Copper-Silver Exchange Rate and Prices in Northern China in 1800-1850: Evidences

from Tong Taisheng Account Books

Debin Ma 　 (LSE and Hitotsubashi) Yuan Weipeng (Beijing Academy of Social Science)

A Presentation by Debin Ma

At Hitotsubashi UniversityJuly 2009

This is part of Global Price and Income Project headed by Professor Peter Lindert. We thank specially Felipe Fernandes

for his data assistance.

The European benchmark: the Greg Clark

series (in JPE) to tell a Malthusian story

Can we construct long-term price and wages for China?

• The Chinese anomaly:

– We have almost seven centuries of grain or rice prices.

– We have grain prices at prefectural level for 18th century (Wang Yeh-chien, Carol Shiue).

– But we still don’t have widely accepted price indices even for the early 20th century.

– So there is a serious problem with other commodity prices.

Why do we have such good grain prices:

• It is associated with the granary storage and grain price reporting system.

• All grain prices are based on government reports using standardized silver tael unit.

• This raises the big questions:

– can we trust these government reports?

– Are we correctly understanding the nature of Chinese market which operated largely on copper cash at the lower end?

– Is it possible to study prices from the end of copper cash?

– Some pessimist historians say it is simply impossible.

– Hans Ulrich Vogel’s exchange rate series show they go all over the place.

North China Herald, 1889, p. 411

• Its (the Chinese currency) chaotic eccentricities would drive any occidental nation to madness in a single generation, or more probably such gigantic evils would speedily work their own cure. …One hundred cash are not 100, and 1,000 cash are not 1,000, but some other and totally uncertain number, to be ascertained only by experience. In wide regions of the Empire 1 cash counts for 2, that is, it does so in numbers above 20, so that when one hears that he is to be paid 500 cash he understands that he will receive 250 pieces, less the local abatement, which perpetually shifts in different places. There is a constant inter-mixture of small or spurious cash, leading to inevitable disputes between dealers in any commodity.

• The condition of the cash becomes worse and worse until, as in some parts of the Province of Honan, everyone goes to market with two entirely distinct sets of cash, one of which is the ordinary mixture of good with bad, and the other is composed exclusively of counterfeit pieces. Certain articles are paid for with the spurious cash only. But in regard to other commodities this is matter of special bargain, and accordingly there is for these articles a double market price.

The Tong Taisheng Account Books

• Currently the most complete and well-preserved account books:– over 400 volumes– Preserved in excellent good conditions.– All account books are string-bound, handwritten with

classical brush pens.– Chinese numeric system as well specialized merchant

numeric system (Suzhou numerals: no longer in use today) were used to keep accounts.

• Period: 1790-1850• Location: Daliu Town, Ninjing County of

Shandong Province.

Research Possibilities • Existing studies by Yan Zhong-ping et al: rough indices

of copper-silver exchange rates and price indices with no information on the actual underlying data.

• Filling the gaps on commodity prices (so far most studies focus on grain prices). The compilation of price series books such as Mitsui Bunko.

• The efficiency of market in currency exchange, distribution margin, capital market.

• Business and accounting history of China

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Note the Suzhou Numeral System used

This Would be the Street where Tongtaisheng was located

Today’s DaLuiZheng

Contents of the Account Book• By categories:

– Original accounts (transactions recorded at the time of buying and selling).

– Summarized Account (most plentiful)• Accounts of inflows and outflows within the store• Copper-silver account (copper silver transactions recorded on a daily

basis, including different types of silver, the buying and selling rates)• Transaction accounts (records of transactions which include the

names of commodities, dates of transactions, prices and quantities, total amount, all recorded under the names of individual clients. Most transactions under individual accounts are not conducted on a cash-basis (period summing up of accounts of individual clients).

• Transaction accounts by branch stores at different counties– Purchase accounts (wholesale prices)– Interest rate accounts (rates of borrowing and lending)– Expenditure accounts (of stores)– Others

Table 2. Volumes of Tongtaishen Account Books by Years

Years VolumesAverage

Vol./ yearNote

1798-1810 67 5.2 Only 2 volume for 1798

1811-1820 54 5.4

1821-1830 85 8.5

1831-1840 104 10.4

1841-1850 100 10 20 vols. For 1844

Years unknown

27

Total 437 8.2

表 3：道光二十四年（1844）统泰升号账薄分类表

年月 账薄名称 账薄类别

备注

道光二十四年 出入银流水账

A 此册存中国社科院经济研究所，月份未注明，余存北京国家图书馆

道光二十四年六月初二 出入钱流水账 A

道光二十四年十一月十二日 钱出入流水账 A

道光二十四十二月二十九日 出入钱流水账 A

道光二十四年 出入钱流水账 A

道光二十四年正月 东北乡总账 B

道光二十四年十月十六日 东北乡总账 B

道光二十四年正月 西北乡老账 B

道光二十四年正月 西南乡老账 B

道光二十四年十月十六日 东南乡账 B

道光二十四年正月 东南乡老账 B

道光二十四年 西镇交易账 B

道光二十四年正月 本镇交易账 B

道光二十四年十月十六日 四街账 B

道光二十四年 宅户交易老账 C

道光二十四年新正月 利息交易账 C

道光二十四年六月初一日 公议老账 C

道光二十四年 日用串钱等项老账 C

道光二十四年 浮记交易老账 C

道光二十四年十一月初二日立 绪（应为续，原文如此）浮记老账

C

A: The original accounts; B: the summary accounts (copied afterward); C: Subsidiary accounts

Some Preliminary Findings:

表 6：道光十年（ 1830）统泰升商号借贷情况表（节录）

TimeLender Borrower Loan Amount Loan Period

MonthlyInterest Rate

10年２月２７日 统泰 德盛当 ５００ 4个月 0.9%

10年３月７日 统泰 德盛当 ５００ ８个月 1.0%

10年３月１１日 统泰 德盛当 ５００ ７个月 0.9%

10年 4月２３日 苑述斋 统泰号 １３０ 1.7%

10年５月２５日 统泰 德盛当 ５００ ６个月 0.9%

10年 5月 25日 顺典号 统泰号 50 ７个月 2.0%

10年６月 27日　 醴泉号 统泰号 ５０ 4个月 2.2%

10年 8月 4日 荣廷怀 统泰号 ５０ 1个月 2.5%

10年８月１２日 统泰 德盛当 ５００ 3个月 1.0%

10年１１月 7日 统泰 德盛当 ５００ 5个月 1.0%

10年１２月２２日 苑述斋 统泰号 ２００

10年１２月２３日 统泰 德盛当 ５００ 4个月 1.5%

10年１２月２９日 孟世才 统泰号 ５０ 2.0%

More Preliminary Findings:

A Comparison of Yan et al Agricultural and Handicraft Price Indices with our data set on rice and iron prices (in wen/jin)

0

20

40

60

80

100

120

140

1800

1802

1804

1806

1808

1810

1812

1814

1816

1818

1820

1822

1824

1826

1828

1830

1832

1834

1836

1838

1840

1842

1844

1846

1848

1850

Agricultural

Rice (jin)

Iron (jin)

Handicraft

表 5：道光十五年（1835）零售物价表 (单位: 文)

月份 江米

(斤)

大米

(斤)

净烟

(斤)

桐油

(斤)

木炭

（斤）

洋烛

(斤）

平丁

(个)

酒

(斤)

白毛边纸

(张）

1 220 340 3 136

2 220 136

120 16

3 110 80 220 3 120

136

4 80 220 340 280 120

136

5 120 80 220 340 3

120

136

128

6 110 80 220 128

136

后 6 120 220 360 260 3 136

7 110 80 220 280 136

128

8 110 80 220 280 136

128

9 120 80 220 280 128

10 100 80;90 220 280 30 240 3 128 16

11 70 220 280 30 136

144

12 90 220 260 144

Our data set offers actual prices on a monthly basis

China Exchange Rate (Copper Cash v. Silver)1802-1852

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1802

1804

1806

1808

1810

1812

1814

1816

1818

1820

1822

1824

1826

1828

1830

1832

1834

1836

1838

1840

1842

1844

1846

1848

1850

1852

Average Yan Zhong Ping et al.

Differences in buying and selling seem to be very small (ranging from 0 to 3%)

0

1,000

2,000

3,000

4,000

5,000

6,000

白银收

白银支

表 4：嘉庆 8年(1803)年 7月宁津县银钱比价表(单位: 文/两)

日 白银收 白银支 宝银收 宝银支

2 1890

2 1900

7 1900

7 1880

7 1930 1930

7 1900 1910

12 1900

12 1930 1955

12 1955

17 1960

17 1915

17 1915

26 1920

27 1990

We have data on a day basis

Interesting and intriguing findings:

1. The law of one price seems to be working: trend looks very similar after conversion. 2. Large retail mark up (could be due to quality difference) and a mysterious drop from

1816.Conversion used: one picul = 160 jin

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

18

02

18

04

18

06

18

08

18

10

18

12

18

14

18

16

18

18

18

20

18

22

18

24

18

26

18

28

18

30

18

32

18

34

18

36

18

38

18

40

18

42

18

44

18

46

18

48

18

50

Suzhou rice Zhili Wheat

Zhili Millet Ninjing Rice

Intriguing findings 2: 1. Copper cash based wages provide far more stability in trend than silver converted wages2. The drop in real wages towards mid-century is not as drastic in real wages measured by copper cash

0

0.5

1

1.5

2

2.5

3

3.5

18

07

18

09

18

11

18

13

18

15

18

17

18

19

18

21

18

23

18

25

18

27

18

29

18

31

18

33

18

35

18

37

18

39

18

41

18

43

18

45

18

47

18

49

Beijing daily rice wage (in jin)

Beijing real wage index

Beijing daily wheat wage

Let us hope money keeps coming from: http://gpih.ucdavis.edu/