Research On Copper Coin (1900-1935)

The cooper coin is a kind of cylindrical copper money with non-hole, cast since 1990, which is different from the cylindrical coin with square hole. As a kind of small money, it seems insignificant, but actually had a huge impact on the economic development of modern China and changes in monetary systems. Through the research on the cooper coin, it could see the entire scenery of Chinese monetary system, clarify the development trace of currency history, but also have a more correct understanding on the economy, politics, social change and development of modern China.From the economic point of view, it combines multiple kinds of research methods, such as economics, history, sociology, and gives a detailed description of the market, financial, livelihood and institutional issues during the process since the copper coin production to exit. It reveals that the modern Chinese market segmentation and hierarchical is an indispensable factor in the model analysis of modern Chinese economy. The copper coin is an important part during the change process of silver-cooper parallel standard system to the silver standard system in modern China.The cooper coin was produced in the late part of modern China's social system transformation, which changed from the feudal society to the semi-feudal and semi-colonial society. Politics, economy and society was restructuring unbearably. Money shortage, the failure of casting coin with machinery, livelihood and financial demands for new kind of money and the large number of foreign currency circulated in China are essential incentive to the generation of the cooper coin. The Qing central government published the cooper coin casting order in 1901,since then the provinces competed to cast it,chasing after the copper coin profit-difference between market value and cost. The quantity of the cooper coin increased dramatically in just four or five years, causing prices fell sharply and the circulation disordered. The reason is mainly twofold:firstly, the financial deficit and excessive pursuit of the copper coin profit drives the provinces to over produce the cooper coin. Secondly, the market segmentation and hierarchical characteristic makes the over-saturation of the copper coin in a local market for a short term.In that case, how is the contribution of the copper coin profit to the finance? Based on the statistic of the financial revenue, expenditure and the copper coin profit, this dissertation give a estimate that the ratio of the cooper coin profit to financial revenue is about 5%, and the compensation role played by the cooper coin to the finance is actually very small. The impact of the copper coin to finance should be analyzed from casting profit and taxation situation.Based on the research on the copper coin circulation market and the geographic space transfer in coastal areas, border areas, central cities and remote areas, this dissertation finds that the economic, politic and institutional factors which caused the commodity market segmentation ultimately affect the distribution of the copper market. The commodity market corresponding to various currencies in Modern China could be divided into the upper level market and the lower one according to the monetary value. The upper level market is the market of the luxury commodity and the bulk production of consumer goods trading market. The lower market consists of basic live necessities, small retail trading market. The copper coin is widely used in the lower market transactions but not absolutely, where the silver coins and the Fan Cast are still in circulation. The VAR model results show that the impact of the copper coin to the retail commodity is more than 30%. Through the discussion on the interacted influence of the copper price changes and commodity price changes, it clarified that the inflation directly caused by the copper coin belongs to the lower market inflation, which is subject to the confusion of the copper coin circulation, uneven market development and people's rational expectations.Series of events of the copper coin will eventually affect people's lives. The copper coin is not the major currency used by all the people in the modern China, but held by the civilian groups who have low income and low levels of consumption due to its small denominations. The circulation of the copper coin related to the various aspect of the civilian life and facilitated the commodity circulation in early period and brought convenience to grassroots people's lives. But with the increase in the casting quantity and confusion of the circulation, the circulation of the copper coin intensified Embarrassment of people's livelihood.The copper coin related economic activities are in fact copper-related monetary system. Establishment of these systems and operation condition plays a decisive role on copper coin tracks. Because the traditional monetary system can not meet modern China's national conditions, the monetary system of modern China gradually changed to the modern monetary system. After several attempts on the reform of the monetary system, silver-copper parallel standard system eventually changed to the silver standard system in 1933 successfully. The bank notes replaced the metal coins in 1935. During that period, changes in the monetary system in late Qing Dynasty related to that in the Northern Warlord Government and National Government period. The changes of the copper coin and the related institution also have their own characteristics. The copper coin system transformation is included in the process of the monetary system changing, and even its own transformation represents the change from the traditional monetary system to the modern one.In summary, the copper coin is an indispensable stage of China's monetary history and even the whole monetary history, which contribute to the development of China's monetary and economic history.