After completing the monumental task of compiling and arranging, in chronological order, the production of each mint from 1735 to 1911, Burger did two things with the data.
First, he was able to calculate with a high degree of accuracy the total annual cash production across China, and compare it with census-based population records. The result is an index of economic activity, from 18 coins per person at the height of China’s prosperity under the Qianlong Emperor to its depths during the period when the Empress Dowager Cixi ruled and China was deep into its period of national humiliation, the antithesis of President Xi Jinping’s Chinese dream.
By the late 19th century, production ranged between 0.5 to one cash per person annually, which, combined with the runaway devaluation of cash currency against the benchmark value of silver, meant that economic activity had slowed to a crawl.
Second, Burger analysed prevailing annual exchange rates.
The massive devaluation of Qing currency in the 19th century is typically blamed on the opium trade, which was funded in silver imported from Mexico through the Manila galleon trade from 1565. Burger’s microscopic focus on mint data, matched with the most extensive cash collection in existence, tells a different story. Forgeries, both domestic and foreign, undermined the currency as early as the Qianlong reign.
“From the Kangxi Emperor [1654-1722] to Qianlong, soldiers were paid the equivalent of two taels of silver per month in two strings of cash,” Burger says. “From Kangxi to Qianlong, no problem. The exchange rate in Qianlong was always around 925 cash to the tael, which meant that the soldiers needed only 1,800 cash to buy two taels of silver to send home to their families and could keep 200 cash in their pockets. So, with this kind of bonus, the soldiers were happy.
“When they were called upon to conquer a new province, whether Xinjiang or Tibet, they were happy to do so.”
In the last years of Qianlong’s reign, the exchange rate suddenly spiked to 1,200 cash to the silver tael as a result of forgeries by mints originally established by loyalists of the previous dynasty, the Ming (1368-1644), in Vietnam. The forged coins were traded into southern Chinese ports and mixed with legitimate cash. The 75-year-old Qianlong forced government offices throughout the country to buy up the forgeries at scrap-metal prices, and the exchange rate rose to 900 cash to the tael.
“It took two to three years, but it was a successful operation,” Burger says. “Fifteen to 20 years after the first clean-up operation, they should have done it again.”
But they didn’t, and by the end of the reign of the eighth Qing emperor, Daoguang (1820-1850), the exchange rate was over 2,000 in every part of China, reaching a peak of 2,500. And there was no credit system.
Proposals by a reform-minded official, Wang Maoyin, in 1854, to develop a paper currency that could be used as a silver equivalent were rudely dismissed, and the continuing disintegration of the monetary system was a factor contributing to China’s losses against foreign powers as well as the government’s helplessness in dealing with the Taiping rebellion (1850-1864), during which 20 million to 30 million lives were lost.
“It was the largest disaster of the Qing dynasty,” Burger says. “All because they didn’t take care of the money. The officials had only studied the Confucian classics and had no idea about money.
“If you tell that to the historian, they say, ‘No, no, no, it’s all the bad imperialistic British. They sold us opium. Before they took tea for it and not silver, but after Napoleon occupied Spain, they couldn’t get pieces of silver any more and the pieces of eight were cut off.’
“What one can learn from how the Qing dynasty ran its show is that, although they were good book keepers – much better than the British or the Germans – they did a lousy job of making a system of their economy. The Europeans very soon had Adam Smith and, by writing down the theory and challenging it, slowly they had the economy in their grip. The Chinese never did. They had no theory.”
http://www.scmp.com/magazines/post-magazine/long-reads/article/2116027/coin-stash-puts-new-spin-chinas-100-years?curator=alphaideas&utm_source=alphaideas
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