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

37 Pages Posted: 28 Jun 2009  

Warren Bailey

Cornell University

Bin Zhao

Shanghai Advanced Institute of Finance; Shanghai Jiao Tong University (SJTU); China Academy of Financial Research (CAFR)

Date Written: June 22, 2009

Abstract

Using the available monthly and annual data from 1866 to 1928, we study the premiums at which foreign silver coins and silver-backed currency circulating in China sold relative to melt value, at both Shanghai and San Francisco. Silver-backed Chinese currency typically sold at a slight premium to its melt value, while Mexican and particularly Spanish silver dollars often sold at substantial premiums above melt value, averaging 2.25% and 16.09% respectively. Silver money premiums appear related to several measures of Chinese and global trade, competitiveness, and prosperity, including the extent of opium imports. We also offer potential psychological and cultural explanations for the observed premiums.

Keywords: China, silver, silver dollar, Spanish piece of eight, international trade

Suggested Citation

Bailey, Warren and Zhao, Bin, Familiarity, Convenience, and Commodity Money: Spanish and Mexican Silver Dollars in Qing and Republican China (June 22, 2009). 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 )

Samuel CurtisJohnson 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/

Bin Zhao

Shanghai Advanced Institute of Finance ( email )

211 West Huaihai Road
Shanghai, 200030
China

Shanghai Jiao Tong University (SJTU) ( email )

KoGuan Law School
Shanghai 200030, Shanghai 200052
China

China Academy of Financial Research (CAFR) ( email )

1954 Huashan Road
Shanghai P.R.China, 200030
China

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