Familiarity, Convenience, and Commodity Money: Spanish and Mexican Silver Dollars in Qing and Republican China

33 Pages Posted: 28 Jun 2009 Last revised: 10 May 2024

See all articles by Warren Bailey

Warren Bailey

Cornell University; Fudan University - International School of Finance (FISF)

Bin Zhao

Thammasat Business School

Date Written: June 05, 2024

Abstract

We study the relative prices of foreign silver coins circulating in China during the period from 1866 to 1924. Spanish and Mexican silver dollar coins often traded at substantial premiums sometimes exceeding 30% and 12% respectively. These premiums are associated with measures of global economic and political conditions, rise with proxies for Chinese political and banking uncertainty, and reflect seasonal production cycles and market conditions for China's export commodities. Diagnostic tests based on predictions for the value of non-silver money and for imports largely confirm our interpretation.

Keywords: China, silver, silver dollar, Spanish piece of eight, silk, alternative currencies

Suggested Citation

Bailey, Warren B. and Zhao, Bin, Familiarity, Convenience, and Commodity Money: Spanish and Mexican Silver Dollars in Qing and Republican China (June 05, 2024). Available at SSRN: https://ssrn.com/abstract=1424070 or http://dx.doi.org/10.2139/ssrn.1424070

Warren B. Bailey (Contact Author)

Cornell University ( email )

S. C. Johnson Graduate School of Management
387 Sage Hall
Ithaca, NY 14853-6201
United States
607-255-4627 (Phone)
607-254-4590 (Fax)

HOME PAGE: http://courses.cit.cornell.edu/wbb1/

Fudan University - International School of Finance (FISF) ( email )

220 Handan Road
Shanghai, 200433
China

Bin Zhao

Thammasat Business School ( email )

2 Prachan Road
Pra Nakorn
Bangkok, Bangkok 10200
Thailand

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