Publications and Research

Autumn 2000

Credit Derivatives by John Kiff and Ron Morrow Recent Performance of the Canadian Economy: A Regional View by David Amirault and Louis-Robert Lafleur Conference Summary: Money, Monetary Policy, and Transmission Mechanisms by Kevin Clinton and Walter Engert Seminar Summary: Price Stability and the Long-Run Target for Monetary Policy by Allan Crawford See also: Tables A1, A2, and Notes to the Tables

Cover: Chinese Emergency Money

Today, paper currency is a common feature of daily transactions in most countries. But this level of use has not always been the case. In some countries, coins were the principal medium of exchange, and notes were issued only as a temporary measure to address a specific need. The Chinese silver note featured on the cover is a classic example.

From 1850 to 1865, China was ravaged by the Taiping Rebellion, a devastating uprising in which hundreds of cities were destroyed, and millions of people died. As the remittance of taxes was disrupted and many ore-producing mines fell into rebel hands, the government faced declining revenues at a time when it needed money to put down the rebellion and to finance its regular operations. To meet this emergency, the government issued paper money, a practice that had been discontinued almost four centuries earlier. The notes were distributed through payments to the civil service and the military as well as through banks and money-changers.

Two types of notes were issued, denominated in either copper or silver. Silver notes were issued in values from 1 to 50 taels—the tael being approximately equal to 1/3 of a troy ounce of silver. Almost 10 million taels' worth were issued between 1853 and 1857. The silver notes were printed from wood blocks and had striking designs. Each note carried an indication of the issuing authority, a statement of value, a serial number, and the date of issue. The three-tael note featured on the cover was issued in 1855 on the eleventh day, of the seventh month, in the fifth year of the reign of Emperor Hsien Feng.

Although they were theoretically redeemable in metal, the silver and copper notes were seldom converted. This, coupled with their overissue, caused them to be heavily discounted and eventually rejected by the public.

This note measures approximately six by ten inches, and forms part of the National Currency Collection, Bank of Canada.

Photography by James Zagon.