghai taels. Brokerage and Bombay agents' commission to be added. If the parity permits, the transaction will be reversed before settlem.ent day. If the silver is to be shipped on
40
THE CURRENCIES OF CHINA
to Shanghai, charges and interest will have to be added to the cost in rupees. Compare with the T.T. rupees remitting rate in order to determine the rentability.
Merely for the purpose of three-cornered arbitrage the following formulae are hereby quoted as supplied by Messrs. Kracht & Murphy:
EXAMPLES OF SILVER PARITIES:
Between INDIA and NEW YORK
? cents = 1 ounce 999 fine
3 ounces fine = 8 tolas fine 100 tolas = 77-12-0 rupees
1 rupee = 30.90 cents
Between NEW YORK and INDIA
•? rupees =100 tolas fine
8 tolas fine = 3 ounces fine
1 ounce 999 fine = 64 cents 30.90 cents = 1 rupee
rupees 77-1230
? rupees =100 tolas fine
8 tolas fine = 3 ounces fine
1 ounce 999 fine = 64 cents 460 cents = 240 pence
16 pence = 1 rupee
rupees 78-5-5
? rupees = 100 tolas fine
8 tolas fine = 3 ounces fine
999 ounces fine = 1000 ounces
999 fine 1 ounce 999 fine = 64 cents 48.80 cents = 100 yen
100 yen
= 158.50 rupees
rupees 78-0-6
64 cents (per ounce 999 fine)
? cents = 1 ounce 999 fine
3 ounces fine = 8 tolas fine 100 tolas fine = 78-5-5 rupees 1 rupee = 16 pence
240 pence = 460 cents 6i.009 cents
? cents = 1 ounce 999 fine
1000 ounces
999 fine = 999 ounces fine 3 ounces fine = 8 tolas fine 100 tolas fine = 78-0-6 rupees 158.50 rupees= 100 yen 100 yen = 48.80 cents
6^.00 cents
Approximate cost for import from New York to India:
Freight on direct steamer New York-Bombay .... 0.50%
Insurance 15%
Buying brokerage, paid by seller and therefore included
in buying price l/16th cent Cartage, storage (can be saved at times) Bill/Lading . . .05% Bank's shipping commission in New York 06%
Transit time New York-Bombay direct: 32-40 days. Interest @ 5% for 36 days
0.76%
.51%
1.27%
Plus landing charges in Bombay.
BAR SILVER AND CHINA 41
Naturally, some of the above figures have to be altered according to conditions actually prevailing. This refers notably to the cross rates, which form part of the above examples.
With the same idea the following examples re London- Bombay parity are hereby quoted:
Formula 12.
? rupees = 100 tolas silver, 0.998 fine
8 tolas = 3 ounces
1 ounce, 0.925 fine = Price in pence per rupee
100 X 0.998 X 3
8 X 0.925
= iOA59 as constant.
In order to obtain the London-Bombay cross rate, multiply the constant by the silver price in London and divide the product by the Indian price for bar silver. Add charges and interest (variable).
Example: Constant 40.459
Charges and interest say . . .541
41.00
London price of bar silver per ounce standard 35 pence. Bombay price 82 rupees per 100 tolas.
41 X 35 .»,,
— — — = 17 V2 pence per rupee. 82
Indian parity is:
j^ London silver price Bombay silver price.
Formula 13.
? pence = 1 ounce silver, 0.925 fine
3 ounces = 8 tolas
1 tola, 0.998 fine = Bombay silver price in rupees
1 rupee = X pence
^•^^^ ^ ^ =z 0.2^7/6 as constant. 3 X 0.998
42 THE CURRENCIES OF CHINA
Multiply the constant (after deducting charges and interest — variable) by the Bombay-London T.T. rate and multiply the product by the Bombay silver price, in order to obtain the London-Bombay bar silver parity.
Say London-Bombay is Is./Qd., and the price per 100 tolas of silver is rupees 70:
|
Consi Less : |
tant Charges |
and |
interest, |
say . |
. 0.24716 . 0.00216 |
|
0.245 |
18 X 70 X 0.245 = 30.87 pence per ounce standard silver.
The Indian Bar Silver Market.
British India is by far the largest user of bar silver, which is exported there from America, London and, by way of re-shipment, from China. It will, therefore, be justified to insert here a short description of conditions prevailing on the Indian silver markets. Bombay is the most important place for dealings in silver; next in im- portance comes Calcutta. Silver is imported into India by the foreign banks established there; in the majority of cases for account of the Indian buyer, at a price fixed before shipment from New York or London.
Direct shipments to India totalled about:
From United States. From England.
1924 . . 81,000,000 ounces, as compared with 27,000,000 ounces
1925 . . 68,000,000 „ , „ „ 34,000,000 „
The large Indian bullion merchants are styled " Chok- seys." In Bombay they practically control the silver market ; there are only about twenty-five of them in existence. Closely allied with the Chokseys are the " Shroffs "; these are native bankers, acting as intermedi- aries between the Chokseys and the dealers situated in the interior of the countrJ^ The Shroffs work on a commission basis. Next in importance comes the crowd of professional speculators in silver, and finally the hundreds of silver brokers.
BAR SILVER AND CHINA 43
The monthly settlement day is five days after the full moon day. Bar silver 0.996 and higher is acceptable as good delivery. Purchases are made at so many rupees per 100 tolas, 0.998 fine; bars are supposed to weigh 2,800 tolas each, and any eventual difference in weight is adjusted on the basis of the quotation ruling at noon on settlement day. The Calcutta settlement follows three days after that in Bombay.
Hamburg Silver.
Bar silver destined for Chinese Turkestan is imported in small bars, owing to the immense difficulties of trans- port, and also on account of the necessity of its being handled and moved about by a population that is largely composed of nomads. Such silver is usually cast in small flat cakes, which weigh about 4% kilograms and which are 0.999 fine. They used to be cast in Hamburg (hence the name) and exported to Turkestan, either overland via Russia, or through China. Dealings in those bars require an exact knowledge of the cost of transport (inclusive of interest during a long journey), which means many factors of a changeable nature. As Hamburg silver would be handled in the majority of cases by banks situated in Russia, we give herewith particulars in connection with Russian requirements.
Formula li.
? roubles = 1 Russian pound of fine silver
1 Russian pound = 409.512 grams
1,000 grams = price of silver in Hamburg in
mark
100 mark = X roubles (sight rate Moscow-
Hamburg)
X = 409.512 X Hamburg silver price x Moscow-Hamburg cross-rate
1000 X 100
Charges and interest to be added.
In the book entitled North Manchuria and the Chinese Eastern Railway (Harbin, 1924), we find the following
44 THE CURRENCIES OF CHINA
vivid description of causes leading up to the use of " Hamburg silver."
As a rule larger sycee shoes are cut or hewn into smaller pieces when necessary for minor payments. A most complete and vivid picture of this process of minor payments made through the medium of silver ingots may be observed at the famous Hunchur Fair (in Barga), at which the largest trading transactions in cattle take place. The local government authorities arrange for the period of this fair a special smithy in a native hut, where full- weight silver ingots are being cut into smaller pieces. This hut is usually leased to an exchange shop for the entire period of the market, and this shop supervises the work performed there. The breaking up of the ingots is done by smiths on ordinary forges. The silver ingots are clenched by tongs, heated over the furnace, and thereafter small pieces of the necessary size are cleft off with a h"ammer. A part of the smith's remuneration is paid by the remaining waste of silver crumbs.
The form of the sycee, especially of the larger pieces, is ex- tremely unsuited for such work; in the majority of cases a piece of the necessary value is only obtained after a whole series of consecutive divisions of the piece originally cleft off. Therefore this process entails a considerable loss, owing to the fact that a large percentage of silver is lost in the shape of small crumbs. This is why the so-called Hamburg Silver in the shape of thin plates, resembling chocolate tablets, with incisions indicating fractions, became so very popular at the Hunchur Fair.
The silver was purchased by Russian merchants in Frankfurt on the Main, or in Hamburg. These two kinds of silver bullion differed by the size of the plates and their marks. The former bore the mark: — "Deutsche Gold-und Silber Scheide Anstalt vorm« Roessler, Frankfurt a/M," and the latter: — "Norddeutsche AflB- nerie, Hamburg;" this is why the silver bullion received the name of "Hamburg Silver."
Standarding.
Bar silver sold in London is usually 0.998 and 0.999 fine, but some bars are 0.997 fine and others 0.996. No bar silver is shipped to China and India, excepting these 4 grades.
The price of silver bought and sold in London is quoted per ounce standard, which means 925/lOOOths fine. The following figures are meant to serve as a rapid way of
BAR SILVER AND CHINA
45
converting bar silver of a fineness of 0.996 to 0.999 into silver 0.925 fine, i.e., from ounces fine (4 grades) into ounces standard.
Silver Standardlng Tables.
Fineness 0.996
Fineness 0.997
|
1 |
1.076756757 |
1 |
1.077837837 |
|
2 |
2.153513513 |
2 |
2.155675676 |
|
3 |
3.230270270 |
3 |
3.233513513 |
|
4 |
4.307027027 |
4 |
4.311351351 |
|
5 |
5.383783784 |
5 |
5.389189189 |
|
6 |
6.460540541 |
6 |
6.467027027 |
|
7 |
7.537297298 |
7 |
7.544864865 |
|
8 |
8.614054054 |
8 |
8.622702703 |
|
9 |
9.690810811 |
9 |
9.700540540 |
|
Fineness 0.998 |
Fineness 0.999 |
||
|
1 |
1.078918919 |
1 |
1.080000000 |
|
2 |
2.157837838 |
2 |
2.160000000 |
|
3 |
3.236756767 |
3 |
3.240000000 |
|
4 |
4.315675676 |
4 |
4.320000000 |
|
5 |
5.394594595 |
5 |
5.400000000 |
|
6 |
6.473613514 |
6 |
6.480000000 |
|
7 |
7.552432432 |
7 |
7.560000000 |
|
8 |
8.631351351 |
8 |
8.640000000 |
|
9 |
9.710270270 |
9 |
9.720000000 |
Example:
London has sold 120,000 ounces of bar silver at 351/2
pence per standard ounce and ships 109 bars to Shanghai,
invoiced as follows:
92 bars, ozs., troy 102,310.50 = 0.998 fine = oz. std. 110,384.773
13 „ „ 13,802.25 = 0.997 „ „ „ 14,876. 58
4 „ „ 4,018.70=0.996 „ „ „ 4,327. 16
109 bars, ozs., troy 120,131.45
oz. std. 129,588. 47
Standard ounces 129,588.47 @ 35y2d. = £19,168.5.10.
The foregoing example shows how bars of varying fineness are converted into standard ounces weight. All
46 THE CURRENCIES OF CHINA
London silver is quoted in standard ounces (0.925 fine) only.
For standarding American silver 0.999 fine, the table referred to can be used to advantage. Example: 50,000 troy ounces of American silver, 0.999 fine, are 54,000 standard ounces.
For converting the American silver price into the London equivalent, refer to
Formula 15.
? pence = 1 ounce silver, 0.925 fine
1 ounce silver, 0.999 fine = X United States dollar
1 United States dollar = 49.316 pence
„ 49.316 X 0.925 ,...„
0.999
This figure is a constant, as long as the pound sterling remains at mint par with the United States dollar. Multiply the constant by the American silver price, in order to obtain the English parity quotation.
If, for example, New York quotes 70 cents per ounce 0.999 fine, the parity price for English silver per standard ounce (0.925 fine) will be 31.964 pence (£l^United States $4.8666).
If the £ has lost in value and is quoted at say $4.45, there will have to be a reconstruction of the
Formula 16.
? pence = 1 ounce of silver, 0.925 fine
1 ounce of silver, 0.999 fine = United States $ .70 United States $4.45 = 240 pence
X = Q-^^^ X Q-^Q X ^^Q = 3^.956 0.999 X 4.45
The English parity quotation in this instance will be 34.956 pence per standard ounce.
If we have the London bar silver price per standard ounce, and if we desire to find the parity price for Amer-
BAR SILVER AND CHINA 47
lean silver, we shall have recourse to a constant, derived from
Formula 17.
? United States $ =1 ounce silver, 0.999 fine
1 ounce silver, 0.925 fine = X pence
49.316 pence - 1 U.S.$
^•^^^ = 2JS9958
0.925 X 49.316
This constant, multiplied by the London silver price, will give the American parity quotation — always pro- vided that the pound sterling is at mint par ($4.8666).
For example: Bar silver price in London per standard ounce is 31% pence. The New York parity would then be 68 cents per ounce, 0.999 fine.
EXPORT OF BAR SILVER.
As will be seen from the foregoing treatise, as well as from the Customs statistics quoted at the end of Chapter VII, the import into China of large quantities of bar silver has become a regular feature. Nevertheless Shanghai not infrequently also exports bar silver, by way of re-ship- m.ent to other China ports or to certain places abroad. Such re-exports are taking place whenever the stocks of silver held by Shanghai banks exceed local requirements, or when a premium over the regular Loofang outturn is offered. It has already been stated that, when bar silver is melted at Shanghai, in order to be turned into sycee, the yield will be 110.90 Shanghai taels currency for each 100 Canton taels v/eight of silver, 0.998 fine; or 111 Shanghai taels currency for 100 Canton taels weight of bar silver, 0.999 fine. Whenever a price is offered by one or the other of China's numerous provincial Mints, ex- ceeding these fixed limits, Shanghai will readily sell its stocks of bar silver and obtain the normal equivalent, plus the market premium.
48 THE CURRENCIES OF CHINA
The following instances are quoted from actual ex- perience :
Export of Bar Silver from Shanghai to Tientsin.
The import into Tientsin of bar silver depends princi- pally on the Tientsin-Shanghai market rate. Bar silver is used at Tientsin for conversion into high-grade sycee, or for minting silver dollars or small coin currency. The following problems may arise in connection with the import of bar silver into Tientsin.
Tientsin currency taels are known under the designa- tion of Hongping Hua Pao. Hongping means Tientsin tael weight, while Hua Pao refers to the touch.
1. How many Tientsin (Hongping) taels weight are 100 Shanghai (currency) taels w^orth of bar silver, 0.998 fine?
2. How many Tientsin taels will it cost to import 100 ounces of bar silver into Tientsin?
3. How many Tientsin taels will 1,000 ounces of bar silver realise, w^hich have been contracted for sale at Tientsin at say 21 per mille premium?
4. If a certain market premium for bar silver is offered at Tientsin, for example 21 per mille, how will the Tien- tsin-Shanghai drawing rate w^ork out?
Formula 18.
? Tientsin Hongping taels = 100 Shanghai taels currency
110.90 Shanghai taels currency = 100 Canton taels weight 82.7815 Canton taels weight = 100 ounces (0.998 fine) 116.28 ounces (0.998 fine) = 100 Tientsin Hongping taels
100 X 100 X 100 X 100 _ Q„ gyg^ 110.90x82.7815x116.28
This means that 93.6768 Tientsin taels are equal to 100 Shanghai taels ; or, 106.7505 Shanghai taels are the equivalent of 100 Tientsin taels, if measured by bar silver, 0.998 fine, imported from Shanghai into Tientsin.
BAR SILVER AND CHINA 49
The figure of 106.7505 is a constant. If this constant is divided by the Tientsin-Shanghai drawing rate, the result will indicate the premium which has to be charged at Tientsin. In connection with the Shanghai tael currency one has to divide by the convention ratio of 98. At Tientsin a market premium is being added instead.
If, for example, the Tientsin-Shanghai drawing rate is 1055, the market premium will be 16.15 taels on every 1,000 Tientsin taels, if weight of bars is given for weight of Tientsin (Hongping) taels.
106.7505 -=- 1055 = 1011.85
Add charges which are variable and which, in 1925,
were as follows:
Freight 2.50 per mille
Insurance 0.50 „
Coolie hire 0.05
Wharfage dues 0.30 „
Interest 5 days at 7% 0.95
Total . . 4.30
To the result of 1011.85
Add charges and interest 4.30
Total . . 1016.15
which means that, in the case under discussion, the Tien- tsin market premium will amount to 16.15 per mille.
Regarding freight charges, these were quoted by one of the Shanghai shipping companies at 2% per mille, but at only 2 per mille, if the value of the shipment exceed- ed 500,000 taels. Another Shanghai shipping company quoted 2y2 per mille, subject to a 5% discount.
Insurance was 5 tael cents per 100 taels for shipment by steamer direct to Tientsin, but 6 cents if shipped via Chinwangtao; and 20 cents if despatched by rail from Shanghai to Tientsin. These rates comprise " all risks," including that of piracy. Another Insurance Company
50 THE CURRENCIES OF CHINA
quoted 0.34 per mille only for shipments of treasure from Shanghai to Tientsin direct, or via Chinwangtao.
A second problem is the following: What is the cost in Tientsin taels of 100 ounces of bar silver, 0.998 fine, imported into Tientsin from Shanghai, if the Tientsin- Shanghai parity rate is 1054.85?
Formula 19.
? Tientsin Hongping Hiia Pao taels = 100 ounces bar silver, 0.998 fine
100 ounces bar silver, 0.998 fine = 82.7815 Canton taels weight 100 Canton taels weight =110.90 Shanghai taels currency
1054.85 Shanghaitaels currency =1000 Tientsin taels currency
_ 100 X 82.7815 X 110-90 X 1000 _ ^j q^^ 100 X 100 X 1054.85
Add charges, say 4.30 per mille (variable) . 0.374
Cost of 100 ounces bar silver, 0.998 fine,
delivered C.I.F. Tientsin . . Tientsin Tls. 87.405
The next question is : How many Tientsin taels will 1,000 ounces of bar silver reahse, which Tientsin has contracted to sell at say 21 per mille market premium?
Formula 20.
? Tientsin taels currency = 1000 ounces silver
116.28 ounces bar silver = 1000 Tientsin taels weight
1000 Tientsin taels weight = 1021 Tientsin taels currency
V 1000X1000X1021 o'yonrc.nK rr- t- , i
X = — — r^^^— r T^^— = 878.05295 Tientsin taels.
116.28 X 1000
The last of the four problems is: If a certain market premium for bar silver is offered at Tientsin, for instance 21 per mille, how does the Tientsin-Shanghai remitting rate work out?
Divide the constant resulting from Formula 18 (106.7505), consider charges, and divide by 1021. 107.1805 -^ 1021 = 10Jf9.75 Shanghai taels.
BAR SILVER AND CHINA 51
Export of Bar Silver from Shanghai to Hong Kong and Canton.
Hong Kong is not importing bar silver for own account, as no Mint is situated there. Bar silver consigned to Hong Kong is meant either for the Canton Mint or for trans-shipment; there is also a moderate demand for the art industries, which have been flourishing at Canton for generations. But, speaking generally, Hong Kong is im- porting bar silver at certain occasions only, and then mostly for account of Canton.
Shanghai will be induced to ship bar silver to Hong Kong and/or to Canton in the event of these places offering higher outturns than what is obtainable on the Shanghai market. The smelting establishments return 110.90 Shanghai taels currency for each 100 Canton taels weight of bar silver 0.998 fine, and 111 Shanghai taels currency for silver 0.999 fine. Some of the provincial Mints offer prices considerably above these limits, the highest of which, according to our experience, so far has been 112.50 Shanghai taels for American silver.
Bullion melted in China is weighed by means of the local tael. In Shanghai gold bars as well as sycee are weighed in Chauping taels. Bullion imported from abroad is weighed in terms of the Canton tael; 100 ounces troy are equal to 82.7815 Canton taels weight. Therefore, supposing the weight of a silver bar to be 1,000 ounces, and the market price Shanghai taels 111.50, the total cost per bar would be
82.7815 X 111.50 = 923.01 Shanghai taels.
Add charges and interest. These are variable and are
approximately as follows (Shanghai to Hong Kong) :
Freight i/4% 0.25%
Wharfage dues 0.03%
Insurance Vz per mille 0.05%
Coolie hire, commission, etc 0.09%
5 days interest at 6% per annum .... 0.08%
Total . . 0.50%
52 THE CURRENCIES OF CHINA
If shipment is made from Shanghai to Canton, with trans-shipment at Hong Kong, the charges from Hong Kong to Canton would be approximately as follows:
20 cents per ounce of silver, which is . . 0.150%
Insurance V^ per mille 0.025%
Coolie hire, etc., Vz per mille 0.050%
2 days interest at 6% per annum .... 0.030%
Total . . 0.255%
In case of shipment being made by direct steamer from Shanghai to Canton, charges would be approximately as follows :
Freight %% 0.500%
Insurance % per mille 0.075%
Coolie hire, wharfage dues, etc 0.075%
8 days interest at 6% per annum .... 0.125%
Total . . 0.775%
With brokerage or compradore's commission, landing charges and insurance against piracy, the total charges will amount to at least 1%.
Bar silver is weighed on the Canton tael scales and sold in Hong Kong at the fixed rate of 71.70 Canton taels weight equal to 100 Hong Kong dollars currency, plus a varying market premium. As 100 troy ounces of bar silver weigh 82.7815 Canton taels, 100,000 troy ounces of bar silver will realise 115,455.30 Hong Kong dollars, plus the market premium of the day, according to
Formula 21.
? Hong Kong dollars = 100,000 troy ounces of bar silver
100 troy ounces of bar silver = 82.7815 Canton taels weight 71.7 Canton taels weight = 100 Hong Kong dollars
^ ^ 100,000 X 82.7815 x 100 ^ ,,5,^55.30 Hong Kong dollars, 100 X 71.7 Q5 Q constant.
BAR SILVER AND CHINA 53
Multiply the constant by the market premium in order to obtain the cost in Hong Kong dollars of 1,000 troy ounces of bar silver. For example, if the market premium on bar silver in Hong Kong should be 8%, multiply the con- stant of 115,455.30 X 108 = 1246.92 Hong Kong dollars for 1,000 troy ounces of bar silver.
Shanghai exports surplus bar silver to Hong Kong and Canton against payment in Shanghai taels, whenever the premium (over 110.90 Shanghai taels for silver 0.998 fine) warrants this. A sale of bar silver by Shanghai to Hong Kong or Canton is, as far as the outturn is concerned, entirely for account of the Southern ports.
Shanghai may be induced to sell bar silver to Hong Kong or Canton in Hong Kong dollar currency, in which event the transaction turns into an arbitrage operation on the part of the Shanghai seller.
Formula 22.
? Shanghai taels = 100 Hong Kong dollars
115,455.30 Hong Kong dollars = 100,000 troy ounces bar silver 100,000 troy ounces bar silver = 91,804.04 Shanghai taels
^ ^ 100 X 100,000 X 91,804.04 ^ ^^ 5^5 5^^^^^. ^^^^^ ^^ ^ 115,455.30 X 100,000 constant
The last mentioned link in the chain represents the amount in Shanghai taels, which the Loofang will pay at Shanghai at the basis of 100 Canton taels weight of bar silver, 0.998 fine, equals 110.90 Shanghai taels currency.
To the constant of 79.515
Add charges and interest, say .... 0.500
Total . . 80.015
Divide by 100, plus the Hong Kong premium of the day, say 7%, in order to obtain the parity quotation between Shanghai and Hong Kong.
80.015 -f- 107 = 74.78 Shanghai taels.
54 THE CURRENCIES OF CHINA
If it is feasible to sell at Shanghai telegraphic transfer on Hong Kong at a rate higher than 74.78, plus %6% brok- erage (0.0467), there will remain a margin of profit.
In case shipment is made to Canton, it will be essential to consider the enhanced charges as outlined on page 52.
The bulk of the bar silver shipped to Hong Kong and Canton in the course of the years 1919 to 1923 was destined for the Canton Mint, where enormous quantities of 20 cents coins were turned out.
Export of Bar Silver from Shanghai to Yunnanfu.
Bar silver is exported to Yunnanfu for the manufacture there of silver coins. For Shanghai the operation is a clean sale against Shanghai taels, at the rate of 111 taels currency (plus a certain premium) for each 100 Canton taels w^eight. The charges are for account of the im- porter. Shipment is made via Haiphong by French steamer, or by coasting steamer, with trans-shipment at Hong Kong.
Charges vary and may be considered to approximate the following figures:
Charges and interest to Hong Kong . . . 0.50%
Freight Hong Kong-Haiphong 0.50%
Trans-shipment 0.04%
Interest 5 days @ 6% Hong Kong-Haiphong . 0.08%
Insurance Vz per mille Hong Kong-Haiphong . 0.05%
Total . . 1.17%
To this figure has to be added the railway freight from Haiphong to Yunnanfu, loading and unloading charges, interest and insurance for the period of the railway journey, and incidentals.
Export of Bar Silver from Shanghai to Mukden.
Mukden at times imports bar silver from Shanghai for the requirements of the provincial Mint situated there. The importer has to consider how many Shanghai taels
BAR SILVER AND CHINA 55
currency will 100 Mukden taels weight of bar silver cost, C.I.F. Mukden.
Formula 23.
? Shanghai taels currency = 100 Mukden taels weight of bar
100 Mukden taels weight = 35.95 grams bar
31.1035 grams bar = 1 troy ounce bar
1000 troy ounces bar = 998 ounces fine
925 ounces fine = 1000 ounces standard
100 ounces standard = 82.7815 Canton taels weight
100 Canton taels weight = 110.90 Shanghai taels currency
100 X 35.95 X 998 x 1000 X 82.7815 x 110.90 ^ - 100 X 31.1035 X 1000 X 925 X 100 x 100 ~ "*•*«<>
Shanghai taels as constant.
100 Mukden taels weight = Shanghai taels currency 114.486 Add charges:
Freight 4% per mille 0.4500
Insurance % per mille 0.0625
Coolie hire, wharfage dues, etc 0.0750
8 days interest at 6% 0.1250
Total Shanghai taels . 115.1985
a figure which needs revising owing to the frequent changes in freight and insurance rates applicable in Manchuria.
Export of Bar Silver from Shanghai to India.
In considering export of bar silver from Shanghai to Bombay we should like to refer to our remarks under the heading "Import of Bar Silver from British India," page 38. The analogous principle applies here, but the reasoning has just the reverse effect. Charges and in- terest have to be deducted from, instead of added to, the proceeds.
Take the constant 2.9047
Deduct charges %% 0.0218
interest 6% for 30 days . . 0.0145
0.0363
2.8684
56 THE CURRENCIES OF CHINA
In multiplying this constant by the forward (30 days) price of bar silver in rupees per 100 tolas, the product will represent the Shanghai parity. For example, the forward quotation for bar silver in Bombay is 82 rupees per 100 tolas.
2.8684 X 82 = 235.208 rupees.
If Shanghai can sell telegraphic transfer on Bombay below 2.35 rupees per tael, it will be remunerative to ship bar silver from Shanghai to India. It should be borne in mind that the charges, and especially the rate of interest, are variable and that brokerage on the sale of telegraphic transfer on Bombay should be considered in the calculation.
Take a practical example: Shanghai has 100 bars of surplus silver, 0.998 fine, and desires to export these to Bombay. The total weight of the 100 bars is 105,000 ounces troy, or 280,000 tolas.
If melted in Shanghai the bar silver will net Shanghai taels 96,394.87. If exported to Bombay and contracted for sale there at the price of say 82 rupees per 100 tolas, the proceeds will be : —
rupees 229.600 Less freight and insurance, etc., %% rupees 1722
„ 8% interest for 30 days ... „ 1530
„ Correspondents' commission,
etc., 1 per mille ... „ 230
■ „ 3.482
rupees 226.118
This corresponds to a Shanghai —
Bombay T. T. rate of rupees 234.58
Less: Vs% brokerage „ .29
Net rupees 234.29
If Shanghai can sell telegraphic transfer on Bombay at or below 234^/4, against the proceeds of this particular shipment, it will be feasible to export bar silver to Bombay.
BAR SILVER AND CHINA 57
Supposing the T.T. rate Bombay-Shanghai is known (say 236 rupees equal to 100 taels) and the parity price quotation of bar silver in Bombay is wanted:
Formula 24.
? rupees =100 tolas bar silver
8 tolas =3 ounces troy
100 ounces troy =82.7815 Canton taels weight
100 Canton taels weight of silver = 110.90 Shanghai taels currency
100 taels currency =236 rupees
^ 100 X 3 X 82.7815 x 110.90 X 236 „^ ^,^
^= 8 X 100 X 100 X 100 = 81.247 rupees.
for 100 tolas of silver, 0.998 fine.
The arbitrated parity quotation per 100 tolas
is therefore 81.247 rupees
Dedzzc/ charges and interest, say 1/^% . . . 1.217 „
Net proceeds per 100 tolas . . 80.03
In short, in order to find the parity quotation between bar silver in India and the Shanghai-Bombay cross rate, divide the latter by the constant of 2.9047 and deduct charges and interest.
236 ~ 2.9047 = 81.247145
less charges and interest.
It does happen at times that Shanghai is requested to ship some of its surplus bar silver to Bombay against payment by telegraphic transfer on London in £. As such transactions are not directly connected with Chinese currency, the instance is merely recorded here without further comment.
Export of Bar Silver from Shanghai to the Batch Indies.
Miniature silver bars are at times shipped from Shang- hai to the Netherlands Indies. These bars are manufac- tured in Shanghai from American or English bar silver
58 THE CURRENCIES OF CHINA
and are therefore of a fineness of 0.999 or 0.998. Their measurement in millimeters approximates 43 in length, 13 in width and 8 in thickness; the weight fluctuates between 1.4 and 1.7 Chauping taels, or about 50 to 60 grams. On the surface, in the centre, is embossed the name of the exporting bank, while on the side is found the name of the smelting shop.
These tiny silver bars are employed in the Dutch East Indies for either hoarding purposes, or else by the silver- smiths. The extent of their shipment is not large, if one may judge from the statistics published by the Chinese Maritime Customs. According to these, China's total exports of bar silver to the Dutch Indies was valued in
1925 ... at Haikwan taels 343,000 1924 ... „ „ 64,000
CHAPTER II.
TAELS
THE tael is of considerable importance to com- mercial and financial life in China. The name is neither Chinese, nor is it derived from the English language. In searching for the etymology of the expression one is inclined to think of the Indian weight, the "tola," notwithstanding the fact that the two are not synonymous as measures of weight.
The term "tael" signifies either a weight or a currency. The tael is really a weight, namely the Chinese ounce. It is true that there is no uniformity regarding ounces in China; the ounce weight of one town differing from that of another, and if possible, the ounce of the seller will weigh more heavily than the ounce of the buyer. But the tael is also a unit of silver money in China.
In Chinese it is not difficult to differentiate between the two meanings, which in almost all foreign tongues, happen to be expressed in a single word. If the tael of weight is meant, the Chinese ounce, the Chinese will use the word " Hang," (^) ; for the money tael they will employ the expression "Hang yindze" (MM-?-)' ^ael of silver.
And