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Money and trade, hinterland and coast, empire and nation-state: an unusual history of Shanxi piaohao, 1820-1930
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Money and trade, hinterland and coast, empire and nation-state: an unusual history of Shanxi piaohao, 1820-1930
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MONEY AND TRADE, HINTERLAND AND COAST, EMPIRE AND
NATION-STATE:
AN UNUSUAL HISTORY OF SHANXI PIAOHAO, 1820-1930
by
Luman Wang
______________________________________________________
A Dissertation Presented to the
FACULTY OF THE USC GRADUATE SCHOOL
UNIVERISTY OF SOUTHERN CALIFORNIA
In Partial Fulfillment of the
Requirements for the Degree of
DOCTOR OF PHILOSOPHY
(HISTORY)
August 2014
Copyright 2014 Luman Wang
ii
Acknowledgements
This dissertation could not be written without the supervision of Brett Sheehan, who gave
me so generously of his time and knowledge after I came to USC. He always proposed
brilliant new ideas for my work, deciphered cryptic accounting books of native Chinese
banks, proofread my numerous drafts, and encouraged me to aim high whenever I lost
confidence. In fact, my gratitude to him cannot be expressed in mere words.
I also extend my heartfelt thanks to Joshua Goldstein, a great teacher having the
talent for turning bland academic moments into enjoyable experiences and a good friend
supporting me in every possible way. I still remembered the thanksgiving dinner he
invited me to have with his family when I first came to L.A., which immediately rid
myself of homesickness.
At the history department, Judith Bennett taught me how to write good essays that
could be appreciated by general academic audience rather than China specialists. Without
her guidance I could never succeed in receiving numerous grants and fellowships. In
addition, Lisa Bitel, William Deverell, Richard Fox, Debra Harkness, Joan Piggott,
Joseph Styles, Lori Rogers, Sandra Hopwood, and Melissa Borek all provided me with
substantial help at various stages during my study at USC.
I am deeply indebted to Jeffrey Nugent of the Department of Economics who kept
up correspondence with me and inspired me with scholarship of non-Asian merchant
groups. The encouragement given by Bettine Birge of the Department of East Asian
Languages and Cultures helped me in surviving my early USC years. I was also fortunate
enough to receive enormous help and suggestions from Stanley Rosen and Clayton Dube.
iii
Outside USC, Thomas David DuBois of the Australian National University is my
mentor and best friend for a lifetime. He led me through the door of history, and my
dissertation actually evolved from a M.A. thesis under his superb supervision at the
National University of Singapore. I also wish to thank Professor Yan Hongzhong of the
Shanghai University of Finance and Economics for providing me endless help during my
field trip to Shanxi province in 2011.
I could not stay focused on my research without the generous funding package
provided by Dornsife College of Letters, Arts and Sciences, US-China Institute, and the
East Asian Studies Center of USC. My special thanks also go to the Graduate School
Dissertation Completion Fellowship for year 2013-2014. Furthermore, I appreciate the
prestigious Dissertation Fellowship of the Chiang Ching-kuo Foundation for International
Scholarly Exchange (American Region), and the China Times Cultural Foundation Young
Scholar Award although I declined the latter. Last but not least, I am grateful to the China
and Inner Asia Council (CIAC) of Association for Asian Studies (AAS) for providing me
with travel grant that made the research trip to the HSBC Archive in London possible.
I enjoy my study and life in Los Angeles thanks to many friends, especially Pei Yuan,
Yuko Konno, Jeanne McDougall, Michelle Damien, Sachiko Kawai, and Benjamin
Uchiyama. The sense of community they provide me is essential to the life of an
international student.
I owe unpayable debts to my parents, Fan Lusheng and Wang Xiaoyan, who give me
endless love and unconditional support. Being a graduate of Tsinghua University, my
mother’s devotion to knowledge kindled my interest in pursuing higher degrees at an
iv
early age. My father gave me the greatest freedom of choosing career paths, and took
good care of me while my mom used to be abroad for years owing to diplomatic
missions.
Finally, I want to thank Kong Jiangbing for accompanying me, indulging me, and
empowering me. It is my greatest pleasure to dedicate this dissertation to him, yet any
errors belong to me.
v
Table of Contents
Acknowledgements ................................................................................................................................. ii
List of Tables ......................................................................................................................................... vii
List of Figures ...................................................................................................................................... viii
Abstract .................................................................................................................................................. ix
Notes to the reader ................................................................................................................................ xii
Introduction ............................................................................................................................................. 1
Setting the scene .............................................................................................................................. 1
State-business relations in late imperial China ................................................................................ 4
Financial history from the inland perspective ............................................................................... 13
Rescuing piaohao’s history from the financial modernist historicism .......................................... 17
Chapter overview .......................................................................................................................... 21
Chapter 1: The birth of Shanxi piaohao and expansion in treaty ports, 1720-1860 .............................. 24
Shanxi merchants’ long-distance trade and the birth of piaohao, 1720-1820 ............................... 25
The early business of piaohao, 1820-1860 ................................................................................... 31
Piaohao and treaty-port trade after 1858 ...................................................................................... 36
1, Contributing to treaty-port trade ........................................................................................ 36
2, Prospering in treaty ports and beyond ............................................................................... 39
Piaohao as patrons of qianzhuang (cash shops) .......................................................................... 48
Piaohao’s symbiotic relations with colonial banks ....................................................................... 51
Chapter 2: Native banks, universal practices: piaohao’s unusual business profile ............................... 60
Piaohao’s bookkeeping method: myth and reality ........................................................................ 61
Credit or collateral: piaohao’s perception and practice of commercial loans ............................... 71
Competition within cooperation: piaohao’s inter-firm relations ................................................... 78
1, Competition for government remittances .......................................................................... 81
2, Inter-firm remittances as cooperation ................................................................................ 83
3, Collective postal and silver shipment services .................................................................. 94
4, Fixed financial transaction dates—biaoqi ......................................................................... 96
5, Inter-piaohao employee flow and marriages ..................................................................... 98
6, Defending against predatory state polices ....................................................................... 102
Chapter 3: Contingency, controversy, and inconsistency: piaohao and the Qing empire, 1850-1985 106
Providing remittance in chaos: contingent encounter between piaohao and the Qing in the 1850s
..................................................................................................................................................... 107
Piaohao’ s rise to national prominence ........................................................................................ 113
The court versus provinces: four futile campaigns against remittance, 1864-1899 .................... 119
1, The court’s first anti-piaohao campaign in the 1860s ..................................................... 120
2, Southern provincial officials’ covert resistance ............................................................... 124
3, Rebirth of the controversy over remittances, 1870s to 1890s ......................................... 129
4, Practical and personal reasons for provincial officials’ preference for piaohao.............. 134
Piaohao’s limited influence over the Qing’s overland tax transfer system ................................. 141
1, Far from monopoly: competition between piaohao and cash shops ............................... 142
2, The court’s successful insistence on overland tax transport in north .............................. 145
3, Piaohao’s business limitation on replacing the overland tax transfer system ................. 150
Chapter 4: Opt-out: piaohao and the Qing’s modern financial reforms, 1895-1911 ........................... 159
Piaohao in the age of modern financial reforms ......................................................................... 160
1, The influence of newly established modern Chinese banks over piaohao ...................... 161
2, Stricter centralized control over piaohao ........................................................................ 167
3, The negative impact of currency unification on piaohao ................................................ 171
4, Modern financial demands that piaohao could not meet................................................. 173
vi
Why did piaohao reject the Qing’s modern financial reforms after 1895 ................................... 176
1, Suffering from financial extortion ................................................................................... 177
2, Suffering from loan requests and defaults ....................................................................... 187
3, Confidence in outstripping modern banks ....................................................................... 198
Chapter 5: Fortunes of the firms or families: reappraisal of piaohao’s decline, 1895-1930s .............. 202
Li Hongling: two books and three myths of piaohao’s decline ................................................... 203
Conservative or adventurous piaohao owners? ........................................................................... 207
1, The Changs: from frontier trade to modern silk filature and printing house ................... 207
2, The Qus: from frontier trade to the Baojin Coal Mining Company ................................ 215
Seeking after the sublime “wealth”: the other histories of piaohao owners ................................ 220
1, Confucian scholar-merchant and its transcendence ......................................................... 221
2, Earning social respect: charity and militia ...................................................................... 228
3, The hedonists ................................................................................................................... 232
Disaggregating piaohao’s future in the new Republic, 1911-1937 ............................................. 235
Conclusion .......................................................................................................................................... 239
Empire to nation-state: piaohao under the Qing dynasty ............................................................ 239
Rethinking piaohao’s “decline”: Confucian culture and family business firms .......................... 242
Inland China as center of changes in the age of imperialism ...................................................... 245
Rewriting histories of piaohao and Shanxi province through storytelling .................................. 246
Bibliography ........................................................................................................................................ 248
Appendices .......................................................................................................................................... 261
vii
List of Tables
Table 1 The numbers of piaohao in treaty ports and inland towns ............................................... 30
Table 2 Branches/agencies of HSBC vs. localities of piaohao’s major financial presence in the
1890s ..................................................................................................................................... 53
Table 3 The General Ledger of Rixinzhong’s Beijing Branch, December 1851 (Unit: Tls.) ........ 67
Table 4 Inter-piaohao remittances handled by Rishengchang, 1889-1893 (Blanks indicate
information unavailable) ....................................................................................................... 86
Table 5 Piaohao’s remittance commission, 1864-1902............................................................... 115
Table 6 The clan of Chang Wanda ............................................................................................... 208
viii
List of Figures
Figure 1 The Qing empire and Shanxi province in 1820 ............................................................ 25
Figure 2 Former residence of Lei Lü tai, Pingyao, Shanxi (photo by author, July 2010) .............. 27
Figure 3 Head office of Rishengchang, Pingyao, Shanxi (photo by author, July 2010) ................ 28
Figure 4 Thirty-nine localities where piaohao had major financial presence ............................. 54
Figure 5 Sample page of a general account book of a firm in Beijing, c. 1842-44 ..................... 64
Figure 6 Five counties of central Shanxi province where piaohao originated ............................ 78
Figure 7 Locations of six piaohao’s head offices inside Pingyao city walls ............................... 84
Figure 8 Map of the Pingyao city in 1882 (red lines correspond to those on Figure 7) ................ 85
Figure 9 Modern representation of Rishengchang’s underground vault (photo by author, July
2010) ..................................................................................................................................... 91
Figure 10 Inter-piaohao remittance as way of seeking/assimilating floating capital .................... 93
Figure 11 Remittances handled by piaohao for various provincial authorities, 1863-1893 ...... 113
Figure 12 Article 3 & 4 of the Rules of the Ta-Ching Government Bank .................................... 165
Figure 13 Refurbished Mansion Gate of the Chang family in present-day Yuci County, Shanxi
(photo by author, July 2010) ............................................................................................... 210
Figure 14 Biography of Chang Liying in The Genealogy of the Chang Family ......................... 215
Figure 15 Chang Linshu’s jinshi degree essay for the Palace Examination, 1903 .................... 224
Figure 16 Members of Chang family’s Poetry Club, c. 1900 .................................................... 233
ix
Abstract
Piaohao were owned and operated by merchants from inland Shanxi province. Before the
1820s, Shanxi merchants had been engaging in tea and fur trade among Russia, Mongolia
and the Qing empire for about a century. They gradually built extensive financial
networks and accumulated capital, which prepared them well for future banking business.
After the 1820s when domestic rebellions often blocked trade routes in the interior,
Shanxi merchants found that moving silver ingots became unsafe and time-consuming
than ever, and they thus responded by opening piaohao that provided remittance service
for themselves and other inter-regional traders. In the 1850s, piaohao began to remit
fiscal revenues on behalf of various Qing provincial authorities, when the Taiping
Rebellion disrupted the overland shipment of provincial tax quotas in the form of silver
ingots. After 1895, the Qing court aimed at reclaiming financial sovereignty from private
banking firms, and piaohao thus shrank in size and scope.
My dissertation makes three major contributions. First, I delineate China’s
transformation from agrarian empire to modern nation-state through the prism of private
banking firms. The gradual disappearance of piaohao during the early twentieth century
was usually ascribed to their reliance on government remittance business. I argue instead
that decline came because of the Qing’s accelerated transition from empire to nation-state
after 1895. Piaohao’s unique business relationship with the Qing—serving it without
being regulated—was only possible when the agrarian empire placed a low priority on
financial sovereignty. After 1895, however, the Qing court started to centralize its
x
financial administration to meet the needs of a modern nation-state, prioritized the
development of modern banks, and thus downplayed native banking firms. From that
point, piaohao were deprived of the right to handle government remittances, because they
refused to transform into modern banks and rejected the state’s modern financial
intervention.
Second, I rewrite the hundred-year financial history of China after the 1820s from
the unprecedented inland perspective. So far scholars of China’s financial history have
rarely traveled beyond the urban-coastal areas such as Shanghai and Hankou to explore
financial institutions and networks in late imperial China. In contrast, I underline that as
inland financiers, Shanxi piaohao’s remittance service made distinct contributions to the
expansion and intensification of treaty-port trade after the 1860s. In particular, piaohao
linked northern inland trading towns to eastern coastal cities, financed local cash shops in
treaty ports, and accelerated monetary flow across the empire. Furthermore, I reappraise
the influence of western financial imperialism over China. Contrary to the common belief
that western banks such as the Hongkong and Shanghai Banking Corporation (HSBC)
suppressed the development of piaohao after the 1840s, piaohao’s role as the linchpin of
Chinese financial market was reinforced upon the arrival of colonial banks, whose
financial activities were confined in coastal regions and thus depended heavily on
piaohao’s extensive financial networks in the interior.
Third, I counter the problematic use of financial modernist discourse to interpret
Chinese banking history after the nineteenth century. Previous scholars strictly viewed
piaohao within the framework of comparison to western-style modern banks, against
xi
which they were helpless to compete. In contrast, I demonstrate that merchants of Shanxi
piaohao were first and foremost inter-regional traders rather than bankers, and piaohao
did not “decline” merely because they did not choose to transform into modern banks
after 1895. Rather, most piaohao of the late nineteenth century invested their capital in
other more profitable industrial opportunities, while others transitioned out of finance
into social charity and scholarship.
xii
Notes to the reader
1, Tls. stands for Tael (liang 兩). Tael is a Chinese ounce. One tael of silver weighed
approximately 40 grams. Yet, the liang weight was not standard from market to market,
there were many tael weights in late imperial China. In addition, the fineness of silver
circulated in a certain locality varied from other places.
1
2, All dates before October 1911 conform to Chinese lunar calendar.
1
Frank H. H King et al., The History of the Hongkong and Shanghai Banking Corporation. Vol. 1, The Hongkong
Bank in Late Imperial China, 1864-1902: on an Even Keel (Cambridge: Cambridge University Press, 1987), 36.
1
Introduction
For hundreds of years, Shanxi piaohao have received countless accolades from both Chinese
people and foreigners for always working at the cutting edge of the business world.
Nevertheless, the sun rises only to fall, and the moon waxes only to wane. Starting from the
Tongzhi reign (1862-1875), modern banks coming across the east and west oceans (i.e. Banks
from Japan, Britain and Europe) are gradually encroaching on our interregional remittance
business. Soon after the Gengzi Incident (Boxer Uprising), the branches of the Ta-Ching
Government Bank are also spreading over China when the court began to prioritize modern
financial reforms. Although our Shanxi piaohao merchants have maintained the soundest
creditworthiness for over two hundred years, we never incline towards competing against other
financial counterparts. Unfortunately, the establishment of the Ta-Ching Government Bank
really is indeed outstripping our remittance business after 1908.
---“The Rise and Decline of Shanxi Piaohao”, Li Hongling 李 宏齡, former senior branch
manager of Weifenghou piaohao, July 1917
2
Setting the scene
Originating from a barren inland province adjacent to the Inner Mongolian frontiers,
Shanxi merchants had a long tradition of reaping commercial profits from interregional
trade rather than agrarian incomes from the land. During the Ming dynasty (1368-1644),
Shanxi merchants took the advantage of the court’s kaizhongfa 開中法 (salt-grain
exchange policy) by shipping grain to the Northern frontier garrisons in exchange for the
exclusive right to sell salt in the interior.
3
The most successful Shanxi merchants
ascended the social ladder and their descendants subsequently converted to
2
Li Hongling 李宏齡, Shanxi piaoshang chengbaiji (Taiyuan, Shanxi jingji chubanshe, [1917] reprint 2003), 178.
3
Beginning in 1370, the Ming government invited merchants to deliver grain to the frontier garrisons in return for salt
certificates (yanyin 鹽引). With these certificates a merchant could draw salt from a stipulated saltern to sell in a
stipulated region. Known as the grain-salt exchange, this system was a unique combination of the state monopoly and
market initiative, bridging the state and the market. The grain-salt exchange did not involve money, but neither was it a
direct barter of grain for salt as the transaction occurred through a piece of paper: the salt certificate that representing a
debt the state owned the merchant denominated in salt. See Wing-Kin Puk, “The Ming Salt Certificate: A Public Debt
System in Sixteenth-Century China”, in Ming Studies, No. 61, April 2010, pp. 1-12: 2-3; Peter Purdue, China Marches
West: The Qing Conquest of Central Eurasia (Cambridge, Mass: Belknap Press of Harvard University Press, 2005), 74.
2
scholar-officials during the late Ming.
4
Yet, new generations of Shanxi merchants did not let the dynastic transition from the
Ming to the Qing disrupt their long-distance trade, and instead sustained the momentum.
During the Kangxi’s western campaign against the Zunghars in the 1720s, Fan Yupin 範
毓馪 (1678-1757), a native of the Jiexiu County, helped the imperial troops transport
grains to the front and was rewarded exclusive trading rights as well as numerous titular
official titles by the court.
5
In 1727, when the Treaty of Kiakhta (Buliansiqi tiaoyue 布連
斯奇條約) appointed Kiakhta, the northern frontier of Mongolia, as the border town for
duty-free Qing-Russian barter trade, Shanxi merchants immediately plunged into tea and
fur trade among Russia, Mongolia and inland China.
6
In pursuit of interregional trade for centuries, Shanxi merchants fostered an enduring
mercantile spirit, accumulated financial capital, and built extensive business networks
across the empire. Yet, at the turn of the nineteenth century, these merchants found that
the transfer of silver ingots by land to settle accounts became costly, unsafe, and
time-consuming than ever, when domestic rebellions, such as the White Lotus Rebellion
(1794-1804), often cut off overland trade routes. Around the early 1820s, some shrewd
Shanxi merchants responded by opening the first-ever piaohao named Rishengchang 日
4
Many descendants of Shanxi merchants received rigorous imperial education and thus converted to scholar-officials.
For example, jinshi degree holders named Wang Chonggu 王崇古 of 1541 and Zhang Siwei 張四維 of 1553 were all
originating from salt merchant families of Shanxi . See Takanobu Terada 寺田隆信, Shanxi shangren yanjiu [Studies
on Shanxi merchants] 山西商人 研究 [Japanese original 山西商 人の研究: 明代における商人および商業資本
Sansei shōnin no kenkyū : Min-dai ni okeru shōnin oyobi shōgyō shihon], trans. Zhang Zhengming 張正明(Taiyuan:
Shanxi renmin chubanshe, 1986), 1-119; 263-264.
5
Terada, Shanxi shangren yanjiu, 310.
6
Joseph Fletcher, “Chapter 7: Sino-Russian Relations, 1800-62”, in The Cambridge History of China: Late Ch'ing,
1800-1911, Part I, ed. John K. Fairbank et al. (Cambridge: Cambridge University Press, 1978), 318.
3
昇昌 (literally means “prosperity along the sunrise”), specializing in interregional
transfer of funds and currency conversion first for themselves and later for fellow traders
as an alternative to the conventional method of overland silver shipment.
When the Taiping Rebellion (1851-64) persistently disrupted the delivery of
provincial tax quotas through overland silver transport, the Qing court finally acquiesced
in provincial officials’ frequent recourse to piaohao’s remittance service. Leaning heavily
on extra commercial revenues supplied by provincial administrations to alleviate constant
financial constrains caused by domestic rebellions and foreign invasions, the court was
left with no other choice but to lift the ban on provincial officials’ use of piaohao’s
remittance service to transfer taxes. By earning remittance fees and gaining access to easy
credits of provincial treasuries, Shanxi piaohao thus rose to national prominence after the
early 1860s. Nevertheless, the court never institutionalized remittance as a legitimate
method of delivering the empire’s fiscal revenues because piaohao weakened the court’s
control over taxes and provincial officials.
Coinciding piaohao’s growing involvement in remitting government taxes, the
expansion and intensification of treaty-port trade reinforced piaohao’s indispensable role
in the Chinese financial market after the 1860s. As private financiers originating from the
interior, piaohao’s banking service facilitated treaty-port trade transactions by linking
northern inland towns to eastern coastal cities, extending loans to cash shops and trading
houses in treaty ports, and accelerating monetary flow across the empire. In their heyday
during the early 1890s, twenty-three piaohao engaged in providing remittance service for
4
various provincial Qing authorities and merchants across China.
7
Yet after 1895, the Qing court started to reclaim financial sovereignty from both
provincial officials and private banking firms by re-consolidating its central financial
administration, tightening controls over banking institutions, and finally establishing the
first-ever central bank to meet the needs of a modern nation-state. The influence of
piaohao thus diminished and their remittance business soon shrank in size and scope. By
1921, only four Shanxi piaohao were still in operation by providing small-scale monetary
exchange services until their final disappearance after the Sino-Japanese War in 1937.
8
The study of Shanxi piaohao provides unprecedented perspectives on interpreting
late imperial Chinese history from three aspects: the relations between the state and
business(-men), China’s encounter with unexpected yet ongoing western intrusion after
the 1840s, and the role of late imperial Chinese family, society and culture in shaping
merchants’ business and non-business activities.
State-business relations in late imperial China
At one end of the spectrum of state-business relations in late imperial China, scholars had
done fine study on merchants’ heavy reliance on the government in order to achieve
business success. Susan Mann examined how local gentry and merchant groups (termed
7
These 23 piaohao were Rishengchang, Weitaihou 蔚泰厚, Weifenghou 蔚豐厚, Weishengchang 蔚盛長, Xintaihou
新泰厚, Tianchengheng 天成亨, Xiehexin 協和信, Xietongqing 協同慶, Baichuantong 百川通, Weichanghou 蔚長
厚, Qianshengheng 乾盛亨, Yongtaiqing 永泰慶, Qichangde 其 昌德, all of which headquartered in the Pingyao
County. Heshengyuan 合盛元, Dadetong 大德通, Dadeheng 大 德恒, Sanjinyuan 三晉源, Cunyigong 存義公,
Changshengchuan 長盛川, Dashengchuan 大盛川 were headquartered in the Qi County. Zhichengxin 志成信,
Xiechengqian 協成乾, Dadeyu 大德玉, Shiyixin 世義信, were headquartered in the Taigu County. See Huang
Jianhui ed., Shanxi piaohao shiliao [Historical Materials on Shanxi Piaohao, hereinafter, SPS], revised edition (Shanxi:
Shanxi jingji chubanshe, 2002), 466; also refer to Appendix I.
8
The four piaohao were: Dadetong, Dadeheng, Dashengchuan and Sanjinyuan. SPS, 1280.
5
as “liturgic groups”) in Shandong province helped the state to regulate the marketplace
and collect commercial taxes in exchange for the privilege of running local markets
before the 1850s.
9
Kwan Man-Bun revealed that from the eighteenth to the twentieth
century, the Changlu salt merchants of Tianjin had been enduring the Qing’s heavy taxes
and compulsory “donations” for the sake of securing the monopoly on harvesting,
transporting and selling salt in designated areas.
10
Although depending heavily on government business opportunities and being prone
to the state’s predatory policies, many merchants appealed to local, provincial and
national authorities for more economic and political power especially after the 1850s,
when the Qing’s determination to build larger state bureaucracy often clashed with the
expanding and thriving businesses of merchants. For example, after the introduction of
the lijin tax in 1853 which broke the delicate balance between state interests and local
liturgical groups, merchants in Guangdong and Zhejiang provinces soon bargained
collectively with local officials for lower lijin rates, altered their trade routes to avoid
burdensome tax stations, or directly protested against the lijin extractions.
11
At the turn
of the twentieth century, not only did Tianjin salt merchants claim for more tax returns
from salt trade, they also actively participated in the newly founded local
self-government bodies such as municipal and provincial consultative assemblies and
wanted to share decision making with officials as equal partners instead of informal
mediation before, all of which were driven by the principle of representation with
9
Susan Mann, Local merchants and the Chinese bureaucracy, 1750-1950 (Stanford University Press, 1987), 29-93.
10
Kwan Man Bun, The salt merchants of Tianjin: state-making and civil society in late Imperial China (Honolulu:
University of Hawai'i Press, 2001).
11
Mann, “Chapter 7: Lijin taxes and the Merchant Response”, in Local merchants, 121-170.
6
taxation.
12
The increasing interactions, negotiations and confrontations between state and
merchants were usually mediated by native-place based guilds (gongsuo 公所 and
huiguan 會館) or trans-regional vocational merchant associations. In the post-Taiping
Shanghai, for example, huiguan increasingly assumed urban managerial functions,
including taxation, defending against bandits, maintaining order during festivals, and
settling disputes, all of which reflected merchant’s growing public activism.
13
In the
1880s Hankou, the tea guild demonstrated its political interest in successfully forcing the
local authority to reduce taxes on tea.
14
At the turn of the twentieth century, the Tianjin
Chamber of Commerce led by salt merchants vehemently rejected the stamp duty
implemented by Yuan Shikai 袁世凱.
15
Although the increasingly politicized merchants and their popularized social
activities deepened the rift between them and the state and challenged the latter’s
authority from local to national level, merchants in late imperial China failed to achieve
the so-called “urban autonomy” and were always subject to the state’s legitimacy and
authority no matter how weak the Qing state was.
16
After all, merchants’ reliance on the
state and their increasing confrontation with it was just two sides of the same coin that
12
Kwan, “Chapter 7: Shifting politics”, in The salt merchants of Tianjin, 122-136.
13
Bryna Goodman, “Chapter 4, Expansive practices, charity, modern enterprise, the city and the state”, in
Goodman, Native Place, City, and Nation: Regional Networks and Identities in Shanghai, 1853-1937 (Berkeley:
University of California Press, 1995), 119-146.
14
William Rowe, Hankow: Commerce and Society in a Chinese City, 1796-1889 (Stanford: Stanford University Press,
1984), 157.
15
Kwan, The salt merchants of Tianjin, 119.
16
Goodman, Native Place, City, and Nation, 205; Rowe, Hankow: Commerce and Society, 344; Kwan, The salt
merchants of Tianjin, 137-152.
7
ironically reinforced Chinese merchants’ susceptibility and subordination to the
formidable late imperial rule.
At the other extreme of the state-merchant relations in late imperial China, however,
scholars found that some merchants were actually competent to achieve business success
as well as significant technological and managerial breakthroughs without getting
involved with the state. In a study of rural low-level publishing-bookselling merchants of
inland Fujian province, Cynthia Brokaw contended that not only did these book printers
and traders enjoy great tax freedom before the 1850s; their business was constantly
unaffected even after the Qing implemented the vigorous lijin transit commercial tax.
17
As to the expansion of inland salt yards in Zigong, Sichuan province after the eighteenth
century, Madeleine Zelin revealed that in a vacuum of state economic policy towards salt
mining that neither interfered in nor promoted it, salt producers nevertheless attained
industrial vertical-integration and technological innovations just by pooling resources
from local families and merchants alone.
18
Because piaohao succeeded overnight in handling government remittance after the
1850s yet plunged into financial difficulties when the Qing fell apart, scholars usually
categorized Shanxi piaohao into the first extreme of the spectrum of state-merchant
relations, and ascribed the decline of piaohao after the 1900s to their over-reliance on
government remittance opportunities and the ignorance of other non-government
17
Cynthia Brakow, Commerce in Culture: The Sibao Book Trade in the Qing and Republican Periods (Cambridge:
Harvard University Asia Center, 2007), 256.
18
Madeleine Zelin, The merchants of Zigong: industrial entrepreneurship in early modern China (New York:
Columbia University Press, 2005).
8
profit-gaining businesses.
19
A prime example is Kong Xiangyi’s 1994 article entitled
“Shanxi piaohao’s collusion with the Qing government” (Shanxi piaohao yu qing
zhengfu de goujie 山西票號與清政府的勾結) , in which he described the Qing dynasty
as piaohao’s patron (kaoshan 靠山) and their relations as “sticking together like glue and
lacquer” (rujiao siqi 如 膠似漆).
20
Kong also asserted that after the First Sino-Japanese
War in 1895, piaohao’s collusion with the Qing reached its peak, which resulted from the
government’s growing demand for remitting war indemnities through piaohao.
21
Although another prominent piaohao scholar Huang Jianhui disagreed with the pervasive
discourse that “when the Qing collapsed, piaohao followed” (qing wang piaohao wang
清亡票號亡), and argued instead that big interregional merchants rather than the Qing
government were the pillar of piaohao, he still conceded that piaohao “declined”
(shuailuo 衰落) irrevocably after the demise of the Qing.
22
Only Zhang Guohui raised a different voice regarding piaohao’s relations with the
Qing dynasty. Although Zhang admitted that piaohao helped the Qing to transfer taxes
19
See Chen Qitian 陳其田, Shanxi Piaozhuang Kaolue 山西票莊 考略 (Shanhai: Shangwu Yinshuguan, [1937] 2008
reprint), 23; Wei Juxian 衛聚賢, Shanxi Piaohao Shi 山西票號史 (Chongqing: Zhongyang yinhang jingji yanjiuchu,
1944); 2008 reprint, 10; Kong Xiangyi 孔祥毅, “Shanxi piaohao chansheng de beijing he gaolidai xingzhi 山西票號產
生的背景和高利貸性質” [The background of the origins of Shanxi piaohao and its usurious nature], in Shanxi
piaohao yanjiu ji, vol 1, 13; Sheng Mujie, “Wo dui piaohao qiyuan he xingzhi de kanfa 我對票號起源和性質的看法”
[My views on the origins of piaohao and its business characters], in Shanxi piaohao yanjiuji, vol. 1, 4-9; Li Zhuoran 李
焯然 (Lee Cheuk Yin), “Shanxi piaohao zhong de xinyong yu guanxi wangluo 山西票號中的信用 與關係網絡” [The
trust and guanxi networks of piaohao], in Zhongguo Jinshang yanjiu [Studies on Shanxi merchants], ed. Zhang
Zhengming et al. (Beijing: Renmin chubanshe, 2006), 209-230; Song Huizhong 宋惠中, “Shanxi piaoshang he guanliao
de fei zhengshi guanxi 山西票號 和官僚的非正常關係” [The informal relationship between the Shanxi piaohao
merchants and Qing officials], in Zhongguo Jinshang yanjiu, ed. Zhang zhengmin et al., 88-126.
20
Kong Xiangyi, “Shanxi piaohao yu qing zhengfu de goujie”, in Zhongguo shehui jingjishi yanjiu 中國社會經濟研
究, Issue 3 (1994):1-12.
21
Kong, “Shanxi piaohao yu qing zhengfu de goujie”, 7.
22
Huang Jianhui 黃鑒暉, Shanxi Piaohao Shi 山西票號史 [A history of Shanxi piaohao] (Taiyuan: Shanxi Jingji
chubanshe, [1992] 2002 Reprint), 530-533.
9
and the two thus fostered a very close relationship (miqie de guanxi 密切的關係) after
the 1850s, he contended that piaohao’s role as government financiers for the Imperial
Treasury (dali guoku 代 理國庫) had been mistakenly exaggerated.
23
Zhang explained
that although some provinces such as Guangdong, Fujian, Zhejiang, and Sichuan had
persisted in employing piaohao to remit tax quotas after the 1860s, the rest including
Jiangxi, Hunan, Hubei, Anhui, and Shandong soon resumed the conventional method of
shipping silver by land to deliver provincial taxes to Beijing. Nevertheless, Zhang did not
provide evidence to elaborate this argument further, because he primarily focused on the
history of cash shops in late Qing China.
24
In fact, piaohao’s relations with the Qing can neither be simplified as reliance on
nor independence from the state. Different from Tianjin salt merchants who could not
succeed without obtaining the monopolies from the Qing; only through interregional
trade did piaohao independently accumulate start-up capital for remittance business and
build empire-wide financial networks. Furthermore, after providing remittance for the
Qing for about fifty years, piaohao rejected the possibility to participate in the state’s
modern financial reforms at the turn of the twentieth century. Nevertheless, unlike the salt
producers of Sichuan and book traders of Fujian province, piaohao could not have risen
to national prominence if they did not provide remittance for the Qing bureaucracy.
The intricate relations between piaohao and the Qing dynasty could only be
reconstructed from three new aspects. First, historical contingency was a determinant of
23
Zhang Guohui, Wan Qing Qianzhuang he Piaohao Yanjiu [Studies on qianzhuang and piaohao in late Qing China]
晚清錢莊和票號研 究 (Beijing: Zhonghua shu ju [1989] reprint 2008), 98, 100.
24
Zhang, Wan Qing Qianzhuang he Piaohao Yanjiu, 100.
10
piaohao’s unexpected business interaction with the Qing after the 1850s. Before then, the
court had been successfully insisting on provincial officials submitting taxes through
overland silver shipment for over two hundred years. Had the Qing never been plagued
by the Taiping Rebellion, the Nian Uprising and the Muslim Rebellion during the
mid-nineteenth century, it would never have acquiesced in provincial officials’ excessive
use of piaohao’s remittance service as an ad hoc way to transfer taxes.
Second, piaohao’s growing involvement in handling the empire’s fiscal revenues
gradually polarized the court and provincial officials after the 1850s. In other words,
piaohao’s encounters with the central and provincial governments were completely
different.
25
On the one hand, provincial officials were staunch supporters of piaohao
whose remittance service not only guaranteed the punctual delivery of provincial taxes
when rampant rebellions disrupted overland silver transport, but also agreed to remit
taxes in advance out of their own pocket when provincial treasuries were depleted by the
court’s frequent tax demands. On the other hand, the court adopted hostile attitudes
towards piaohao. As unauthorized third-party financiers interfering in the empire’s fiscal
affairs, piaohao weakened the court’s complete control over the delivery of provincial
taxes and territorial bureaucracy. As a result, not only did the court never institutionalize
remittance as a legitimate alternative to overland silver transport, but also re-imposed the
ban on using piaohao to submit taxes for many times. Nevertheless, the court tolerated
provincial officials’ reliance on piaohao in exchange for additional funds, because after
1850s the financially-strapped court depended more on provincial taxes as it expanded
25
The court consisted of emperors, the Empress Dowager Cixi, officials at the Board of Revenue, the court’s think
tank—imperial censors and so forth. The provincial governments usually consisted of provincial governors, chief
supervisors of maritime customs and so forth.
11
expenditure on building larger state bureaucracy and quelling rebellions.
After 1895, the court was finally determined to reclaim the long-lost financial
sovereignty from provincial officials and started to centralize its financial administration,
sponsor modern financial institutions, and tighten controls over private banking firms
including piaohao. Since 1908, branches of the Qing’s central bank named Ta-Ching
Government Bank (daqing yinhang 大清銀行) had successfully deprived piaohao and
other private cash shops of handling and remitting provincial taxes and customs revenues
first in Shanghai and later in the rest of major cities including Hangzhou, Wuhan,
Qingdao, Ningbo, Fuzhou, Chongqing, Dalian and so forth.
26
Contrary to the prevailing
assumption that piaohao encountered financial difficulties only after 1911, their
remittance business showed the first sign of shrinking in size and scope two decades
earlier owing to the court’s modern financial reforms.
Third, piaohao’s interaction with the Qing state defied the model of
“reliance-turned-confrontation” prevailing in previous scholarship. By providing
remittance for provincial authorities, piaohao rose to national prominence after the 1850s.
For the same reason, however, the court was unhappy about piaohao’s rise, and continued
to extract money from them. Furthermore, although provincial officials supported
piaohao’s remittance business, they frequently borrowed from piaohao and defaulted on
loans because of perennial financial constraints faced by provincial treasuries.
Notwithstanding the substantial financial losses incurred by serving the Qing
authorities, the unpoliticized merchant community of piaohao remained loyal to the Qing
26
Ta-Ching Government Bank was the Bank’s official English name printed on its legal tenders.
12
empire. Of course, piaohao merchants would occasionally unite and collectively protest
against the Qing’s predatory tax policies, yet they always protested within the imperial
political polity without any transgression, and never formed any sort of permanent
associations aiming at confronting the state’s policies. In fact, the banking community of
piaohao primarily focused on supplementing business-related services that would
facilitate smooth remittance transactions, such as providing postal service and regulating
loan practices within the community, rather than claiming for greater political
representation with greater taxation. Even after 1895 when the court started to revoke the
financial freedom enjoyed by piaohao for about a century, piaohao chose not to confront
the state and instead opted out of the government remittance market. Contrary to the
increasingly politicized salt merchants in Tianjin, tea dealers in Hankou, and merchant
guilds in Shanghai which all requested formal political representation and greater
merchant autonomy from the Qing bureaucracy, piaohao remained detached from the
growing tensions between state and businessmen after the 1850s, regardless of their
expanding financial influence over the empire.
In conclusion, piaohao’s encounter with the Qing was the complexity of reliance on
and independent from the state without direct confrontations, which was distinct from the
extreme cases seen in other state-merchant relations in late imperial China. Furthermore,
the gradual disappearance of piaohao during the early twentieth century was not because
of their reliance on government, but because of the Qing’s accelerated transition from
empire to nation-state after 1895. Piaohao’s unique business relationship with the
Qing—serving it without being regulated—was only possible when the agrarian empire
13
placed a low priority on financial sovereignty. After 1895, however, the court started to
centralize its financial administration to meet the needs of a modern nation-state,
prioritized the development of modern banks, and downplayed native banking firms.
From that point, piaohao were deprived of the right to handle government remittances
when they refused to transform into modern banks and rejected the state’s modern
financial intervention.
Financial history from the inland perspective
Although the Qing empire was forced to open a series of treaty ports for foreign trade and
missionary activities after the 1840s, many scholars became aware of the limited
influence of western colonialism and imperialism over Chinese society even in treaty
ports. William Rowe contended that although Hankou transformed into the most bustling
treaty port of the mid-Yangtze region after 1861, it did not feel the shock of foreign
irritants until the 1890s. Instead, during the preceding century, nearly all the social
changes taken place in Hankou were “along a course dictated by the internal logic of
China’s own socioeconomic development” that was “independent from the arrival of the
West”.
27
Bryna Goodman found that when in 1893 the British-dominated multinational
Municipal Council celebrated the Silver Jubilee of the opening of Shanghai as a treaty
port, the participation of Chinese merchants did not manifest their compliance of a
colonized native elite nor did they enthusiastically transformed themselves after the
Western presence in the city. Instead, they reinforced the identity as sovereign subjects of
27
Rowe, Hankow: Commerce and Society, 341.
14
the Chinese empress by celebrating Cixi’s birthday concurrently.
28
Notwithstanding the awareness of western power’s limited influence over Chinese
societies in treaty ports, in the realm of China’s banking history after the 1840s, however,
scholars are still preoccupied with the distinct contributions of modern western-style
banks and their sweeping influence over China’s domestic financial institutions. Many
studies had been done on the achievements of the HongKong-based colonial exchange
bank—HongKong Shanghai Banking Corporation (HSBC), which after the 1840s acted
as the de facto financier for various provincial Qing authorities, handled war indemnities
on behalf of the British government, and issued paper bank notes as a new reliable
medium of exchange circulating in Shanghai, Canton and beyond.
29
Scholars also
emphasized the rapid development of domestic banking firms such as qianzhuang (cash
shops) in lower Yangzi Delta under the aegis of western colonial banks which
continuously injected financial capital (known as “chop loans”) into qianzhuang.
30
28
Bryna Goodman, “Improvisations on a Semicolonial Theme, or, How to Read a Celebration of Transnational Urban
Community”, in The Journal of Asian Studies, Vol. 59 (2000), 891, 919.
29
Frank H.H King, The Hong Kong Bank in Late Imperial China, 1864-1902: on an Even Keel (Cambridge; New
York: Cambridge University Press, 1987); Frank H. H. King, David J. S. King, and Catherine E. King, The Hongkong
Bank in the Period of Imperialism and War, 1895-1918: Wayfoong, the Focus of Wealth (Cambridge: Cambridge
University Press, 1988); Ji Zhaojin, A History of Modern Shanghai Banking: the Rise and Decline of China's Finance
Capitalism (New York: M.E. Sharpe. 2003); Niv Horesh, Shanghai's Bund and Beyond: British Banks, Bank Note
Issuance, and Monetary Policy in China, 1842-1937 (New Haven: Yale University Press, 2009).
30
Cash shops (qianzhuang) were common domestic banking firms in the lower Yangzi river delta regions, such as
Shanghai and Zhejiang province. Whereas piaohao provided remittance service for the Qing government and big
merchants through their empire-wide branches, most cash shops provided local merchants and residents with financial
services such as monetary exchange between silver and copper coins, and small scale deposits and loans. Nevertheless,
some big cash shops such as Fukang based in Shanghai owned several branches in southern China, and also conducted
remittances for the Qing government. For more information on qianzhuang, see Andrea Lee McElderry, Shanghai
Old-style Banks (chien-chuang) 1800-1935: a Traditional Institution in a Changing Society (Ann Arbor: University
Microfilms International, 1975); Susan Mann Jones, “Finance in Ningpo: The ‘Ch’ien Chuang’, 1750-1880”, pp. 47-77,
in W. E. Willmott, ed., Economic Organization in Chinese Society (Stanford, Stanford University Press, 1972); “The
Ningpo Pang and Financial Power at Shanghai”, pp. 73-96, in Mark Elvin and G. William Skinner, ed., The Chinese
City Between Two Worlds (Stanford, Stanford University Press, 1974).
15
Furthermore, many studies revealed the positive influence of modern western-style banks
over China’s domestic modern banking firms. For example, HSBC provided the ideal
institutional model that China’s first-ever government-supervised merchant-managed
modern bank—the Imperial Bank of China established by Sheng Xuanhuai—followed. In
order to gain a foothold in the Chinese financial market after the 1900s, modern Chinese
banks also endeavored to adopt western banking practices such as loans based
exclusively on collaterals, institutionalize the expert knowledge on banking, and improve
the working and living conditions of banking staff modeled on western-style banks.
31
In contrast, scholars of China’s hundred-year banking history after 1840 have thus
far failed to explore questions of how money and banking actually worked beyond treaty
ports and coastal areas, and how inland banking firms, such as Shanxi piaohao, actually
“unexpectedly” contributed to the development of treaty-port economy. This is because
scholars still mistakenly yet firmly believed that inland localities along the north China
plain, connected by the Yellow River and the Grand Canal waterways, irrevocably
declined after the 1850s. This was because the Qing court, plagued by the encroaching
western powers and domestic rebellions after the 1850s, abandoned its responsibility to
maintain the conventional inland transportation and diverted its priority to the coastal
areas where seemed to be the shortcut to solving the dynastic crises. From that point, late
imperial China was permanently divided into two cultures: a coastal (littoral) zone
oriented toward foreign trade, maritime commerce and cosmopolitan ideas; and a vast
31
Wen-Hsin Yeh, "Corporate Space, Communal Time: Everyday Life in Shanghai's Bank of China" in The American
Historical Review. 1995 (100), no. 1, 97-122; Cheng Linsun, Banking in modern China: entrepreneurs, professional
managers and the development of Chinese banks, 1897-1937 (New York, Cambridge University Press, 2003); Brett
Sheehan, Trust in troubled times: money, banks, and state-society relations in Republican Tianjin (Cambridge, MA,
Harvard University Press, 2003); Ji, A History of Modern Shanghai Banking.
16
interior (hinterland) that was landlocked, agrarian, and Sino-centric. In a recent study of a
middling-sort gentry in Yuci County, Shanxi province, Harriet Harrison reinforced the
backward image of the Chinese interior and Shanxi in particular that this impoverished
province became an isolated and inaccessible after being gradually excluded from the
“commercial prosperity and political power” after the Qing’s development policy leaned
towards the coastal areas in 1850s. As a result, most Shanxi people did not benefit from
urban industrialization and export-oriented commerce.
32
My research on Shanxi piaohao thus aims at countering the treaty-port-centered
financial history of China, and instead places the so-called “hinterland” and its financial
firms at the center of change after the 1840s. I underline that as inland private financiers
far from waterways and coasts, piaohao and their remittance service seized the rare
opportunity of the expansion and intensification of treaty-port trade and made distinct
contributions to it especially after the 1860s. By linking northern inland trading towns to
eastern coastal cities and financing local cash shops in treaty ports, Shanxi piaohao
accelerated monetary flow across the empire. On the other hand, piaohao merchants also
benefited from the financial interaction with treaty ports. Not only did they maintain the
prosperity of their localities in central Shanxi, they quickly adapted to the modernizing
world by investing in modern industries and sending descendants to Japan to obtain
modern professional degrees.
32
Kenneth Pomeranz, The Making of a Hinterland: State, Society, and Economy in Inland North China, 1853-1937
(Berkeley: University of California Press, 1993); Paul Cohen, Between tradition and modernity: Wang Tao and Reform
in late Ch’ing China (Cambridge, Mass 1974), 214-42; Henrietta Harrison, The Man Awakened from Dreams One
Man's Life in a North China Village, 1857-1942 (Stanford, Calif: Stanford University Press, 2005), 7; Kathryn
Edgerton-Tarpley, Tears from Iron: Cultural Responses to Famine in Nineteenth-Century China (Berkeley: University
of California Press, 2008).
17
I also reappraise the influence of western financial imperialism over China through
the history of piaohao. Contrary to the common belief that modern colonial banks such as
the Hongkong and Shanghai Banking Corporation suppressed the development of native
banking firms including piaohao after the 1840s,
piaohao’s role as the linchpin of
Chinese financial market was reinforced upon the arrival of colonial banks, whose
financial activities were confined in few treaty ports and thus depended heavily on
piaohao’s extensive financial networks in order exert greater financial influence in the
interior.
33
It might be true that HSBC’s banking business quickly outstripped piaohao’s
in Xiamen (Amoy) and Canton, yet in major treaty ports such as Shanghai, Hankou,
Tianjin and northern inland Chinese cities such as Beijing, Kaifeng, Lanzhou and Xi’an,
piaohao enhanced the businesses of most colonial banks over the course of the ever
expanding import/export trade.
Rescuing piaohao’s history from the financial modernist historicism
For nearly a century, scholars have strictly viewed piaohao within the framework of
comparison to western-style modern banks, against which they were helpless to compete.
In particular, piaohao were either acclaimed as domestic “proto-banks” (yuanchu yinhang
原初銀行) that appeared independently before the arrival of western banks in China, or
blamed for their financial backwardness which hindered them from reforming into
western-style banks after the 1910s.
34
English-language scholars have followed this
33
Cheng, Banking in Modern China; Ji, A History of Modern Shanghai Banking.
34
Chen, Shanxi Piaozhuang Kaolue; Wei, Shanxi Piaohao Shi; Shanxi piaohao yanjiu zu 山西票號 研究組 ed.,
Shanxi piaohao yanjiu ji, vol. 1 山西票號研究集第一輯 (Taiyuan: Shanxi Caijing xueyuan keyanchu, 1982); Shanxi
piaohao yanjiu zu ed., Shanxi piaohao yanjiu ji, vol. 2 山西票號研 究集第二輯 (Taiyuan: Shanxi Caijing xueyuan
18
interpretation a bit too eagerly and have regularly mistranslated the Chinese term “Shanxi
piaohao” into “Shanxi banks”.
35
In contrast, I argue that “modern banks” are a poor framework within which to
analyze Shanxi piaohao. Although piaohao handled monetary transfer and extended
loans to merchants, they were not the modern western-style banks as we know them
today. In fact, piaohao were completely incommensurable with modern western-style
banks. Piaohao’s business mechanisms, such as targeted clients and the ways to raise
capital, all distinguished them from western banks. And the biggest difference was the
backdrop against which piaohao and modern western-style banks functioned. In Britain
and continental Europe, central state began to exert ongoing influence over the financial
system through controls over the money supply and interest rates, and to charter/regulate
private banks in the state’s financial interest as early as the late seventeenth century.
36
Whereas in late imperial China, the central government had always been lacking a sense
of financial sovereignty, and the supply of non-standardized silver--the major form of
keyanchu, 1984); Zhang, Wan Qing Qianzhuang he Piaohao Yanjiu; Huang, Shanxi Piaohao Shi; Shi Ruomin 史若民,
Piaoshang xingshuai shi 票商興 衰史 (Beijing: Zhongguo Jingji chubanshe, 1992); Kong Xiangyi, Jinrong Piaohao
Shilun 金融票號史論 (Beijing: Zhongguo jinrong chubanshe, 2003); Liu Jiansheng 劉建生, Ming Qing jinshang
zhidu bianqian yanjiu 明清晉商 制度變遷研究 (Shanxi: Renmin chuban she, 2005); Zhan Zhengming 張正明 et al.
ed., Zhongguo jinshang yanjiu 中國晉商研究 (Beijing: Renmin chubanshe, 2006); Kwan Man Bun, “Chinese
business history in the People’s Republic of China, a review”, in Robert Gardella, Jane Kate Leonard, and Andrea Lee
McElderry ed., Chinese Business History: Interpretive Trends and Priorities for the Future (Armonk, N.Y .: M.E.
Sharpe, 1998), 41 (pp. 35-64).
35
The most recent reference to Shanxi piaohao in mass media appeared in The New York Times, 17 March 2009. See
Edward Wong, “Ghosts of a Faded Gilded Age Haunt a 19th-Century Chinese Banking Hub”
(http://www.nytimes.com/2009/03/18/world/asia/18pingyao.html?_r=1). Also see Frank Tamagna, Banking and
Finance in China (New York, Institute of pacific relations: 1942); Yang Lien-Sheng, Money and Credit in China: a
Short History (Cambridge, Harvard University Press, 1953); Frank H.H.King, Money and Monetary Policy in China,
1845-1895 (Cambridge, Harvard University Press,1965); McElderry, Shanghai Old-style Banks (chien-chuang); Cheng,
Banking in Modern China; David Faure, China and Capitalism: a History of Business Enterprise in Modern China
(Hong Kong: Hong Kong University Press, 2006).
36
Richard Sylla, Richard Tilly and Gabriel Tortella, “Introduction: comparative historical perspectives”, in The State,
the Financial System, and Economic Modernization, ed. Richard Sylla, Richard H. Tilly, and Gabriel Tortella
(Cambridge, U.K.: Cambridge University Press, 1999), 1-19.
19
state tax payments and large-scale commercial transactions--had thus been in control of
private banking sectors until the early 1930s when the Nationalist government
implemented the fabi 法幣 reform.
37
After all, piaohao shared many similarities with the majority of family firms in late
imperial China, such as relying on sole proprietorships/partnerships to raise capital, and
building business networks based on exclusive lineage and regional ties.
38
Yet, by
emphasizing piaohao’s nature as family firms, I do not intend to explore how it
contributed to remarkable business expansions, such as how lineages functioned as
corporation that pooled financial resources together, provided cheap labor family
businesses, and devised unique household division policies to prevent the scattering of
capital.
39
Rather, by exploring the non-financial and non-business strategies adopted by
piaohao merchants and their descendants, I treat the social and business practice of
piaohao as “a special kind of economic enterprise, in which mercantile decisions were
constantly taken with a view to their wider implications for the life of the family as a
social group”, and contend that the profit and loss of piaohao had always to be set in the
37
Lin Manhong, China Upside Down: Currency, Society, and Ideologies, 1808-1856 (Cambridge, Mass: Harvard
University Asia Center, 2006), 2, 70; Richard von Glahn, Fountain of Fortune: Money and Monetary Policy in China,
Fourteenth to Seventeenth Centuries (Berkeley, Calif.: University of California Press, 1996).
38
Wellington Chan, “Tradition and change in the Chinese business enterprise, in Robert Gardella, Jane Kate Leonard,
and Andrea Lee McElderry ed., Chinese Business History: Interpretive Trends and Priorities for the Future (Armonk,
N.Y .: M.E. Sharpe, 1998), 127-144.
39
Zelin, “Chapter 4: Organization and entrepreneurship in Qing Furong”, in The Merchants of Zigong; 74-122.
Contrary to common believe that equal distribution hindered family business expansion because of the fragmentized
capital, the household division practice of the Sibao book printers/traders in southern inland Fujian province after the
eighteenth century actually promoted the expansion of the book trade, because the newly divided families would soon
create an expanding family network of book printing and sell after they gained the initial portion of the capital (Brakow,
Commerce in Culture, 160-163). In addition, Anhui merchants in southeastern China even devised a special strategy:
they had a practice of dividing family property in a phased manner over time, rather than all at once. Sometimes the
family was dividing profits rather than the business firms. While the land and housing had been divided, their most
profitable possession—the firms remained intact. See David Wakefield, Fenjia, household division and inheritance in
Qing and Republican China (Honolulu: University of Hawaii Press, 1998), 178-179.
20
context of the future of the family rather than the remittance firms.
40
Piaohao’s gradual disappearance from the Chinese financial market was usually
translated into the ultimate failure of China’s indigenous banking firms competing against
modern banking institutions after the 1840s. I contend instead if viewing the history of
piaohao from a family-centered perspective, the shutdown of the most piaohao during
the 1910s did not mean the decline of Shanxi piaohao families. In fact, when the Qing
started to tighten the regulation on private financial firms after 1895, many piaohao
merchants deliberately opted out of the remittance market and invested in modern
industries as alternative strategies to maintain family prosperity. Furthermore, many
descendants of prominent piaohao families gradually transitioned out of finance, and
became avid readers of Confucian classics and generous donors of social charity. Some
earned the highest imperial exam degrees, whereas others pursued modern degrees
abroad. In other words, no matter how successful or abortive was Shanxi piaohao’s
remittance business as impersonal financial firms, the history of piaohao is more about
the people who not only pursued profit maximization as innovative businessmen, but also
engaged in non-banking activities in the social and cultural context of late imperial China
as filial sons and enthusiastic gentry interested in local affairs.
The ultimate purpose of discussing piaohao’s history from the family-centered
instead of firm-centered perspective is not just to reinforce the omnipresent influence of
late imperial Chinese culture and society over merchants’ business decisions.
41
Rather,
40
C. A. Bayly, Rulers, townsmen and bazaars: north Indian society in the age of British expansion 1770-1870 (Delhi,
India: Oxford University Press, 1992), 361.
41
Joanna F. Haudlin Smith, “Benevolent Societies: the reshaping of charity during the late Ming and early Ch’ing”,
309-337, in The Journal of Asian Studies, Vol. 46, No. 2 (May, 1987); Richard Lufrano, Honorable merchants:
21
the family-centered history of piaohao merchants avoids the dangerous trap of linking
piaohao’s future to modern western-style banks and portraying piaohao merchants as
inward-looking businessmen from the interior. I therefore reject the singular vision of
piaohao’s financial and social-economic future as modern western-style banks, and
counter the financial modernist historicism prevailing in the scholarship of post-1840
Chinese financial history that either applauded the positive influence of modern banks
over the Chinese financial market or blamed indigenous Chinese financial firms for
unable to emulate western-style banks owing to defective business and organizational
structures.
42
Chapter overview
Chapter 1 dates the origin of Shanxi piaohao back in the 1800s when the Qing economy
finally pegged to the New World silver, and reveals the symbiotic relations between the
rise of Shanxi piaohao as inland financiers and the expansion and intensification of treaty
port trade in both coastal areas and the interior after the 1860s. Chapter 2 explores
piaohao’s everyday business practices including bookkeeping methods, perception and
practice of commercial loans, and piaohao’s inter-firm relations, and makes two
commerce and self-cultivation in late imperial China (Honululu: University of Hawai’i press, 1997), Brokaw, “Sibao's
‘Confucian merchants’ in Minxi society and the late imperial economy”, Commerce in Culture, pp. 268-304; Kwan,
“Chapter 4: Merchant culture”, in The salt merchants of Tianjin, 73-88.
42
David Faure, China and Capitalism: A History of Business Enterprise in Modern China (Hong Kong: Hong Kong
University Press, 2006).
I am indebted to Dipesh Chakbrakarty’s argument, which calls for a reimagining of the present and future in terms
of a non-totalizing, heterogeneous plurality. Not only does Charkrabarty accept rationality, he also suggests preserving
the life-worlds in which rationality figures in various ways. Just as humans live with two halves of a brain, History 1,
the universalizing drive of capital, is always and perennially tempered by History 2. Seeking totality, Chakrabarty
suggests, is the error from which we must escape, see Alice Bullard’s review on Chakravarty, Provincializing Europe:
Postcolonial Thought and Historical Difference, in Theory & Society, 31 (2002): 784; Chakrabarty, Provincializing
Europe Postcolonial Thought and Historical Difference (Princeton, N.J.: Princeton University Press, 2000);
22
arguments. First, although piaohao and modern western-style banks are two types of
incommensurable financial institutions, piaohao’s banking practices were functionally
equivalent to those of western-banks, and the disappearance of piaohao at the turn of the
twentieth century cannot be ascribed to their “innately defective” banking practices.
Second, although piaohao would temporarily united in opposing the Qing state’s
predatory policies, their inter-firm interactions were hardly politicized and instead
focused primarily on everyday business transactions. This inter-firm merchant
community explained the reason why piaohao refused to work with the state’s modern
financial reforms, and distinguished them from other prominent merchant groups whose
political confrontation with the Qing state reached the peak after the 1900s. Chapter 3
argues that although piaohao rose to national prominence soon after remitting taxes for
provincial officials, their business interaction with the Qing dynasty was contingent and
inconsistent. The court had been hostile towards piaohao’s interference in handling its
fiscal revenues. And if the Taiping Rebellion did not disrupt the transfer of provincial
taxes by overland, the court would have never acquiesced in provincial officials’
employment of piaohao to remit taxes. Furthermore, in northern China, the court
successfully insisted on submitting taxes through overland shipment. In fact, the
limitation of piaohao’s remittance mechanism hindered them from replacing the
conventional tax transfer method of overland silver shipment as well as exerting greater
influence over the remittance market empire-wide. Chapter 4 delineates how piaohao’s
remittance business contracted after 1895, when the Qing court started to reclaim
financial sovereignty from private financial firms by centralizing and modernizing its
23
financial administration. Although piaohao had certain chances to be assimilated into the
state’s modern financial projects, they refused to do so because they suffered from the
Qing’s financial extortions for about half a century and were also over-optimistic about
co-existing with modern western-style banks. Chapter 5 counters the prevailing
teleological assertion that piaohao “declined” at the turn of the twentieth century when
failing to transform into modern banks. I postulate instead that when viewing the history
of piaohao from a family-centered perspective, piaohao devised complex non-banking
strategies to maintain family prosperity, such as investing in modern industries, devoting
to social charity, and pursuing scholarship. In other words, the dynamic non-banking
history of piaohao has long been foreclosed by the hegemonic modernity discourse which
blamed them for not evolving into full-fledged modern banks.
24
Chapter 1: The birth of Shanxi piaohao and expansion in
treaty ports, 1720-1860
This chapter argues that although Shanxi merchants had been engaging in inter-regional
trade among Russia, Mongolia and southern China after the 1720s, Shanxi piaohao did
not emerge until the highly commercialized Qing economy finally pegged to the New
World silver at the turn of the nineteenth century. During piaohao’s early business years
from 1820 to 1860, they provided remittance service for merchants conducting
long-distance trade and local elites purchasing titular official/studentship titles from the
Beijing court. Meanwhile, piaohao continued to participate in inter-regional trade in
order to maximize their business profit.
Yet, not until the expansion and intensification of import and export trade resulting
from a series of Sino-western treaties after 1858, did piaohao finally carve out a unique
niche in the Chinese financial market and rose to national prominence consequently: as
inland private financiers far from coasts and waterways, piaohao nevertheless linked
inland trading towns to coastal cities through their remittance services, financed local
cash shops in treaty ports and accelerated monetary flow across the empire. As a result,
they made significant contributions to and benefited from the bourgeoning Sino-western
trade both in treaty ports and the interior.
This chapter also reappraises the influence of western financial imperialism over
China. Contrary to the belief that modern colonial banks such as the Hongkong and
25
Shanghai Banking Corporation outstripped piaohao after the 1840s, piaohao’s role as the
linchpin of the Chinese financial market was reinforced upon the arrival of colonial banks.
This was because these bank’s financial activities were confined to few treaty ports, and
they had to depend solely on piaohao’s extensive financial networks in order to earn
greater profits in the interior.
Shanxi merchants’ long-distance trade and the birth of piaohao, 1720-1820
Miles of hilly areas and high soil acidity never made Shanxi province breadbasket of the
Qing dynasty. Thus, it had been difficult for Shanxi people to depend solely on
agriculture to feed themselves. Yet, what the province lacked in climate, it made up for in
location: Shanxi province was much larger during the Qing than its present-day
counterpart, putting even Guihua 歸化 (Hohhot)—present-day southern Inner
Mongolia—under its jurisdiction (Figure 1). As a result, Shanxi sat exactly in the inland
center of the Qing—linking southern China to the borderlands of Mongolian tribes and
the Russian empire. In 1727, the Treaty of Kiakhta was concluded between the Qing
and the Russian empire, which appointed Kiakhta, the northern frontier of Mongolia, as
the border town for duty-free Qing-Russian barter trade.
43
Figure 1 The Qing empire and Shanxi province in 1820
44
43
Joseph Fletcher, “Chapter 7: Sino-Russian Relations, 1800-62”, in The Cambridge History of China: Late Ch'ing,
1800-1911, Part I, ed. John K. Fairbank et al. (Cambridge: Cambridge University Press, 1978), 318.
44
Tan Qixiang 譚其驤 ed., Zhongguo lishi ditu ji 中國歷史地圖集 [The Historical Atlas of China], vol. 8 (Beijing:
Zhongguo ditu chuban she, 1982), 3-4.
26
Before long, shrewd Shanxi people with sharp business acumen took the
geographical advantage of their homeland and soon engaged in purchasing tea leaf, brick
tea, silk and cotton cloth from southern China to exchange goods with Mongolians and
Russians at Kiakhta. Although the trade was of barter only, Shanxi merchants managed to
cover the high cost of overland tea shipment through selling exotic hide and fur of Siberia
and Mongolia and broadcloth from Europe to inland residents. In addition, they also
conducted other kinds of inter-regional trade, such as dyestuff, tung oil and silk.
45
Long-distance trade enabled Shanxi merchants to acquire financial resources
45
Roger T. Banister and the Imperial Maritime Customs, A History of the External Trade of China, 1834-81, Being an
Introduction to the Customs Decennial Reports, 1882-1931 (Shanghai : Inspectorate General of Customs, 1931), 35;
Jiang Xuekai 蔣學楷, “Shanxi sheng zhi jinrongye” 山西省之金 融業[The finance of Shanxi province], in Yinhang
zhoubao [The Bank’s Monthly], 20 (1936), no. 21 of Jinshang yanjiu zaoqi lunji, vol. 2 晉商研究早 期論集 [Early
essays on Shanxi merchants], ed. Shanxi caijing daxue jinshang yanjiu yuan (Beijinng, jingji guuanli chubanshe, 2008),
31.
27
gradually and learn practical knowledge about doing business in different localities for
generations, which were conducive to the formation of their remittance business at the
turn of the nineteenth century. In fact, the predecessors of the earliest piaohao such as
Rishengchang and Weitaihou were dyestuff and silk firm respectively.
46
When the White Lotus Rebellion (1796-1804) plagued northern China, Lei Lü etai
雷履泰, by then the Tianjin branch manager of a dyestuff firm called Xiyucheng 西裕成,
worried that he could not safely transport silver ingots back to the firm’s head office in
Pingyao County, Shanxi province. He then devised a way of sending money back without
physically transferring it by giving the silver to a fellow Tianjin firm, which
coincidentally had an agency representing it in Pingyao. The fellow firm issued Lei a
document indicating the receipt of the money. When the head office of Lei’s firm
received the document sent back by Lei, it cashed the money from the fellow firm’s
Pingyao agency. Lei, therefore, was able to remit the money back home without shipping
actual silver ingots.
Figure 2 Former residence of Lei Lü tai, Pingyao, Shanxi (photo by author, July 2010)
46
Wei, Shanxi piaohao shi, 27.
28
Notes: The horizontal inscribed board in the center saying “Ba hu qi cui” 拔乎 其 萃, meaning
“transcending the excellence”, is used to describe financial achievements of Lei Lü tai.
Such method saved both time and cost of overland silver transport. From then on,
many firms in Tianjin started to pay Lei Lü tai to transfer silver through such method, and
Lei discovered that his remittance business was outstripping the firm’s original dyestuff
trade. During the 1820s, Lei successfully persuaded the owners of the dyestuff firm to
invest in a new firm named Rishengchang with remittance service as its primary business.
In 1851, Rishengchang had already opened seventeen branches across the Qing empire.
47
Figure 3 Head office of Rishengchang, Pingyao, Shanxi (photo by author, July 2010)
47
Huang Jianhui, “Table 1-1-10: Sanjia piaohao fenbu tongji” 三家 票號分佈統計 [Statistics on branches opened by
Rishengchang, Rixinzhong and Weitaihou], SPS, 43. The branches were located in Beijing, Zhangjiakou, Suzhou,
Hankou, Guangzhou, Changsha, Changde, Bianliang, Jinan, Xi’an, Chengdu, Chongqing, Yangzhou, Qingjiangpu,
Hekou (Jiangxi province), Sanyuan and Tianjin.
29
Of course, the founding story of Rishengchang is semi-anecdotal, because
remittance had been coexisting with trade that involved currency, and Lei cannot be the
first man “inventing” such method. Nevertheless, the fact that only after the turn of the
nineteenth century but not earlier did the first piaohao begin to provide professional
remittance service was still quite telling.
In particular, without the continuous influx of the New World silver to China which
triggered the increasing monetization and commercialization during the late eighteenth
century, Shanxi piaohao would never have come into being, because abundant silver
supply at merchants’ but not government’s disposal was fundamental to the trade and
30
financial activities of Shanxi merchants. In fact, although the Qing had been mining
silver in Annam and Burma after the mid-eighteenth century, domestic demand just
coming from Yunnan and Guangxi soon outstripped the insufficient supply of Southeast
Asian silver. Only after 1775 when Latin America replaced Southeast Asia and Japan and
became the sole supplier of silver dollars to the Qing, it ultimately switched to a
monetary system denominated in silver.
48
In a word, although Shanxi merchants had
been conducting inter-regional trade after the 1720s, Rishengchang’s debut in the
remittance market could only be dated at the turn of the nineteenth century but not earlier,
because the highly commercialized Qing economy’s need for a more standardized
medium of exchange was not satisfied until the importation of the New World silver after
the late eighteenth century.
After Rishengchang opened its remittance business after the 1820s, other Shanxi
trading firms admired the profits that Rishengchang gained and therefore opened their
own piaohao. Up to 1853, eleven piaohao had already been in operation (Table 1).
Table 1 The numbers of piaohao in treaty ports and inland towns
Locations (and the year
they became treaty
ports)
Numbers of
piaohao up to
1853
During the
early 1860s
1870s-1880s
From the
1890s
onwards
Pingyao 7
i
9
ii
12
iii
Qixian 2
iv
4
v
7
vi
Taigu 2
vii
3
viii
4
ix
Shanghai (1842) 22
x
19
xi
Xiamen (1842) 3
xii
4-5
xiii
Fuzhou (1842) 4
xiv
3
xv
4
xvi
Guangzhou (1842)
3-9
xvii
48
Manhong Lin, China Upside Down: Currency, Society, and Ideologies, 1808-1856 (Cambridge, Mass: Harvard
University Asia Center, 2006), 57-58, 43.
31
Tianjin (1858) 1
xviii
21
xix
Hankou (1858) 22
xx
19
xxi
Zhangjiakou (1860) 1
xxii
15
xxiii
Chongqing (1891)
16
xxiv
Shashi (1895)
11
xxv
Hangzhou (1895) 7
xxvi
0
xxvii
Chengdu 9
xxviii
10
xxix
Suzhou (1895) 3
xxx
10
xxxi
Kaifeng 9
xxxii
8
xxxiii
Changsha (1904) 9
xxxiv
Lanzhou 2
xxxv
3
xxxvi
The early business of piaohao, 1820-1860
Shanxi piaohao’s early financial business fell into three major categories. First and
foremost, they met the remittance need of inter-regional merchants who conducted
long-distance tea, silk, cotton, dyestuffs and tung oil (raw material for oil paints) trade.
Second, being the heirs of inter-regional merchants themselves, many piaohao continued
to engage directly in long-distance trade, such as tea and silk. In other words, many
piaohao adopted a bifurcated business strategy from the 1820s to the 1860s: while
making foray into the new remittance business on the one hand, they retained the
tradition of long-distance trade on the other hand. Third, piaohao developed an avid
interest in cultivating good relationship with local elites and bureaucracy, and offered
high quality remittance service to them, hoping to seek political patronage and bigger
business opportunities as return.
Business correspondence left by Rishengchang and Weitaihou, two of the earliest
piaohao, indicated that commercial firms and traders were the main pillar of piaohao’s
32
remittance service. For example, around 1850, a letter sent by Rishengchang’s
Zhangjiakou branch to Kaifeng stated: “(We have) got informed that you remitted
Tls.1,000 to us for a trading firm called Xingshengde 興盛德; another Tls. 1,200 for
Yongshunxiang 永順祥; and Tls. 500 for Yuxingchang 裕興昌”.
49
In 1851-1852, a
letter penned by Weitaihou’s Suzhou branch informed that it had prepared well for
cashing remittance drafts brought by silk merchants from Beijing.
50
During the same
period, Weitaihou’s Beijing branch communicated with the Suzhou branch the interest
rate that it was going to charge tea merchants.
51
Other letters of the Beijing branch
revealed that Weitaihou also provided remittance service to cotton, tung oil and grain
shipment traders who commuted between Suzhou and Beijing.
52
While gaining a foothold in the newborn remittance market, some piaohao such as
Rishengchang persisted in long-distance trade. Not only did this bifurcated business
strategy help maintaining the momentum of Shanxi merchants’ century-long prosperous
inter-regional trade, it also guaranteed piaohao steady profits in case the financial market
was at a low ebb.
Extant business correspondence of Rishengchang revealed the firm’s direct
involvement in tea and dyestuff trade during its early years. In the spring of 1861, the
Pingyao head office decided to open a new branch in Zhangjiakou, also known as the
Eastern Gateway (dongkou 東口), a northeastern trading center standing in the midway
49
Rishengchang’s Zhangjiakou branch to Kaifeng office, c.1840s, Takeshi Hamashita 濱下武志, Sansei hyōgō shiryō
山西票號資料, 書簡篇 [Primary sources of Shanxi piaohao, letters] (Tōkyō: Tōkyō Daigaku Tōyō Bunka Kenkyūjo
Fuzoku Tōyōgaku Bunken Sentā, 1990), 105-106.
50
Weitaihou’s Suzhou branch to Beijing office, c.1844-1845, Hamashita, Sansei hyōgō shiryō , 27.
51
Weitaihou’s Suzhou branch to Beijing office, 18 December c.1844-1845; Hamashita, Sansei hyōgō shiryō , 100.
52
Weitaihou’s Suzhou branch to Beijing office, 3 September c.1851-1852, and 25 December c.1850-1851,
Hamashita, Sansei hyōgō shiryō , 130-131, 162-163.
33
between Shanxi and Mongolia. Nevertheless, the reason Rishengchang came to
Zhangjiakou was not because it attempted to expand remittance business there, but to
promote the firm’s very own tea trade between Guangdong and Zhangjiakou.
53
In May
1861, the Pingyao office recorded that the employees of the Hankou branch were
carrying 1,500 jin of copper 紅銅, 3,000 jin of bronze 西碌, and 400 jin of tin alloy 點
銅 with them while fleeing to Fancheng 樊城 (present-day Xiangfan 襄樊), when the
Taiping Army was raiding Huangzhou 黃州 (present-day Huanggang 黃岡). All of
these goods were raw materials for making dyestuff, revealing Rishengchang’s preceding
specialty of dyestuff trade.
54
Last but not least, piaohao’s early remittance business was further blessed with the
patronage of local elites and bureaucracy, who were, in addition to inter-regional traders,
piaohao’s regular customers. In particular, one of Rishengchang’s signature services after
the 1820s was to help local gentry to purchase titular titles from the central government.
By then, the cash-depleted Qing court promoted the sale of titular official and studentship
titles to an unprecedented scale. Yet, local gentry soon discovered that traveling to
Beijing, finding and submitting money to officially-endorsed silver houses in person
caused too much trouble: they were either cheated by random imposters on the street or
extorted by silver houses which depreciated local silver ingots while converting into
Kuping taels (standard Imperial Treasury taels). Thus, when piaohao rolled the
remittance service out, local gentry immediately turned to piaohao which now remitted
payments for titular titles to Beijing on behalf of the gentry.
53
Rishengchang’s Pingyao head office to Guangzhou branch, 24 December 1861, SPS, 848.
54
Rishengchang’s Pingyao head office to Guangzhou branch, 28 February 1862, SPS, 852.
34
For example, around 1844-1845, Weitaihou’s Suzhou branch helped some local
gentry named He Lin 何麟 and Ye Qilin 葉啟林 purchased a ninth-ranking official title
and gongsheng 貢生 studentship from Beijing.
55
Later on, the same branch helped Li
Zhaochun 李兆春 obtained jiansheng 監生 studentship through remittance.
56
From 23
March to 5 June 1850, Rishengchang’s Beijing branch successfully helped twelve
well-to-do men from Jiangsu, Jiangxi, Sichuan, Shanxi, Shaanxi, Zhili, Hubei and Fujian
to purchase their desired titular titles, and the total remittance amount was Tls. 1,341.
57
The remittance service of piaohao also alleviated the burden of local elites and
officials who needed to (secretly) move their fortunes among different places. A few
examples yield a glimpse into local gentry’s patronage of piaohao’s remittance business.
Around 1841, Rishengchang’s Pingyao office remitted Tls. 1,200 for Lord Zhang; the
Beijing branch remitted Tls. 500 for Lord Hu Ruiting 胡瑞廷.
58
In April 1844,
Weitaihou’s Suzhou branch remitted Tls. 3,000 for Wang Lanshi 王蘭史, by then the
County magistrate of Changzhou 長洲 (a district of present-day Suzhou), to Beijing.
Before long, Wang requested Weitaihou to remit another Tls. 1,200 to Beijing.
59
In 1851,
Weitaihou’s Beijing branch helped Lord Jing remit Tls. 2,500 to Suzhou.
60
Meanwhile,
its Suzhou branch sent Tls. 17,000, 1,170 and 102 in a row to Zhangjiakou on behalf of
Wu Tang 武棠, a Shanxi native and retired Jiangsu lieutenant governor (buzhengshi 布
55
Hamashita, Sansei hyōgō shiryō , 4.
56
Hamashita, Sansei hyōgō shiryō , 24.
57
Huang, Shanxi piaohao shi, 162-3.
58
Rishengchang’s Beijing branch to Pingyao head office, c. 1841-1850, SPS, 833, 835.
59
Hamashita, Sansei hyōgō shiryō , 2, 9.
60
Hamashita, Sansei hyōgō shiryō , 167-168.
35
政使).
61
Piaohao’s early endeavor to curry favor with local elites and bureaucrats gradually
paid off. Business correspondence revealed that they began to receive big remittance
orders from local government. For example, in 1851, Weitaihou’s Suzhou branch
complained bitterly that because they offended Mr. Ni, the Grain Intendant (liangdao 糧
道) of Suzhou, the lion’s share of remitting the Expenditure on Grain Shipment by Sea
(haiyun jingfei 海運經費) with a total amount of Tls. 250,000 had been taken by its
major competitor—Rishengchang.
62
In other words, as early as 1851, piaohao such as
Rishengchang and Weitaihou had been competing for profitable government remittance
orders against each other.
Owing to the patronage of long-distance traders and local elites, piaohao
endeavored to keep their remittance business on the right track. Nevertheless, only after
piaohao’s remittance service met the imperative financial need of the import and export
trade stimulated by the treaty-port system and the prompt delivery of provincial taxes
when domestic rebellions disrupted the normal tax transfer by land after the early 1860s,
did piaohao finally rise to national prominence. The rest of the chapter reconstructs the
process of piaohao linking inland trading towns with treaty ports through remittances and
thus becoming prominent and prosperous financial firms across the empire. Chapter
Three will delve into piaohao’s multi-layered business relationships with the Qing
government.
61
Hamashita, Sansei hyōgō shiryō , 130-131.
62
Weitaihou’s Suzhou branch to Beijing office, 27 January 1852, Hamashita, Sansei hyōgō shiryō , 185-186.
36
Piaohao and treaty-port trade after 1858
1, Contributing to treaty-port trade
Although the Treaty of Nanking signed in 1842 unleashed a new era of free trade at five
treaty ports, only after the early 1860s did the import and export trade gain the ultimate
momentum, when inland provinces were gradually incorporated into the treaty system
that had been spreading along the east coast for two decades. Shanxi piaohao, whose
remittance business not only adeptly connected inland areas with treaty ports but also
extended credits to dealers of treaty-port trade, facilitated trade transactions, and thus
reaped both fame and fortune from it. In other words, without the expansion and
intensification of treat-port trade after the 1860s, Shanxi piaohao could never rise to
national prominence.
The Treaty of Tientsin in 1858, the First Convention of Peking in 1860 and their
subsequent amendments “constituted a definitely new stage in the history of foreign trade
in China” and “created the system under which trade with foreign nations was regulated,
fostered, and grew to undreamt-of dimensions for the next 70 years.” Under these
Treaties, not only were eleven new treaty ports opened to foreign residence and trade, but
foreign merchants also obtained unprecedented privilege of travelling in the Chinese
interior for the purpose of trade.
63
Furthermore, these Treaties were “elucidation,
development, and consolidation of the Nanking Treaties” which were now “interpreted in
63
Banister, A History of the External Trade of China, 1834-81, 50-51. These treaty ports were: Niuzhuang, Tianjin,
Dengzhou, Hankou, Jiujiang, Nanjing, Zhenjiang, Taiwan (present-day Anping harbor of Tainan city), Danshui,
Shantou, Qiongzhou.
37
every way as the foreign powers wished”.
64
For example, although the Treaty of Nanking
promised to reduce the transit duties levied on goods bought or owned by foreign
merchants while moving them inland, only after the Treaty of Tientsin did the transit dues
(zikoushui 子口稅), now fixed on the rate at 2½ percent, ad valorem, replace various
heavy inland duties for the first time.
65
In 1871, even Chinese merchants sending imports
to the interior started to enjoy the privilege of being exempted from lijin and other inland
taxes after paying the transit dues at 2½ percent.
66
The new fixed-rate inland transit tax immediately accelerated the commercialization
of agricultural products in the interior and stimulated the import and export trade across
the Qing empire after 1858.
67
For example, the British firm Jardine, Matheson & Co. and
the American firm Russell & Co. soon plunged into the upcountry purchase of tea and
silk, and set up agencies in Shanghai, Hankou, Jiujiang, Fuzhou and so forth.
68
Russian
merchants were also active tea buyers based primarily in Hankou.
69
Over the five years
from 1845-1849, about 52,000,000 pounds (390,977 piculs) of tea was exported out of
China, yet during a single year of 1862, more than 1,300,000 piculs of tea were
exported.
70
Regarding importation, foreign cotton goods such as yarn, T-cloths, and
grey/white shirtings quickly surged into China. In 1859, the value of foreign cotton goods
64
Banister, A History of the External Trade of China, 1834-81, 51.
65
Opium, however, was excepted and was not allowed the privilege of the transit certificate, see Banister, A History of
the External Trade of China, 1834-81, 50-51.
66
Banister, A History of the External Trade of China, 1834-81,73-74.
67
Hao Yen-p’ing, “Chapter 6: The commercialization of agricultural products: the upcountry purchase of tea”, 138-162;
and “Chapter 7: The intensification of competition”, 163-211, in The commercial revolution in nineteenth century
China—the rise of Sino-Western mercantile capitalism (Berkeley, University of California Press, 1986).
68
Hao, The commercial revolution in nineteenth century China, 163-164.
69
Ibid., 176.
70
Banister, A History of the External Trade of China, 41, 91.
38
entering Shanghai was Tls. 8,200,000 and in 1869 the value reached Tls. 18,805,000.
71
The importation of opium to China also soared after it was legalized and taxed under the
treaty settlement of 1858-1860. For example, during 1838-1839, the amount of opium
sending from India to China was 40,000 chests, and during 1862-1863 the amount hit a
whopping 75,331 chests (one chest weighed one picul).
72
Yet how did the remittance business of piaohao benefit from the expansion and
intensification of import/export trade in the interior? Generally speaking, piaohao’s
remittance service not only facilitated the transfer of funds in large sums between the
interior and treaty ports, it also extended both long- and short-term credits to dealers and
agents who mediated between import and export trade. Consider export trade first.
Although foreign trading firms mushroomed after the 1860s, they still depended heavily
on Chinese agents, dealers and compradors who spoke dialects, owned adequate local
knowledge and thus made direct purchase from growers in the countryside.
73
As to import trade, merchants in the interior usually did not come to the treaty ports
and buy directly from foreign firms. Instead, they gave orders to their agents based in the
treaty ports. These agents would then proceed to local dealers, who had direct businesses
with foreign firms, to obtain goods ordered by importers based in the interior.
74
Almost any parties involved in completing any import or export transactions
comprising inland importers, agents of the importers in treaty ports, and compradors of
71
Ibid., 23, 26, 90.
72
Banister, A History of the External Trade of China, 10, 91, 28, 56; Hao, The commercial revolution in nineteenth
century China, 60.
73
Banister, A History of the External Trade of China,52; Robert P. Gardella, Harvesting Mountains: Fujian and the
China Tea Trade, 1757-1937 (Berkeley: University of California Press, 1994), 64-5, 67.
74
Srinivas R Wagel, Finance in China (Shanghai: North-China Daily News & Herald, 1914), 118, 123, 128.
39
foreign firms relied heavily on piaohao’s remittance drafts as an indispensable medium of
exchange circulating between the interior and treaty ports. For example, if importing grey
shirtings from Shanghai, an inland importer in Kaifeng would give a native order on his
bank to the local branch of a Shanxi piaohao, buy a remittance draft and send it to his
agent in Shanghai. The Shanghai agent then presented the remittance draft to piaohao’s
branch in Shanghai, and received in exchange a native order on some local qianzhuang,
which the agent would later present to the dealer in foreign goods.
75
Piaohao’s remittance drafts also served as important credit instruments for
Sino-western trade. It was very common that middlemen and dealers would not get paid
until they fulfilled importers’ or foreign firms’ orders in the first place. Furthermore,
many inland importers did not have enough cash ready to pay for the goods they planned
to purchase.
76
Under these circumstances, piaohao were willing to issue overdrafts to
sound merchants and dealers who were allowed to pay the money back after six months
or longer.
77
Suffice it to say that the Sino-western trade after the 1860s would never
reach to the scale as it actually did, provided that piaohao did not facilitate and accelerate
monetary flows between the interior and treaty ports, and vice versa.
2, Prospering in treaty ports and beyond
Indeed, after the 1860s piaohao had been providing remittance service in
unprecedentedly large scale and scope in major treaty ports with Shanghai as the prime
example. According to a travelogue written by a contemporary literati Ge Yuanxi 葛元熙
75
Wagel, Finance in China, 123.
76
Hao, The commercial revolution in nineteenth century Chin, 81,
77
Wagel, Finance in China, 128.
40
in 1876, twenty-two Shanxi piaohao operated in Shanghai, the irreplaceable nexus of
Sino-western trade.
78
A quick glimpse of Rishengchang’s correspondence also revealed
that its remittance business in Shanghai was simply thriving. During the early 1890s, a
letter of the Shanghai branch recorded that it remitted Tls. 16, 065 from Beijing to
Shanghai for Ruifuxiang 瑞蚨祥, the famous silk and cloth chain store headquartered in
Beijing.
79
In addition, it remitted Tls. 15,000 from Tianjin to Shanghai for a trading firm
called Dongrusheng 東 如升.
80
Before long, the Shanghai branch conducted another
remittance of Tls. 22,081 from Beijing to Shanghai for Ruifuxiang and of Tls. 20,000 for
a firm named Yudazhuang 餘大莊.
81
According to piaohao scholar Huang Jianhui’s
statistics, Rishengchang’s Shanghai branch remitted no less than 3.2 million taels of
silver to the rest of the empire in 1906, whereas its Xi’an branch remitted only about 0.56
million of taels.
82
This comparison highlighted Shanghai as the most important center of
gravity for piaohao’s remittance business.
Hankou, the most bustling entrepô t on the middle Yangzte River, was another locus of
Shanxi piaohao. Before Hankou was opened by the Treaty of Tientsin in 1858, however,
there was no single piaohao operating there.
83
In 1866, Hankou became the starting point
of a whole new Russian tea export route. During that year, modification to the Treaty of
78
Ge Yuanxi, “Shanxi huiye” 山 西匯業 [Shanxi remittance business], in Huyou zaji 滬遊雜記 [Miscellaneous notes
on trip to Shanghai], Guangxu r. 22 (1896), reprinted in SPS, 58.
79
Sometimes it is very hard to trace the exact year of such business transaction, due to the limited information
provided by SPS.
80
Rishengchang’s Shanghai branch to Pingyao head office, 7 May c. 1889-1893, SPS, 922.
81
Firm’s name and the destination are unavailable here, due to the damage of the original letter.
82
Huang Jianhui, “Table 1-1-74:1906 nian Rishengchang 14 ge fenhao huidui tongji biao” 1906 年 日昇昌票號 14 個
分號匯兌統計表 [Statistics on the remittances conducted by Rishengchang’s 14 branches in 1906], in SPS, 472.
83
Yang Yinpu 楊蔭溥, Zhongguo jinronglun 中國金融論 [On Finance in China] (Shanghai, liming shuju, 1931), 312.
41
Tientsin abolished the coast trade duty on Chinese produce including tea brought from
other ports to Tianjin for export thence under bond to Kiakhta, the principle being that
movement from Tianjin to Kiakhta was now considered as direct export. Most tea
shipped to Tianjin originated from Hankou, where Russian merchants set up agencies to
obtain raw tea and established workshops to bake and pack into brick tea for export.
84
Tea business in Hankou therefore boomed after the implementation of the new tax policy.
The value of tea shipped from Hankou to Tianjin via Shanghai, for example, increased
from Tls. 800,000 in 1868 to Tls. 1,950,000 in 1869.
85
Nevertheless, most Russian firms still relied heavily on Chinese middlemen who
were employed to make direct purchase from tea growers across the countryside in Hubei
and Hunan provinces.
86
These middlemen, who frequently sent money back and forth
among Hankou and other tea trading ports including Shashi, Xiangtan, and Changsha,
were the pillar of piaohao’s remittance and overdraft businesses. In 1881, twenty-two
piaohao streamed to Hankou, providing remittances for local import and export trade,
especially for Russian tea exportation. In 1906, Rishengchang’s Hankou branch remitted
more than Tls. 600,000 to Shashi, and cashed remittances of Tls. 513,536 sent from
Shashi. In addition, it fulfilled remittance orders of Tls. 508,129 sent from Changsha.
87
In addition to providing financial services to the burgeoning tea export trade, some
piaohao in Hankou also clung to the tradition of bifurcated business strategy: not only did
they directly engage in supplying raw tea and processing brick tea for export, some
84
Banister, A History of the External Trade of China, 1834-81, 70, 79.
85
Ibid, 104, 70.
86
Gardella, Harvesting Mountains, 65; Banister, A History of the External Trade of China, 1834-81,79.
87
Huang, “Table 1-1-74:1906 nian Rishengchang 14 ge fenhao huidui tongji biao”, SPS, 470, 471, 473.
42
piaohao’s tea business was vertically integrated to some extent. In particular, the Firm
Rules (haogui 號規) drafted by Dadetong piaohao in 1884 granted the equal status of the
firm’s tea and remittance sections that “our remittance and tea businesses are essentially a
unity (chapiao shengyi, tongshu yijia 茶票生意 ，同屬一家), so each section will have
the same start-up capital of Tls. 50,000.” The Rules then inculcated its Hankou branch
with the importance of quality control while purchasing raw tea from Hubei and Hunan.
88
A merchant manual called Predecessors’ Know-how For Itinerary Merchants
(xingshang yiyao 行商 遺要), transcribed in 1917 and found at the Qi County in 1994,
further evidenced piaohao’s direct participation in tea trade and manufacture in Hankou
after the 1860s. The manual was believed to belong to either the Qu family owning
Sanjinyuan, Changshengchuan and Baichuantong piaohao or the Qiao family owning
Dadetong and Dadeheng piaohao.
89
Yet because the Qus and the Qiaos both located in
the Qi County and had become relatives through marriage long before the 1860s, it was
highly possible that the manual was shared by both of them whose piaohao conducted tea
trade simultaneously in Hankou.
90
The manual consisted of seventy-five documents ranging from merchants’ moral
codes to practical guidance on taxes levied on tea. Three documents, in particular,
88
Firm Rule of Dadetong, 1884, reprinted in SPS, 595.
89
Huang, “Qixian chengnei Qujia”, in SPS, 779; Liang Xiaoshu 梁 小樹, Liu Chongzheng 柳崇正: “Minguo
xinshang yihao shouchaoben jingxian qixian” 民國《行商遺要》手抄本驚現祁縣 [Discovering Predecessors’
Know-how For Itinerary Merchants in the Qi County], in Shanxi Dang’an 山西檔案 [Documents of Shanxi], vol. 6,
2007, 10-11; Shi Ruomin 史若民, and Niu Bailin 牛白琳 ed., Ping, Qi, Tai jing ji shehui shiliao yu yanjiu 平祈太經
濟社會史料研究 [Primary sources on society and economy in Pingyao, Qi and Taigu County] (Taiyuan: Shanxi gu ji
chu ban she, 2002), 481.
90
In particular, Qu Benqiao (1862-1919), who took charge of the Qu families’ piaohao after the 1880s, spent his
childhood and received early education in the Qiao family with his maternal grandparents, see Shanxi shengzhengxie et
al. ed., Jinshang shiliao quanlan, Jinzhong juan, 136.
43
deserved further elucidation, which not only indicated that piaohao’s tea business was
sort of vertically-integrated in Hubei and Hunan, but also revealed that tea products
supplied by piaohao catered to the Russian tea export trade in Hankou. The document
titled “Advice On Purchasing Tea In the Mountains (jinshan anzhi wujian maicha
zonglundi 進山安置物件買茶總論底)” showed that piaohao took control over the very
first step of tea export—purchasing raw tea. The document elaborated the techniques for
selecting high-quality black tea according to the color, texture, smell, and taste of raw tea
while buying from local tea growers in Anhua 安化, Hunan province.
91
Another document called “Rules for Processing Raw Tea (chuaicha zuogong guili di
踹茶做工規例底) ” indicated that piaohao operated tea processing workshops in the
countryside next to the tea growing areas. It distinguished different wages of day and
night shift, and even stipulated a meat allowance of forty copper coins for each tea
worker twice a month. Piaohao also subcontracted the work of tea baking and packing to
local Jiangxi foremen and workers, and would reimburse each worker for 1,000 copper
coins as travel cost of coming to the workshop. A wage increase was also recorded during
the Xuantong Reign (1908-11).
92
The third document “Selling (tea) to Foreign Firms in
Hankou (Hankou shou yangzhuang lidi 漢口售 洋莊例底) ” detailed the process of
selling finished tea products to Russian firms in Hankou, which included sending tea
samples to the agents of Russian firms, negotiating prices and sending the bulk of tea to
Russians for export after deals were made. The document also converted Chinese weight
91
Shi and Niu ed., Ping, Qi, Tai jing ji shehui shiliao yu yanjiu, 489.
92
Ibid., 493-4.
44
measurement into western standards.
93
In sum, Hankou and Shanxi piaohao mutually benefited each other after the 1860s.
On the one hand, without Hankou being opened as a treaty port and given tax privileges,
Shanxi piaohao and their remittance business could never gain a firm foothold there. On
the other hand, by accelerating monetary flow among Hankou and adjacent market towns
and becoming direct tea suppliers, piaohao propelled the local success in import and
export trade.
After the 1870s, piaohao also expanded its remittance business in Chongqing, a
southwestern trading hub. Although Chongqing did not become treaty port until 1891, it
had risen to the role of a major distributing center of domestic opium when the Qing
government reluctantly relaxed the prohibition against cultivating poppy in Sichuan after
opium trade was legalized by the Treaty of Tianjin.
94
Before long, piaohao set up
branches in Chongqing and provided remittance service for opium dealers swarming
from the rest of the empire. These dealers even dubbed drafts used for purchasing opium
“tupiaozi 土票子” (opium drafts).
95
In addition, letters left by Rishengchang’s
Chongqing branch before the 1890s indicated that cotton traders, buying raw cotton from
Wuhan and Changsha and selling it to Chongqing and Chengdu, were also piaohao’s
93
Ibid., 524.
94
Banister, A History of the External Trade of China, 1834-81, 67.
95
Hou Zhaolin 侯兆麟 (Hou wailu 侯外廬), “Jindai zhongguo shehui jiegou yu shanxi piaohao: Shanxi piaohao lishi
de zhengque renshi” 近代中國 社會結構與山西票號 ——山西票號歷史的正確認識 [Modern Chinese social
structure and Shanxi piaohao—a correct understanding of the history of piaohao], in Zhongshan wenhua jiaoyuguan
jikan 中山文化館季刊, 1936 winter, re-quoted from Jinshang yanjiu zaoqi lunji 晉商研究早期論 集 [Early essays on
Shanxi merchants], vol.1, Shanxi caijing daxue 山西財經大學 ed. (Beijing: Jingji guanli chuban she, 2008), 91-104.
45
primary customers during the pre-treaty-port period.
96
Piaohao’s remittance business went full-throttle after the opening of Chongqing as a
treaty port in 1891. The Decennial Report of 1882-1891 compiled by the Imperial
Maritime Customs estimated that there were sixteen piaohao operating in Chongqing
during that period.
97
According to the Decennial Report of 1892-1901, each summer
piaohao’s Chongqing branches were busy cashing enormous amount of remittances
sending by opium buyers especially coming from Shanghai.
98
In the 1896 opium-buying
season, Chongqing market’s demand for silver quickly outstripped the supply so that
piaohao had to borrow Tls. 100,000 from the magistrate’s treasury of the Ba County, in
order to fulfill remittance orders sent from every corner of the empire.
99
In addition,
piaohao also met the remittance need of local importers of cotton yarns who had to send
money to Shanghai on a regular basis to make purchase there.
100
Besides major treaty ports, piaohao’s business expansion into smaller inland towns also
directly resulted from new changes in Sino-western trade after the 1860s. In particular,
although Zhangjiakou, also known as Kalgan and Eastern Gateway, had been serving as a
major transit hub connecting Siberia and Mongolia with northern Chinese markets as
early as the 1730s owing to the Treaty of Kiakhta, exchange of silver or other currencies
96
Rishengchang’s Chongqing branch to Pingyao head office, c. 1899-1893, SPS, 957.
97
Imperial Maritime Customs (IMC hereafter), Decennial Reports on the Trade, Navigation, Industries, etc., of the
ports open to foreign commerce in China and Corea ,and on the condition and development of the treaty port provinces,
1882-91 , (Shanghai: Statistical Department of the Inspectorate General of Customs, 1892, 115.
98
Decennial Report of 1892-1901, Chungking, reprinted in SPS, 305.
99
The report was penned by the Ba County magistrate named Guozhang 國璋 in Guangxu r. 22 (1896), April 8,
reprinted in SPS, 309.
100
Ikenaga Rin'ichi 池永林一, “Financial Report from the Consulate-general of Japan in Chongqing, Year 1907”, in
Pan Cheng’e 潘承鍔 trans. & ed., Zhongguo zhi jinrong 中國之金 融, V ol. 2 (Shanghai: Zhongguo tushu gongsi,
1908), 13-14.
46
was being strictly prohibited in Kiakhka before 1851, and Zhangjiakou did not become an
inland trade and financial center until it was opened as a treaty port for Russians under
the Convention of Peking between the Qing and Russia in 1860.
101
After then, piaohao
quickly began to provide remittances in the Zhangjiakou market. For example, a letter
penned by Rishengchang’s Pingyao head office in February 1861 disclosed that it decided
to set up a branch in Zhangjiakou just for the purpose of facilitating tea trade between
southern China and Siberia.
102
Zhangjiakou’s key role in the Sino-Russian trade was further reinforced after 1866,
when Russian merchants adopted the new tea export route featuring Zhangjiakou as the
inland transit station over the course of shipping tea from Hankou to Kiakhta via
Tianjin.
103
By the end of the 1890s, fifteen piaohao were doing business in Zhangjiakou,
indicating that the expansion of foreign trade and the prosperity of piaohao were
mutually enhancing after the 1860s. According to Japanese scholar Tadashi Negishi’s 根
岸佶 estimation in 1906, piaohao’s branches in Zhangjiakou had to fulfill remittance
orders of more than two-million taels annually sent from Tianjin.
104
Even piaohao’s foray into remote towns could be ascribed to the intensification of
Sino-western trade after 1860s. For example, Feng Xiangyu 馮祥玉, a former employee
of Weifenghou piaohao’s Ningxia branch during the early 1910s, disclosed in an
interview in July 1961 that the primary business of the piaohao’s Ningxia branch was to
101
Banister, A History of the External Trade of China, 1834-81, 35.
102
Rishengchang’s Pingyao head office to Guangzhou branch, 19 December 1861, SPS, 848.
103
Banister, A History of the External Trade of China, 1834-81, 104, 98.
104
Tadashi Negishi ed., Shin-koku shōgyō sōran 清國商業綜覽 [A comprehensive survey of commerce in the Qing
dynasty] (Tōkyō: Maruzen Kabushiki Kaisha 丸善株式會社, 1906), reprinted in SPS, 372.
47
provide remittances for Tianjin-based British mercantile firms including Messr.
Tokmakoff, Molotkoff & Co. (xintai yanghang 新 泰洋行) and Bisset & Co. (pinghe
yanghang 平和洋行), which purchased hide and fur from the northwest and shipped to
Tianjin for export abroad.
105
In sum, piaohao’s remittance business started to reach the apex after the 1860s, owing to
a series of treaties which stimulated import and export trade not only in treaty ports but
also in the interiors.
106
As financial firms originating from the heartland and having been
engaging in interregional remittances for four decades, piaohao connected northern
inland towns with southern coastal cities through remittances, accelerated money flow
across the empire, and were indeed the linchpin of the thriving trade-port trade.
105
Intervidw with Feng Xiangyu, 6 July 1961, SPS, 334; these firms are translated into English according to Yao
Xiangao 姚賢鎬 et al. ed., Zhongguo jindai duiwai maoyi shi ziliao,vol. 3 中國近代對外貿易史資 料 [Primary
sources on foreign trade in modern China] (Beijing: Zhonghua shuju, 1962), 1670.
106
Banister, A History of the External Trade of China, 1834-81, 51.
48
Piaohao as patrons of qianzhuang (cash shops)
107
107
Although piaohao acted as patrons of cash shops in most treaty ports, this was not always the case, especially in
places where only few piaohao set up branches and thus had to turn to local cash shops for help, because seeking
floating cash through inter-piaohao remittance transactions became difficult and unrealistic.
In Cheefoo 芝罘 (present-day Yantai 煙臺), the 1882-1891 Decennial Report found out that “should the house
(i.e. Hui-tui-chuang, or Shanxi piaohao) on which the order is drawn not have funds in hand, it borrows from the
chieh-tai-chuang class”. The Report later defined “chieh-tai-chuang (i.e. jiedaizhuang 借貸莊)” as “money lenders”,
whose “advances being generally limited to Tls. 2,000 or Tls. 3,000 at a time. Houses of this class are established in
each trade centre throughout the province. In Chefoo there are three of these hongs, each of which is a branch
establishment of a Peking house; the latter undertake remittances between Chefoo and Peking” (Imperial Maritime
Customs, Decennial reports, 1882-1891, 72). Although these “money lenders” (jiedaizhuang) were not necessarily
local qianzhuang, this scenario indicated that piaohao were not always patrons of cash shops. In contrast, the success of
their remittance businesses depended on floating cash withdrawn from the local financial market.
Rishengchang’s business letters also described similar situations in Hunan province. On 28 January 1861, the
head office of Rishenchang recorded that its Xiangtan 湘潭 branch had been worrying about fulfilling a remittance
order of Tls. 20,000 recently sent from Guangzhou, because silver shortage had been haunting Xiangtan after the
Taiping Rebellion. “Fortunately,” the letter continued to report, that “a cash shop called Juxianglong 巨興隆 in
Xiangtan coincidently had the silver stock at hand, and was willing to lend it to us. Thanks to Juxinglong, our
remittance reputation for always being solvent is eventually maintained” (SPS, 33). Nevertheless, Rishengchang had
been always that lucky. During 1890-1891, its Xiangtan branch desperately reported to Pingyao that “the recession in
the local market has already reached the apex…Now it became extremely difficult for us to seek floating capital from
local cash shops after several of them closed down during the previous years, which caused huge panic and credit
constraints in Xiangtan” (Rishengchang’s Xiangtan branch to Pingyao head office, 8 December 1895, SPS, 1037).
Furthermore, sometimes the business relationship between piaohao and local cash shops was constantly changing,
depending only on the ebb and flow of local financial markets. A moment ago piaohao and cash shops might be still
willing to extend credits to each other, a moment later they might decide to withdraw their deposits from each other and
withhold the extra cash at hand. In other words, the status quo of local market heavily mediated the relationship
between piaohao and cash shops, which was beyond the control of both. Once being patrons of cash shops never meant
that piaohao made a permanent commitment to such identity, or vice versa. For example, during the 1883 Shanghai
financial crisis, according to a report of Shenbao on 24 October 1883, piaohao urged cash shops to repay all the
short-term loans with a week, which reinforced the panic in the Shanghai financial market (SPS, 69).
In Xiamen, the 1882-1891 Decennial Report observed that Shanxi piaohao used to lend generously to local cash
shops. Yet, because of the frequent shutdowns of insolvent cash shops, piaohao now preferred withholding floating
cash to lending it to cash shops:
Although they (piaohao) give lower rates of interest on deposits, and the volume of their business exceed that of
the local banks, they often hold large amounts which remain unemployed. Formerly the funds for which there
was no immediate call were placed with those local banks… (which was) a fairly remunerative profit for the
kind of business. Of late years, however, owing to the reported instability of some of the local banks and the
number of failures, the Shansi banks have taken the precaution of keeping their surplus funds in their own safes,
rather than run any risk by entrusting them to other banks. (Imperial Maritime Customs, Decennial reports,
1882-1891, 518).
On 6 April 1903, the grand councilor (junji dachen 軍機大臣) named Ziji 字寄 reported to the court that the
financial market of Tianjin failed to recover from the recession resulted from the Boxer’s Rebellion. Before 1900, it
was easy for cash shops to borrow money from piaohao. But now piaohao refused to lend money to them unless local
officials guaranteed these loans. Ziji reminded local officials never agree to piaohao’ unreasonable requests, because
once cash shops defaulted, local government would be then burdened with the responsibility to repay irrelevant
commercial debts on behalf of cash shops, in addition to numerous war indemnities and foreign loans.
49
Piaohao’s financial interactions with qianzhuang in treaty ports also verified their vital
role in participating and stimulating import/export trade across China after the 1860s. In
major treaty ports including Shanghai, Hankou and Tianjin, the financial business of
qianzhuang depended heavily on the floating capital injected by piaohao.
In early 1870s Shanghai, there were twenty-odd piaohao conducting remittances in
the local financial market, and most of them extended credits to local qianzhuang.
108
During the 1883 Shanghai financial crisis resulting from speculation in silk, many
qianzhuang suddenly went insolvency. On 18 October 1883, Zilin Hubao 字林滬報, a
local Shanghai newspaper, estimated that before the crisis piaohao had previously lent
qianzhuang two to three millions of silver taels.
109
Although Shenbao’s calculation was
more conservative comparing to Hubao, it also confirmed that the amount of silver that
Shanghai qianzhuang borrowed from piaohao was at least a million taels.
110
In Hankou, piaohao were also the financial pillar of local qianzhuang. For example,
on 23 April 1878, Shenbao reported that a local cash shop called Zhangchang 正昌 went
bankrupt, and Yuanfengjiu and Xiechengqian piaohao were its primary creditors which
108
Huang, Shanxi piaohao shi, 198.
109
“Lun qianshi zhi shuai” 論錢市 之衰 [On the decline of money market], in Zilin hubao, 9 February 1884, reprinted
in SPS, 70.
110
“Zhengdun qianye shuo” 整頓 錢業說 [On the regulation of money market] Shenbao, 24 October 1883, reprinted
in SPS, 69.
There were many more comprehensive descriptions and discussions on the role of Shanxi piaohao in Shanghai
financial market, see Huang, Shanxi piaohao shiliao, 217-9; Zhang, Wanqing qianzhuang he piaohao yanjiu, 104-8.
The financial crisis of 1883: as Shanghai had become an international trade center, its trade transactions brought
financial dependence in the world. Trading firms dealt with raw silk and various silk products were major business in
Shanghai, and they business were impacted greatly international trading market. In 1883, when the world silk market
went stagnant, the effects of the previous speculations by Chinese businessmen magnified. This finally caused a major
financial crisis in 1883. During that year, a lot of silk firms and some other tea and sugar firms defaulted their loans
whose principle creditors were qianzhuang. Subsequently, eighty-seven percent of Shanghai qianzhuang closed their
doors and about 300-400 commercial firms went into bankruptcy as well. This caused a money constraint in the
Shanghai financial market. For more information, see Ji, A History of Modern Shanghai Banking: The Rise and Decline
of China's Finance Capitalism, 65-6; McElderry, Shanghai Old-Style Banks (Ch’ien-Chuang), 113-8.
50
lent Tls. 60,000-70,000 to it.
111
In 1900, when the repercussions of the Rubber Share
Crisis of Shanghai hit Hankou, many qianzhuang immediately closed down and the
Hankou financial market was panicked. According to the estimation of Shangwubao 商
務報 (Commercial Newspaper), the total amount of short-term loans that piaohao
granted Hankou qianzhuang ranged from seven to eight millions taels of silver.
112
In
1906, according to a report written by Japanese Consul Mizuno Kōkichi 水 野幸吉
(1873-1914) sojourned in Hankou, there were over twenty Shanxi piaohao doing
financial business there, which attended the daily meeting held by big local qianzhuang
and negotiated with them the exchange and interest rates of the day.
113
In 1908, Shenbao
reported that a famous local qianzhuang called Yishenglong 怡生隆 went into
bankruptcy, which owed Weishengchang piaohao’s Hankou branch Tls. 185,000;
Zhongxinghe Tls. 35,000; Tianchengheng Tls. 50,000, Shiyixin Tls. 40,000, Dadetong
Tls. 12,000, Cunyigong Tls. 10,000, and Dashengchuan Tls. 3,000.
114
Although the
aforementioned examples were local newspapers’ calculations of bad debts incurred by
insolvent qianzhuang, they also reflected that piaohao were patrons of the Hankou
financial market.
In Tianjin, qianzhuang also depended heavily on floating capital provided by
piaohao. For example, soon after the Eight-Power Allied Army invaded Beijing in 1900,
many qianzhuang in Tianjin suddenly closed down and fled away. Piaohao then
111
“Qianzhuang daota” 錢莊倒塌 [The collapse of cash shops], Shenbao, 23 April 1878, SPS, 193.
112
Pan Cheng’e trans. & ed., Zhongguo zhi jinrong, Vol. 1, 39.
113
Mizuno Kōkichi 永野幸吉, “Financial Report from the Consulate-general of Japan in Hankou, 1906”, in Pan trans.
& ed., Zhongguo zhi jinrong, vol. 1, 38.
114
“Hankou qianye zhi konghuang” 漢口錢業之恐慌 [The financial panic of Hankou money market], Shenbao, 15
November 1908, reprinted in SPS, 413.
51
immediately responded by withdrawing all short-term loans from the remaining
qianzhuang, which reinforced the financial panic in Tianjin. As a result, qianzhuang were
forced to unite and petition the Zhili government to implement a moratorium, which
finally pacified the panic of the local market.
115
Piaohao’s symbiotic relations with colonial banks
Piaohao’s indispensable role in facilitating and stimulating import and export trade after
the 1860s was reflected ultimately from their everyday business interaction with western
colonial banks. Previous scholars asserted that the arrival of colonial banks such as the
Hongkong and Shanghai Banking Corporation (HSBC) hindered piaohao from further
expanding.
116
Contrary to this common belief, I reveal that first of all, piaohao and
colonial banks were of different kinds and their businesses did not conflict each other in
many occasions. The primary goals of treaty-port-based colonial banks after the 1840s
were to finance regional trade for Eastern-based foreign firms, such as opium exportation
from India to China, and to serve as exchange banks by buying and selling bills of
exchange
,
purchasing and selling bullions, and circulating banknotes within Asia, whereas
piaohao primarily engaged in financing inter-regional trade inside the Qing.
117
Furthermore, the soundest colonial banks lent stupendous amount of money to the Qing
which was in urgent need to pay war indemnities and fund modernization projects. Take
115
“Tianjin song jun shouheng shang ling taishou jiuzhi shimian tiaochen” 天津宋君壽恒上淩太守救 治市面條陳
[The petition to Tianjin governor by Song Shouheng for rescuing the Tianjin financial market], in Dagongbao, 14
June 1903, reprinted in SPS, 296-7; also see discussions in Zhang, Wan Qing Qianzhuang he Piaohao Yanjiu, 111.
116
Zhang, Wan Qing Qianzhuang he Piaohao Yanjiu; Huang, Shanxi piaohao hao shi.
117
Frank H. H. King, Catherine E. King, and David J. S. King, The History of the Hongkong and Shanghai Banking
Corporation, vol. 1, The Hongkong Bank in Late Imperial China, 1864-1902: On an Even Keel (Cambridge:
Cambridge University Press, 1987), 6, 43, 56, 83.
52
HSBC as the example. From 1874 to 1894, it issued a total of £ 12 million loans to the
Qing.
118
HSBC was able to accomplish such financial task by being appointed as the
British government’s banker in China and hence issuing public loans in the London
market at a discount and a sum less than the amount paid to the Qing.
119
Yet such
business went far beyond the scale and scope of Shanxi piaohao doing financial business
in late Qing China.
Second, in terms of funding and facilitating the ever expanding import and export
trade in coastal and inland China, piaohao’s vital role was actually reinforced upon the
arrival of colonial banks. Of course, in southeastern coastal cities such as Xiamen (Amoy)
and Canton, colonial banks, such as HSBC, were soon competing against piaohao for
remitting money to adjacent cities such as Hongkong.
120
Yet, in most treaty ports and
inland towns from north to south, colonial banks had either to work closely with piaohao
or depend solely on piaohao’s extensive financial networks if they wanted to reap profits
from the interiors. In other words, regarding import and export trade across China, the
relationship between piaohao and foreign banks was complementary rather than
competitive.
In particular, most colonial banks had little practical access to the interior, and most
foreigners were reluctant to step out of the treaty ports during their four to five-year
tenure as expatriate bankers in China.
121
In fact, these banks were pretty much “on the
118
Frank H. H King, David S. S. King, and Catherine E. King, The History of the Hongkong and Shanghai Banking
Corporation, Vol. 2, The Hongkong Bank in the Period of Imperialism and War, 1895-1918: Wayfoong, the Focus of
Wealth (Cambridge: Cambridge University Press, 1988), 264.
119
Frank H. H. King et al., The History of the Hongkong and Shanghai Banking Corporation, vol. 1, 16, 550-551.
120
Pan trans. & ed., Zhongguo zhi jinrong, vol. 2, 60; According to Shenbao, only three piaohao set up branches in
Xiamen, as of 6 July 1888, SPS, 60.
121
Frank H. H. King et al., The History of the Hongkong and Shanghai Banking Corporation, vol. 1, 15, 500.
53
edge of China” with limited geographical scope. By 1895, for example, HSBC operated
only six branches and agencies in China, consisting of Shanghai, Fuzhou, Hankou,
Xiamen, Tianjin and Beijing, and the last two were intended to further the Bank’s
contacts with senior Qing government officials rather than facilitating treaty-port trade.
122
In contrast, during the same period, the thirty-odd Shanxi piaohao had a major financial
presence in about forty localities, spreading from major treaty ports in the coastal areas to
border towns in the interior (Table 2 and Figure 4).
Table 2 Branches/agencies of HSBC vs. localities of piaohao’s major financial presence
in the 1890s
HSBC branches and agencies by
1895
123
Localities piaohao had a major
presence in the 1890s
124
Hong Kong
Batang 巴塘
Beijing (Peking) Beijing
Changde
Changsha
Chengdu
Chongqing
Dajianlu 打箭爐
Dihua 迪化 (Ürü mchi)
Fuzhou Fuzhou
Ganzhou
Guangzhou (Canton)
Guihua (Hohhot)
Guilin
122
Ibid., 501-502.
123
Frank H.H. King et al., The History of the Hongkong and Shanghai Banking Corporation. Vol. 1, The Hongkong
Bank in Late Imperial China, 1864-1902: on an Even Keel (Cambridge: Cambridge University Press, 1987), 501.
(A list of China branches opened before 1895 provides an indication of their limited geographical scope—they were on
the edge of China.)
124
Huang Jianhui, “Table 1-1-73: Qingmo piaohao zai quan’guo gedi fenhao jiashu tongji 清末票號 在全國各地分號
家數統計 [Statistics on piaohao’s branches across the empire in late Qing period], SPS, 468-469.
54
Guiyang
Hangzhou
Hankou Hankou
Jilin
Jinan
Kaifeng
Kiakhta
Lanzhou
Liangzhou
Nanchang
Pingyao
Qixian
Sanyuan
Shanghai Shanghai
Shashi
Shenyang
Suzhou
Taigu
Taiyuan
Tianjin (Tientsin) Tianjin
Wuzhou
Xi’an
Xiamen (Amoy) Xiamen
Xiangtan
Yingkou
Zhangjiakou (Kalgan)
Figure 4 Thirty-nine localities where piaohao had major financial presence
125
125
Tan ed., Zhongguo lishi ditu ji, vol. 8, pp. 5-6.
55
As a result, while financing foreign firms’ upcountry purchase of tea and silk for
export, the only choice of colonial banks was to rely on Chinese compradors and dealers,
because these banks had neither direct access to local growers nor direct knowledge of
the areas in which agricultural products were grown and processed.
126
Under such
circumstances, foreign banks, similar to the practice of foreign trading firms, usually
injected money into local cash shops in treaty ports which intermediated between foreign
funds and Chinese dealers in import/export trade. Yet, only through piaohao’s extensive
financial networks linking coastal cities with the hinterland, could Chinese dealers remit
their funds to any localities in the interior.
127
That was the reason why piaohao’s role as
126
Frank H.H. King et al., The History of the Hongkong and Shanghai Banking Corporation. Vol. 1, 504-5, 518.
127
Ibid., 503.
56
linchpin of the Sino-western trade was reinforced instead of being impeded upon the
arrival of colonial banks after the 1860s.
Not only did the extant business correspondence of Rishengchang prove Shanxi
piaohao’s direct role in mediating between Chinese merchants and foreign banks, it also
proved piaohao’s direct business interaction with foreign banks over the course of the
ever expanding Sino-western trade. For example, around 1890, Rishengchang’s Shanghai
branch remitted 10,000 foreign silver dollars for a certain merchant to the Guangzhou
branch which later transmitted the money to the Hongkong branch of the Comptoir
Nationale d’Escompte de Paris.
128
During the same period, the Guangzhou branch
transferred 50,000 foreign silver dollars to the local branch of a certain foreign bank,
whose name evaded the extant sources because of the damage of the original letter.
129
During the mid-1890s, Rishengchang’s Guangzhou branch remitted Tls. 21,600 to the
Shanghai branch which later cashed the draft from HSBC’s Shanghai office on behalf of
a certain trading firm. Before long, the Shanghai branch remitted another Tls. 42,990 for
a merchant to its Guangzhou branch which later transferred 60,000 foreign silver dollars
to the Hongkong office of the Chartered Bank of India, Australia and China. Meanwhile,
the same branch remitted 7,170 silver dollars, which were transferred to HSBC via
Rishengchang’s Guangzhou branch.
130
In fact, throughout the extant business letters, it
was evident that Rishengchang’s Guangzhou and Shanghai branches frequently
conducted remittances for firms and merchants sending Chinese silver taels from one
place and picking up foreign silver dollars from foreign banks at another place via the
128
Rishengchang’s Shanghai branch to Pingyao head office, 8 December 1889, SPS, 918.
129
Rishengchang’s Guangzhou branch to Pingyao head office, 8 January, 1895, SPS, 932.
130
Rishengchang’s Shanghai branch to Pingyao head office, c. 1894-1899, SPS, 1018, 1028.
57
financial mediation of local piaohao.
131
Besides Rishengchang, Zhang Zhongquan 張仲
全, a former employee of Baichuantong piaohao, also recalled during an interview in
1961 that its Hankou branch kept frequent business contact with many local branches of
colonial banks, including HSBC, Chartered Bank of India, Australia and China,
Russo-Chinese Bank and so forth.
132
Piaohao’s direct and frequent involvement with foreign banks regarding
import/export trade could be further evidenced from three other aspects. First, in treaty
ports such as Hankou, colonial banks usually dispatched representatives to three meetings
convened monthly by local piaohao and cash shops and negotiating exchange rates
among Chinese silver taels and foreign dollars.
133
Second, most piaohao were avid recorders of exchange rates among various foreign
silver dollars and Chinese taels. For instance, around the late 1890s, Dadetong and
Dadeheng piaohao kept a detailed conversion chart of British sterling pounds and
Shanghai tael for everyday remittance business, according to which one Shanghai tael
was equivalent to 2s 3½d.
134
In early 1890s, Rishengchag’s Yangzhou branch also
informed in a letter that the current exchange rate between one Carolus dollar and
Pingyao tael was 0.698.
135
Furthermore, some piaohao even provided financial support
for Chinese compradors who speculated on currency exchanges. Around 1890,
131
Rishengchang’s Guangzhou branch to Pingyao head office, c. 1894-1899, SPS, 1027, 1029.
132
Interview with Zhang Zhongquan, July 1961, SPS, 333.
133
Mizuno Kōkichi 永野幸吉, “Financial Report from the Consulate-general of Japan in Hankou, Year 1906”, in Pan
trans. & ed., Zhongguo zhi jinrong, vol. 1, 39.
134
Wei Juxian 衛聚賢, “Shanxi piaohao zuijin zhi diaocha (xu)” 山 西票號最近之調查( 續) [Recent studies on
Shanxi piaohao,sequal], Zhongyang yinhang yuebao [The Monthly of the Central Bank of China], 2047 (December
1937), 2047.
135
Rishengchang’s Yangzhou branch to Pingyao head office, c. 1889-1893, SPS, 927.
58
Rishengchang’s Shanghai branch disclosed that many compradors went bankrupt recently
owing to over-speculation in British sterling pounds whose price suddenly rose against
Chinese taels. As a result, Zhichengxin piaohao, which had been financing compradors
for doing so, was forced to write off more than Tls. 300,000 of bad debts.
136
Third, a private letter sent by David Mclean (1833-1908), the Shanghai branch
manager of HSBC during 1865-1872, to W. H. Vacher in January 1872, revealed that not
only did he obtain up-to-date firsthand financial information from Shanxi piaohao in
order to manipulate exchanges, he also did direct business with them. An excerpt of the
letter goes as follows:
It strikes me that we are going to have high exchanges this year Sycee being
exceedingly scarce in China...The Shansi bankers (i.e. Shanxi piaohao, author’ s
note) (with whom I do a large business occasionally) tell me that the hard metal
is very scarce all over the northern part of China which is confirmed by the
eagerness of the Govt agent here to get bills on Tientsin. I shall keep a sharp
look out after precious metal & may Telegraph to you for Bar Silver. Do you
think you could purchase from the other Banks on this 5/10½ @ 5/11 60 d/st.
137
Although Mclean never elaborated what kind of direct business he had with piaohao, the
context of this letter nevertheless indicated that piaohao had fostered a direct and
complementary business relation with colonial banks in major treaty ports during the
early 1870s.
136
Rishengchang’s Shanghai branch to Pingyao head office, 10 March 1890, SPS, 921.
137
David Mclean, a letter to W. H. Vacher, 12 January 1872, The Hongkong Bank History Program, Transcript of
McLean's letterbook, 1870-1872, volume IV (Oriental and African Studies, University of London, n.d.), 112; King, 199,
44.
59
In conclusion, western colonial banks arriving in China after the 1840s indeed
outstripped piaohao in terms of issuing large amount of loans to the Qing government
and providing financial services in certain southeastern treaty ports such as Xiamen.
Nevertheless, Shanxi piaohao enhanced the financial businesses of most colonial banks
not only in treaty ports but also in the interior after the 1860s. Colonial banks, whose
banking activities were confined to few treaty ports, must depend heavily on piaohao’s
extensive financial networks linking the littoral to inland areas in order to exert greater
influence on and gain greater profits from the expanding import/export trade across the
vast Qing empire.
60
Chapter 2: Native banks, universal practices: piaohao’s
unusual business profile
This chapter delineates piaohao’s everyday remittance businesses from three aspects.
First, I argue that piaohao’s bookkeeping method was functionally equivalent to
western-style double-entry bookkeeping method with similar features of recording assets
and liabilities and keeping track of bad debts. I thus debunk the prevailing myth that
piaohao’s gradual disappearance in the early twentieth century was because of their
backward and innately defective bookkeeping method.
Second, contrary to the common belief in piaohao’s fatal ignorance about collateral
loans, I find that they actually practiced them on a regular basis. Nonetheless, piaohao
did prefer insider lending and loans based on personal trusts to loans based on collaterals
that frequently failed to guarantee lenders the secure rights to mortgaged assets once
borrowers defaulted. Yet, insider lending was not just confined to native Chinese banks
but a universal financial practice across the world, especially in the
pre-industrial/information ages when the legal/third-party enforcements of loan contracts
were too expensive to maintain.
Third, I portray piaohao’s inter-firm relations as competition within cooperation:
on the one hand, thirty-odd piaohao competed intensely against each other for a limited
number of government remittance opportunities after the 1860s. On the other hand,
piaohao contacted each other on a daily basis, consisting of handling inter-firm
61
remittances in order to absorb fellow piaohao’s surplus capital; conforming to uniform
loan repayment dates; collectively sending mail and silver ingots to reduce transaction
costs; having frequent inter-firm staff flow and marriages; and collectively defending
against predatory polices of the Qing government.
Piaohao’s bookkeeping method: myth and reality
Although being monetary remittance firms, scholars have been rarely interested in
piaohao’s bookkeeping methods, which are in fact the key to understanding their
remittance mechanism. Furthermore, scholars’ earlier effort to dispel the
pseudo-distinction between the advanced double-entry bookkeeping method of the West
and the backward single-entry bookkeeping of late imperial China has still been
overlooked thus far.
138
In 2006, in answer to why late imperial China failed to develop western-style
capitalism, David Faure ascribed it to “traditional Chinese accounting lacked the means
to calculate capital”, and reinforced the assumption of China’s predestined divergence
from capitalism.
139
Based on just one contract from an undated Ming dynasty Huizhou
handbook regarding profit-sharing pattern of salt-mining in Sichuan and coal-mining in
138
“The term double-entry refers to the conceptualizing of business transactions as two-sided and self-balancing.
Each event is recorded in dual form as a “debit” (an entry on the left side of an account or a “credit” (an entry on the
right side), readily facilitating detection of clerical errors. Since two basic types of records are required for recording
transactions—a book of original entry (the journal), data from which is then transferred (posted) to a classified or
topical record of accounts (the ledger)—the term “double-entry” at times is loosely used to refer to such records. The
self-balancing feature of the system is loosely used to refer to such records. The self-balancing feature of the system is
neatly illustrated in today’s elementary accounting textbooks—the assets (value owned) of the enterprise in question
equal its liabilities plus owner’s equity (value owed).” Definition quoted from Robert Gardella, “Squaring accountings:
Commercial bookkeeping methods and capitalist rationalism in late Qing and Republican China”, Journal of Asian
Studies, Vol. 51, No.2 (May, 1992), 319.
139
David Faure, China and Capitalism: a History of Business Enterprise in Modern China (Hong Kong University
Press, 2006), 93.
62
Beijing, Faure explained further that “traditional Chinese accounts lacked the mechanics
to keep track of capital…No records of assets and liabilities were really necessary… The
absence of any means for capital accounting…would have made no provision for bad
debts or depreciation”.
140
In fact, Robert Gardella had attempted to debunk the myth of the “backward”
Chinese bookkeeping method as early as 1992, and postulated that double-entry
bookkeeping method might not be the prerequisite to capitalist development and
industrial takeoff in the West:
Double-entry records did not materially enhance a merchant’s ability to allocate
revenue more rationally or maximize returns on investments, were not
particularly valued because they were abstract quantifications, and certainly did
not involve separation of habitually intermingled business and personal
assets.”
141
In fact, Gardella argued, “Even in the early phase of Great Britain’s industrialization in
the late eighteenth and early nineteenth centuries, an astonishing inexactitude prevailed
with respect to cost calculations and product pricing…entrepreneurs such as Josiah
Wedgwood and Matthew Bolton arbitrarily guessed their expenses and prices.”
142
Gardella then shifted his focus to late imperial China, and informed that, “with the
‘dragon gate ledger’ (longmenzhang 龍門帳), late Ming-early Qing Shanxi bankers
created an indigenous double-entry accounting system”, although “the basis of state
140
Faure, China and Capitalism, 36-37.
141
Gardella, “Squaring accountings”, 320.
142
Ibid.
63
accounting in late imperial China was the single-entry four columns system (sizhufa 四柱
法)”.
143
In particular, the dragon gate ledger:
“[A]ltered the sizhufa’s account categories to entities more appropriate for business
transactions, namely income (jin 進)
144
, expenses (jiao 繳), assets (cun 存), and
liabilities (gai 該). The receipt-payment form of double-entry recording, based
upon dual offsetting entries and a bisected page format, owed much to the
sanjiaozhang 三腳賬.
145
The use of three principal types of account books—a
journal for initial recording (caoliu 草流 or caozhang 草賬), a ledger for daily
double-entry posting (liushuibu 流水薄), and a ledger for categorizing accounts
(zongqingbu 總清薄 or juanqing 眷清)—was nonetheless a major advance. At
the end of the year, accounts were closed by harmonizing the dragon gate (he
long men 合龍門): the profit or loss from subtracting expenses from income had
to tally with that obtained by deducting liabilities from assets (on the grounds that
143
Gardella, “Squaring accountings”, 324. Gardella’s description of the dragon gate ledger is a precise translation of
Fu Jianmu’s research on Chinese merchants’ double-entry bookkeeping methods during the Qing dynasty, see Fu
Jianmu 傅建木, “Qingdai minjian kuaiji fushi jizhang gaishu” 清 代民間會計複式記賬概述 [An outline of civil
double-entry book keeping methods], Zhongguo shehui jingjishi yanjiu 3(1989):73-77. As a result, I will not translate
Fu’s description of the dragon gate ledger if Gardella had already translated the same content.
“Sizhufa consisted of “four categories for recording official receipts and disbursements: balance forwarded (guan
管), new receipts (shou 收), outlays (chu 出), and present balance (zai 在). This was a single-entry system based upon
a simple principle: the balance forwarded plus new receipts must equal outlays plus present balance. In the late 17
th
century and early centuries, the method was applied with particular rigor in the zouxiao 奏銷, the comprehensive Qing
system of annual fiscal auditing of local and provincial accounts”, quoted from Gardella, “Squaring accountings”, 323.
144
Gardella’s initial translation of “jin” is “receipt”, but I think “income” is more accurate.
145
Sanjiaozhang, or “three footed account”, marked the first use of a double-entry recording principle during late Ming
and early Qing. Every transaction was recorded twice in “incoming” (lai 來) and “outgoing” (qu 去) categories on the
upper and lower halves of the same account-book page. These incoming and outgoing categories were also designated
as “receipts” (shou 收) and “payments” (fu 付). Gardella, “Squaring accountings”, 324; Fu, “Qingdai minjian kuaiji
fushi jizhang gaishu”, 73-74.
64
assets plus expenses must equal liabilities plus income.
146
To transcribe the balancing principle of the dragon gate ledger into an equation, it is:
Jin-Jiao=Cun-Gai OR Income-Expense=Asset-Liability
147
And I find this equation has no significant difference from the modern extended
accounting equation of the West:
Assets + Expenses = Equity + Liabilities + Income
148
I assume what Gardella meant by “Shanxi bankers” is Shanxi piaohao merchants,
because he later displayed a sample page from a general account book held at the Rare
Book and Manuscript Library of Columbia University, which presumably belonged to a
certain Shanxi piaohao in Beijing circa 1842-44 (Figure 5). Yet, whether this general
ledger belonged to piaohao rather than other mercantile firms or it was kept under the
principle of the “dragon gate ledger” had been unconfirmed by Gardella, who left this
sample page without analysis. Nevertheless, Gardella’s effort to debunk the arbitrary
distinction between bookkeeping methods of the West and late imperial China deserves
acclaim.
Figure 5 Sample page of a general account book of a firm in Beijing, c. 1842-44
149
146
Gardella, “Squaring accountings”, 324; Fu, “Qingdai minjian kuaiji fushi jizhang gaishu”, 74-5.
147
Fu, “Qingdai minjian kuaiji fushi jizhang gaishu”, 75.
148
Clyde P Stickney and Roman L. Weil, Financial Accounting: An Introduction to Concepts, Methods, and Uses
(Cincinnati, Ohio: Thomson/South-Western, 2003), 46.
149
Gardella, “Squaring accountings”, 325.
65
In fact, if all types of the account books of the thirty-odd piaohao for over a century
are well kept until today, there would be sufficient primary sources for scholars to be
more confidently reconstructing the bookkeeping methods of piaohao. Chen Qitian, a
sociology professor of Yenching University who took many field trips to Shanxi to study
piaohao during the mid-1930s, estimated that piaohao’s remittance required at least
sixteen different kinds of account books. Wei Juxian, a renowned Republican scholar who
was commissioned by H. H. Kung (Kong Xiangxi)—the Minister of Finance from
1933-44 and a native of the Taigu County—to write a history of piaohao during 1936-44,
indicated that piaohao’s accounts could be divided into four basic categories.
Synthesizing Chen and Kong’s research, I think the core types of piaohao’s account
books comprises: 1, Daybooks (liushuizhang 流 水賬) recording the everyday
remittance transactions; 2, Cash books (xianjinzhang 現金賬) indicating cash inflows
and outflows of daily business; 3, Monthly general journals (yueqing 月清) that every
branch of piaohao was required to report to the head office; and 4, General ledgers
66
(nianqing 年清 or nianzongjie 年總結) which were made annually by the head offices
based on monthly journals sent by branches.
150
In contrast, however, no scholars have been able to pin down the bookkeeping
methods adopted by piaohao thus far, because only twenty-odd account books of various
types from different periods are currently available, yet some contain irrevocable clerical
errors that are unsuitable for analysis.
151
The reason for the scarcity of piaohao’s account
books is twofold. First, many piaohao took the initiative to destroy their accounts after a
certain period, in order to prevent business secrets from leaking. In addition, most
account books simply could not survive the twentieth century’s endless upheavals of civil
wars, the Japanese invasion, and Mao Zedong’s socialist movements, and the Cultural
Revolution.
Despite of scanty account books, I discover that a brief analysis of a ledger kept by
Rixinzhong piaohao’s Beijing branch in 1851 (Table 3) is surprisingly sufficient to
demonstrate that some Shanxi piaohao’s bookkeeping method was functionally
equivalent to the self-congratulatory double-entry accounting system of the West. In other
words, neither this bookkeeping system existed solely in the West, nor it should be
identified as one of the unique characteristics of Western Capitalism.
150
Chen, Shanxi piaozhuang kaolue, 76; Wei, Shanxi piaohao shi, 44-45.
151
Wei Juxian’s 1944 book included 1), ledgers of Rishengchang’s eighteen branches of various years; 2), the ledger
of Weitaihou’s Suzhou branch in 1847 and the ledger of its Shenyang branch in 1858; 3), the ledger of Rixinzhong’s
Beijing branch of 1850, see Wei, Shanxi piaohao shi, 101-139. Many of the accounts in Wei’s book contained
irrevocable clerical errors because of the initial transcription from unique Chinese numerals designed for accounting
into Arabic ones plus printing typos, for example, the ledger of the Shashi branch in 1906 can not be balanced (Wei,
Shanxi piaohao shi, 121-22).
Huang Jianhui’s Shanxi piaohao shiliao only re-quoted two of Rishengchang’s ledgers from Wei’s book, see SPS,
617-620.
Shi Ruomin provided daybooks of Rishengchang’s all branches of 1876, one ledger of Rishengchang’s Hangzhou
branch of 1888, and a daybook of Rishengchang’s Changsha branch of 1896-97, see Shi and Niu ed., Ping Qi Tai
shehui jingji shiliao , 689-858.
The afore-mentioned are all the existing accounts of Shanxi piaohao.
67
Table 3 The General Ledger of Rixinzhong’s Beijing Branch, December 1851 (Unit:
Tls.)
152
Categories Items and equations Amount
1, Beginning Balance (At the
beginning of year 1851, the amount
that the Pingyao head office owed the
Beijing branch)
71,067.31
A. Shouxiang 收項 (Total
amount of drafts that Beijing
branch received and remitted
to eleven places
153
)
606,129.90
2, The amount that Beijing branch
now owed Pingyao in December 1851
(2=A-1)
535,053.59
B, Jiaoxiang 交項 (The
total amount of drafts which
were remitted from twelve
places and were cashed by
Beijing branch
154
)
596,442.32
3, The amount that Pingyao now owed
Beijing branch in December 1851
(3=B-2)
61,388.73
C, Shouru 收入(Income)
155
11,541.75
D, Chufu 出付 (Expense)
156
7,934.10
4, Net income of Beijing branch by
the end of 1851
(4=C-D)
3,607.65
5, The amount that Pingyao head
office now owed Beijing branch after
subtracting the net income of Beijing
(5=3-4)
57,781.08
152
Transcribed from Wei, Shanxi piaohao shi,137.
153
These places are: Suzhou, Shanghai, Wuhan, Wuhu, Nan (a place I could not identify), Jinan, Zhangjiakou,
Zhoukou, Jingyang, Shahukou.
154
These places are: Pingyao, Suzhou, Shanghai, Wuhan, Nan, Wuhu, Tunxi, Jinan, Zhangjiakou, Zhoukou, Jingyang,
Shahukou.
155
Shouru consisted of Interest earned from deposit, Interest receivable, Silver exchange premium, Remittance
commission, Silver exchange premium earned from official title donation, and Cash.
156
Chufu consisted of Interest paid, Interest payable, Loss from silver exchange, Loss from handling the purchase of
official titles for others, Purchase of official titles, Room and board of Beijing branch, Room and board of Zhangjiakou
branch.
68
E, Jikai shicun 計開實 存
(The amount that Beijing
branch owned)
51,707.65
Current silver deposit 924.01
Accounts receivable 49,860.01
Interest receivable 783.63
Furniture 140.00
F, Jikai gaiwai 記開該外(the
total amount that Beijing
branch owed)
157
109,488.73
Loan 84,976.07
Accounts payable 1,512.66
Short-term loan 23,000.00
8, The debt of Beijing branch
(8=F-E)
57,781.08
3, The amount that Pingyao now owed
Beijing branch in December 1851
(3=B-2)
61,388.73
9, Net income of Beijing branch by
the end of 1851
(9=3-8)
3,607.65
According to Table 3, Rixinzhong piaohao’s Beijing branch calculated its annual net
income twice against the Pingyao head office from two different sets of data. The first net
income (item 4) was item C Shouru (income) minus item D Chufu (expense). The net
income (item 9) calculated for a second time was the result of a complex calculation that
could be transcribed into the following equation:
Net income of Beijing branch (Item 9)=B-
(A-1)-(F-E)=Jiaoxiang-(Shouxiang-Beginning balance of 1850)-(Gaiwai-Shicun).
Although it is still difficult to tell how this piaohao keep track of capital according to
157
Although “shicun” is similar to “asset”, and “gaiwai” is similar to “liability”, these two sets of terms are not quite
interchangeable because “asset” and “liability” are packed with western financial accounting principles which may not
precisely reflect the real meanings of “shicun” and “gaiwai” here. As a result, I leave the name of “shicun” and “gaiwai”
untranslated.
69
Table 3
158
, piaohao’s complex bookkeeping method—keeping corresponding records of
assets and liabilities—had transcended the single-entry accounting system, and thus
rebutted Faure’s assumption that as to late imperial Chinese business, “no other record of
assets and liabilities was really necessary…In the absence of capital accounts, rules of the
thumb dictated methods for fair division of profits.”
159
If the ledger of Rixinzhong’s Beijing branch is not sufficient to prove that piaohao
understood the gist of double-entry bookkeeping method, I have evidence which is more
intuitive. Fan Chunnian 範椿年 (1878-1951), a former employee of Weifenghou
piaohao during the early 1910s, served as managers of several branches of the
western-style Central Bank (zhongyang yinhang 中央銀行) of the Nanjing nationalist
government after 1934. In 1935, he wrote a research article on Shanxi piaohao for the
Bank’s flagship journal—Monthly of the Central Bank (zhongyang yinhang yuebao 中央
銀行月報), in which he defined the bookkeeping method of piaohao as “jiu fushu buji
舊複式簿記 (old-style double-entry bookkeeping)”.
160
Being both an immediate
participant of piaohao who was trained by “old-style” Chinese accounting method and a
senior manager of modern Chinese banks familiar with western-style banking principles,
Fan’s judgement on piaohao’s just could not be more authoritative.
Furthermore, the working experience in piaohao benefited many piaohao veterans,
158
It is neither possible nor necessary to understand Table 2.1’s bookkeeping mechanism completely, because
otherwise I will need the entire set of Rixinzhong’s various account books of the year 1851—especially the detailed
daybooks and the monthly general journals of the Beijing branch—all of which evaded the extant sources.
159
Faure, China and Capitalism, 36, 37.
160
For more information on Fan Chunnian, see my research paper of Spring 2010. Fan Chunian, “Shanxi piaohao zhi
zuzhi ji yange” 山西票號之組織 及沿革 [The organization and evolution of Shanxi remittance firms), in Zhongyang
yinhang yuebao (The Monthly of the Central Bank of China) 4(1935) (Jan.): 1-10 of Jinshang yanjiu zaoqi lunji, vol. 1
晉商研究早期論集 [Early essays on Shanxi merchants], ed. Shanxi caijing daxue jinshang yanjiu yuan (Beijinng,
jingji guuanli chubanshe, 2008), 62.
70
whom later became sought-after employees of modern Chinese banks. This fact indirectly
yet convincingly indicated that there was no significant difference between the
bookkeeping methods adopted by Shanxi piaohao and modern/western-style banks. For
example, when Fan Chunnian was invited by the Guangxi warlord Lu Rongting 陸榮廷
to supervise the Guangxi Provincial Bank after 1918, he often made great efforts to seek
former piaohao employees and persuade them to become his colleagues in the
western-style Guangxi Provincial Bank.
161
In a letter of the late 1910s, Fan wrote with
joy that Cheng Xiduo 程 錫鐸, a native of the Taigu County, who first worked in
Xiechengqian piaohao and later in the Bank of China, had now agreed to work for the
Guangxi Provincial Bank. Fan commented that the natives of Taigu were born to
understand bookkeeping, and Mr. Cheng in particular “is really good at the new-style
(read “modern double-entry bookkeeping”) accounting”.
162
In addition to Fan Chunnian, the Beiyang Government’s Ministry of Finance was
also busy recruiting former piaohao employees to work in Government banks. During the
mid-1910s, the Ministry requested Fan Yuanshu 範元澍, the General Director of the
Chamber of Commerce in the Pingyao county, to enroll piaohao employees as candidates
for the Ministry’s Training Institute of Banking Assistants (yinhang yingyeyuan
yangchengsuo 銀行營業 員養成所). The graduates of the Institute would then be
dispatched to working in modern western-style Chinese banks, namely Jiaotong yinhang
(Bank of Communications) and Zhongguo yinhang (Bank of China).
163
161
Shi and Niu, ed., Ping, Qi, Tai jing ji she hui shi liao yu yan jiu, 656, 658.
162
Ibid., 668-669.
163
“Shanxi huishang Tianchengheng deng hao lichen shou zhanshi yingxiang shangye dianwei gongken jiuji youguan
71
In a word, the significance of discussing piaohao’s bookkeeping methods lies in
three aspects. First, I strive to enhance the understanding of piaohao’s complex
bookkeeping methods—the most important aspect of piaohao’s remittance
business—using the limited sources of piaohao’s account books available. Second, I
contend that bookkeeping methods in late imperial China were as advanced as their
western counterparts, and thus debunk the myth that double-entry bookkeeping was an
exceptional invention by Western Capitalism. Third, although piaohao’s remittance
business shrank in size and scope after 1895 and they refused to transform into modern
banks, these events had nothing to do with their “backward, innately defective”
bookkeeping methods. In fact, the role played by accounting methods in predetermining
the success or failure of any kinds of business in East or West has been exaggerated, as
the prevailing double-entry accounting system failed to prevent bankruptcies and
economic downturns at the turn of the twenty-first century.
Credit or collateral: piaohao’s perception and practice of commercial loans
In addition to the misunderstanding of piaohao’s bookkeeping methods, misconceptions
of how piaohao’s practice of commercial loans affected their survival never stopped
circulating from East to West. In 1936, Chen Qitian contended that “piaohao wrongly
overvalued credit loans and ignored the importance of securing collateral before lending.
As a result, when their borrowers became insolvent, piaohao did not even own a chance
wenjian” 山西匯商天成亨等號瀝陳受戰事影響商業顛危公懇救濟有關文件 [Tianchengheng’s petition for
government help with war-afflicted Shanxi remittance firms], in Beiyang zhengfu dang’an 北洋政 府檔案 [Archive of
the Beiyang Government], Second Historical Archives, Nanjing, vol. 206, reprinted in SPS, 506.
72
to sell collateral in order to minimize their monetary loss on defaults”.
164
In 1992,
prominent piaohao scholar Huang Jianhui also argued similarly that the primary reason
piaohao encountered huge financial difficulties after 1911 was because of their
preference for credit loans which foreclosed any possibility of gaining access to
mortgaged asset in the event of borrowers’ defaults.
165
None of them, however, showed
any evidence to elaborate their arguments.
Although Chinese scholars treated piaohao’s loans on credit as poison, American
journalists, tailoring to their criticisms of the potential causes for the US economic crisis
in 2008, treated piaohao’s loaning practice as meat. In 2009, The New York Times
journalist Edward Wong, by manipulating piaohao’s loaning practice to criticize
America’s irresponsible mortgage lending, concluded, “Compared with the excesses of
today, scholars say, the early days of [piaohao’s] banking were a time of solid business
ethics. There were no toxic mortgages, no opaque financial instruments.”
166
Yet, how did
piaohao perceive and practice commercial loans from their own perspectives? Did they
never care about collateral? If so, why did they prefer credit loans?
167
To begin with, piaohao never prioritized extending loans to merchants and firms
because their business interest lay primarily in remittance business. Extant sources
indicated that many piaohao were averse to extending direct loans to any local businesses,
even if their creditworthiness appeared to be sound. This is because first of all, piaohao’s
164
Chen, Shanxi piaozhuang kaolue, 24.
165
Huang, Shanxi piaohao shi, 470.
166
Edward Wong, “Ghosts of a Faded Gilded Age Haunt a 19th-Century Chinese Banking Hub”, The New York Times,
17 March 2009, accessed 11 April 2012, http://www.nytimes.com/2009/03/18/world/asia/18pingyao.html.
167
In this section I primarily discuss piaohao’s commercial loans which they made to interregional traders and
financial firms such as cash shops in a certain locality. I will leave the discussion on piaohao’s loans to various Qing
bureaucracies to Chapter 4, which examines piaohao’s interaction with the Qing government in greater detail.
73
remittance business, which frequently became de facto commercial loans, had already
been exposed to great risk of frequent defaults, and piaohao thus strived to evade extra
loan defaults brought by non-remittance related commercial lending.
168
Second, in late
imperial China, it was quite difficult for piaohao’s branches to obtain accurate
information about the creditworthiness of every single mercantile firm which wanted to
take out a loan from them. In the circumstances, piaohao would usually make the
risk-averse yet savvy decision to turn down outsiders’ loan requests which might lead to
very heavy losses.
169
For example, in 1874, the head office of Xietongqing piaohao blamed its branch in
Qinzhou 秦州, Gansu province for depositing over Tls. 7,800 and Tls. 5,800 in local
cash shops named Juxingtai 聚興泰 and Yongshunyuan 永順源. The head office deeply
worried that these local cash shops never established sound creditworthiness and their
working capital was less than Tls 1,000-2,000. As a result, Xietongqing demanded its
Qinzhou branch to withdraw the deposits from these local cash shops immediately,
because latter would become insolvent at any time.
170
In 1884, the tea firm Dadexing 大德興 decided to embark on the lucrative
remittance business, and spun Dadetong piaohao off. In the Firm Rules (haogui) of
Dadetong drafted in 1884, one article clearly stated:
168
For example, piaohao would remit the money in advance for interregional traders. The traders then carried
piaohao’s remittance draft (i.e. cash advance) and traveled from their hometowns to localities where they would
purchase produce such as cotton and tea and sell it. This meant piaohao extended credit to these traders who would not
have any cash to pay off piaohao until they sold the products they bought.
169
This argument is inspired by Naomi Lamoreaux’s Insider Lending: Banks, Personal Connections, and Economic
Development in Industrial New England (Cambridge: Cambridge University Press, 1994).
170
Wei Juxian, “Shanxi piaohao zuijin zhi diaocha (5)” 山西票號最 近之調查( 五) [Recent studies on Shanxi
piaohao], Zhongyang yinhang yuebao [The Monthly of the Central Bank of China], 6 (July 1937): 1275.
74
In exuberant trading towns such as Dongkou (zhangjiakou) and Xikou (Western
Gateway, i.e. shahukou 殺虎口 of northern Shanxi), loan interest rates tended
to be much higher than other places, which lured our employees frequently into
irresponsible lending because of that. As a result, the top priority of our firm is
not to make profits from but to avoid any loans associated with high interest
rates (zong yi buzuo weishang 總以不做爲上). Whoever violates this rule and
incurs loan defaults would be punished without mercy.”
171
In addition, Rishengchang also expressed a similar concern about extending loans
to unreliable merchants and firms. In a letter sent to its Changsha branch during the early
1890s, the head office warned the local staff against excessive lending especially because
the Changsha branch had been notoriously famous for irresponsible financial transactions.
The head office concluded the letter by reminding them of “always being cautious (zhike
jinxiao shenwei 只可謹小慎微)”.
172
Even Japanese diplomats who sojourned in treaty ports noticed piaohao’s famous
practice of cautious insider lending. In a report submitted on 22 June 1906, Ikenaga
Rin'ichi 池永林一, the assistant consul of the Japanese Consulate of Chongqing,
commented:
Piaohao usually only lend money to reliable borrowers with whom they had
worked before. And it is very rare for them to extend credit to unfamiliar
merchants and firms even if they offered piaohao extraordinarily high interest
171
Firm Rule of Dadetong, 1884, reprinted in SPS, 595.
172
Rishengchang’s Pingyao head office to Changsha branch, c. 1889-1893, SPS, 878.
75
rates…In addition, piaohao prioritized remittance business and were not very
eager to assimilate deposits from local financial markets.
173
Strong financial preference for loans on credits, piaohao nevertheless endeavored
to claim collateral to minimize financial losses once their borrowers went insolvent. This
contradicted to the common belief that piaohao never practiced loans on collateral.
Around 1871-72, a letter penned by Rishengchang’s Changsha branch reported that a
certain Mr. Jiang owed Rishengchang Tls. 2,000 and was unable to pay off. The
Changsha branch then solicited support from a local gentry surnamed Li, who eventually
helped the Rishengchang to obtain the collateral from Mr. Jiang’s middleman.
174
During
the early 1890s, Rishengchang’s Yangzhou branch also described how its counterpart
Weifenghou dealt with a loan default. A certain local salt merchant went bankrupt and
owed Weifenghou Tls. 83,000. Fortunately, the merchant had mortgaged the title deeds of
his salt yards to Weifenghou. With the guarantee of a middleman, both parties agreed that
the local salt merchant would repay the loan within eight years by revenues generated
from the salt yard. Weitaihou would then receive an annual repayment of Tls. 10,000 plus
interest on the loan from the merchant.
175
During the same period, a local cash shop in
Changsha defaulted on a loan of Tls. 30,000 taken out from Xietongqing which agreed to
get repaid by the title deeds of the borrower’s residential houses and farmland, though at
a 40% discount of the original loan.
176
Nevertheless, even if piaohao secured collateral and attempted to resell borrowers’
173
Pan trans. & ed., Zhongguo zhi Jinrong, vol. 2, 3.
174
Rishengchang’s Changsha branch to Pingyao head office, c. 1871-1872, SPS, 862.
175
Name of the salt yard/merchant remains unknown because of the damage to the original letter, see SPS, 927.
176
Rishengchang’s Changsha branch to Pingyao head office, c. 1889-1893, SPS, 943.
76
mortgaged assets to minimize losses on loan defaults, many of them begrudged this
practice and treated it as heavy burden. Around 1900, Rishengchang’s Pingyao head
office regretted that they had been lending too much money to local cash shops in Xi’an,
which in turn lent excessively to local merchants. But because of the turbulence caused
by the Boxers Uprising, many merchants went bankrupt , followed immediately by cash
shops. Supplying credits and loans upstream, piaohao became the ultimate victims which
were left with nothing but piles of their insolvent borrowers’ unsalable merchandises.
Rishengchang complained that these chain effects locked up all cash flows available in
the local market, which constrained their remittance business.
177
During the early twentieth century, Weishengchang piaohao lent Tls. 40,000 to a
modern printing factory located in Daokou 道口, Henan province. When the factory
closed down after 1911, Weishengchang was left with nothing but eleven printing
machines pledged to it as collateral. Yet until 1920, the eleven dated machines were still
stored in a warehouse that Weishengchang had no idea of how to handle.
178
Occasionally, piaohao would decide to write off bad debts for complex reasons,
including maintaining good business relations, meager chances of ever getting repaid,
and retaining good reputation as cautious/wise lenders. On July 21 1874, the head office
of Xietongqing wrote to instruct its Chongqing branch in handling a recent loan default
by a firm called Hengfengyi 恒豐益. The letter said:
We have been fostering good business relations with Hengfengyi. Although our
177
Letter by Rishengchang’s Pingyao head office, c. 1900, SPS, 1062.
178
Interview with former employee of Weishengchang piaohao named Fan Fengyuan 範逢源 on 7 July 1961, SPS
343.
77
financial loss is now the biggest among all other lenders, the head office has now
officially decided not to sue Hengfengyi for bad debts. If our loans could be
partially paid off, that would be great. Otherwise we will give Hengfengyi as
much time as they need to recover from insolvency. We shall not betray our good
business relations with them especially when they are currently in big
trouble….In addition, even if we sue them, we might be unable to get the loans
back.
The letter then went on to blame the Chongqing branch:
You should have devoted your wisdom and energy to avoiding such bad loans
rather than suing them…Again, (the Chongqing branch) must not follow other
lenders to sue them, otherwise we are not only losing money, but also losing face
as (reputable cautious lenders)”.
179
In conclusion, perhaps the myth created by The New York Times is ironically closer
to piaohao’s own attitudes towards commercial loans than Chinese scholars: piaohao
sometimes viewed loans on collateral as “toxic”, especially when the collateral was
unsalable merchandises that no one wanted to buy during economic recessions. In
addition, embracing the ideal of a minimalist agrarian empire, the Qing did not prioritize
setting up legal institutions to enforce loan contracts and protect private property rights at
local levels. This reason might explain further why piaohao preferred insider lending
instead of impersonal loans on collateral, when doing banking business in an information
poor environment without legal protection of reclaiming mortgaged assets in late imperial
179
Wei, “Shanxi piaohao zuijin zhi diaocha (5)”, 1275.
78
China. In other words, piaohao treated loans on personal creditworthiness (i.e. cautious
insider lending) as the most advanced and safest form of commercial lending, not vice
versa as Chinese scholars had previously posited. Nevertheless, piaohao’s emphasis on
credit loans never meant they ignored the importance of securing collateral to minimize
losses on defaults. Many examples discussed earlier demonstrate the opposite situation.
Competition within cooperation: piaohao’s inter-firm relations
Although the term Shanxi always precedes “piaohao” indicating the provenance of these
remittance firms, almost all owners, managers, employees and apprentices of the
thirty-odd piaohao, however, came exclusively from five counties of central Shanxi,
which were: the Pingyao, Taigu, Jiexiu 介休, Yuci, and the Qi County. There were about
a hundred miles from the northernmost Yuci to the southernmost Jiexiu County, and
because central Shanxi is a plain, transportation among these five counties was relatively
easy. In addition, all head offices of piaohao were located in the aforementioned three
counties, namely Pingyao, Qi, and Taigu. As a result, scholars usually divided Shanxi
piaohao into three bang (groups) according to the head offices’ locations, which were
Pingyao bang 平遙幫, Qixian bang 祁縣幫 and Taigu bang 太谷幫, or together as
Pingqitai sanbang (three groups from Pingyao, Qi County and Taigu) 平祈 太三幫.
180
Figure 6 Five counties of central Shanxi province where piaohao originated
181
180
Chen, Shanxi piaozhuang kaolue, 36-37; Wei, Shanxi piaohao shi, 15-28; Yang Lien-sheng, Money and Credit in
China (Cambridge, Mass: Harvard Univ. Press, 1952), 82; Huang, Shanxi piaohao shi, 107.
181
Tan ed., Zhongguo lishi ditu ji, 20-21.
79
The actual inter-firm relations among the thirty-odd piaohao, however, were more
multi-dimensional than the clear-cut categories of Pingyao, Qi and Taigu groups. Piaohao
scholar Huang Jianhui suggested understanding inter-piaohao relations from two aspects.
First, Huang pointed out that in major trading cities where they had a major financial
presence, piaohao merchants were usually organized by guilds exclusively for native
Shanxi and Shaanxi merchants. For example, in 1872, under the aegis of twenty-two
piaohao including Rishengchang, Weifenghou, Baichuantong, Xiechengqian,
Qietongqing, Weichanghou, and Xintaihou, the Guild of Shanxi Remittance Merchants
80
(Shanxi huiye gongsuo 山西匯業公所) was set up in Shanghai.
182
In 1882, thirty-three
piaohao supported the construction of a new building for the Shanxi and Shaanxi Guild
in Hankou (Hankou shanshaan huiguan 漢口山 陝會館).
183
Although Huang indicated
that piaohao formed some sort of native-based commercial networks in major trading
places, he did not go into details about how piaohao worked with each other in these
localities.
Second, Huang postulated that inter-piaohao relations were highly competitive. For
example, Weitaihou piaohao had been competing against Rishengchang since the early
1840s. Legend had it that Mao Honghui 毛鴻翽 used to serve as the vice manager under
the supervision of Lei Lü tai, the chief manager of Rishengchang. Then Lei gradually
became so jealous of Mao’s talent for finance that he soon ousted Mao. After leaving
Rishengchang, Mao persuaded a wealthy Hou family of the Jiexiu County to invest in a
brand-new piaohao—Weitaihou—and became its founding chief manager, which
officially marked the beginning of the long-term financial competition between
Rishengchang and Weitaihou. Because Lei and Mao hated each other so much that Mao
Honghui intentionally named one of his grandsons as “Mao Lütai”, whose first name was
the same as his grandfather’s rival.
184
In China, this practice was considered an effective
and powerful way to throw insult at someone that you were really sick of.
Huang Jianhui not only entertained his readers with the aforementioned
semi-anecdotal account about the rivalries between Rishengchang and Weitaihou, he also
182
Huang, Shanxi piaohao shi, 198.
183
Ibid., 204.
184
Ibid., 99-100.
81
gave two prime examples of such rivalries supported by solid evidence. In July 1844,
Weitaihou’s Suzhou branch decided to stop providing remittance for local gentry who
wanted to send money to Beijing for purchasing titular official titles. This was because
Rishengchang charged a remittance fee which was so low that Weitaihou was unable to
maintain the same low rate, otherwise Weitaihou would lose money from such remittance
transactions.
185
In February 1851, Weitaihou’s Suzhou branch management felt
depressed about the failure to remit a single penny of the Expenditure on Grain
Transportation via Sea, because for some unknown reasons they had offended Mr. Ni, the
Grain Superintendent of Suzhou, who only trusted Rishengchang and had already given
them a big remittance order of Tls. 70,000.
186
1, Competition for government remittances
In addition to Huang’s description of inter-piaohao stiff competition for government
remittances, numerous memorandums sent by provincial officials to the throne indeed
disclosed that no piaohao was able to monopolize the remittance service for any
provincial authority at any time. In 1877, Jiangxi provincial governor Liu Bingzhang 劉
秉璋 requested Sanjinyuan to remit Tls. 10,000 to Zhili, and Xintaihou to remit another
Tls. 10,000 to Fujian province for the Expenditure of Coastal Defense (haifang jingfei 海
防經費).
187
In 1886, the Surveillance Commissioner of Sichuan named Youzhi 游智
raised Tls. 100,000 for the Navy Expenditure, and asked Baichuantong, Rishengchang
185
Huang, Shanxi piaohao shi, 163. The original letter could be found in SPS, 637, 1111.
186
Huang, Shanxi piaohao shi, 169, and the original letter could be found in SPS, 636-37, 1173-76.
187
Memorandum by Liu Bingzheng, 28 August 1875, SPS, 83.
82
and seven other piaohao to remit to the Navy Bureau (haijun yamen 海軍 衙門) in
Beijing.
188
In 1890, Baichuantong, Rishengchang, Weitaihou, Weichanghou and
Xintaihou together remitted Tls. 50,000 of the railroad construction fund to Beijing, on
behalf of the Guangdong provincial government.
189
In 1900, Yu Liansan 俞廉 三, the
provincial governor of Hunan, utilized nine Shanxi piaohao to remit Tls. 100,000 of the
provincial tax quota of Capital Requisition. This meant that each piaohao was only able
to handle remittance of an average of Tls. 10,000.
190
Business correspondence left by piaohao also verified the intensified inter-piaohao
relations because of government remittances. In 1874, the Liangzhou branch of
Xietongqing piaohao reported that its Xi’an branch failed to take part in remitting the
Grain Fund from Xi’an to Lanzhou owing to Tianchengheng’s competition.
191
During the
late 1890s, Rishengchang’s Pingyao head office complained that Zhichengxin and
Xiechengqian dominated the remittances of Capital Acquisition originating from
Guangdong. While being very upset about this potential loss of profits, Rishengchang
successfully secured new opportunity to remit customs revenues from the Imperial
Maritime Customs in Beijing.
192
During the Boxer’s Uprising in 1900, Rishengchang
turned down Sichuan provincial government’s request to remit Capital Acquisition to
Beijing because of the upheavals in Northern China, and then tried to persuade fellow
piaohao to do the same. Unfortunately, no other piaohao followed Rishengchang’s
188
SPS, 83. The memorial did not articulate the names of the seven other piaohao.
189
Memorandum by Li Hanzhang, 8 August 1890, SPS, 84.
190
Memorandum by Yu Liansan, 18 August 1900, SPS, 232. The nine piaohao are: Rishengchang, Tianchengheng,
Baichuantong, Xintaihou, Weifenghou, Weitaihou, Weishengchang, Xietongqing, and Qianshengheng.
191
Wei, “Shanxi piaohao zuijin zhi diaocha (5)”, 1278.
192
Rishengchang’s Pingyao head office to Beijing office, c. 1894-1899, SPS, 985.
83
suggestion and continued to provide remittance services for the Sichuan government,
although it was indeed very dangerous for piaohao to take remittance orders by then,
when cashing these drafts became almost impossible owing to the scarcity of floating
silver.
193
In fact, many piaohao thrived to fill a unique business niche in a certain region in
order to minimize the fierce competition among peers. In particular, Dadeyu piaohao
primarily concentrated on the remittance market in northern Hebei. Dadetong dominated
the financial market of Shaanxi. Baichuantong specialized in the financial markets of
Sichuan, Yunnan and Guizhou. Weifenghou, Xietongqing and Tianchengheng conducted
remittances primarily in Shaanxi and Xinjiang.
194
2, Inter-firm remittances as cooperation
Although no space seemed to be left for piaohao’s inter-firm cooperation because of the
stories about their intensive competition for government remittances told above, a simple
glimpse of how the head offices of piaohao were distributed in the Pingyao County urged
me to rethink the inter-piaohao relations from an unprecedented angle.
At the intersection of the South and West streets inside the city walls of the
Pingyao County where the county seat as well as the most bustling marketplace were
located, there were at least six piaohao once headquartered there (Figure 7 & 8). All of
them were close to each other within less than five-minute’s walk, including
Rishengchang and Weitaihou—two long-term rivals. The surprisingly short distance
193
Rishengchang’s Chengdu branch to Pingyao head office, c. 1900, SPS, 1073.
194
Donghai 東海, “Ji Shanxi piaohao” [Notes of Shanxi piaohao], Yinhang zhoubao [Bank’s Weekly], 1 (1917), no. 7:
21, reprinted in SPS, 636.
84
among these head offices hinted that inter-firm cooperation rather than competition must
be the major theme of inter-piaohao relations, otherwise these six head offices were
unable to neighbor each other so closely for about a century. In fact, because
inter-piaohao cooperation, consisting of inter-firm remittances, collective postal and
silver shipping services, fixed financial transaction dates, inter-firm marriage and staff
flow, and defense against governments’ predatory policies, was so complex and
multi-dimensional that it had previously been shrouded by the more distinct scenarios of
inter-firm competitions. The rest of the chapter, therefore, aims to repaint the picture of
piaohao’s inter-firm cooperation.
Figure 7 Locations of six piaohao’s head offices inside Pingyao city walls
195
Notes: 1, Rishengchang; 2, Rixinzhong; 3, Weitaihou; 4, Weishengchang; 5, Xietongqing; 6, China
Armed Escort Firm (zhongguo biaoju 中國鏢 局); 7, Tongxinggong Armed Escort Firm (tongxinggong
biaoju 同興 公鏢 局); 8; Baichuantong.
195
Tang Xilin 唐稀林 ed., Jieshuo pingyao 解說平遙 [Highlights of Pingyao], trans. Wang Xiuhong 王秀紅 and
Jiao Jing 焦晶 (Taiyuan, Shanxi kexue jishu chubanshe, 2006), A1.
○
5
○
6
○
7
○
8
○
1
○
2
○
3
○
West Street
East Street
South Street
85
Figure 8 Map of the Pingyao city in 1882 (red lines correspond to those on Figure 7)
196
Among Rishengchang’s extant two thousand business letters dating from the early
1840s to the 1900s, many indicated that this piaohao frequently handled remittances for
fellow piaohao and charged them remittance fees. For example, during the early 1890s,
Rishengchang helped Dadeyu, Cunyigong and Dashengchuang piaohao in remitting Tls.
6,000, 3,000, and 14,000 respectively.
197
From 1896 to 1897, Rishengchang’s Changsha
remitted Tls. 15,000 to Hankou for Weifenghou piaohao, and charged such remittance for
196
Wu Dacai 武達材 and En Duan 恩端 ed., Guangxu Pingyao Xianzhi 光緒平遙縣志 [The Gazetteer of Pingyao,
Guangxu Reign] (Nanjing: Feng huang chu ban she, [1882], 2005 reprint), 27.
197
Rishengchang’s Pingyao head office to Beijing office, c. 1889-1893, SPS, 869. The branch names of Rishengchang
which conducted such transactions for Dadeyu and Cunyigong and the destinations of such remittances remained
unknown, because of the damage to the original letter.
86
a fee of Tls. 30.
198
In the late 1890s, the Beijing branch once again remitted Tls. 15,000
for Dadeheng, Tls. 3,000 for Sanjinyuan, Tls. 5,000 for a non-piaohao firm, and earned
remittance fees of Tls. 300.
199
The aforementioned transactions are only a few examples among hundreds to
demonstrate numerous inter-firm remittances that piaohao handled for their peers. Based
on the existing letters left by Rishengchang’s Pingyao head office from 1889 to 1893, I
provide Table 4 as follows, which reveals the high frequency of inter-piaohao remittances
in greater details. Please be aware that Table 4 is never a complete list of all such
transactions taken place during this period, and the actual amount of remittance
transactions might be much greater than what the Table 4 represents here.
Table 4 Inter-piaohao remittances handled by Rishengchang, 1889-1893 (Blanks indicate
information unavailable)
200
Rishengchang’s
piaohao
customers
Remittance
Amount
(Unit:
Tls. )
Fees
Rishengchang
charged
Remittance
Origins/Destinations
Approximate
Transaction
Date
201
Heshengyuan 10,000 3 May
Dadeheng 3 May
Dashengchuan 4,000 From Beijing 3 May
Cunyigong 2,000
Dadeyu 4,000 20 August
Cunyigong 3,000 20 August
Dadeyu 2,000 20 August
Dashengchuan 14,000 From Beijing
September and
December
Dadeheng 9 August
Dadeyu 4,000
198
Shi and Niu, ed., Pingqitai shehui jingji shiliao yu yanjiu, 802.
199
Rishengchang’s Pingyao head office to Xiangtan branch, c. January 1895, SPS, 991.
200
This Table is made based on business letters that Rishengchang’s Pingyao head office sent to various branches from
1889 to 1893, SPS, 865-901.
201
The exact years of these transactions remained unknown.
87
Cunyigong 4,000
15 and 25
August
Dadeyu 4,000
Dashengchuan 7,000 October
Cunyigong 8,000 To Beijing
Late March,
Late April and
Mid May
Qianshengheng 10,000
From Shanghai to
Pingyao Spring
Heshengyuan To Beijing
Cunyigong 6,000
16-day
usance To Pingyao
15 and 25
August
Weifenghou 3,000 From Xi'an Late January
Dashengchuan
Dadeheng 18,000 zero To Chongqing
Late April and
July
Heshengyuan 1,000 To Beijing 25 May
Dadeheng 1,000
35-day
usance To Beijing 25 May
Weifenghou 2,500
Heshengyuan
Tls. 36 plus
36-day
usance, To Taiyuan
October and
December
Dadeheng 3,000
68-day
usance Late May
Dadeheng 5,000 6-dau usance Late June
Dedeheng
35-day
usance
heshengyuan 1,500
Dadeheng 5,000
Tls. 126 plus
64-day
usance To Hankou Late October
Dadeheng 18,000 zero To Chengdu
April, May,
Early June, Late
June, July, and
August
Dadeheng 3,000
Late September
202
Tianchengheng 3,000
47-day
usance
202
Rishengchang only reluctantly agreed to handle this remittance because of the inter-piaohao business relationship
(yingchou weizhi 應酬爲之）with Dadeheng, Rishengchang’s Pingyao head office to Kaifeng branch, c. 1889-1893,
SPS, 899.
88
Weifenghou 10,000
zero, but with
96-day
usance
Total amount
handled by
Rishengchang 156,000
Now that my examples have demonstrated the high frequency and large quantity of
remittances that piaohao handled for their peers, it is time to explain why I argue that
these transactions indicated inter-piaohao cooperation. By and large, the initial founding
capital of every piaohao was relatively small, and each branch of piaohao usually
received less than Tls. 10,000 as working capital for their business. In addition, many
owners/investors did not invest all of their money in just one piaohao. Instead, they
parceled out their funds among multiple piaohao and mercantile firms including pawn
shops and grocery stores. As a result, all branches of piaohao were facing a perennial
question of seeking more cash inflows which was the lifeline of their everyday remittance
transactions. Another haunting question for piaohao was that occasionally they had too
much floating silver in hand yet without many opportunities to cash remittance drafts.
Under these circumstances, piaohao might become eager to lend out the floating money
to local merchants/firms in order to generate short-term interests. Yet, as mentioned
earlier most piaohao were also cautious lenders and thus would not easily extend loans to
strangers to avoid bad debts. As it turned out, inter-piaohao remittances served as the
most reliable institutional solution to both of the aforementioned questions. This
non-anonymous inter-piaohao organizational framework—an economic response to
“problems of contract enforceability and coordination that arose in complex trade
89
characterized by asymmetric information, slow communication technology, inability to
specify comprehensive contracts, and limited legal contract enforceability”—not only
increased the value of a each piaohao’s working capital remarkably, but also reduced the
risk of dealing with non-piaohao merchants whose creditworthiness was always hard to
detect in a pre-information age.
203
In particular, the initial founding capital of most piaohao ranged approximately from
Tls. 100,000 to 300,000.
204
Money was usually raised from households which shared the
same distant ancestor or surname inside lineages, as well as from local wealthy families
(see Appendix I). Though the initial capital seemed huge, the majority of the branches
would not receive more than Tls. 10,000 as working capital, because piaohao usually
opened ten to twenty branches across the empire. Nevertheless, the head offices and some
prominent branches in major localities such as Beijing and Shanghai, could obtain
working capital ranging from Tls. 30,000 to 100,000.
205
203
Avner Greif, “Contract Enforceability and Economic Institutions in Early Trade: The Maghribi Traders' Coalition”,
in The American Economic Review, 83 (1993): 544.
This argument is inspired by Avner Greif’s research on coaliation--the organization framework devised by
sub-Jewish group Maghrihi traders during the eleventh century. Within the coalition, an internal
information-transmission system served to balance asymmetric information and a reputation mechanism was used to
ensure proper conduct. Each trader benefited from being a coalition member more than he could have by establishing
agency relations based upon a reputation mechanism outside the coalition. Obtaining the benefits of coalition
membership depended upon proper conduct in the past, while the short-run gain from cheating today was less than the
long-run benefit an honest coalition member could obtain. See Greif, “Reputation and Coalitions in Medieval Trade:
Evidence on the Maghribi Traders”, in The Journal of Economic History, 49 (1989), 859, 881-882.
204
Wei, Shanxi piaohao shi, 15-27; Huang Jianhui, “Table 1-2-7: Gebang de shili” 各幫的實力 [The business
profiles of three piaohao groups], SPS, 638-665.
The exact amount of piaohao’s founding capital is an eternal myth, past and present. This is because first, piaohao
usually considered such number as top business secret, and would keep it only to themselves on purpose. Second, the
investors would adjust their investment in piaohao depending on the performance of remittance businesses by either
adding or withdrawing capital from piaohao. In other words, the working capital of piaohao was probably changing
every year and the actual number was very hard to pin down.
205
Chen, Shanxi piaozhuang kaolue, 42-43; Xinzuan Yunnan tongzhi 新纂雲南通志 [New gazetteers of Yunnan], vol.
144, 1-2, reprinted in SPS, 326.
Piaohao’s founding capital consisted of two parts. The first was the “formal capital (zhengben 正本) or “silver
shares” (yingu 銀股). It was the original funds put up by the investors of piaohao, and dividends of each investor were
calculated according to how many shares of zhengben they held. The amount of one share of zhengben varied from
90
Most investors would inject more follow-up capital into piaohao if its remittance
business proved to be profitable. For example, in 1884, the newly-established Dadetong
piaohao had founding capital of Tls. 130,000. In 1888 its working capital rose to Tls.
140,000, Tls. 160,000 in 1892, Tls. 180,000 in 1896, and by the year of 1908, the number
soared to Tls. 220,000.
206
Nevertheless, piaohao owners almost never gamble all of their
wealth on one single piaohao, and instead diversified their investment in other businesses
such as cash exchange shops, local grocery stores, tea, tobacco, silk, and cloth firms.
For example, the founding investor of Rishengchang piaohao—Li Daquan, a
Pingyao native, also owned Qianjisheng piaohao. He also opened four local cash shops
and one cloth firms in the Pingyao County, two chain dyestuff trading firms in Tianjin
and Hankou. Other members of the Li family, many of whom invested in Rishengchang,
operated cash shops, grocery stores, a medicine shop, and even a barber shop in
tandem.
207
Another example is the Hou family in Jiexiu county. Hou Chongji 侯崇基,
who supported Lei Lü tai’s rival Mao Honghui, founded Weitaihou piaohao as well as
four other piaohao during the late 1820s, which were Weifenghou, Weishengchang,
Xintaihou, and Tianchengheng.
208
Although Weishengchang invested Tls. 20,000 in
Weitaihou according to the latter’s Contact drafted in 1856, these five piaohao of Hou
piaohao to piaohao. For example, according to the Contract of Zhichengxin in 1873, its “zhengben” was Tls. 34,000
silver taels, and every Tls. 2,000 was one share (SPS, 586-87). The Contract of Weitaihou penned in 1879 stipulated
that one share of its zhengben was Tls. 5,000 (SPS, 589). The second type founding capital is the supplementary capital
(fuben 副本) or protection capital (huben 護本). For example, the investors may deposit their personal money into
piaohao as “supplementary capital” at any time. In addition, the investors and senior employees sometimes chose to
deposit their dividends earned from piaohao to supplement its working capital (Interview with former Sanjinyuan
employeeYang Jinghao 楊景灝, July 1961, SPS, 581).
206
Wei, Shanxi piaohao shi, 33.
207
Huang Jianhui, “Pingyao Dapu Li jia” 平遙達蒲李家 [The Li family of the Dapu village of the Pingyao County],
in SPS, 771-2.
208
Huang, “Table 1-2-7: Gebang de shili”, SPS, 638-42; Huang Jianhui, “Jiexiu Jiacun houjia” 介休賈 村侯家 [The
Hou family of the Jia village of the Jiexiu County], in SPS, 772-73.
91
Chongji conducted remittance businesses and calculated dividends separately.
209
In
addition to piaohao, the Hou family also managed silk and brocade firms, pawnshops,
dye houses, grocery stores, grain shops, and medicine shops in the Jiexiu County and in
Beijing.
210
The third example is the Qiao family of the Qi County, which not only owned
Dadetong and Dadeheng piaohao, but also conducted inter-regional tea trade and
operated a vertically-integrated tea enterprise in Hubei province.
211
Furthermore, many piaohao investors preferred hoarding silver to investing more
money in piaohao and other businesses. They also spent lavishly on buying farmland.
The Qu family, the primary investor of Sanjinyuan, Changshengchuan and Baichuantong
piaohao, built two silver vaults to hoard money in their magnificent mansion. Legend had
it that when Qu Yuanzhen—the founding investor of Sanjinyuan—passed way, his son
Qu Benqiao dug Tls. 3,000,000 from his father’s silver vault (Figure 9).
212
The Chang
family who owned Dadeyu and Dadechuan piaohao, bought over 330 acres of land in the
Yuci County, though the quality of the land was not quite suitable for farming.
213
Figure 9 Modern representation of Rishengchang’s underground vault (photo by author,
July 2010)
209
The contract of Weitaihou piaohao drafted in 1856, the original copy is kept in Shanxi University of Finance and
Economics, reprinted in SPS, 589.
210
Huang, “Jiexiu Jiacun houjia”, in SPS, 772-3.
211
Huang Jianhui, “Qixian chengnei Qujia” 祁縣城內渠家 [The Qu family of the Qi County], in SPS, 780.
212
Huang, “Qixian chengnei Qujia”, in SPS, 779.
213
Huang Jianhui, “Yuci Chewang Changjia” 榆次車網常家 [The Chang family of the Chewang village of the Yuci
County], in SPS, 778.
92
But in the context of piaohao’s risk-averse strategies of diversified investments and
limited working capital, how did inter-firm remittances enable piaohao to seek more cash
inflow to facilitate remittance when working capital was limited, or lend out floating cash
without incurring loan defaults when local demands for cashing remittance drafts were
meager? Figure 10 explains how inter-firm remittance transactions taken place between
piaohao A and B not only provides piaohao A with floating cash it needs for remittance
but also simultaneously assimilates piaohao B’s surplus floating cash.
Step 1: a local tea merchant asked piaohao A’s Hankou branch to remit Tls. 10,000
to Beijing. If piaohao A’s Beijing branch did not have the cash of Tls. 10,000 in hand,
then piaohao A’s Hankou branch would either transport actual silver ingots of Tls. 10,000
93
from Hankou to Beijing which was costly and dangerous, or simply decline such order.
Step 2: fortunately, piaohao B’s Hankou branch later informed A that its Beijing
branch coincidently had the floating cash of Tls. 10,000 and was willing to lend to A’s
Beijing branch. In that case, piaohao B’s Hankou branch would then inform its Beijing
branch that it had remitted Tls. 10,000 to Beijing upon A’s request. Then A’s Beijing
branch would proceed to pick up the Tls. 10,000 from B’s local office.
Usually B would charge piaohao A commission for this inter-piaohao transaction,
though this was not always the case. Sometimes piaohao B would simply let A to use this
Tls. 10,000 for free, when piaohao B’s Hankou branch was planning to borrow money
from A’s Hankou branch as well, which had some cash in hand received from local
merchant to be remitted.
Step 3: upon receiving Tls. 10,000 from piaohao B, A’s Beijing branch would then
cash the draft brought by the tea merchant’s Beijing agent.
Step 4: piaohao A’s Hankou branch later returned Tls. 10,000 to B’s Hankou branch.
Figure 10 Inter-piaohao remittance as way of seeking/assimilating floating capital
○ 4
○ 2
○ 3 ○ 1
Piaohao A’s Hankou branch Piaohao A’s Beijing branch
Piaohao B’s Hankou branch
Piaohao B’s Beijing branch
Tea merchant
Tea merchant’s agent
in Beijing
94
In a word, the aforementioned inter-piaohao remittance transaction between piaohao
A and B not only help piaohao A to fulfill the remittance orders placed by other local
merchants, but also help piaohao B’s Beijing branch to solve the thorny issue that they
were having too much floating capital by hand without having reliable outlets to generate
interests. In that case, lending to piaohao A (i.e. providing remittance service to piaohao
A) became the best solution for piaohao B: it knew better about the creditworthiness of
piaohao A than that of local merchants/firms. In fact, both piaohao A and B worried less
about each other’s loan defaults, because even if such thing happened, it was much easier
to monitor each other’s financial performance when both came from central Shanxi
within the radius of a hundred miles.
3, Collective postal and silver shipment services
Smooth information exchanges of interest rates, trade activities, supply and demand of
silver in various localities were prerequisite for piaohao’s everyday remittance
transactions. Yet, the Qing empire did not built its first domestic telegraph line from
Tianjin to Dagu until 1879, nor it started providing empirewide civil postal services until
the establishment of the Imperial Postal Administration (daqing youzheng 大清郵政) in
1897.
214
So how did piaohao send business letters among branches across the empire?
Initially, piaohao relied on private provided by minxinju 民信局 or xinjuzi 信局子 to
send business letters. These firms were called “native postal agencies” or “postal hongs”
214
Wei, “Shanxi piaohao zuijin zhi diaocha (5)”, 1275; Huang, Shanxi piaohao shi, 39.
95
in the Decennial Reports of the Imperial Maritime Customs.
215
In late imperial China,
there were usually ten to twenty-odd mailing firms in major trading cities/treaty ports,
which specialized in providing mail services for merchants and ordinary people.
216
Later on, as piaohao expanded their financial empire, they decided to pool postage
together and employ professional mail runners called gongjiao 公腳 (public feet) to
send letters and parcels exclusively for their remittance business.
217
For example, during
1889 to 1893, Rishengchang collaborated with many piaohao, including Baichuantong,
Tianchengheng, Weichanghou, Weishengchang, Weitaihou, Weifenghou, Yuanfengjiu,
Qianshengheng, Xintaihou, and Xietongqing, in mail service for each other. Although
piaohao hired their own mail runners separately, all participating piaohao were eligible
for receiving the postal service provided by other piaohao’s runners.
218
Furthermore, many piaohao also collectively hired armed escorts to transport silver
ingots inter-regionally. No matter how hard piaohao tried to avoid transporting silver
overland through inter-piaohao transactions, their remittance business still relied heavily
on transporting real silver ingots (yunxian 運現) for complex reasons. For example,
sometimes inter-piaohao remittances were unable to meet a certain locality’s surge in
remittance drafts which required continuous silver inflows. During the early 1890s,
Rishengchang recorded that many piaohao collectively sent a batch of silver ingots of
215
Imperial Maritime Customs, Decennial reports on the trade, navigation, industries etc of the ports open to foreign
commerce in China and Corea and on the condition and development of the treaty port provinces, 1882-1891 (The
statistical department of the inspectorate general of customs,1893), 267, 519.
216
Yang, Qingdai huobi jinrong shigao, 131.
217
Another name for these professional runners was xinzuzi 信卒子, according to an interview with a former piaohao
employee named Qiao Dianjiao 喬殿蛟 in January 1961, SPS, 27.
218
SPS, 865-901.
96
over Tls. 200,000 from Beijing to a certain locality where was in short supply of silver.
219
During the Boxer’s Uprising in 1900, many branches of piaohao were forced to
suspend their remittance business and thus held large amounts of silver in hand which
they could not find appropriate outlets to lend out or remit. As a result, many piaohao
agreed to hire armed escorts to transport the surplus silver back to their head offices in
Shanxi. For example, piaohao headquartered in the Qi County hired 26 armed escorts and
sent over Tls. 250, 000 from Hankou back home.
220
Rishengchang worked with other
piaohao to collectively send Tls. 700,000 of silver ingots from Shanghai back to Pingyao,
including Sanjinyuan’s Tls. 120,000, Changshengchuan’s Tls. 60,000, Weichanghou’s Tls.
30,000, Weitaihou’s Tls. 30,000, Qichangde’s Tls. 20,000, and Xietongqing’s Tls. 20,000.
Before long, piaohao sent another batch of silver from Shanghai to Pingyao together,
including Tls. 60,000 of Xintaihou, Tls. 45,000 of Baichuantong; Tls. 45,000 of
Dadeheng; Tls. 21,000 of Weichanghou; Tls. 33,000 of Xietongqing, and collectively
paid the fee for armed escorts, which was Tls. 29 for every Tls. 1,000 transported.
221
4, Fixed financial transaction dates—biaoqi
Initially, the character “biao” was written as 鏢 instead of 標, and biaoqi 標期 literally
meant “due dates that armed escorts should return”. The concept of “biaoqi” derived
from inter-regional trade among northern China, Mongolia and Russia after the
eighteenth century, and it stipulated the fixed dates when merchants were expected to pay
off their loans and the interest rates. For example, a tea merchant borrowed money from a
219
The actual name of the locality is missing because of the damage to the original letter.
220
Letter from a certain branch of Rishengchang, c. 1894-1899, SPS, 1056.
221
Rishengchang’s Shanghai branch to Pingyao head office, c. 1900, SPS, 1068.
97
piaohao in the Pingyao County, and agreed to repay the loan after six months plus a
certain amount of interests on the fix dates stipulated by biaoqi. Then the merchant used
the loan to buy tea in southern China and traveled to Mongolia to sell his merchandise.
He would then hire armed escorts to transport his earnings from Mongolia to Pingyao no
later than the stipulated biaoqi to repay his debts. Biaoqi guaranteed merchants enough
time to travel and trade, offered relatively transparent interest rates which were
announced seasonally, and served as third-party regulation on the lending practice of
financial firms which would otherwise charge higher interest rates and grant much shorter
grace-periods.
222
Biaoqi was collectively decided by and agreed among piaohao and merchants, and
was announced four times annually conforming to four seasons, which were chunbiao 春
標 (spring term), xiabiao 夏標 (summer term), qiubiao 秋標 (autumn term) and
dongbiao 冬標 (winter term). In Shanxi province, biaoqi in different trading and
financial hubs varied from place to place. For example, biaoqi in Taiyuan (Taiyuan biao
太原標) was announced on 3 March, 19 May, 24 August, and 19 November. All of these
dates were five days earlier than the ones of Taigu (Taigu biao 太谷標). Yet, Taigu biao
was announced five days earlier than Taifen biao 太汾標 used in the Pingyao, Yuci, Qi,
and Jiexiu County. The variance of biaoqi was determined according to average time
needed to transport silver from northern frontiers to these southern inland Shanxi counties.
223
222
Jiang, “Shanxi sheng zhi jinrongye” , 31; Huang, Shanxi piaohao shi, 112.
223
Wei, Shanxi piaohao shi, preface, 2. Jiang, “Shanxi sheng zhi jinrongye”, 31.
98
Because many piaohao once conducted inter-regional trade before they started
engaging in remittance, they conveniently applied the concept of biaoqi to their
remittance business too, especially when handling inter-piaohao remittance transactions.
According to Rishengchang’s letters, it is obvious that due dates of inter-piaohao
remittance transactions almost always conformed to biaoqi. For example, during the early
1890s, Cunyigong remitted Tls. 16,000 via Rishengchang, and it would not cash the two
drafts of Tls. 8,000 from Rishengchang until the two dates stipulated by the Taigubiao’s
Spring and Summer terms.
224
Another letter of Rishengchang’s head office reported that
it received Tls. 1,000 from Dadeheng and another Tls. 1,000 from Heshengyuan, all of
which would be remitted to Beijing. Yet, these two piaohao would not cash their drafts
until the date of Taigubiao’s Spring term.
225
Given the communication and transportation difficulty during the nineteenth century,
biaoqi, which shared the fixed seasonal loan repayment dates ex ante, served as default
merchant’s law regarding financial transactions, and consequently “economized on
negotiation cost, governed the transmission of information and the provision of services,
and substituted comprehensive contracts” among piaohao merchants and relevant Shanxi
traders.
226
5, Inter-piaohao employee flow and marriages
As mentioned earlier, because almost all investors, managers and employees originated
224
Rishengchang’s Pingyao head office to Beijing office, c. 1889-1893, SPS, 866.
225
Rishengchang’s Pingyao head office to Chengdu office, c. 1889-1893, SPS, 886.
226
Avner Greif, “Contract Enforceability and Economic Institutions in Early Trade: The Maghribi Traders' Coalition”,
in The American Economic Review, 83 (1993): 544.
99
from the five counties of central Shanxi province, inter-piaohao staff flow and marriages
were also quite frequent, which were conducive to maintaining cohesive piaohao
merchant communities. In particular, many senior managers of piaohao had experiences
in working in more than just one piaohao. Mao Honghui, the founding manager of
Weitaihou, was actually an ousted employee of Rishengchang. Although such
inter-piaohao staff flow caused cutthroat competitions, the frequent inter-piaohao
remittance transactions among Rishengchang and Weitaihou (Table 4) demonstrated that
cooperation actually loomed larger than competition. Ren Licheng 任立 誠 (1847-1902)
who used to serve as the manager of Tianchengheng’s Guangzhou branch, was later hired
by Baichuangtong as its Hankou branch.
227
Hou Wangbin 侯王賓 (1846-1922), who
retired as the chief manager of Tianchengheng’s head office in Pingyao, started his
piaohao career in Weitaihou in his early 20s, and had sojourned in Beijing for over ten
years.
228
In fact, the identities of being piaohao’s mangers and investors frequently
overlapped and did not contradict each other: many managers decided to become
investors of other piaohao after accumulating sufficient capital and experience as
employees. While continuously shouldering the responsibility for managing Weitaihou, in
1864, Mao Honghui established his own piaohao called Weichanghou.
229
Liu Qinghe
(1827-1890), a Pingyao native, came to work in Weitaihou as a teenager and was
dispatched to work in Suzhou and Beijing branches from quite some time. Soon after the
227
Wei, Shanxi piaohao shi, 95.
228
“Biography of Hou Wangbin” in Wei, Shanxi piaohao shi, 88.
229
Wei, Shanxi piaohao shi , 82.
100
Taiping Rebellion broke out, Liu was laid off but immediately found a new job in the
Guangju 廣聚 cash shop. In 1856, Liu invested Tls. 36,000 and established his own
Xietongqing piaohao, whose business scale soon caught up with his former
employer—Weitaihou.
230
Furthermore, when considering embarking on a career in piaohao, the family
members of the managers/investors of a certain piaohao were not confined to working in
the same piaohao—another proof of frequent inter-piaohao staff flow. For example, Ren
Rumei 任汝梅, the son of Tianchengheng and Baichuang’s manager Ren Licheng,
actually worked in Xietongqing piaohao.
231
Because the investor of Xietongqing (Liu
Qinghe) was different from the ones of Tianchengheng (Hou family) and Baichuantong
(Qu family), such staff flow was freer and broader than the flow among various piaohao
owned by same investors. Another example is Liu Qinghe’s great grandson who worked
in Rishengchang instead of in his great grandfather’s own piaohao—Xietongqing.
232
The
third example comes from the three sons of a Song family in Pingyao, who worked in
different piaohao owned by different investors. The oldest brother Song Juyuan 宋聚源
(1828-1897) initially worked in Qichangde of the Pingyao County along with his father.
But he was also a good friend of Xietongqing’s founder Liu Qinghe and Liu soon hired
him as the manager of Xietongqing’s Lanzhou branch after both he and his father were
230
“Biography of Liu Qinghe: in Wei, Shanxi piaohao shi, 83-84; “Epitaph of Liu Qinghe”, in Shanxi shengzhengxie
山西省政協 and Jinzhongshi zhengxie 晉中市政協, ed., Jinshang shiliao quanlan, Jinzhong juan 晉商史料全覽, 晉
中卷 [The histories of Shanxi merchants, volume on central Shanxi region] (Taiyuan, Shanxi renmin chubanshe, 2006),
802-803.
Liu Qinghe later became famous local gentry of Pingyao county, with whom the contemporary County Magistrate
Wang Shouzheng 汪守正 frequently consulted about the methods of distributing relief grains over the course of
relieving the severe famine of 1877, see Chapter 5.
231
“Biography of Ren Licheng”, Wei, Shanxi piaohao shi, 95.
232
Wei, Shanxi piaohao shi, 84.
101
laid off by Qichangde. When Liu passed away, Juyuan decided to return to Qichangde
because of his first employer’s heartfelt apology and invitation. The second brother Song
Jukui 宋聚奎 (1845-1908) served as a vice manager of Weitaihou; and the youngest
brother Song Guihua 宋 桂華, who was in his 40s in 1936 when Wei Juxian interviewed
him, used to be a manager of Baofenglong piaohao in the salt-producing county Ziliujing
自流井, Sichuan province.
233
The extant sources, though scarce, also mentioned cases of inter-marriages among
prominent piaohao families. For example, Chang Zanchun (1872-1941), a juren and a
bachelor’s degree holder in literature of Peking University, and a professor of Shanxi
University during the 1920s, was born into a wealthy family of the Yuci County which
invested in Dadeyu and Dadechuan piaohao. In 1903, Chang married Qiao Yingyi
(1888-1924) 喬映漪 as his third wife. Qiao was the granddaughter of Qiao Zhiyong, a
native of the Qi County, who established Dadetong and Dadeheng piaohao during the
1880s.
234
Sun Jixian 孫繼 先, the only son of Yuanfengjiu piaohao’s investor Sun Shulun
(1851-1879) 孫淑倫 in the Qi County, married a daughter of the famous investor—Li
Zhenshi 李箴視—of Rishengchang piaohao.
235
Qu Yuanzhen’s second wife originated
from the famous Qiao family of Qiao Zhiyong. Qu, also a native of the Qi County, was
the founding investor of Baichuantong and Sanjinyuan piaohao. Unfortunately, Qu
Yuanzhen disliked Ms. Qiao and her son Qu Benqiao 渠本翹 (1862-1919) who had to
233
Wei, Shanxi piaohao shi, 97-8.
234
“Biograpphy of Qiao Yingyi”, in Changshi xingshi lue (Biographies and Achievements of the Changs) of Changshi
jiasheng [The Genealogy of the Chang Family], ed. Chang Zanchun (Taiyuan: Fanhua zhiban yinshua chang, 1924),
16.
235
Wei, Shanxi piaohao shi, 95.
102
spend his childhood in the courtyards of the Qiao family with his maternal grandparents,
but did receive very good education. In the end, Benqiao still took over Sanjinyuan and
Baichuantong piaohao from his father, because of his excellence in study and the
premature death of his father’s favorite son.
236
Probably because of Qu Benqiao’s good
connections with the Qiao family, when his Baojin Coal Mining Company encountered
problems of raising the stipulated paid-in capital of five million yuan in 1907, Benqiao
successfully persuaded Dadetong and Dadeheng piaohao of the Qiao family to subscribe
to the shares of the Company.
237
6, Defending against predatory state polices
After piaohao started providing government remittance for various Qing authorities in
the late 1850s, they had been subject to the Qing’s random yet heavy financial extortions
and predatory policies. Under such circumstances, most piaohao would immediately
gather to convene on strategies that would meet the needs of the government without
exhausting their own business.
It is easy to understand piaohao’s collective responses to the Qing government.
First and foremost, the individual voice of the middling-sort non-scholar non-official
piaohao was just too faint to be heard by the government. Thus, negotiating collectively
with the Qing government was the only effective way to protect piaohao’s interests from
being hurt. Second, if piaohao donated or lent out money to the Qing separately without
236
Shanxi shengzhengxie et al. ed., Jinshang shiliao quanlan, Jinzhong juan, 136
237
See the Archive of Yanquan Steel Company, “Baojin gongsi touzi sanbaigu yishang huamingce [The honorary list
of shareholders who subscribed more than 300 shares]” 保晉公 司投資三百股以上花名冊, in SPS, 338. Also see my
Chapter 5.
103
reaching a consensus among each other on the actual amounts, whoever contributed the
highest would become easy prey for the financially constrained Qing government in the
future. As a result, almost every piaohao understood the benefits of synchronized
reactions to the state’s volatile financial policies and demands.
For example, on 5 September 1884, the Board of Revenue forced every branch of
piaohao to submit Tls. 600 as their annual registration fee. If not, they would be punished
for conducting illegal financial activities. Because each piaohao usually opened ten to
twenty branches, this new policy would result in an annual financial burden starting from
Tls. 6,000 imposed on piaohao.
Soon after, piaohao’s branches in many major localities quickly united in
opposition to this predatory policy. They first decided to appoint representatives from
their Beijing branches who would collectively donate a certain amount of money to the
Board of Revenue on behalf of all piaohao once and for all, instead of submitting
registration fees annually. Then piaohao’s branches in Zhejiang, Sichuan, Zhili, Gansu,
Shaanxi, Shanxi, Guangxi, Shandong, and Jiangxi petitioned their respective provincial
governors to memorialize their proposal to the Board of Revenue, and the provincial
governors actually agreed to do so, owing to piaohao’s collective protest against the
annual registration policy.
238
In fact, eight months after the announcement of this policy, the Board of Revenue
was still debating piaohao’s proposal turned in by provincial governors, and had not
238
Memorandums sent by provincial governors and general-govenors of Zhejiang (Liu Bingzhang), Sichuan (Ding
Baozhen), Zhili (Li Hongzhang), Shaanxi and Gansu (Tan Zhonglin), Shaanxi (Bian Baoquan 邊寶 泉), Shanxi (Kuibin
奎斌), Guangxi (Li Bingheng), Shandong (Chen Shijie 陳士傑), Lijin (Xiyuan), Henan (Sun Fengxiang 孫鳳翔),
Jiangxi (Dexin), Fujian and Zhejiang (Yang Changjun), Guizhou (Li Yongqing 李用清), Jiangsu (Wei Rongguang 衛
榮光), Gansu and Xinjiang (Liu Jintang 劉錦堂) to the Board of Revenue, SPS, 208-10.
104
received a single penny from piaohao thus far. Policy reached deadlock by then. Finally,
on 20 June 1885, Wang Jian 汪鑒, the Investigating Censor of Jiangxi province,
persuaded the throne to abandon the policy of collecting annual registration fees and
instead accept piaohao’s proposal of a one-time donation. The throne immediately
endorsed Wang’s suggestion in order to cajole piaohao into giving money as soon as
possible.
239
Although piaohao were still forced to donate after all, their collective
negotiation with the Qing central government was a success because they replaced the
potential yearly extortions with a one-time donation.
In 1900, the provincial army stationed in Hankou wanted to borrow money from
piaohao in order to pay for soldiers’ provision. Most piaohao from the Pingyao County,
being afraid of the discrepancies in the amounts of loans if lending out separately, sat
down together and discussed how much each firm should contribute to this compulsory
loan. They eventually agreed that each piaohao lend the provincial army Tls 8,000.
Nevertheless, Qianshengheng piaohao refused to conform to this agreement for some
unknown reason.
240
This example reminds us that although cooperation was the main
theme of piaohao’s response to government policies, dissonance always existed.
In late imperial China, because modern technologies of identifying and policizing every
individual had yet to be invented, it was difficult for Shanxi piaohao to monitor the
financial performances of stranger borrowers. As a result, piaohao relied heavily on
raising capital from kinship groups and native-ties of Shanxi province in order to avoid
239
Memorandum by Wang Jian, 20 June 1885, SPS, 210-11.
240
Rishengchang’s Hankou branch to Pingyao head office, c. 1900, SPS, 1077.
105
the danger of impersonal financial transactions. Piaohao thus formed de facto exclusive
and cohesive financial communities (though never openly announced that), in which they
frequently handled inter-firm remittance transactions to provide cash flows to each other,
provided collective postal and silver shipment services to lower the transaction cost
incurred by remittance, stipulated fix loan repayment dates as third-party enforcement of
loan contracts, and defended against the Qing’s predatory financial policies.
Notwithstanding cooperation as the main theme of inter-piaohao relations, piaohao also
competed against each other for government remittances.
The significance of reconstructing piaohao’s inter-firm relations is twofold. First, I
explain why piaohao, family business firms with limited financial capital, were able to
rise to national prominence by providing remittance for the Qing dynasty after the 1860s,
yet were actually unable to monopolize the government remittance business and become
an indispensable financial institution of the Qing’s tax transfer system, as Chapter 3
demonstrates. Second, in contrast to other prominent merchant groups appealing for
greater politico-economic power and often clashing with the Qing’s expanding state
bureaucracy after the 1850s, the merchant community of piaohao kept detached from
engaging in or countering the Qing’s state expansion. Piaohao’s very much de-politicized
inter-firm relations predetermined their unwillingness to accommodate to the Qing’s
interventionist banking policies and the quick opt-out from remittance business after
1985, which will be described in Chapter 4.
106
Chapter 3: Contingency, controversy, and inconsistency:
piaohao and the Qing empire, 1850-1985
This chapter begins by discussing two major benefits that piaohao gained from providing
remittance service for the Qing dynasty after the 1860s, which were considerable
remittance fees and short-term cheap government credit that piaohao could reinvest in
their own businesses. Notwithstanding these gains, piaohao’s financial encounter with the
Qing had always been contingent, inconsistent, and painful. In fact, only after the empire
was plagued by a series of mid-nineteenth century internal rebellions did the central
government reluctantly lift the ban on provincial officials’ use of piaohao’s remittance
service to deliver taxes in 1862. Yet, the court never institutionalized remittance as a
legitimate way of transferring taxes, because piaohao undermined the court’s control over
fiscal revenues and provincial officials by interfering in the delivery of provincial taxes.
As a result, from the 1860s to the 1890s, the court launched four futile campaigns to
re-impose the ban on provincial official’s use of piaohao to remit provincial taxes.
Although all of the court’s anti-piaohao campaigns failed because of provincial
officials’ persistent reliance on piaohao’s efficient remittance service to deliver taxes
when overland silver transport was disrupted, piaohao never carved out a unique niche in
the market of handling government remittances and failed to outstrip the conventional
way of submitting taxes through overland shipment. First, prominent cash shops in
southern China took a considerable amount of government remittance away from
107
piaohao, owing to their entrenched relations with provincial officials. Second, the court
successfully insisted on provincial officials submitting taxes in silver ingots by land in
northern provinces. Third, piaohao’s remittance mechanism, which restricted the amount
of remittance drafts that they could cash with a certain period, forced provincial officials
to resort to the conventional method to deliver taxes through overland silver shipment. In
a word, piaohao’s business relationship with the Qing court and provincial governments
had always been inconsistent and non-institutionalized even after the 1860s when
piaohao rose to national prominence.
Providing remittance in chaos: contingent encounter between piaohao and the Qing
in the 1850s
The Qing court would have never thought of allowing piaohao, a group of private
financial firms, to interfere in handling and transferring its fiscal revenues, provided it
had never been plagued by constant rebellions and bandit activities after the
mid-nineteenth century. Each year, the court demanded the punctual delivery of
provincial taxes called Capital Acquisition (jingxiang 京餉) to Beijing, and also
requested affluent provinces to deliver Assistant Funds (xiexiang 協餉) to provinces in
need of extra funds for disaster relief or military expenditure. The conventional way of
transferring and delivering these taxes was as follows: per one-thousand taels of
shoe-shaped silver ingots (weighing about 31.5 kilograms/69.4 pounds) would be packed
into a wooden olive-shaped box sealed by iron hoops. This process was called the
Encasement of Silver (xianyin zhuangqiao 現銀 裝鞘). Provincial governors would then
108
assign one to five delegates as well as dozens of armed soldiers to escort the silver
transport to Beijing or other destinations.
241
The court had been firmly sticking to the overland method of tax delivery to Beijing
and various destinations until the late 1850s. Any official who dared to slightly alter this
method would be punished without mercy. For example, in 1828, a delegate from
Zhejiang province escorted the surplus revenues of the provincial treasury all the way to
Beijing by land. But for some unknown reason, when he and the silver both arrived in
Beijing safely, he decided to let a local cash shop submit the silver to the Board of
Revenue on his behalf. This Zhejiang delegate was immediately cashiered by the court
when his misconduct was impeached by the patrolling imperial censor of Shaanxi
province named Shao Jiaming 邵甲名. Before long, the Daoguang emperor reinforced in
an imperial edict, “When submitting the Capital Acquisition, provincial delegates should
engage with and supervise the entire process, and any merchants or dishonest yamen
runners were prohibited from interfering in it”.
242
Again in 1848, a ninth-rank official of the Zhejiang provincial treasury named
Zhang Bingzhong 張炳 鐘, who should have escorted Tls. 4,600—the ginseng funds for
the Imperial Household—to Beijing in person, remitted the money instead through a local
Hangzhou cash shop called Yuanquan 源泉. Zhang attempted to defend his use of
remittance against the court’s punishment that in addition to transferring the ginseng
funds, he was also in charge of shipping 18,000 jin of Tong oil, 5,000 jin of tea and 1,000
jin of copper to Beijing without being any armed escorts. Being overwhelmed by the
241
Huang, Shanxi piaohao shi, 230, 265; Zhang, Wanqing qianzhuang he piaohao yanjiu, 83.
242
Zhang, Wanqing qianzhuang he piaohao yanjiu,81.
109
arduous journey and afraid of losing money en route, he thus decided to remit the money
to Beijing in advance and transport the rest of the cargo in person. Nevertheless, the
unmoved Daoguang emperor soon dismissed this delegate as well as his immediate
superior—the Supervisor of the Zhejiang treasury without mercy, and reiterated the strict
ban on using third-party private financial firms to remit taxes to Beijing rather than
shipping them by land.
243
Unfortunately, after the 1850s the court helplessly found that the stubborn insistence
on overland tax transfer prevented it from receiving annual fiscal revenues on time in the
face of disruptive affects of constant internal rebellions. In May 1860, the Taiping Army
besieged Nanjing and Suzhou, and its battles with the Qing troops also culminated in
Hubei, Jiangxi, Anhui and Zhejiang.
244
To be worse, scattered Nian rebels continuously
harassed much of eastern and northern China across Jiangsu, Anhui, Hubei, Hunan,
Shandong, Shanxi and Zhili provinces, which completely cut off the overland routes
between south and north China during the 1860s.
245
In addition, Sichuan, Yunnan,
Guizhou and Guangxi provinces were also plagued by local bandits and rebels.
246
Under the circumstances, the best way to deliver provincial taxes was through
remittance service provided by Shanxi piaohao as well as other third-party private
financial firms. Nevertheless, by then no provincial governors dared to use such private
financial service, because the court would penalize anyone for violating the rule against
remittance. On the other hand, however, if provincial governors continued to transfer
243
Memorandum by Wu Wenrong 吳文熔, governor of Zhejiang, 24 April 1848, SPS, 74-75.
244
Huang, Shanxi piaohao shi, 231.
245
Zhang, Wanqing qianzhuang he piaohao yanjiu, 83.
246
Shangyudang 上諭檔 [Archive of imperial edicts], 2 January 1862, reprinted in SPS, 75.
110
taxes by transporting silver overland, they were facing another high risk that the tax
money would get robbed by rebels and bandits while en route to Beijing. If that ever
happened, not only would provincial delegates escorting the money be fined and/or
cashiered, provincial officials also had to compensate for half of the loss at their own
expense. In a memorandum written in 1884, the Board of Revenue reiterated the
punishment for mistakes made during overland tax transfer:
Once provincial taxes being transported to Beijing get lost, provincial
governors should compensate for 50% of the total loss from their salary,
officials (usually Supervisors of the provincial treasury) in charge of
dispatching delegates should compensate for 30%, whereas the
remaining 20% should be compensated by provincial delegates who
escorted the money to final destinations. If delegates were too poor to do
so, then officials who dispatch them should then shoulder the full
responsibility for repaying the loss on behalf of their subordinates.
247
The callous punishment for the loss of overland tax transfer placed an incredibly
heavy burden on provincial officials who simply could not afford it. For example, by
1906, second-ranking officials, the normal rank of provincial governors, earned about
300 taels of silver plus 300 shi of rice per year, whereas ninth-ranking officials, usually
the rank of provincial delegates in charge of escorting silver, made only 66 taels plus 60
shi of rice per year.
248
If, for example, 5,000 taels of silver got lost while being
247
Memorandum by the Board of Revenue, February 1884, in Guangxu chao donghua lu 光緒朝東華 錄 [Palace
memorials of the Guangxu reign], vol. 2 (Beijing: Zhonghua shuju, 1958), 1666-1667.
248
Ju Fang’an 鞠方安, “Qingmo guanzhi gaige zhong guanyuan de fenglu gaige” 清末官制改革中 官員的俸祿改革
[Changes on Salaries of Civil Officials in the Late Qing Dynasty Civil Service System Reform], in Renmin daxue
111
transferred to Beijing, then the provincial governor was forced to compensate for the loss
of 2,500 taels—more than eight times of his annual salary.
Because the chances of getting punished were equally high regardless whether
provincial officials deliver taxes by overland silver transport or through remittance,
officials frequently delayed submitting taxes to Beijing to avoid risk. To the dismay of the
Tongzhi emperor, on 11 October 1862, the Board of Revenue desperately discovered that
tax arrears of the annual Capital Acquisition was mounting up to Tls. 2.68 millions of
taels, among which Tls. 1.1 million should be submitted by Guangdong province which
had not handed in a penny so far. Grappling with huge financial deficits, the Board of
Revenue soon cast aside the rhetoric of keeping the empire’s great tradition of submitting
taxes by overland silver shipment, and instead agreed in a memorandum it sent to
Guangdong officials that the acting governor-general Yan Duanchu 晏端 初 and his
successor Liu Changyou 劉長佑 could do any of the followings including “choose
alternative overland routes, ask merchants to remit the taxes (emphasis mine), or ship
silver ingots via steamboats to Tianjin”, as long as they submitted Guangdong’s taxes
without further delays. The Tongzhi emperor soon endorsed the Board’s decision and
demanded that Yan and Liu to “make the greatest effort to guarantee the punctual delivery
of taxes”.
249
Year 1862 thus marked the watershed in the shifting balance between rhetoric and
practice of the Qing’s policy on tax transfer and delivery. Forced by widespread
rebellions across the empire and the persistent financial strains, the Qing court gave up its
xuebao 人民大學學報, Issue 5 (2001) :120.
249
Shangyudang, 11 October 1862, reprinted in SPS, 75.
112
200-year rhetoric of retaining the method of overland silver transfer as the ultimate
symbol of absolute control over territorial bureaucracy and provincial revenues, and for
the first time acquiesced in provincial officials’ use of third-party private financial
firms—Shanxi piaohao to deliver taxes via remittance. The memorandum of the Board of
Revenue, sent to Guangdong implying the ad hoc use of remittance, ironically lent
provincial officials the legitimacy that actual practices of delivering taxes could deviate
from the rhetoric without getting punished.
Indeed, after the ban on using remittance to deliver taxes was de facto lifted by the
court in 1862, various provincial governors of Guangdong, Zhejiang, Sichuan, Hubei,
Hunan, and Jiangxi immediately take advantage of the loophole in the imperial memorial
system, and rushed piaohao into remitting all kinds of taxes to Beijing or other
destinations. It was estimated that in 1863, one year after the Board of Revenue
acquiesced in submitting taxes by remittance, Hubei provincial treasury remitted taxes of
Tls. 389,410 through Shanxi piaohao, Guangdong--Tls. 381,575, Fujian--Tls. 200,000,
Jiangxi--Tls. 100,000, Hunan--Tls. 100,000, Sichuan--Tls. 50,000, the customs of
Hankou--Tls. 70,000, and the customs of Fujian--Tls. 50,000.
250
Weitaihou, Yuanfengjiu, and Xintaihou piaohao soon plunged into the business of
remitting provincial taxes. For example, on 27 March 1863, Hunan provincial governor
Mao Hongbin 毛鴻賓 reported that he collected Tls. 50,000 of land taxes and remitted it
as Capital Acquisition to Beijing through Weitaihou and Xintaihou piaohao’s Changsha
250
Huang Jianhui, “Table 1-1-18: 1862-1893 nian shouhui gesheng guan kuanxiang tongji” 1862-1893 年收匯各省關
款項統計 [Statistics on government remittances conducted for various provincial authorities and maritime customs,
1862-1893], SPS, 128.
113
branches.
251
On 25 June 1863, Hubei governor Yan Shusen 嚴樹森 remitted Tls. 30,000
of the Hankou customs revenue through Weifenghou’s local branch.
252
During the same
year, Sichuan governor-general Luo Bingzhang 駱秉章 also remitted Tls. 40,000
through local Yuanfengjiu piaohao, and the money would be used by the court to revamp
the Ming Imperial Mausoleums.
253
Piaohao’s rise to national prominence
Adeptly seizing the stupendous government remittance opportunities after the 1850s
created by the court’s extraordinary fiscal demands on provincial authorities and the
latter’s increasing need for remittance as an alternative to overland tax shipment,
Shanxi piaohao quickly rose to national prominence after that point. Piaohao scholar
Huang Jianhui estimated that piaohao remitted about Tls. 1.39 million for various
provincial treasuries and customs in 1863, and thirty years later the number quadrupled to
Tls. 5.2 million.
254
Figure 11 Remittances handled by piaohao for various provincial authorities, 1863-1893
255
251
Memorandum by Mao Hongbin, 27 March 1863, SPS, 79.
252
Memorandum by Yan Shusen, 25 June 1863, SPS, 78.
253
Memorandum by Luobingzhang, 1863, SPS, 78.
254
Huang, “Table 1-1-18: 1862-1893 nian shouhui gesheng guan kuanxiang tongji”, SPS, 131.
255
These numbers were calculated by the piaohao scholar Huang Jianhui, who primarily relied on incomplete data
extracted from extant provincial governors’ memorandums. As a result, these numbers do not reflect the exact amount
of remittances handled by piaohao. Nevertheless, they do show a general trend that piaohao’s remittance services
played an indispensable role in remitting taxes for provincial governments after the 1860s.
114
Business correspondence of the Rishengchang piaohao further evidenced that its
remittance business gained remarkable development after it started serving the Qing
empire. Letters penned before the late 1850s revealed that by then, most of
Rishengchang’s remittance orders came from interregional traders and rich local gentry,
and the amount of remittance in a single transaction usually ranged from Tls. 100 to
5,000.
256
For example, from 23 March to 5 June 1850, Rishengchang’s Beijing branch
conducted remittances of Tls. 1,341 in total for twelve members of gentry from various
localities (about Tls. 100 per transaction) who donated money to the court in exchange
for titular official or examination degree titles.
257
In contrast, after the 1860s,
Rishenchang frequently processed large remittance orders ranging from Tls. 10,000 to
40,000 placed by various provincial governments.
258
Just within a few months in the
early 1890s, Rishengchang’s Guangzhou branch remitted Tls. 46,132 and Tls. 46,354 of
256
“Letters from Zhangjiakou to Beijing and Hankou”, in SPS, 841-6; “Letters from Pingyao head office to its
Guangzhou branch”, in SPS, 847-57.
257
Huang, Shanxi piaohao shi, 162-163.
258
“Letters during 1889-1893”, in SPS, 865-982; “Letters during 1894-99”, in SPS, 983-1057.
115
the Capital Acquisition for the Guangdong Provincial Treasury.
259
By providing government remittance for various provincial authorities, piaohao
primarily gained two benefits. First, they charged a considerable amount of fees ranging
from one to five percent of the total amount remitted, depending on the distance and
duration needed to remit the money to and cash the drafts at the final destination. Based
on provincial officials’ memorandums and piaohao’s business correspondence, examples
of piaohao’s remittance commission rates dated from the early 1860s to the 1900s are
listed in Table 5.
Table 5 Piaohao’s remittance commission, 1864-1902
Date Amount
remitted
(Unit:
Tls.)
Remitt
-ance
commi
-ssion
Commi
-ssion
rate
Usance
260
Remitter/
Originating
place
Destination Which
piaohao
handled
1864 n/a 40 per
1,000
4% n/a Superintende
nt of
Guangzhou
Maritime
Customs,
Yuqing 毓清
Board of
Revenue,
Beijing
261
n/a
1878 10,000 800262 8% n/a Jiangxi
Provincial
Treasury
263
Military
Funds
Transportatio
n Bureau,
Suiyuan 綏
遠, Shanxi
Weichanghou
1879 10,000 384 3.80% n/a Guangzhou
Maritime
Customs
264
Suiyuan
Prefecture,
Shanxi
Zhichengxin,
and
Xiechengqian
259
Rishengchang’s Beijing branch to Pingyao head office, 22 August 1890, SPS, 904, 906.
260
Usance refers to the period of time, stipulated before remittance transaction and agreed by remitters and piaohao,
between the date of remittance and its final payment.
261
Memorandum of Yuqing, 25 October 1864, SPS, 77.
262
This amount consisted of both remittance fees and allowances for office expenses.
263
Memorandum of Ruilian 瑞聯, 1871, SPS, 92.
264
Memorandum of Liu Kunyi 劉坤一, 28 March 1879, SPS, 92.
116
Early
1890s
12,366 17 per
1,000
1.7% 20 days Provincial
Treasury of
Guangdong
265
Board of
Revenue,
Beijing
Rishengchang
Early
1890s
20,000 97 per
1000
9.7% 10-odd
days
Guangzhou
266
Navy Bureau,
Tianjin
Rishengchang
Early
190s
16,790 17 per
1,000
1.7% n/a Provincial
Treasury,
Guangdong
267
Beijing Rishengchang
Early
1890s
20,000 220 1.1% n/a Chengdu
268
Shanghai
Maritime
Customs
Rishengchang
1893 6,439 341 5.30% n/a Governor-gen
-eral of
Fujian and
Zhejiang, Tan
Zhonglin 譚
鐘麟
269
Board of
Revenue,
Beijing
Weichanghou
1895 60,000 1080 1.80% 40 days Governor of
Jiangxi,
Dexin 德馨
270
Board of
Revenue,
Beijing
Weichanghou
Late
1890s
15,388 14 per
1,000
1.4% n/a Guangdong
271
Shanghai
Maritime
Customs
Rishengchang
1898 35,000 350 1% 20 days Governor of
Jiangxi,
Deshou
272
Shanghai
Maritime
Customs
Weishengcha
ng
1898 240,000 120
per
10,000
1.20% 50 days Governor-Ge
neral of
Sichuan,
Gongshou 恭
壽
273
Imperial
Bank of
China,
Shanghai
Xietongqing,
etc.
1898 100,000 1500 1.50% n/a Governor of
Guizhou,
Wang Yuzao
王毓藻
274
Imperial
Bank of
China,
Shanghai
n/a
1899 47,500 1615 3.40% n/a Governor-gen
eral of Fujian
Shanghai
Maritime
n/a
265
Rishengchang’s Guangzhou branch to Pingyao head office, 12 October 1890, SPS, 930.
266
Rishengchang’s Guangzhou branch to Pingyao head office, 1890, SPS, 930.
267
Rishengchang’s Guangzhou branch to Pingyao head office, 1890, SPS, 931.
268
Rishengchang’s Chengdu branch to Pingyao head office, c. 1890, SPS, 964.
269
Memorandum of Tan Zhonglin, 28 May 1893, SPS, 82.
270
Memorandum of Dexin, 4 May 1895, SPS, 276.
271
Rishengchang’s Guangzhou branch to Pingyao head office, c. September 1898, SPS, 1027.
272
Memorandum of Deshou, 1898, SPS, 224.
273
Memorandum of Gongshou, January 1898, SPS, 348.
274
Memorandum of Wang Yuzao, 23 October 1898, SPS, 348.
117
and Zhejiang,
Xu Yingkui
許應騤
275
Customs
1899 200,000 120
per
10,000
1.20% 28 days Governor-gen
eral of
Sichuan,
Kuijun 奎俊
276
Shanghai
Maritime
Customs
1901 33,300 333 1% 20 days Governor of
Jiangxi, Li
Xingrui 李興
銳
277
Shanghai
Maritime
Customs
Weichanghou
Weishengcha-
ng,
and Xintaihou
1901 183,333 120
per
10,000
1.20% 25 days Governor-gen
eral of
Sichuan,
Kuijun
278
Shanghai
Maritime
Customs
Xietongqing,
etc.
1902 116,666 1185 1% n/a Governor of
Jiangxi, Li
Xingrui
279
Shanghai
Maritime
Customs
Xintaihou,
etc.
1902 66,670 340
per
10,000
3.40% 28 days Governor-gen
eral of Fujian
and Zhejiang,
Xu Yingkui
280
Shanghai
Maritime
Customs
n/a
Piaohao’s government remittance business was quite lucrative when comparing
their commission rates with loan interest rates charged by the contemporary foreign and
domestic financial institutions operating in China. For example, from 1877 to 1895,
HSBC issued ten-odd public loans with a value at the rate of the day of some ￡12
millions to the Qing court and provincial governments, and the annual interest rates of
these loans usually ranged from six to eight percent.
281
As a result, HSBC’s monthly
interest rates were about 0.5% to 0.67%. Another example came from report written by
275
Memorandum of Xu Yingkui, 20 May 1899, SPS, 224.
276
Memorandum of of Kuijun, 17 September 1899, SPS, 226.
277
Memorandum of of Li Xingrui, 15 September 1901, SPS, 232.
278
Memorandum of of Kuijun, 20 November 1901, SPS, 236.
279
Memorandum of of Li Xingrui, 26 April 1902, SPS, 236.
280
Memorandum of Xu Yingkui, 10 January 1902, SPS, 238.
281
Frank King, Catherine E. King, and David J. S. King, The History of the Hongkong and Shanghai Banking
Corporation, Vol. 1, The Hongkong Bank in Late Imperial China, 1864-1902, on an Even Keel (Cambridge: Cambridge
University Press, 1987), 548-549.
118
Ikenaga Rin'ichi in 1906. As assistant Consul of the Japanese Consulate at Chongqing,
Rin'ichi recorded that by then, the monthly interest rates of loans in Chongqing were
from 0.6% to 0.8 %.
282
In contrast, Table 5 shows that needing 20 to 40 days to fulfill
most provincial remittance orders, piaohao usually got 1% or more commission on them.
For instance, a piaohao’s Chongqing branch received a government remittance of Tls.
10,000 to be remitted to Shanghai. Yet, the Shanghai branch did not have enough silver
ingots in hand to cash the remittance draft; it then proceeded to obtain a one-month loan
from a local cash shop at an average loan interest rate of 0.7%. Because the remittance
commission was usually higher than one percent with a month of usance, then even after
paying off the one-month loan from the local cash shop, this piaohao’s Shanghai branch
could at least Tls. 30 from remitting Tls. 10,000. In other words, the profit on conducting
government remittances was not only considerable but also predictable when comparing
it to that of loans.
By providing remittances for the Qing, piaohao also enjoyed the privilege of gaining
access to large amounts of short-term yet interest-free government credits. Normally, a
time difference existed between piaohao receiving provincial taxes and cashing these tax
remittances at various destinations. As a result, piaohao frequently took advantage of this
time difference and reinvested these interest-free temporary government credits into their
own financial and commercial businesses, such as providing loans to other merchants and
speculating on tea trade. Such cheap government credits were very important to
maintaining piaohao’s daily financial businesses, considering the limited silver supplies
282
Pan trans. & ed., Zhongguo zhi jinrong, V ol. 2,13-14.
119
and the rampant circulation of unbacked paper currencies in late imperial Chinese
financial markets. Unfortunately, piaohao were easily lured into taking advantage of their
position, and scandals about their embezzlement of government money frequently broke.
This was one of the primary reasons that piaohao’ remittance service was neither
acknowledged nor legitimized by the Qing court in terms of handling and delivering
provincial taxes. These scandals will be elaborated later in this chapter.
The court versus provinces: four futile campaigns against remittance, 1864-1899
The Qing court soon realized that the Board of Revenue’s 1862 memorandum mistakenly
opened the floodgates to private financial firms’ excessive interference in the state’s fiscal
revenues, which deeply challenged the court’s financial authority. As a result, from the
mid-1860s to the 1890s, the court launched four campaigns against provincial officials’
overreliance on remittance service to deliver taxes, aiming at restoring the symbolic
rhetoric in controlling territorial bureaucracy and provincial revenues through overland
tax transport. Nevertheless, all of the four campaigns launched by the court against
remittance failed. On the one hand, provincial officials were fully aware of the court’s
escalating hostility towards piaohao through the imperial edicts and rescripts circulated
through the imperial memorial system, and thus constantly paid lip service to the imperial
ban on remittance. On the other hand, however, both the court and provincial officials
were able to cast political rhetoric aside in actual practices of tax transfer and delivery.
Officials, especially those of southern provinces, persisted in submitting taxes through
piaohao’s remittance service simply because it was thus far the most efficient and
120
effective method to deliver taxes long distance, when overland routes of silver
transportation were constantly disrupted by rebellions and bandits; whereas the court,
incompetently grappling with the empire’s financial difficulties, was forced to constantly
cede financial authority to provincial officials and private financial firms after the 1860s.
1, The court’s first anti-piaohao campaign in the 1860s
In 1864, imperial censor named Xie Yingxi 謝膺禧 memorialized the throne regarding
the imperative to restore overland silver transport as the only legitimate way to deliver
Capital Acquisition. Xie appealed against the use of remittances for two primary reasons.
First, piaohao’s remittance service undermined the court’s strict control over the qualities
of provincial-cast silver ingots, and made it more difficult for the Imperial Treasury to
track down which provinces submitted silver ingots of inferior quality. Xie illustrated this
point further:
Silver ingots cast in each provincial treasury bore unique shape and mark
that indicated their places of origin, manufacturing dates and names of
shroffs. As a result, the Imperial Treasury could easily track down the
origins of any batches of low quality silver and punish provincial
officials accordingly, even if these ingots had been submitted a long time
ago. Nowadays, however, provincial delegates brought remittance drafts
instead of actual silver ingots to Beijing, cashed these drafts for local
silver ingots at piaohao’s Beijing branches, and then submitted these
made-in-Beijing ingots to the Imperial Treasury as provincial taxes. In
121
that case, if the Imperial Treasury staff were unable to discern low
quality silver ingots upon receiving them, they lost the chance forever to
trace the origins of low quality silver back to provincial delegates who
should shoulder the responsibility for it, because all silver ingots
delivered by provincial delegates were locally cast and circulated in
Beijing.
283
Second, Xie contended that using piaohao’s remittance service to submit provincial
taxes posed an urgent problem of liquidating large amounts of remittance drafts in a very
short period of time, leading to silver shortage and price increase against copper coins
and thus detrimental to the livelihood and economy in Beijing because most local
residents lived on copper coins. According to Xie’s observation,
Whenever taxes were due for final submission to the Imperial Treasury in
Beijing, provincial delegates were busy dumping large amounts of remittance
drafts onto the Beijing financial market where these drafts were all waiting to be
cashed into silver. The soaring demand for silver soon exceeded Beijing’s local
silver supply, which then led to the depreciation of copper coins and the
subsequent price increases in food and grain…Ultimately, local residents whose
living depended solely on copper coins were severely impoverished day after
day.”
284
In an ideal world, the liquidity problem caused by the surge in remittance drafts
283
Xie Yingxi: “Jingxiang yi jie shiyin shu” 京餉宜解實銀疏 [On the submission of Capital Acquisition using actual
silver], 1864, in Huangchao jingshi wen xubian 皇朝經世文續編 [Second collection of Qing dynasty writings on
statecraft], vol 31, huzheng 3 戶政[Administration of the Board of Revenue], reprinted in SPS, 166.
284
Ibid.
122
would not last long, because in order to alleviate silver shortages and guarantee the
punctual delivery of provincial taxes, local piaohao and cash shops would soon transport
silver from nearby places to Beijing. In reality, however, piaohao did so and would
instead solve this problem by taking advantage of the different tax due dates set for
different provinces. In particular, during the peak tax delivery season, there were always
some provincial delegates who arrived in Beijing first, cashed remittance drafts from
local piaohao before silver shortage hit the market, and then rendered their provincial tax
quotas to the Imperial Treasury earlier than other provincial delegates. Meanwhile, the
Imperial Treasury, upon restocking these provincial tax silver, would soon re-dispense the
money back to the local Beijing financial market, either as officials’ salaries or imperial
funds for various purposes. In addition, the Treasury also occasionally deposited part of
its silver reserves in local cash shops and piaohao, in order to gain interest and reduce the
Treasury’s cost of safekeeping. As a result, relying on new sources of silver supplies
re-injected by the Imperial Treasury into the local market, piaohao and cash shops were
almost always able to cash remittance drafts tendered by latecomers of provincial
delegates, therefore evaded the huge cost of shipping silver from other places.
But this pattern of recycling local Beijing silver ingots without new replenishment
from other provinces was exactly the reason why Xie Yingxi was so bothered with the
method of using remittances to submit provincial taxes. Xie noticed that after the ban on
using remittance to submit provincial taxes was de facto lifted, “no new silver ingots ever
arrived in Beijing from other provinces. Instead, as long as a certain amount of silver was
constantly circulating in Beijing, the illusion that ten or more times than the current silver
123
amount has been delivered to the Imperial Treasury is maintained... In fact, however, the
problem of silver shortage in Beijing exacerbated by remittance has become
persistent.”
285
In other words, what Xie really worried was that remitting provincial taxes
instead of delivering actual silver ingots to Beijing would magnify the danger of cutting
off provincial silver supplies and isolating the Capital’s financial market from the rest of
the empire.
Convinced by Xie Yingxi’s treatise on the danger of relying on remittance to deliver
provincial taxes, the throne soon re-imposed a new ban on it. In an imperial edict of 1
May 1864, the Tongzhi emperor commanded, “All provinces should immediately resume
the original way of submitting Capital Acquisition by overland silver shipment, and the
use of remittance is henceforth prohibited.”
286
The new ban on remittance did take some effect. For example, in early 1868, the
Imperial Household official Ruichang 瑞常 memorialized that the customs offices of
Hankou and Jiujiang, as well as Shandong province and the Changlu Salt Administration
had already switched back to the method of delivering taxes to Beijing through overland
silver transport.
287
In September 1869, the governor of Zhejiang, Li Hanzhang 李瀚章,
proudly reported that he endeavored to transfer land and salt taxes by land several
times.
288
285
Xie: “Jingxiang yi jie shiyin shu”, reprinted in SPS, 166.
286
Shangyudang, 1 May 1864, reprinted in SPS, 167.
287
Memorandum of Ruichang, 17 November 1867, SPS, 167.
288
Memorandum of Li Hanzhang, 28 September 1869, SPS, 173.
124
2, Southern provincial officials’ covert resistance
Unfortunately, in southern provinces such as Fujian, Guangdong, Sichuan, Zhejiang and
Hubei, the court’s new ban on remittances had taken no effect. To the dismay of the court,
the Board of Revenue’s memorandum in 1862 set the precedent for the use of remittance
as a permissible expedient to deliver taxes. As a result, provincial officials no longer
abided by the court’s edicts restricting remittance like they used to do. On the one hand,
provincial officials still paid lip service to the court’s new ban on remittances and the
rhetoric of resuming overland transport of silver ingots. On the other hand, by making
various valid excuses for continuing to employ piaohao to remit taxes, provincial
officials successfully postponed the restoration of overland silver transport and thus
covertly resisted the court’s new ban on remittance.
One common excuse that provincial officials frequently resorted to was the
unpredictable risks posed by transporting silver long-distance between southern
provinces and Beijing. During the mid-1860s, although the Taiping Rebellion had been
quelled, the Nian rebels and the Muslim rebels continued to disturb central China and the
northwest. As a result, chances were still very high that large shipments of silver ingots
would get robbed while en route to Beijing. For example, on 20 March 1867, the
governor of Zhejiang Ma Xinyi 馬新貽 memorialized the Tongzhi emperor that at the
moment, he was unable to stopping using remittance and resume the overland silver
transport because of the ongoing Nian Rebellion. Ma explained as follows:
The overland distance between Zhejiang and Beijing is so long that our
Zhejiang delegates must trudge up hills and through waters of Jiangsu,
125
Shandong, and Zhili, laden heavily with silver. Yet nowadays these provinces
are filled with rampant Nian rebels, who completely cut off the transportation
to the north. In addition, there are random bandits disturbing the area north of
the Qingjiang river 清江 (present-day Wenzhou 溫州). Once our delegates get
robbed en route to Beijing, the loss of provincial land taxes and salt gabelle
totaling up to Tls. 100,000 is irrevocable even if the delegate be punished and
dismissed. As a result, after pondering over the safest way of submitting my
provincial tax quotas for Capital Acquisition, I beg the throne to endorse my
continuous use of remittance.
289
Ma Xinyi was not alone in his excuse for using remittance to deliver provincial taxes.
Three days later after Ma’s memorandum, Ruilin 瑞麟, the governor-general of
Guangdong and Guangxi, also memorialized the Tongzhi emperor:
I completely understand that using remittance to submit Capital
Acquisition is ad hoc only. Yet, if I now shift back towards the normal
way of shipping tax silver from Guangdong to Beijing by land, the
delegates escorting the money will have to travel across provinces of
Henan, Shandong and so forth, where the activities of rebels are still
erratic…Once the money is lost, the damage would be immense. Of
course, my delegates could make detours around these dangerous roads,
yet our tax delivery to Beijing will be severely delayed. Alternatively, it
sounds quite convenient to ship tax silver by steamboats via sea routes,
289
Memorandum of Ma Xinyi on temporarily continuing the antecedent practice of submitting Capital Acquisition
through remittance, 22 March 1867, SPS, 173.
126
yet the big ocean storms are actually more unpredictable. In addition,
the insurance fee for sea transportation is actually much higher than
remittance fees paid to piaohao…As a result, I beg [the emperor] to
forgive my continuous use of remittances, and I promise to immediately
switch back to overland tax transfer once peace is restored.
290
A memorandum of 27 April 1867 penned by the governor-general of Sichuan named
Luo Bingzhang also yielded a glimpse at same concern about the danger of overland
silver transport. Luo said:
When transferring silver from Sichuan to Beijing, delegates escorting the
money must pass through Shaanxi province, where the transportation is
disrupted by Muslim rebels…As a result, I still have to employ Weifenghou
and Tianchengheng piaohao to remit my provincial taxes, and dispatch
delegates to carry remittance drafts and cash them in Beijing.”
291
Provincial governors’ second excuse for their covert resistance to the court’s ban
on remittance was the constant financial constraints they encountered. Simply put, after
the 1850s, the court’s increasing financial demands, ranging from military expenditures
to expenses of the Self-strengthening Movement, often exceeded the annual income of
most provinces. As a result, provincial officials frequently took out loans from private
financial firms that were able to advance provincial governments money to meet the
central government’s soaring taxation demands on time. In return for piaohao’s generous
loans, officials felt obliged to use the remittance service of piaohao which agreed to remit
290
Memorandum of Ruilin, 21 March 1865, SPS, 169.
291
Memorandum of Luo Bingzhang, 25 April 1867, SPS, 171.
127
taxes in advance on behalf of provincial officials and get repaid later. For example, on 17
October 1869, the Superintendent of Guangzhou maritime customs named Chong Li 崇
禮 reported:
Since I took charge of the maritime customs of Guangzhou and Chaozhou
on 19 April, the duties I have collected from these two customs were about
Tls. 611,000. Yet, I actually manage to meet the court’s tax demands of
over Tls. 892,000, consisting of Capital Acquisition, shipping expenses of
the Imperial Household’s storage office, gold funds for the Imperial
Household’s workshop, Foreign Office (zongli yamen)’s loan repayments
for the United States, expenses of the Grain Tax Circuit’s soup kitchens,
office expenses of the maritime customs, and military expenditure on
Western Campaigns [of Zuo Zongtang]. So far the outstanding debt owed
by the maritime customs of Guangzhou and Chaozhou [to local cash shops
and piaohao] is more than Tls. 290,000. As a result, without the
substantial help of local piaohao and cash shops which agreed to remit the
allocated tax quotas in advance and get repaid later, I would have delayed
my delivery of all sorts of taxes…I thus humbly request the throne to
allow my continuous yet ad hoc use of remittance.
292
In Fujian and Zhejiang, provincial officials also relied heavily on remittances to
submit taxes, though their financial constraints were caused by a different reason—the
prevalence of foreign silver dollars and the subsequent lack of silver ingots in local
292
Memorandum of Ruilin, 17 October 1869, SPS, 169.
128
financial markets. On 9 June 1867, the General of Fuzhou named Ying Gui 英桂
revealed that:
The form of silver required by Capital Acquisition is shoe-shaped ingots. In
local markets of Fujian, however, foreign silver dollars are the prevailing form
of currency especially after the new opening of the maritime customs in Fuzhou,
where duties imposed on foreign goods were always paid in that form. As a
result, without the remittance services of piaohao which agreed to remit silver
ingots to Beijing in advance and accept foreign silver dollars as repayments later,
I could never meet the increasing financial demands of the court.”
293
On 28 September 1869, the governor of Zhejiang Li Hanzhang explained his persistent
reliance on remitting customs revenues of Ningbo and Shaoxing with exactly the same
reason stated by Yinggui.
294
In fact, the court’s first anti-remittance campaign in the 1860s failed almost
immediately after it was launched, because first of all, provincial officials gave so many
legitimate excuses for the continuous reliance on remittance and the covert resistance to
the ban. Second, the court clearly understood that clinging to the empty political rhetoric
of insisting on overland silver transport simply could not alleviate the empire’s financial
strains. Eventually, the court decided to tolerate such practices, as long as provincial
officials delivered the allocated tax quotas on time. An imperial edict of November 1867
disclosed that the throne undermined its own ban on remittance and continued to
acquiesce in provincial officials’ continuous use of remittances to submit taxes:
293
Memorandum of Yinggui, 5 March 1865, SPS, 170.
294
Memorandum of Li Hanzhang, 28 September 1869, SPS, 172.
129
[When using remittance to deliver taxes to Beijing], provincial governors
should always notify the throne in advance of the estimated arrival date of their
delegates and the details of merchants who handled the remittance of
provincial taxes. In addition, upon arriving in Beijing, provincial delegates
should expedite the processes of cashing remittance drafts into silver ingots as
well as the final submission to the Imperial Treasury.”
295
3, Rebirth of the controversy over remittances, 1870s to 1890s
The court’s attempt to re-impose the ban on remittances during the 1860s was only the
beginning of the tug-of-war between the court and provincial governors over this
contentious issue. From the perspective of the court, remitting provincial taxes through
piaohao had always been an ad hoc and unpleasant event, and it never planned to
institutionalize piaohao’s remittance service as a legitimate method for transferring and
submitting fiscal revenues, which harmed the court’s absolute control over provincial
taxes and officials.
Consequently, in 1876-1877, in 1884-1885, and in 1899, by bombarding provincial
officials with endless imperial edicts and rescripts, the court endeavored three more times
to fight back against the excessive use of remittance and inculcate them into shifting back
towards the conventional method of overland tax transfer. Unfortunately, each time
provincial officials always, on the one hand, echoed the court’s rhetoric of restoring
overland transportation; whereas on the other hand clung to the old excuses for the
295
Shangyudang, November 1867, SPS, 168.
130
reliance on piaohao and persisted in delivering provincial taxes through remittance.
The court’s three anti-remittance campaigns were strikingly similar to each other as
well as to the first one of the 1860s. Each time it was officials in charge of the imperial
memorial system such as the imperial censors (yushi 禦史) and grand councilors (junji
dachen 軍機大臣) taking the initiative to appeal for the re-imposition of the ban on
remittances. The second anti-remittances campaign of 1876-1877 was launched by the
patrolling imperial censor of Fujian named Hebao 和寶, imperial censor Liu Xijin 劉錫
金, and two supervising censors (jishizhong 給 事中) named Ma Xiangru 馬相如 and
Cui Muzhi 崔穆之. Their reasons for banning piaohao again from remitting provincial
taxes were the same as those given during the 1860s: First, piaohao’s remittance
weakened the court’s control over the entire process of receiving and submitting
provincial taxes, such as the quality of silver ingots. Second, remittances also increased
the risk of cutting off the silver supplies to the Beijing from the rest of the empire. The
court’s revived campaign against remittance during the mid-1870s did not take much
effect either, because provincial officials of Guangdong, Fujian, Zhejiang, Sichuan,
Jiangxi and Hubei provinces continued relying on piaohao to remit taxes and they
justified such practice by repeating the excuses given by their predecessors during the
1860s.
296
The Board of Revenue launched the third campaign against remittances in October
1884. Different from reasons for the previous two campaigns, the direct cause of the third
296
Memorandum of Hebao, 28 November 1876; Memorandum of Ma Xiangru, 7 December 1876, Memorandum of
Cui Muzhi on the petition for using silver to submit Capital Acquisition, 13 December 1876, Memorandum of Liu Xijin
on quelling inflation, 1877, SPS, 174-176.
131
one was the scandalous embezzlement of treasury money by Fukang cash shops— a
chain of financial firms owned and operated Hu Guangyong 胡光墉, a Zhejiang native
red-hat merchant who had been the infamous proté gé of Zuo Zongtang since the early
1850s. Similar to financial businesses of piaohao, Fukang also conducted remittance for
provincial treasuries and maritime customs of southern provinces.
297
Since the early 1880s, Hu’s Fukang cash shop had been embezzling revenues from
the customs in Shanghai, Hangzhou, and Wuhan like crazy. Relying on customs revenues,
Hu’s own silk firms in Shanghai and Zhejiang purchased and hoarded large quantities of
raw silk, and planned to export it at a much higher price to European markets where the
demand for raw silk by then was exceptionally high. Yet, the silk price in Europe soon
went down, and Hu’s silk firms as well as his Fukang cash shop immediately became
insolvent. In November 1883, Fukang cash shop finally went bankrupt, which led to a
disastrous financial crisis in Shanghai. Meanwhile, Hu’s scandalous embezzlement of
customs revenues soon became public. While investigating Hu Guangyong’s case of
bankruptcy and embezzlement in 1884, the grand sectary of the Board of Revenue named
Yan Jingming 閻敬銘 estimated that Hu had secretively appropriated about Tls. 780,000
when his Fukang cash shop was in charge of remitting the customs revenues of Wuhan
297
Since the 1860s, Hu had assisted Zuo to achieve excellence in his military career in many possible ways, such as
negotiating with HSBC for loans to support Zuo’s Western Campaigns against the Uighurs, delivering military funds,
grains and medicine for Zuo’s army, purchasing armaments from foreign countries and so forth (Frank King et al, The
History of the Hongkong and Shanghai Banking Corporation, Vol. 1,162-3; SPS, 116-117). In return for Hu
Guangyong’s help, after Zuo took the position as governor-general of Fujian and Zhejiang in 1862, he immediately
allowed Hu’s Fukang cash shop to keep and remit money for the provincial treasuries of Fujian and Zhejiang located
in Fuzhou and Hangzhou cities (Zuo Zongtang, Zuo Zongtang Quan Ji 左宗棠全集, Shanghai: Shanghai shu dian,
1986, Memorial vol. 19, 30, 40, 52,53; Letter vol. 12, 17, 19). In addition, Zuo Zongtang also permitted Fukang to
handle and remit customs revenues of Ningbo, Wenzhou, Xiamen, Fuzhou, and Wuhan (John Stanley, Late Ch'ing
Finance: Hu Kuang-Yung As an Innovator, Cambridge, Harvard University Press, 1961), 33-35; SPS, 125).
Subsequently, in certain provinces such as Fujian where Zuo once ruled but left the position later, Zuo’s successors
usually continued to follow the tradition that Fukang cash shop would remit the lion’s share of the provincial treasury
funds until the late 1870s (Memorandum of Yinggui, 26 January 1871, SPS, 171).
132
and Shanghai after the early 1870s.
298
Although it was Fukang, not Shanxi piaohao, which embezzled government funds,
the court’s hatred for private remittance firms including piaohao, both of which provided
remittance for provincial treasuries, escalated nonetheless. On 28 December 1883, the
Board of the Revenue re-imposed the ban on employing piaohao and other financial
firms to remit provincial taxes to Beijing.
299
To the dismay of the court, however,
provincial official such as He Jing 何璟, the Governor-General of Fujian and Zhejiang,
vindicated piaohao by distinguishing them from the Fukang cash shop, and thus insisted
on remitting provincial taxes through Shanxi piaohao. An excerpt from He’s memorial of
28 January 1884 deserves quotation verbatim:
How Fukang and Shanxi piaohao remit government money are completely
different. In previous years, Fukang was able to receive government
money in advance before remitting it. However, because of the constant
financial constraints, the provincial treasury has for a long time stopped
advancing piaohao any money. Instead, piaohao must use their own
money to deliver provincial taxes first, and get repaid later when
provincial treasury is able to do so. As a result, piaohao have no chance at
all to embezzle any money from the treasury.
300
He Jing was not alone in guaranteeing to the court the credibility of piaohao’s
remittance services. Provincial officials of Sichuan, Guangdong and others all promised
298
Gao Wenen 高文恩, Hu Xueyan zhuan 胡雪岩傳 (Biography of Hu Xueyan) (Beijing: Jinghua chu ban she,
2002), 235.
299
Memorandum by the Board of Revenue, February 1884, in Guangxu chao donghua lu, 1666-1667.
300
Memorandum by He Jing, 28 January 1884, SPS, 181.
133
that piaohao would get no chance to embezzle government money and thus vindicated
their persistent reliance on piaohao to remit taxes. Once again, the court’s third
anti-remittance campaign failed in 1884.
Although the anti-remittance campaign in 1884 was directly against the Fukang cash
shop not Shanxi piaohao, and provincial officials tried to defend piaohao’s innocence,
the court’s hostile attitude towards private financial firms’ interference in tax delivery
was not simply hysterical. In fact, some Shanxi piaohao’s handling of provincial treasury
money was as scandalous as that of Fukang. On 29 September 1883, the Shanxi governor
Zhang Zhidong 張之洞 submitted a memorandum which delineated a scandal regarding
Juxingyuan 巨興源 piaohao. On 15 May 1878, Sanjinyuan 三晉源 piaohao
headquartered in Qi County received Tls. 10,000 remitted from the provincial
governments of Hubei and Hunan as the twenty-seventh batch of famine relief funds.
Upon receiving the money, Sanjinyuan immediately relayed the money to Juxingyuan
which should then be responsible for delivering it to Shanxi provincial treasury in
Taiyuan. When Juxingyuan’s employee named Che Yuelong 車躍籠 brought the draft of
Tls. 10,000 to the house of Baoting 葆亭, by then the head of the provincial treasury, the
retainer of Baoting’s house did not immediately accept Che’s draft but told him to come
back later on the due date. When the due date was approaching, Che poked around the
provincial treasury several times and soon discovered that the staff of the treasury all
seemed to have forgotten his Tls. 10,000, because they were preoccupied with receiving
new batches of famine relief funds sending to Shanxi from the rest of the empire. In
addition, many treasury staff members were newcomers knowing little about the status
134
quo of previous famine relief funds including Che’s Tls.10,000. In the end, Che Yuelong,
Jia Shiyuan 賈世源 and Wang Jian 王鑒, all of whom were employees of Juxingyuan,
plotted together to fake Juxingyuan’s accounts, divide up the Tls. 10,000, and put the
money into their own pockets.
301
Juxingyuan’s scandal proved that the so-called credibility of Shanxi piaohao was
just empty rhetoric employed by provincial officials, and piaohao’s chances of
embezzling provincial treasury money through remittance were as big as those of Fukang
cash shops. It was thus plausible that the scandalous business practices of some Shanxi
piaohao, in addition to those of Fukang, triggered off the central government’s third
anti-remittances campaign in 1884.
In 1899, the grand councilor Ziji 字寄 launched the fourth and last anti-remittance
campaign on behalf of the court. Again, Ziji failed immediately because of provincial
officials’ persistent reliance on remittances which was excused by valid reasons such as
financial strain and disrupted overland transportation.
302
Because of the last campaign’s
striking similarity to the previous ones, the details will not be reconstructed here. Instead,
what deserve further discussion are the underlying reasons behind provincial officials’
personal and practical preference for piaohao’s remittances which perpetuated the court’
constant anxiety over private remittance firms for over forty years.
4, Practical and personal reasons for provincial officials’ preference for piaohao
As mentioned before, provincial officials’ primary reasons for relying on remittance
301
Memorandum by Zhang Zhidong, 29 September 1883, SPS, 96-97.
302
Shangyudang, January 1899, SPS, 186.
135
instead of restoring the method of overland tax transfer were because of the long-distance
transportations between Beijing and southern provinces as well as provincial
governments’ financial strains. Nevertheless, both reasons were superficial in comparison
to the underlying reason that piaohao and their remittance services distinctly alleviated
the latter’s heavy responsibility to deliver taxes to Beijing in a safe and timely manner
and helped them evade punishments in case mistakes occurred.
Under the system of overland tax shipment, all relevant provincial officials ranking
high and low faced harsh punishment in addition to compensating for the entire loss of
the tax money. In contrast, however, piaohao’s remittance service at least guaranteed
provincial officials that land taxes and customs revenues that were painstakingly
collected would not get lost while en route to Beijing. In case the submission of taxes was
delayed, provincial officials could easily scapegoat piaohao instead of being punished by
the court directly. Furthermore, after using piaohao’s remittance service, provincial
officials stopped worrying that the quality of their silver ingots might fail the rigorous
quality test of the Imperial Treasury to which these ingots were tendered. With the help of
remittance, they now rested assured that piaohao would take care of this issue henceforth.
Even if the silver ingots submitted to the Treasury were of inferior quality, the court could
no longer directly blame provincial officials. In other words, the entire process of
transferring and delivering provincial taxes, which was previously a two-party tug-of-war
between the court and provincial authorities, now evolved into a tripartite one. As a result,
from the perspective of the court, piaohao’s remittance services undermined its absolute
power over the submission and receipt of provincial taxes, as well as its absolute right to
136
punish provincial officials for mistakes made during such process.
A memorandum of 12 December 1899 submitted by the governor-general of Fujian
and Zhejiang named Xu Yingkui 許應騤 served best to reveal provincial officials’
rationale for relying on piaohao to transfer taxes. Xu stated:
I assigned Xintaihou piaohao long time ago to remit my provinces’ tax quota of
Capital Acquisition originally due in May. Nevertheless, the Boxers had been
disturbing Beijing and looting many local silver houses and financial firms, so
Xintaihou has not been able to turn in any taxes thus far…I have again urged it
to do so as quickly as possible, yet it should be Xintaihou [but not me] which is
solely responsible for punctually deliver taxes to the Imperial Treasury.
303
Xu’s memorandum clearly indicated that with piaohao as the buffer between central
government and provincial authorities in terms of tax delivery, Xu easily shrugged off
any responsibility for mistakes which occurred while transferring and submitting
provincial taxes. Simply put, provincial governors’ underlying reason for their persistent
reliance on remittance was exactly the reason why the court mistrusted piaohao and
launched four campaigns against remittances from the 1860s to the late 1890s.
Another plausible yet unspeakable reason for provincial officials’ persistent
preference for piaohao and their remittance service was a personal and scandalous one.
The officials’ memorandums, tabloid news, and piaohao’s business letters all disclosed
that many high-ranking provincial officials, who frequently employed piaohao to remit
taxes, benefited personally from piaohao’s financial services, including borrowing money
303
Memorandum by Xu Yingkui, 12 December 1900, SPS, 228.
137
from piaohao to cover private expenditures, depositing bribes in piaohao, and even
laundering money with the aid of piaohao.
For example, when the court launched its first anti-remittance campaign during the
1860s, the Manchu General of Fuzhou named Wenyu 文煜 was among the high-ranking
provincial officials who continuously reiterated the imperative of employing piaohao to
remit taxes because of the frequent disruption of overland silver shipment.
304
Subsequently, when the embezzlement scandal of the bankrupt Fukang cash shop became
known to the public in late 1883, one supervising censor named Deng Chengxiu 鄧承修
immediately impeached Wenyu, who had been promoted to the Minister of the Board of
Punishment by then, for depositing bribes up to Tls. 700,000 at Fukang.
305
Before long,
the imperial censor Bi Daoyuan 畢道遠 verified that Wenyu indeed secretively
deposited his personal funds of about Tls. 360,000 at Fukang. This case yielded a glimpse
of the close personal connections between remittance firms and provincial officials. And
such infamous connection also explained the court’s escalating hatred for provincial
officials’ reliance on piaohao which resulted in the supervising censor’s exaggeration of
the actual amount of Wenyu’s bribery.
A more immediate case regarding the notorious relations between private
remittance firms and provincial governors concerned another Manchu high-ranking
official named Kuijun 奎俊, a diehard supporter of Shanxi piaohao’s remittance service
to deliver taxes. On 17 February 1893, as the governor of Jiangsu, Kuijun reported that he
304
Memorandum by Wenyu, 9 September 1869, SPS, 171.
305
“The rescript responding to Deng Chengxiu”, in Guangxu chao donghua lu, 1676.
138
remitted Tls. 10,000 as flood relief to Shanxi province through Baichuantong and
Weishengchang piaohao.
306
After being promoted to the governor-general of Sichuan in
1899, he asked piaohao to remit approximately Tls. 230,000 to Shanghai maritime
customs as Sichuan’s quota of repaying the Qing’s loans from Russia and France.
307
In
November 1901, Kuijun assigned Tls. 183,333 to Xietongqing and other piaohao which
were in charge of remitting the money to Shanghai as Sichuan’s monthly installment on
the Boxer Indemnity.
308
According to an undated anonymous compilation of records regarding the Qing
government’s corrupt officials, the reason Kuijun gave so many government remittance
opportunities to piaohao was because piaohao had been laundering bribes for him. In
1898, Shandong was badly hit by the Yellow River floods, and Sichuan residents thus
donated thousands taels of silver for Shandong people as disaster relief. Yet upon
receiving the relief money, anecdote had it that Kuijun did not deposit it into the
provincial treasury as he should have, but gave the money to Weichanghou piaohao
instead and asked it to keep the money on behalf of the treasury. Later on, Weitaihou
appropriated Tls. 6,000 from the relief funds and credited it to Kuijun’s personal banking
account at Weitaihou. When Kuijun left his official position in Sichuan, he did not
withdraw his embezzlement of the Shandong flood relief money directly from
Weichanghou. Instead, another Shanxi piaohao, Xietongqing, presented Kuijun with a
farewell gift of a remittance draft valued at Tls. 6,000 in order to compensate for Kuijun’s
relocation fees. Shortly after, Weichanghou repaid Xietongqing the cost of Kuijun’s
306
Memorandum of Kuijun, 17 February 1893, SPS, 96.
307
Memorandum of Kuijun on remitting loan repayment for Russia and France,13 March 1899, SPS, 221.
308
Memorandum of Kuijun, 20 November 1901, SPS, 235-236.
139
farewell gift. In other words, both Weichanghou and Xietongqing participated in
laundering money for Kuijun.
A third case regarding the notorious relations between piaohao and provincial
officials concerned Xu Yingkui, who was promoted to the governor-general of Fujian and
Zhejiang in 1898. During the court’s last campaign against remittance in 1899, Xu
convinced the court of the difficulty in restoring overland silver transport, because the
provincial treasury of Fujian was depleted and had been relying on piaohao’s loans to
submit provincial taxes for over three decades.
309
In addition, as mentioned earlier, Xu’s
memorandum written in 1898 explicitly revealed the underlying rationale for provincial
governors’ persistent preference for piaohao’s remittance services, which relieved their
heavy responsibility for submitting taxes to the court without making mistakes.
In no time, corruption scandals involving Xu and piaohao were flying around. On 9
September 1902, a rumor appeared in Dagongbao that after Xu started administering
Fujian as the governor-general in 1898, he accumulated personal wealth of over
five-million taels which had already been remitted from Fujian back to Xu’s native place
in Guangdong through Weichanghou piaohao.
310
In addition, on 21 February 1904, Xu’s
successor, the acting governor-general of Li Xingrui 李興銳 memorialized the Guangxu
emperor that Xu’s household retainer Yang Sheng 楊升 falsified salt certificates and
received bribery of 4,300 strings of cash (approximately Tls. 4,000) from a local salt
309
Xu Yingkui: “Lichen minsheng nanjie shiyin shu” 瀝陳閩省難 解實銀疏 [Treatise on Fujian’s difficulty in
delivering taxes by silver], SPS, 177,187
310
“Mindu zhifu” 閩督致富 [Fujian governor becoming rich overnight], in Dagongbao, 9 September 1902, reprinted
in SPS, 163.
140
merchant. Yang later deposited the bribe in Xintaihou piaohao.
311
Although Xu Yingkui
was not directly involved in the second scandal, it nevertheless indicated that the private
financial interactions between Shanxi piaohao and provincial officials including their
retinues were frequent and dishonest.
Shanxi piaohao’s business correspondence also indicated that they were willing to
pay high price in order to procure more government remittance orders from provincial
officials through personal and private financial interactions with them. For example, an
undated business letter, penned by the senior branch manager Li Hongling of Weifenghou
piaohao, revealed that when Zhang Linge 張麟 閣 left Beijing for Sichuan after being
appointed the circuit intendant of a northern Sichuan prefecture, he borrowed Tls. 2,000
from Weitaihou’s Beijing branch to cover his relocation cost. Li commented that this
gave Weifenghou the best chance to cultivate personal relations with Zhang, and the
reason for lending money to him was not for immediate return on the loan. Rather, Li was
investing in Zhang’s future political career, because Zhang had such a good reputation
and might be promoted soon. Li therefore reminded his colleagues in Sichuan that they
should never urge Zhang to repay the loan after he arrived there.
312
Another letter written by Li Hongling around 1904 recorded that Zhao Erxun 趙爾
巽, by then the Minister of the Board of Revenue, borrowed Tls. 2,000 from
Weifenghou’s Beijing branch. Similarly, Li reminded his colleagues to never press Zhao
for repaying the debt because Zhao once helped Weifenghou to regain the firm’s
defaulted loans in Hunan province where he used to be the provincial governor. In
311
Memorandum of Li Xingrui, 21 February 1904, SPS, 164.
312
Li, Tongzhou zhonggao and Shanxi piaoshang chengbaiji, 113.
141
addition, Weifenghou once made a loan of Tls. 3,000 to the governor-general of Shaanxi
and Gansu named Shengyun 升允. By doing so, Li was expecting Shengyun’s patronage
of Weifenghou’s Lanzhou branch where he ruled.
313
Piaohao’s limited influence over the Qing’s overland tax transfer system
Although piaohao quickly rose to national prominence owing to the surge in remittance
orders from provincial officials after the 1860s, their remittance business never
monopolized the market of delivering provincial taxes and funds, and never shook the
ultimate foundation of the Qing’s tax transfer system embedded in overland silver
shipment. On the one hand, they were in cutthroat competition with prominent cash shops
for government remittance. On the other hand, piaohao failed to meet provincial
authorities’ imperative needs to remit money to remote military posts in the north or to
major localities across the empire in troubled times. In fact, the court had been
successfully insisted on northern provincial officials submitting taxes through the
conventional way of overland silver shipment. The underlying reason for piaohao’s
inability to remove the overland silver shipment from the Qing’s tax transfer system with
remittance was because piaohao’s mechanism of remittance based on commodity money
actually prevented them from honoring unlimited numbers of remittance drafts even at
the most thriving treaty ports in peacetime, let alone in remote areas plagued by
rebellions or wars.
313
Li, Tongzhou zhonggao, 154.
142
1, Far from monopoly: competition between piaohao and cash shops
Notwithstanding the court’s failed campaigns against provincial officials’ persistent
reliance on piaohao to remit taxes, piaohao were actually unable to monopolize the
business of government remittance in southern provinces. Instead, they faced stiff
competition with prominent cash shops, which plunged into providing remittances for
provincial authorities soon after the court de facto lifted the ban on transferring tax
revenues through remittance in 1862. The reason was that many cash shops of southern
provinces were actually set up under the aegis of provincial officials, whose private and
political interests were deeply entrenched in these financial firms. This mere fact
illustrated further that, in addition to piaohao’s unacknowledged status at the central level,
their official and private business relations with provincial authorities had been
inconsistent. As a result, piaohao failed to carve out a unique niche in terms of
government remittance at both the central and provincial levels.
Around 1863, two Hangzhou-based chain cash shops Fukang and Hutongyu 胡通裕
both of which were owned by Hu Guangyong, immediately branched out into providing
remittance for provincial officials in Shanghai, Zhenjiang, Ningbo, Fuzhou, and
Beijing.
314
Because of Hu’s entrenched personal and official relations with Zuo Zongtang,
his cash shops remitted the lion’s share of military funds raised for Zuo’s Northwestern
Campaigns from the 1860s to the 1880s.
315
For example, on 1 February 1869, Governor
314
Huang Jianhui, “Table 1-1-12: Nanbang piaohao de xingqi” 南幫 票號的興起 [The rise of southern China’s
remittance firms] , SPS, 65.
315
Zuo Zongtang, “ Daoyuan Hu Guangyong qing poge jiangxu pian” 道員胡光墉請破格獎敘片 [Petition for
granting Circuit Intendant Hu Guangyong exceptional award] , 14 April 1878, in Zuo Zongtang Quan Ji, Memorandum
vol. 52; “Yu Hu Xueyan” 與胡雪岩[To Hu Xueyan], 1874, in Zuo Zongtang Quan Ji, Letters vol. 14.
143
Li Hanzhang remitted Tls. 64,693 through Fukuang from Hangzhou to Shanghai as
Zhejiang’s allocated quota of the Assistant Provision for Shaanxi and Gansu (Shaangan
xiexiang 陝甘協餉). After the Provision arrived in Shanghai, Hu Guangyong would then
send it to Hubei, where Zuo Zongtang, by then the Imperial Commissioner of Military
Affairs of Shaanxi and Gansu, stationed his troops.
316
On 16 December 1880, the
governor of Zhejiang, Tan Zhonglin 譚鐘麟, again requested Fukang to remit Tls.
140,000 from Hangzhou to the HSBC’s Shanghai office, as an installment on Zuo’s
foreign loans for Northwestern Campaigns.
317
In 1883, Yan Xinhou 嚴信厚, another red-hat merchant originated from Jiangsu
province, opened Yuanfengrun 源豐潤 cash shop headquartered in Shanghai.
318
Yan
became a proté gé of Li Hongzhang during the Tongzhi reign (1862-74), and was one of
the co-founders of China’s first modern bank—the Imperial Bank of China in
1897—along with Sheng Xuanhuai.
319
Owing to Yan’s close connection to the most
prominent official of the late Qing, Yuanfengrun undertook a considerable amount of
government remittance soon after its grand opening, especially of provincial taxes
originating from southern provinces, such as Zhejiang, Fujian and Guangdong.
320
For
316
Memorandum of Li Hanzhang, 1 February 1869, SPS, 87.
317
Memorandum of Tan Zhonglin, 16 December 1880, SPS, 108. Zuo borrowed from HSBC for three times. The first
loan was obtained in 1877 with the amount of Tls. 5 millions; the second in 1878 with the amount of Tls. 1.75 millions,
the third in 1881 with the amount of Tls. four millions. King, The History of the Hongkong and Shanghai Banking
Corporation. Vol. 1, 548.
318
Huang, “Table 1-1-12: Nanbang piaohao de xingqi”, SPS, 66; “Biography of Yan Xinhou”, SPS, 785.
319
Chen Xulu 陳旭麓 et al. ed., Zhongguo tongshang yinhang: Sheng Xuanhuai dang’an ziliao xuanji zhi wu 中國通
商銀行: 盛宣懷檔案資料選輯之五 [The Imperial Bank of China: selected primary sources of Sheng Xuanhuai, vol. 5]
(Shanghai: Remin chubanshe, 2000), 4; “Biography of Yanxinhou”, in Shangye yuebao 商業月報[Commercial
Monthly], 1 (July 1921), 1, re-quoted from SPS, 785.
320
For more examples, see memorandum of the superintendent of Fujian maritime customs Xiyuan, 14 July, 1893;
memorandum of the Governor-General of Guangdong and Guangxi Tao Mo 陶模, 19 December 1901; memorandum
of Li Hanzhang, 1895, see SPS, 85, 236, 277; Ueno Senichi 上野專一, “Financial Report from the Consulate-general of
144
example, on 27 May 1904, the governor of Zhejiang Nie Jigui 聶緝椝 memorialized the
court that Yuanfengrun was the exclusive firm to handle the remittance of an installment
of Tls.110,000 on HSBC’s loan from Zhejiang to Shanghai.
321
In fact, any cash shops with relatively large floating cash and several regional agents
possessed the ability to handle government remittances. As a result, there was actually a
glut of financial firms on the market that were competent to handle provincial
government remittances, and piaohao never monopolized such business from the very
beginning. From the 1860s onward, rather than relying solely on piaohao, provincial
governors of Anhui, Hubei, Hunan, Jiangsu, Zhejiang, and Yunnan, had all once assigned
local cash shops to remit taxes and funds to various destinations.
322
On 30 April 1865,
the governor of Sichuan Luo Bingzhang remitted Tls. 60,000 of salt gabelle Beijing
through four Shanxi piaohao, in addition to two local cash shops named Guangju 廣聚
and Hetai 和泰.
323
On 16 December 1889, the governor-general of Guangdong and
Guangxi Li Hanzhang asked the prominent Kunming-based chain cash shop named
Tianshunxiang 天順祥 to handle a remittance of Tls. 105,000 from Guangdong to
Yunnan. The money was raised for the Expenditure on Copper Mining in Yunnan
(tongben 銅本).
324
On 26 September 1891, the governor of Zhejiang Songjun 崧駿
remitted Tls 50,000 of salt gabelle to Beijing through four Hangzhou cash shops that
Japan in Guangzhou, Year 1907”, in Pan Cheng’e ed., Zhongguo zhi jinrong, vol. 2, 67-68.
321
Memorandum of Nie Jigui, 27 May 1904, SPS, 225.
322
For the cases on Anhui, see memorandum of Nie Jigui, 19 January 1902, SPS, 367, 370; Hubei, see memorandum
of Zhang Zhidong, 18 August 1896, SPS, 367; Hunan, see memorandum of Yu Liansan, 15 March 1902, SPS, 237, 371;
Jiangsu, see SPS, memorandum of Chen Kuilong, 16 April 1906, 366; Zhejiang, memorandum of Liao Shoufeng, 9
April 1896, see SPS, 223, 365-366.
323
The four Shanxi piaohao are: Xietongqing, Weifenghou, Yuanfengjiu and Tianchengheng. The two local money
shops are: Guangju and Hetai, see memorandum of Luo Bingzhang, 30 April 1865, SPS, 78.
324
Memorandum of Li Hanzhang, 16 December 1889, SPS, 88.
145
were Kaitai 開泰, Hongsheng 洪生, Qingyu 慶餘, Shenyu 慎裕, whereas no piaohao
was given the change to handle it.
325
In 1902, the governor of Jiangsu Enshou 恩壽
remitted the quota of Capital Acquisition through Yuyuan 裕源 cash shop to Beijing.
326
On 25 August 1908, the Circuit Intendant of Shanghai (Shanghai daotai) Cai Naihuang
蔡乃煌 remitted the revenues of the Shanghai Maritime Customs (jianghaiguan 江海關)
to Beijing through a local cash shop named Dechenghou 德成厚.
327
Although many other memorandums of the Qing officials could evidence the fierce
competition between cash shops and piaohao for government remittances further, the
aforementioned examples have already said enough about it, which reinforced that
piaohao failed to foster any enduring legitimate or private relations with provincial
governments even in their heyday.
2, The court’s successful insistence on overland tax transport in north
In addition to piaohao’s incompetence to monopolize the remittance market in the south,
the court’s insistence on overland silver transport in northern China also reflected
piaohao’s illegitimate and non-institutionalized business relations with both the court and
provincial authorities. In other words, although the court was forced to acquiesce in
provincial officials’ persistent use of piaohao to transfer taxes, neither did piaohao’s
remittance service alter the Qing’s overland tax transport system empire-wide, nor
substituted the original system with remittance.
325
Memorandum of Song Jun, 28 August 1892, SPS, 365.
326
Memorandum of Enshou, 10 June 1903, SPS, 366.
327
Memorandum of Ruizheng 瑞征, 25 August 1909, SPS, 367.
146
In Shanxi province, for example, tax delivery through overland silver shipment to
Beijing persisted ironically from the 1860s to the 1890s. The Veritable Records of the
Qing (Qingshilu 清實錄), the official compilation of the imperial edicts of the Qing
emperors, revealed that when delivering taxes to Beijing or distributing military funds to
remote military posts, Shanxi officials almost never employed piaohao to remit taxes
regardless that piaohao originated from the same province. Instead, they scrupulously
abided by the court’s imperial rule of submitting taxes through overland silver transfer.
When Zhejiang officials sneakily remitted taxes as early as 1828, and other southern
provincial officials were busy rushing piaohao into transferring taxes after 1862, Shanxi
officials persisted in shipping silver by land until the last minute, even when the
escalating domestic rebellions complicated this practice more than ever. On 16 October
1862, the governor-general of Shaanxi and Gansu Enlin 恩麟 memorialized the throne
that huge military expenditure on quelling Muslim rebellions in Shaanxi had depleted the
Gansu provincial treasury completely. Yet, the financial assistance which should have
been arrived from the Hedong 河東 Salt Administration of Shanxi was severely delayed
because of the overland transportation between Shanxi and Gansu was cut off.
Nevertheless, until then the Tongzhi emperor still urged the governor of Shanxi, Yinggui
英桂, to deliver military funds to Gansu through overland silver transport, who reverently
obeyed.
328
Unfortunately, a month later, General Shengbao 勝保, the imperial envoy
appointed to quell the Muslim rebellions, reported that the military funds shipped by land
328
Muzong shilu 穆宗實錄, vol. 46, in Qingshilu 清實錄, (Beijing, Zhonghua shuju, reprint in 1986), 49-50. (1684)
147
from Yingui were looted while en route to his military camps in Shaanxi.
329
Notwithstanding the robbery incident, Shanxi province continued to follow the court’s
instruction to deliver military funds through overland silver shipment for about two more
years.
The first case of Shanxi’s employment of piaohao to deliver taxes did not appear in
the Veritable Records of the Qing until 29 June 1864, when Enlin, the governor-general of
Shaanxi and Gansu, begged the throne on behalf of his subordinate—the Shanxi
governor—to permit the latter to remit money for the long-overdue expenditure on
quelling Muslim rebellions. Enlin contended that he was in desperate need of such money
and could wait no more for it being transferred by land from Shanxi. The court
immediately endorsed Enlin’s request and ordered the Shanxi governor Shen Guifen 沈
桂芬 to immediately remit the military funds to Gansu through piaohao without further
delays. Nevertheless, the court stipulated that once the overland roads between Shanxi
and Gansu were cleared, Shanxi should stop remittance.
330
To the delight of the court, Shanxi officials complied with the rule and immediately
shifted back towards overland silver transport in the same year of 1864. In fact, as the
Veritable Records of the Qing disclosed, from 1864 to the early 1900s, Shanxi provincial
officials had been persistently transporting silver by land to deliver taxes and funds to
Beijing and other destinations. Even at the height of the Muslim rebellions during the
mid-1860s that severely disrupted Shanxi’s overland transportation, Shanxi almost never
defied the ban on submitting taxes through remittance. In September 1864, only a month
329
Muzong shilu, Vol. 50, 18-19 (1690)
330
Muzong shilu, vol. 107, 62-3. (1773)
148
after Shen Guifen’s initial employment of piaohao to remit military funds to Gansu, he
endeavored to ship Tls. 80,000 by land to Kobdo 科布多 (present-day Khovd,
Mongolia) — one of the Qing’s strategic military gateway to central Asia—via Suiyuan,
the northernmost border of Shanxi province (present day Hohhot). Upon arriving at
Kodbo, Shen’s military funds was then transported farther eastwards to Uliastai and
westwards to Tarbagatay, where the Qing stationed troops to put down Muslim rebels in
Xinjiang.
331
The aforementioned route was the most common one that Shanxi provincial
officials deployed to deliver military funds to Xinjiang overland. If delivering military
funds to Gansu, Shanxi officials would then silver ingots to Lanzhou or to Qingyang 慶
陽 (east of Gansu) by land, where the military treasury and granary were located. In a
word, Shanxi officials’ ad hoc use of piaohao’s remittance service during 1864 never
really bothered the court because of their immediate return to overland silver transport
whenever possible.
In addition to Shanxi, northern provinces including Shandong, Henan and Zhili
also persisted in transporting silver overland after 1862. In Henan, an imperial edict
indicated that on 14 September 1863, the governor named Zhang Zhiwan 張之萬, the
elder brother of Zhang Zhidong, shipped Tls. 100,000 to the military treasury and granary
of Jining 濟寧 to support the Mongolian General Sengge Linqin 僧格林 沁 (Sengge
Rinchen) in cracking down on the Nian Rebellions.
332
On 4 January 1865, Zhang Zhiwan
again managed to transfer another Tls. 70,000 to Suiyuan as Henan’s financial assistance
331
Muzong shilu, vol. 111, 51-3. (1779)
332
Muzong shilu, vol. 75, 7. (1718).
149
in quelling Muslim rebellions in Xinjiang.
333
In 1900 when the Empress Dowager Cixi
and the Guangxu emperor were fleeing westwards, Yuchang 裕長, by then the governor
of Henan, painstakingly shipped the funds for the imperial household by land to Shanxi,
where the royal family temporarily resided.
334
In Shandong, the imperial edicts of
1865-1866 revealed that the governor Yan Jingming, diehard anti-remittance official who
later impeached the Fukang cash shop owner Hu Guangyong in 1884, also set a good
example of persisting in delivering military funds to Xinjiang by land.
335
In Zhili, the provincial governor Tingyong 廷雍 reverently obeyed the court’s rule
of transporting taxes by land during the early 1900s, even when the Boxer rebellion and
the subsequent invasion of the Eight-Ally Army disrupted the normal order of the entire
northern China. An imperial edict on 25 July 1900 disclosed that Tingyong successfully
transferred the expense of the royal family by land from Baoding (the provincial seat of
Zhili) to Taiyuan, where Guangxu and Cixi temporarily stayed.
336
Only until the court
urged Tingyong to expedite the transfer of funds via piaohao did he dare to do so after 5
September 1900, because the activities of the Boxers were growing more rampantly in
the vicinity of Baoding.
337
Extant sources did not reveal direct reasons for northern provincial officials’
persistence of transporting silver by land even in chaos. Nevertheless, the relatively short
distance between northern provinces and Beijing might be a determining factor in the
court’s successful insistence on and provincial officials’ persistence of overland tax
333
Muzong shilu, vol. 126, 11-12. (1799)
334
Dezong shilu 德宗實錄, vol. 467, in Qingshilu, 11-12 (2446)
335
Muzong shilu, vol. 148, 12-14; vol. 161, 15-16 (1834, 1855)
336
Dezong shilu, vol. 467, 15-16. (2447)
337
Dezong shilu, vol. 468, 19-22. (2453)
150
shipment. Furthermore, piaohao’s remittance mechanism, which required them to set up
business only in exuberant trading towns and treaty ports rather than remote military
posts, might also contribute to such persistence. In particular, a successful remittance
transaction relied solely on steady silver supplies that piaohao were able to obtain from
local financial markets. As a result, most piaohao would open business in the most
prosperous trading cities such as Shanghai, Hankou and Tianjin where silver flows were
abundant. In contrast, few piaohao ever operated in military posts such as Kobdo where
market trade barely existed, because they could not procure enough silver to cash
remittances.
3, Piaohao’s business limitation on replacing the overland tax transfer system
In fact, piaohao’s remittance mechanism, which restricted the amount of drafts they could
honor within a certain period in any localities, was the underlying reason they were
unable to monopolize government remittance business and alter the Qing’s tax transfer
system regardless in north or south. Although big government remittances seemed rather
profitable, piaohao would treat them as extremely heavy burden, especially when they
underwent cash shortage and had to ship extra silver ingots by land—costly and
dangerous—in order to fulfill these government orders.
Indeed, piaohao’s business letters revealed that occasionally they were running into
difficulties with fulfilling provincial remittance orders. On 1 January 1874, the Pingyao
head office of Xietongqing piaohao warned its Hankou branch against remitting another
big draft of Tls. 40,000 of military funds to be cashed at the Lanzhou office, which had
151
exhausted all sources of silver supply because big drafts had been continuously sent from
Hankou. Pingyao office therefore reinforced the rule:
Taking small remittance orders will bring peace of mind into our firm, whereas
big remittance orders will incur immense financial losses to our business. From
now on, the Hankou branch is prohibited from accepting remittance orders larger
than Tls. 20,000 sent to Gansu as military funds.
338
Nevertheless, Xietongqing’s Hankou branch did not listen to the head office and a
month later, accepted another remittance order of Tls. 30,000 of military funds sent to
Gansu. The Pingyao head office was now outraged at Hankou’s defiance of the firm’s
rule, which put the Lanzhou office into the great danger of insolvency:
In order to honor Hankou’s new remittance draft, Lanzhou office is now forced to
obtain Tls. 30,000 from local market within fifty-five days. Yet Lanzhou office is
currently grappling with short silver supply after fulfilling an earlier remittance
order of Tls. 40,000 sent by Hankou. In fact, during the previous hundred days,
Lanzhou has already cashed Hankou’s drafts of up to Tls. 100,000 and thus
exhausted all sources of cash flows to honor future remittance orders…How dare
the Wuhan branch persistently forget that sustainable remittance business always
depends on meticulous consideration of whether its fellow branches could obtain
enough cash from local markets in order to honor these drafts?
The Pingyao office concluded the letter by reiterating the danger of taking excessive
government remittance orders, which “usually require us to cash these remittances as
338
Xietongqing’s Pingyao head office to Hankou branch, 1 January1874, SPS, 87.
152
quickly as putting down wild fires on grasslands. Even if we encounter severe silver
shortage, we would still be rushed into cashing these drafts and lose money because of it.”
339
Xietongqing was not alone. Yuanfengjiu 元豐玖 piaohao’s Beijing branch
complained about similar difficulties in fulfilling government remittance orders. In
October 1890, the Sichuan provincial government asked Yuanfengjiu to remit Tls. 20,000
to Beijing as Capital Acquisition. Yet the Beijing branch was in short silver supply and
was unable to obtain a penny from the local market. After painstakingly appealing to
fellow branches for surplus silver to honor Sichuan’s government drafts, the Beijing
branch finally begged its Tianjin branch to ship eighty pieces of silver ingots valued at
Tls. 20,000 to Beijing by land, and honored Sichuan government’s remittance at great
expense.
340
Ironically, staunch supporters of piaohao’s remittance service notwithstanding,
southern provincial officials, similar to their northern counterparts, frequently resorted to
the traditional method of overland silver shipment, or backed up remittance with this
method to punctually deliver taxes, whenever piaohao were unable to accept remittances
sent to wherever trade was stagnant and cash flows were meager. In 1875, Liu Bingzhang,
the governor of Jiangxi, planned to send Tls. 50,000 as camel funds to General Jinshun
金順 who stationed in Uliastai. Yet, the local Weichanghou piaohao in Jiangxi agreed to
remit the money only to Xi’an rather than to Jinshun’s military base directly. In the end,
Liu managed to ship the money from Xi’an to Uliastai for over a thousand miles by
339
Xietongqing’s Pingyao head office to Hankou branch, 22 February 1874, SPS, 87-88.
340
Letter by Yuanfengjiu’s Beijing branch, 22 October 1890, SPS, 207.
153
land.
341
In March 1879, Liu Kunyi, the governor of Guangdong, was ordered by the
court to deliver Tls. 10,000 again to Uliastai. Because Yuanfengjiu piaohao’s Guangzhou
branch was only able to remit the money to the Guisui prefecture (present-day Hohhot),
Liu had to arrange overland silver shipment from Guisui to Uliastai. Two months later, in
order to send military expenditure of Tls. 12,500 to Kobdo, Liu Kunyi again combined
overland silver transport with remittance. The money was first remitted by Zhichengxin
piaohao to the General Headquarters of the banner Army in Chahar (chaha’er dutong
yame 察哈爾都統衙門), and then shipped to Kobdo by land.
342
In 1887, Zhang Zhidong, the governor-general of Guangdong and Guangxi, also
combined remittance and overland silver transport in order to deliver funds for dike
repair in Henan after floods. Because Zhang failed to find any piaohao that was able to
cash drafts sent to Henan, in the end he asked Zhichengxin and Xiechengqian piaohao to
remit Tls. 100,000 from Guangdong to the temporary bursary in Tianjin supervised by Li
Hongzhang, who was then responsible for transferring the funds to Henan by land.
343
In
November of the same year, Yang Changjun 楊 昌浚, the governor-general of Fujian and
Zhejiang, also planned to remit Tls. 100,000 through piaohao to Henan as flood relief.
Unfortunately, all of the local Henan piaohao declined this big remittance order, because
a recent trade recession had cut off major cash supplies to the local market and piaohao
were unable to honor most remittance drafts. Eventually, Yang Changjun remitted the
relief first to Qingjiangpu in Jiangsu province, and then shipped it to Henan province by
341
Memorandum of Liu Bingzheng, 26 March 1875, SPS, 93.
342
Memorandum of Liu Kunyi, 21 June 1879, SPS, 93.
343
Memorandum of Zhang Zhidong, 10 November 1885, SPS, 95.
154
land.
344
To be worse, piaohao, whose remittance business depended solely on the normal
order of markets and the empire and was extremely vulnerable to the disruption of
internal rebellions or foreign invasions, would immediately stop function and reject any
remittance orders from provincial officials who ironically needed remittance service the
most by then. Under the circumstances, officials had no other choice but again shifted
back towards the traditional overland silver shipment to fulfill the arduous task of
punctual delivery of taxes.
On 12 April 1865, Xiechengqian piaohao turned down the remittance request of the
Shuntian prefecture (present-day suburb of Beijing), which was planning to send Tls.
200,000 to General Wenxiang’s 文祥 troops stationed in Fengtian (present-day
Shenyang). This was because mounted bandits were by then plundering Fengtian, so that
Xiechengqian immediately suspended its local remittance business and was thus unable
to honor any remittance drafts to be cashed at Fengtian. In the end, the magistrate of the
Shuntian prefecture resorted to shipping silver ingots overland to Fengtian five times in a
row, because no piaohao were willing to take his remittance orders.
345
After the Sino-Japanese war broke out in 1894, piaohao suspended remittance
transactions in almost every locality where they ran a business, and subsequently turned
down numerous remittance orders placed by officials of Zhejiang, Fujian, Jiangxi, and
Sichuan. On 26 October 1984, Liu Bingzhang, the governor-general of Sichuan,
memorialized the throne that the submission of Tls. 400,000 to Beijing as the provisional
344
Memorandum of Yang Changjun, 17 October 1887, SPS, 95.
345
Shuntian prefecture’s memorandum on escorting funds for Fengtian by armed forces, 28 December 1865, SPS, 94.
155
military expenditure would be severely delayed, because all piaohao refused to honor
remittance drafts originating from Sichuan to Beijing whose financial market encountered
severe silver shortage. As a result, Liu had to ship the provisional military funds to
Beijing by land, which almost took forever to arrive. A month later, Liao Shoufeng 廖壽
豐, the governor of Zhejiang, described a similar situation that after the Sino-Japanese
War broke out, no piaohao in Zhejiang were able to remit a single penny of the Tls.
400,000 as military expenditure sent to Beijing . After the court pressed Liao several
times for the immediate submission of the money, he had to ship it to the court by land.
346
History repeated in 1900, when northern China was turned upside down by the
Boxers and was soon at the mercy of the Eight-Power Allied Army. By then most of the
piaohao suspended business, packed current silver stocks, and fled back their native
places in Shanxi province. As a result, provincial officials who were urged to deliver
more money to the court were unable to approach any piaohao about remittances. On 10
August 1900, Kuijun, governor-general of Sichuan who persisted in remittances during
the court’s forth campaign against piaohao and was reputed to scandalously interact with
piaohao, eventually delivered the amount of Tls. 7,000 as the annual bonus for court
officials to Beijing through overland silver transfer. In a memorandum Kuijun revealed
the reason for this decision was that most piaohao in Beijing were so devastated that no
one was able to fulfill even this small order.
347
During the Boxer’s Rebellion, provincial officials of Fujian, Guangdong, Zhejiang,
Anhui, and Hunan, who had been embracing piaohao’s remittance service, also shifted
346
Memorandum of Liao Shoufeng, 21 November 1894, SPS, 219.
347
Memorandum of Kuijun, 10 August 1900, SPS, 229.
156
back towards overland silver transport or combined remittance with it in order to deliver
taxes. On 24 August 1900, Shanlian 善聯, General of Fuzhou, memorialized the throne
that he had been preparing to remit tax revenues of Tls. 210,000 from the maritime
customs of Fuzhou to Beijing as the Capital Acquisition. Nevertheless, no piaohao were
able to help Shanlian to remit the money to Beijing, where all of piaohao’s branches had
suspended business. In the end, Shanlian remitted the money to Shanghai first, and then
shipped it to the court’s Bursary in Qingjiangpu, Jiangsu province, and finally to Beijing
by land.
348
In Guangdong, the governor Deshou 德壽, whose predecessors relied heavily
on remittance to submit taxes, also encountered the same problem. Deshou initially
attempted to use piaohao to remit Tls. 218,000 as Guangdong’s annual quota of Capital
Acquisition to Beijing but failed. In the end, he remitted the money to Shanghai first, then
shipped it to Qingjiangpu by land, from where the court picked up the money and
transported it to Beijing by horse.
349
Similarly, Zhejiang governor Liu Shutang 劉樹堂,
Hunan governor Yu Liansan, and Anhui governor Wang Zhichun 王之春 , whose
predecessors were all frequent users of piaohao’s remittance, also shifted back towards
the mainstream method of delivering taxes by land in 1900.
350
In conclusion, the Qing court had been insisting on provincial officials submitting annual
taxes through overland transfer of silver ingots for about two hundred years. After the
1850s, however, nationwide rebellions disrupted normal inland transportation; provincial
348
Memorandum of Shanlian, 28 August 1900, SPS, 230.
349
Memorandum of Deshou, 19 July 1900, SPS, 228.
350
Memorandum of Liu Shutang, 14 August 1900; memorandum of Wang Zhichun, 20 May 1900, SPS, 231, 273.
157
officials therefore started half-century long negotiations with the court regarding the
method of remitting taxes through Shanxi piaohao—a group of third-party private
financial firms. Afraid that piaohao’s interference in imperial revenues would severely
harm its tight control over taxes and territorial bureaucracy, the court never openly
endorsed the use of remittance and launched four campaigns against provincial officials’
excessive reliance on piaohao. Nevertheless, grappling with severe financial constraints
after the 1850s, the court eventually acquiesced in provincial officials’ persistent use of
remittance to transfer and submit taxes.
Nevertheless, piaohao’s remittance business had intrinsic limitations which
prevented them from monopolizing the government remittance market and replacing the
mainstream method of overland tax transport. First, ever since the court de facto lifted the
ban on employing third-party financial firms to transfer provincial taxes, piaohao had
been in fierce competition with prominent southern cash shops—for government
remittances. Second, in the north, the court successfully insisted on provincial officials
transferring taxes and funds through overland silver transport. Third, whether piaohao
were able to accept provincial remittance orders had always been subject to their limited
ability to seek silver flows from local markets. Yet, piaohao would immediately stop
operation once unpredictable factors such as wars, rebellions and natural disasters
destroyed the normal order of local markets, where piaohao could no longer procure
floating silver ingots to honor remittance drafts. In the circumstances, provincial officials
from north to south, no matter how heavily they previously depended on piaohao’s
remittance, must shift back towards the fundamental method of tax delivery through
158
overland silver shipment, which in fact also served as the last line of defense of
maintaining piaohao’s remittance business. In other words, piaohao’s remittance service
was always a contingent and temporary method in comparison to the overland silver
shipping method, and was never competent to replace the latter.
159
Chapter 4: Opt-out: piaohao and the Qing’s modern financial
reforms, 1895-1911
This chapter focuses how piaohao negotiated with the Qing’s accelerated transformation
into a financially centralized modern state, yet were gradually deprived of the contentious
privilege of remitting provincial taxes when they rejected the state’s modern financial
intervention. After 1895, the Qing court instigated a series of financial reforms, aiming to
modernize its central financial administration and reclaim the financial sovereignty lost to
private banking firms for centuries. The reforms consisted of the establishment of the
state’s first-ever central bank—the Ta-Ching Government Bank, and the implementation
of regulations on supervising and restricting private banking activities. From that point,
piaohao were gradually deprived of the financial freedom that they had been enjoying as
private financiers for over a century.
Although piaohao did have certain chances of participating in the court’s modern
financial reforms, they opted out for two primary reasons. First, piaohao had been
suffering from the court and provincial authorities’ financial extortions ranging from
random levies to loan defaults since the 1860s. Second, after conducting remittances for
over a century and having built financial networks empire-wide, piaohao were still
confident of coexisting with modern western-style Chinese banks at the turn of the
twentieth century. Although in modern hindsight piaohao might have made the wrong
judgment, their decision cannot simply be blamed for conservatism and backwardness.
160
Piaohao in the age of modern financial reforms
Piaohao had been maintaining a unique business relationship with the Qing—serving it
without being supervised and regulated after 1862 when the court reluctantly lifted the
ban on transferring provincial taxes through piaohao. Being overwhelmed by thornier
dynastic issues, the court failed to rigorously supervise piaohao’s interference in handling
the empire’s fiscal revenues that it should have done so.
In fact, the court treated piaohao’s remittance service as ad hoc method to transfer
provincial taxes when overland silver transport was disrupted by rebellions, which might
explain why the court never bothered to supervise piaohao nor endorse them as
legitimate financial firms to handle provincial taxes. Instead, the court constantly
re-imposed the ban on using piaohao to deliver taxes, and extorted money from them to
vent anger on piaohao’s interference in the state taxation system.
Nevertheless, only after 1895 did the Qing court finally start to dispel piaohao’s
influence over the central-local financial affairs and modernize its central financial
administration—the prerequisite to repaying 200 million taels of war indemnity imposed
by Japan and building a strong nation-state.
351
From that point, the court established a
series of modern Chinese banks which gradually reclaimed the privilege from piaohao of
handling and remitting provincial taxes, and also put piaohao and other private banking
firms under strict state financial regulations through mandatory registration with the
Ministry of Finance.
351
Immanuel Hsu, “Late Ch’ing foreign relations, 1866-1905”, in The Cambridge History of China, vol. 11: Late
Ch’ing, 1800-1911, ed. John K. Fairbank and Kwang-ching Liu (Cambridge: Cambridge University Press, 1980), 108;
Chuzo Ichiko, “Political and Institutional Reform, 1900-11,” in The Cambridge History of China, vol. 11: Late Ch’ing,
1800-1911, 403.
161
1, The influence of newly established modern Chinese banks over piaohao
A decade before 1895, the court had yet linked the empire’s future with a centralized
financial administration, and still vehemently rejected the establishment of modern
Chinese banks. Soon after Fukang cash shops went bankrupt in 1883, the British trading
firm Jardine Matheson & Co suggested a Sino-British joint modern bank in China to the
Inspector General of Imperial Maritime Customs Service, Sir Robert Hart, who later
mentioned this idea to Li Hongzhang. Two years later, Li, the newly appointed
Commander of the Navy Bureau, presented Hart’s proposal for a western-style modern
Chinese bank to the throne as well as the Board of Revenue. Nevertheless, the Board was
not impressed at all by Li’s brave new suggestion, and turned it down. Although the
primary reason for the Board’s negative response was to prevent foreign countries from
interfering in the empire’s fiscal revenues, it also alleged that “a modern bank will neither
benefit the court nor common people except depleting money from the two (zhi yinhang
duzhan liyi, gongsi jie wuyi er yousun 只銀行獨 佔利益，公私皆無益而有損 ).”
352
A decade later, however, the Board of Revenue completely transformed its mindset,
and subsequently established the empire’s first-ever modern bank under its aegis. On 26
April 1897, the Imperial Bank of China (zhongguo tongshang yinhang 中 國通商銀行,
IBC hereinafter), the brainchild of Sheng Xuanhuai, opened its door in Shanghai—the
Bank’s headquarters as well as in Tianjin, Hankou, Guangzhou, Shantou, Yantai, and
352
Board of Revenue, “Lun yinhang jingguan guojia kuanxiang zhi bi” 論銀行經管國家款項之弊 [Treatise on the
evils of modern banks’ management of national fiscal revenues], in Gongzhong dang’an 宮中檔案 [Palace memorial
archive], zouzhe 奏摺 [memorandum] 8:5, First Historical Archives, Beijing.
162
Zhenjiang.
353
The Board of Revenue generously lent out Tls. 1,000,000 to the Bank as
paid-in capital, which defined the Bank as a government-supervised merchant-managed
modern banking institution.
354
Whereas in operation, the Bank modeled after the
Hongkong and Shanghai Banking Corporation (HSBC hereinafter) in everything, with
Andrew Wright Maitland, a former HSBC’s Chief Accountant and Agent of the Tianjin
office, as the founding Chief Manager of the Bank’s Shanghai Headquarters.
355
The Board of Revenue disclosed the rationale for endorsing Sheng’s Bank in a
memorandum a month later after its grand opening:
[Modern banks] will make both invisible and visible contributions to the empire.
The invisible part is that they will facilitate monetary flows and guarantee smooth
transactions of trade and commerce across the empire. Whereas the visible part is
that the smoother the transactions, the more the banks will earn, and the greater
profits the court will gain from these banks… In fact, the primary function of
modern banks is not to monopolize commercial profits, but to divert them from
merchants’ previous monopoly in order to circulate in greater spheres and at faster
speed.
356
After successfully tested the waters about modern banks in 1897, but also because of
the much heavier Boxer Indemnity of 450 million taels imposed on the Qing after 1901,
the Board of Revenue promulgated the Tentative Prospectus of the Bank (shiban yinhang
353
Sheng Xuanhuai (1844-1916) was a proté gé of Li Hongzhang, and a prominent official and progressive
entrepreneur in late Qing dynasty. In 1897, Sheng’s official title was Vice Minister of the Court of Judicial Review
(dalisi shaoqing 大理寺少卿 ). In 1908,he was appointed the Minister of Communications.
354
Board of Revenue, “Zunyi zhongguo tongshang yinhang huijie guankuan shu” 遵議中國通商銀行 匯解官款疏
[Treatise on endorsing the Imperial Bank of China’s remittance of government taxes], reprinted in SPS, 384.
355
Frank King et al., The History of the Hongkong and Shanghai Banking Corporation, Vol. 1,232.
356
Board of Revenue, “Zunyi zhongguo tongshang yinhang huijie guankuan shu”, SPS, 384.
163
zhangcheng 試辦銀行 章程 ) and established the Bank of the Board of Revenue (hubu
yinhang 戶部銀行 , BBR hereinafter) in 1904, aiming at increasing the liquidity of the
court and its heavy foreign debts. The Bank had a start-up capital of four million taels,
modeled on the principles of western-style modern banks, and was defined as a
limited-liability company.
357
In February 1908, after reforming the Board of Revenue
into the Ministry of Finance (duzhibu 度支部 ), BBR was subsequently reconsolidated
into the Ta-Ching Government Bank (TCGB hereinafter) with the paid-in capital of ten
million taels. According to The Rules of the Ta-Ching Government Bank (Daqing yinhang
zeli 大清銀行則例), TCGB was clearly defined as “the central bank (zhongyang
yinhang 中央銀行) of the Qing empire”, which was unprecedented throughout the
two-thousand-year history of imperial China.
358
Shanxi piaohao immediately encountered stiff competition with these newly
chartered or state-owned modern Chinese banks for government remittances, indicating
the court’s dogged determination to regain the long-lost control over the transfer of
government funds among provinces and Peking.
359
On 19 May 1898, a month after the
opening of the Imperial Bank of China, Sheng Xuanhuai appealed the throne to urge all
357
Immanuel Hsu, “Late Ch’ing foreign relations, 1866-1905”, in The Cambridge History of China, vol. 11: Late
Ch’ing, 1800-1911, 126; Daqing yinhang qinglichu [Daqing Bank Clearance office] ed., Daqing yinhang shimoji [The
whole story of the Great Qing Bank], (Beijing: Daqing yinhang qinglichu, 1915), 3-8.
358
“Daqing yinhang zeli 大清銀行則例”, in Daqing yinhang zeli zhangcheng 大清銀行則例章程 (Beijing, Jingshi
jinghua yinshuju,1909?), 1-3.
359
Albert Feuerwerker, “Economic trends in the late Ch’ing empire, 1870-1911”, in The Cambridge History of China,
vol. 11: Late Ch’ing, 1800-1911, 59.
In an ideal world, the primary task of a central bank is to assume the responsibility for lender-of-last-resort, such as
what the Bank of England started to do after the 1870s (Sylla et al., The State, the Financial System, and Economic
Modernization, 9). Whereas continuing to engage in commercial business and behave in a profit-maximizing way
would harm the bank’s role as the lender of last resort. Nevertheless, most European’s universal banks as well as the
Ta-Ching Government Bank, given the imperative financial need to quickly industrialize and increase the governments’
liquidity in these countries, usually competed for commercial profits against private financial institutions (Forrest Capie,
“Banking in Europe in the 19
th
century: the role of the central bank”, 118-133, in The State, the Financial System, and
Economic Modernization, ed. Sylla et al., 127).
164
provincial officials to remit their provincial taxes through his Bank. Sheng amplified the
point further that:
If provincial authorities continue to employ private financiers (i.e. piaohao and
other private banking firms) to deliver taxes to Beijing rather than IBC, then not
only will Chinese people distrust the court’s new financial policy, westerners
will also mock it. The empire’s future of modern commerce and communication
should not be hampered by provincial officials’ persistence use of piaohao’s
remittance service.
360
The Board of Revenue soon endorsed Sheng’s request and urged IBC to advertise its
new remittance service among provincial officials, such as offering higher interest rates if
officials decided to deposit their provincial taxes in the Bank as well as lower remittance
fees in comparison to the ones charged by piaohao. Before long, the Bank plunged into
the cutthroat competition with piaohao for government remittances. In January 1898, the
governor-general of Sichuan named Gongshou 恭壽 stated that although Xietongqing
and other piaohao were still in charge of remitting Tls. 240,000 of the Luhan railroad
funds from Sichuan to Shanghai, once the money arrived in Shanghai, the newly
established IBC would be solely responsible for remitting the money to the final
destination where the railroad company was located.
361
After 1904, piaohao’s remittance business of provincial taxes was further eclipsed
by the state-owned Bank of the Board of Revenue. In October 1906, the Board of
Revenue circulated a memorandum among provincial governors, requesting them now to
360
Board of Revenue, “Zunyi zhongguo tongshang yinhang huijie guankuan shu”, SPS, 384.
361
Memorandum of Gongshou, January 1898, SPS, 348.
165
remit provincial taxes to Beijing only through BBR.
362
The fatal blow to piaohao’s government remittance business came in 1908, when the
central bank of the Qing — the Ta-Ching Government Bank — succeeded BBR. Article
Three and Four of The Rules of the Ta-Ching Government Bank stipulated that TCGB’s
branches and agencies, setting up at every provincial capital and major prefecture seats,
should immediately take over the remittance of provincial taxes on behalf of the central
state.
363
Figure 12 Article 3 & 4 of the Rules of the Ta-Ching Government Bank
In late 1910, the Ta-Ching Government Bank completely deprived piaohao and
other cash shops of the privilege of handling and remitting provincial taxes and customs
revenues first in Shanghai and later in major localities across the empire, after the court
362
Memorandum of the Board of Revenue to the banking sector of BBR, October 1906, SPS, 385.
363
Duzhibu, Daqing yinhang zeli zhangcheng 大清銀行則例章程 (Beijing, Jingshi jinghua yinshuju 京師京華印書
局,1909?), 3.
166
quelled the severe financial crisis in Shanghai caused by local cash shops’ outrageous
embezzlement of the Shanghai maritime customs’ revenues and fanatical speculation in
rubber shares. From then on, TCGB became the only financial institution endorsed by the
court to handle the remittance of provincial taxes wherever a branch existed.
364
A
memorandum of the Ministry of Finance revealed, “After March 1911, the Shanghai
branch of TCGB is the only authorized institution to deposit and remit customs revenues
and all other indemnity installments sent to Shanghai.”
365
In addition, after early 1911,
various branches of TCGB had also been taking over government financial businesses of
accepting, depositing, and remitting customs revenues in localities such as Hangzhou,
Wuhan, Wenzhou, Qingdao, Yingkou, Ningbo, Fuzhou, Chongqing, Jiujiang, and
Dalian.
366
Piaohao’s business correspondence expressed their anxiety over TCGB’s immediate
and omnipresent dominance in government remittance. In 1908, a public letter
collectively penned by piaohao’s Chengdu community complained that the thirteen local
piaohao’s remittances of provincial taxes were slashed in half after TCGB’s Chengdu
branch started engaging in this business. Now the Bank of Communication (established
by the Ministry of Communications in 1908 and managed by Li Hongzhang’s nephew Li
Jingchu 李經楚 ) was also grabbing another large slice of the government remittances in
Chengdu, then how could we then survive in the local remittance market?
367
In 1909, a
364
“Duzhibu tongfusi ziwen” 度支部通阜司諮文 [Official communication by Supervisory Bureau of Coinage,
Ministry of Finance], July 1911; Letter by Secretary Cheng Lichuan 程利川 to TCGB, 25 June 1911, SPS, 385, 461.
365
“Duzhibu tongfusi ziwen”, SPS, 385.
366
Official communication sent by the Supervisory Bureau of Coinage of the Ministry of Finance to the
Governor-General of Fujian and Zhejiang, et al., SPS, 386-388.
367
Li, Shanxi piaoshang chengbaiji, 204.
167
public letter penned by piaohao’s Shashi community revealed the same sad situation,
“Nowadays almost all provincial taxes, military funds and installments on war indemnity
are remitted exclusively by TCGB, which left us no more opportunities to handle
government remittances”.
368
According to Li Hongling, a senior manager of Weifenghou
piaohao during the 1900s, although TCGB was just open for a few years and whose
scope of financial services was still quite limited, it had already seized the lion’s share of
government remittances from piaohao’s hands.
369
2, Stricter centralized control over piaohao
To regain financial sovereignty, the court also strived to monitor business activities of
private banking firms and supervise financial markets at local levels. In 1908, the court
clearly defined piaohao and cash shops as private financial institutions for the first
time — almost a century later when piaohao started to provide financial services across
the empire. The court also stipulated that if piaohao wanted to continue their banking
business, they must immediately register with the newly reformed Ministry of Finance
and accept mandatory government financial inspections half-yearly. From then on,
piaohao could no longer evade the state’s modern financial interventions while making
profits from government remittances.
In January 1908, the Ministry of Finance promulgated the Universal Rules of Banks
(yinghang tongxing zeli 銀行通行則例 ). The Rules began by categorizing all domestic
private financial institutions consisting of piaohao, cash shops and modern Chinese banks
368
Li, Shanxi piaoshang chengbaiji, 215.
369
Li,Tongzhou zhonggao, 165.
168
as “ordinary banks” (putong yinhang 普通銀行)”. Three of the fifteen Articles as well as
an additional Article of the Rules deserve quotation verbatim:
Article III. All ordinary banks (piaohao included, author’s emphasis)
must report their general business particulars to the Ministry of Finance
before operation. The business particulars consist of the name of the
Bank, the locations of headquarters and branches, the start-up capital, the
nature of ownership such as sole-proprietorship or joint-stock, limited or
unlimited liabilities, and the names, native places and home addresses of
the owners and investors of the Bank.
Article V . All Banks should submit balance sheets or account books
to the Ministry of Finance for a semi-annual routine inspection of
performance. If a Bank encounters financial difficulties, the Ministry
reserves the right to dispatch envoys to scrutinize the Bank’s accounting
journals, receipts, and cash reverses in greater details. Nevertheless, the
Ministry promises not to intervene in the daily operations of all Banks.
Banks also have the right to appeal to the Ministry against government
financial extortions at any time.
Article XII. All piaozhuang (draft houses, i. e. piaohao), silver
houses and cash shops, in order to enjoy government legal protection,
must immediately register with the Ministry as “ordinary banks” and
obey the Universal Rules of Banks henceforth. Any Banks, failing to
register within three years, will be prohibited from depositing or
169
remitting government funds.
Additional Article. Financial firms engaging solely in monetary
exchange need not to be registered as “ordinary banks” with the
Ministry.
370
In no time, piaohao started protesting against the heavy-handed Universal Rules of
Banks, which aimed to transition the court’s financial policy from laissez-faire to
interventionism. Understandably, since piaohao started building their remittance empire
in the 1820s, they had been operating in an almost absolute vacuum of either central or
local financial regulations, in spite of constant levies and compulsory loans. In other
words, neither did piaohao ever work with any sort of non-predatory financial regulations
nor did they anticipate receiving legal protection from the state. As a result, most piaohao
strived to evade registering with the Ministry of Finance, which they deemed unnecessary
to help with their daily banking business.
Li Hongling, senior branch manager of Weifenghou, contended in a letter written in
February 1908 that the compulsory registration policy was superfluous:
As far as I know, piaozhuang 票莊 (i.e. piaohao) are very different from
(modern) banks…Piaohao have built sound business reputation as early as in the
1850s regardless of how much capital they own…As a result, although modern
banks might need to register with the Ministry of Finance to maintain
creditworthiness, we piaohao should never be forced to do the same because it
370
Daqing huangxu xin faling 大 清光緒新法令 [New laws and statutes of the Guangxu Reign], Series 2, vol. 10,
Shanghai: Shangwu rinshuguan, 1910-1911), 70-74.
170
really is unnecessary.
371
Li consequently requested the Beijing General Chamber of Commerce (jingshi
shangwu zonghui 京師 商務總會) to negotiate the possibility of being exempted from
the mandatory registration policy.
372
However, the Ministry of Finance immediately
turned down Li’s request and pushed all branches of piaohao to register with no further
delays. Ultimately, on 19 December 1909, 358 branches of the twenty-odd piaohao
reluctantly complied with the court’s new registration rule and obtained business licenses
issued by the Ministry of Finance.
373
The one-time registration fee that each branch of
piaohao had to pay for was only Tls. 4, and the total amount of fees paid by the entire
piaohao community was only Tls. 1,432.
374
Comparing to Tls. 600 that the Board of Revenue forced each branch of piaohao to
pay for the annual registration fee back in 1884, it was plausible that the one-time Tls. 4
registration fee asked by the Ministry of Finance marked a watershed in the Qing court’s
transformation into a modern central state, whose registration fee was no longer an
extortion, but aimed to regulate private banking firms and provide them some sort of
basic financial protections. Nevertheless, history is always outcome blind. After
encountering the court’s predatory and volatile financial policies for fifty years, how
could piaohao easily be convinced that the court’s modern financial interventions were
different from its previous extortions?
371
Li, Tongzhou zhonggao, 164.
372
Ibid., 156-7.
373
These piaohao included Rishengchang, Weitaihou, Weichanghou, Dadetong, Weishengchang, Weifenghou,
Tianchengheng, Xiechengqian, Dadeyu, Xietongqing, Shiyixin, Baofenglong, Zhichengxin, Xintaihou, Dadechuan,
Chengyiqian, Jinshengrun, Heshengyuan, and Baichuantong.
374
“Huiduizhuang Rishengchang deng jing shangbu zhuce” 匯兌莊 日升昌等經商部註冊 [Rishengchang and other
remittance firms’ registration with the Ministry of Finance] , reprinted in SPS, 356.
171
3, The negative impact of currency unification on piaohao
The monetary trend in currency unification at the turn of the twentieth century also
negatively influenced the prosperity of piaohao. Since the late Ming, the economy of late
imperial China had relied on a bimetallic monetary system consisting of copper coins
used in petty transactions, and silver ingots used in wholesale trade and tax payments.
375
However, this bimetallic system was in constant chaos because both copper coins and
silver ingots lacked uniformity and standardization, and thus varied greatly from one
place to another. This situation was exacerbated when large amounts of foreign silver
dollars (especially Spanish and Mexican dollars) and foreign bank notes began
circulating widely in China after the nineteenth century.
376
Given the inconvenience caused by the complex bimetallic system, the demand for
currency unification became very insistent after the Qing’s modern transformation into a
nation-state. In 1910, state-minted silver dollars in Hubei, Guangdong, Yunnan and
Sichuan were ultimately denominated as the standard currency of the Qing.
377
In addition,
the central government also strived to centralize and standardize the issuance of paper
currencies. On 8 June 1909, the Ministry of Finance promulgated the Regulation on the
Circulation of Silver and Cash Paper Notes (tongyong yinqianpiao zhangcheng 通用銀
錢票章程) . It stated that from then on, only the Ta-Ching Government Bank had the
exclusive right to issue convertible paper notes backed by government reserve funds, and
375
Richard von Glahn, Fountain of fortune: money and monetary policy in China, fourteenth to seventeenth centuries
(Berkeley, University of California Press, 1996).
376
For backgrounds, see Hao, Commercial Revolution in nineteenth century China, Chapter 3: New forms of Money,
34-71; King, Money and monetary policy in China, 1845-1895, 81-90.
377
Chuzo Ichiko, “Political and Institutional Reform, 1900-11.” In The Cambridge History of China, vol. 11: Late
Ch’ing, 1800-1911, J. Fairbank and Kwang-ching Liu ed.(Cambridge: Cambridge University Press, 1980), 403-407.
172
any other private financial institutions were no longer allowed to issue paper notes and
those already in circulation must be retrieved from the market immediately.
378
The Regulation negatively affected the survival of piaohao from two aspects. First,
because a portion of piaohao’s profits relied on manipulating the conversion of silver
ingots of various weights and finenesses, the promotion of state-minted standardized
silver dollars consequently cut off piaohao’s profits from that source. A silver exchange
converter made by Dadetong piaohao indicated that at least 58 different types of silver
ingots were commonly circulated in major trading cities and towns. In particular, Tls.
1,000 of Shanghai Standard Silver taels (Shanghai shen’gongfa guiyin 上 海申公法規銀)
were equivalent to Tls. 945.67 of the Beijing Public Standard Silver (jingshi jinggongfa
zuwenyin 京師京公法 規銀). If piaohao remitted Tls. 500 of the Beijing Public Standard
Silver to Shanghai, it would only pay the customer who cashed the draft in Shanghai Tls.
500 of the Shanghai Standard Silver.
379
Piaohao thus gained a considerable profit from
such remittance transaction because the Beijing silver ingots were more valuable than the
Shanghai ones under the same weight. Relying on the financial know-how of converting
tens, if not hundreds of silver standards and the empire-wide network to procure local
silver ingots to cash remittance drafts denominated in a different type of ingots, piaohao
actually benefited from the Qing’s chaotic monetary system prior to the currency
unification at the turn of the twentieth century. In 1856, twenty percent of the profits of
Rishengchang’s Suzhou branch originated from the manipulation of various silver
378
Duzhibu, “Tongyong yinqianpiao zhangcheng [Regulations on the Circulation of Silver and Cash Paper Notes]”,
June 8 1909, in Daqing yinhang dang’an 大清銀行檔案 [The Arhices of the Ta-Ching Government Bank], vol. 1, Diyi
lishi dang’an guan 第一歷史檔案 館 [First Historical Archives], Beijing, last accessed by author in December 2006.
379
Wei, “Shanxi piaohao zuijin zhi diaocha (xu)”, 2045-2046.
173
standards; and in 1906, its Tianjin branch gained Tls. 1,338 from doing so (see Appendix
II).
The second detrimental effect on the survival of piaohao was caused by the
prevalence in convertible paper bank notes issued by modern Chinese and foreign banks,
and ultimately by the central bank of the Qing empire. This new type of credit
instruments, whose risk of counterfeit was drastically mitigated by advancement of
modern printing technologies after in the nineteenth century, gradually removed the
necessity for ordinary people and merchants to carry remittance drafts while engaging in
long-distance travel and trade.
380
In fact, with the popularity of modern paper bank notes,
piaohao’s remittance business gradually became obsolete. A letter penned by Weifenghou
piaohao’s Yingkou branch in 1909 complained bitterly about how this new monetary
trend eclipsed its remittance service:
[To be worse,] because paper bank notes have gained a widespread circulation,
now people seldom visited us to remit their silver ingots. Indeed, when they have
the better choice of carrying convertible paper notes free of charge while traveling,
why should they still bother to pay for our remittance service?
381
4, Modern financial demands that piaohao could not meet
In addition to losing the lion’s share of government remittance to the state’s modern
central bank, piaohao’s influence over the Chinese financial market was further
undermined because it could not meet state’s modern financial demands. In particular, the
Ta-Ch’ing Government Bank assumed responsibility as the lender of last resort to
380
Angela Redish, Bimetallism: An Economic and Historical Analysis (Cambridge: Cambridge University Press, 2000),
10.
381
Li Hongling, Tongzhou zhonggao & Shanxi piaoshang chengbai ji, 198.
174
preserve the stability of financial markets during economic crises, which happened
frequently after China was gradually integrated into the volatile world trade market after
the 1870s. Article XII of The Rules of the Ta-Ching Government Bank clearly defined the
Bank’s role as the lender of last resort:
Whenever local markets encountered silver/cash shortages, staff of the Bank is
responsible for reporting this situation to the Ministry of Finance, which would
then inject funds into troubled financial firms on a reasonable interest rate to
appease market panic.”
382
In contrast, neither the limited working capital raised from sole proprietorship or
partnerships nor the court’s ambition to regain financial sovereignty would allow piaohao
to assume the role of lender of last resort. Instead, piaohao also started to rely on the
protection given by the central bank during various financial crises after 1900.
For example, in 1908, owing to speculation, some prominent soybean trading houses
in Yingkou suddenly became insolvent to repay loans including those taken from
piaohao’s local branches, which immediately panicked the local financial market. Before
long, the Yingkou branch of the Ta-Ching Government Bank injected over Tls. 200,000
into the market to maintain its liquidity, which gradually alleviated the crisis. Meanwhile,
the Bank started to sell assets of these trading houses to clear off the remaining debts.
383
A second example concerned the Rubber Shares Crisis of Shanghai. In 1910, the
Shanghai-based Yuanfengrun cash shops shut down because of their irrational speculation
382
Duzhibu, Daqing yinhang zeli zhangcheng, 5.
383
“Yingkou shangwu zonghui cheng feng Shanhaiguan dao wen” 營口商務總會呈奉山海關道文 [Petition
submitted by the Yingkou General Chamber of Commerce to the Circuit Intendant of Shanhaiguan], Daqing yinhang
dang’an, vol. 46, First Historical Archives, Beijing, accessed in December 2006.
175
in rubber shares, which caused a chain effect on local financial markets wherever it set up
branches, including Beijing, Tianjin and Guangzhou. Again, the Ta-Ching Government
Bank immediately assumed the role as lender of last resort, and provided more than Tls.
1,000,000 of silver ingots for the Shanghai market. Meanwhile, the Bank strived to
maintain the stability of the Capital’s financial market by injecting Tls. 500,000 to it.
Besides the central bank, other newly founded modern Chinese banks such as the Bank of
Communications (jiaotong yinhang 交通銀行), the Zhili Provincial Bank (zhili yinhang
直隸銀行), and a private commercial bank named Zhicheng Bank (zhicheng yinhang 志
誠銀行) also participated in maintaining the liquidity of local markets during the 1910
financial crisis, whereas no piaohao was able to assume such role.
384
Modern Chinese banks also met the Qing state’s extraordinary demand on building
modern infrastructures and industries, whereas piaohao were unable to do so because
their financial business operated on too small a scale to contribute to modern state’s
industrial financing.
385
Nevertheless, how these modern Chinese banks supported the
Qing’s industrialization is beyond the scope of this text, thus no further examples will be
given here.
In sum, when the Qing court was accelerating its modernization process at the turn
of the twentieth century, piaohao gradually failed to exert greater influence over the
Chinese financial market, because they were not allowed to assume many modern
384
“Zhongguo dashiji” 中國大事 記 [Chronicles of China] in Dongfang zazhi 東方雜誌 [Eastern miscellany], Vol. 7,
Issue 10, 130-13; Memorandum of Chongfang 崇芳, 12 September 1910, Memorandum of Shanqi 善耆 and Wuzhen
烏珍, 13 September 1910; “Jingshi shimian zhongzhong” 京師市面種種 [On financial market of Beijing], in
Dagongbao, 15 October 1910, reprinted in SPS, 438.
385
Cheng, Banking in modern China, 22; Faure, China and capitalism, 19, 40-2.
176
financial responsibilities constrained either by the court or their own business mechanism
relying on limited working capital.
Why did piaohao reject the Qing’s modern financial reforms after 1895
Without providing government remittance for the Qing dynasty, piaohao could have
never risen to national prominence after 1860. Nevertheless, why did piaohao
vehemently reject the state’s brave new modern financial reforms at the turn of the
twentieth century after serving it for over fifty-years? The underlying reason is threefold.
First, because piaohao undermined the court’s absolute control over provincial taxes, the
court had been implementing hostile financial policies on piaohao including random yet
heavy levies, unreasonable reduction of remittance fees, and compulsory loans. In fact,
by debunking the myth that piaohao provided financial support for the Empress Dowager
Cixi and successfully sought her political patronage while she was fleeing westwards in
1900, I argue instead that piaohao’s business relations with the Qing court had always
been inconsistent and non-institutionalized. Second, although provincial officials were
staunch supporters of piaohao’s remittance service, they frequently forced piaohao to
remit provincial taxes in advance and defaulted on these loans later, although not always
intentionally. Third, being the jewel in the crown of nationwide remittance services for
over a century, piaohao were still quite confident of coexisting with modern
western-style Chinese banks at the turn of the twentieth century.
177
1, Suffering from financial extortion
After the court reluctantly lifted the ban on remittances in 1862, it was haunted by
provincial officials’ excessive use of piaohao’s remittance service. Yet, as long as
provincial governors paid their tax quotas in full and on time, the court acquiesced in the
ad hoc method of delivering provincial taxes through piaohao’s remittance service.
Nevertheless, the court adopted predatory policies on piaohao by constantly imposing
compulsory levies and reducing remittance fees.
Of course, as merchants who immersed in the late imperial Confucian culture
promoting the ideal combination of scholars and merchants, merchants of piaohao would
occasionally make voluntary donations to the court in case of flood, famine and war, in
exchange for titular official titles either for themselves or for family members to glorify
their family history. For example, in 1853, Baijun 柏葰 , an official of the Imperial
Arsenal who was in charge of purchasing armaments to suppress the Taiping Rebellion,
handed the throne a list of piaohao merchants who enthusiastically donated money to
support his purchase. Soon after, the court acknowledged the loyalty of piaohao
merchants, and rewarded them titular official titles because of their generosity.
386
Nevertheless, voluntary donation was not always the case. In contrast, the court
frequently coerced piaohao into donating money for famine relief and military
expenditure whenever it had a pressing need for extrabudgetary money. The court’s
registration-turned-compulsory-donation in 1884 was a prime example.
386
Memorandum by Baijun, 2 October 1853, SPS, 50; Ju, “Qingmo guanzhi gaige zhong guanyuan de fenglu gaige”,
120.
178
After Fukang cash shops went bankrupt, the Board of Revenue described all private
remittance firms including Fukang and Shanxi piaohao in a memorandum penned in
September 1884 as “evil merchants” (jianshang 奸商), and their scandalous
embezzlement of money as “extremely abhorrent (youwei kewu 尤為可惡 )”. Allegedly
aiming at preventing piaohao from committing future financial crimes, the Board enacted
three new rules that piaohao must obey if they wanted to continue to provide remittances
for provincial tax transfer. First, piaohao were required to shoulder each other’s debts in
case a certain piaohao went bankrupt, which was termed “mutual guarantee” (lianhuan
hubao 連環互保 ). Second, every single branch of piaohao must submit Tls. 600
annually in exchange for a business license issued by the Board of Revenue. Third, every
branch of piaohao should report to provincial governments its business details including
names and native places of branch managers.
387
The Board claimed these new rules to be conducive to regulating and supervising
financial markets after the disastrous shutdown of Fukang cash shops. Nevertheless, the
Board also frankly admitted that these rules were primarily aiming at raising military
funds for the Sino-French War (1883-85).
388
Piaohao immediately sensed that these rules would impose a heavy financial burden
on their businesses. In particular, each piaohao owned from 10 to 20 branches, and if
every branch submitted Tls. 600 annually, then the total amount that one piaohao had to
pay the Board of Revenue would start from Tls. 6,000 to 12,000. As discussed in Chapter
2, managers of piaohao’s branches located in Zhejiang, Sichuan, Zhili, Gansu, Shaanxi,
387
Guangxu chao donghua lu, vol.2, 1875.
388
Ibid.
179
Shanxi, Guangxi, Shandong and Jiangxi soon united against this predatory policy and
collectively negotiated with the court through provincial governors for replacing the
annual registration fee with an one-shot “voluntary” donation. Eight months later,
piaohao succeeded, and the court’s half-hearted attempt to regulate financial markets
eventually turned out to be camouflage for financial extortion.
389
Notwithstanding the failure to levy money on piaohao annually, three years later the
Board of Revenue was up to its old tricks again. In September 1887, the Yellow River in
Zhengzhou, Henan province flooded rampantly, which called for a substantial amount of
funds to repair old dikes and build additional ones in the affected areas. Yet, the Imperial
Treasury had been depleted for a long time, and the Board of Revenue again was
coveting piaohao’s money for such expense. The Board stated in a memorandum:
All remittance firms (i.e. Shanxi piaohao and other non-Shanxi remittance firms)
were businesses with deep pockets. In previous years we proposed imposing an
annual fee of Tls. 600 on every branch of piaohao, but we soon revoked this
policy as the fundraising for sea-defense drew to a conclusion. Now because our
financial need for dike repairs becomes urgent again, we decide to resume the
previous policy temporarily and request every piaohao branch to donate Tls. 600
once and for all without registering with us for business licenses.
390
After many rounds of tough negotiations mediated by provincial governors, in January
1888, piaohao’s third-odd Beijing branches, on behalf of their Shanxi headquarters,
collectively turned in Tls. 100,000 to the Board of Revenue as another one-time
389
Memorandum by Wang Jian, 20 June 1885, SPS, 209-210.
390
Guangxu chao donghua lu, vol. 2, 2346-2348.
180
“voluntarily donation” for dike repairs.
391
In addition to random levies, the court also constantly forced provincial governors
to reduce remittance fees paid to piaohao. Considering the small number of money that
this fee reduction effort might have saved the court, it was plausible that the court
primarily aimed to vent its anger on piaohao which interfered in its fiscal revenues rather
than to slash spending. In January 1900, Kuijun, the governor-general of Sichuan and a
long-term supporter of piaohao, was under the court’s pressure to reduce piaohao’s
remittance fees from Tls. 150 to 130 and from Tls. 120 to 100 for sending every Tls.
10,000 from Sichuan to Beijing and from Sichuan to Shanghai/Gansu. Kuijun estimated
that reducing remittance fees to the current prices would save his provincial treasury
about Tls. 4,000 per year, which he would turn in to the court.
392
In May 1906, Wang
Zhichun, the governor of Jiangxi, also complied with the court’s order of cutting down
fees paid to piaohao from Tls. 180 to 140 and from Tls. 100 to 90 for every Tls 10,000
remitted from Anhui to Beijing and to Shanghai respectively. Nevertheless, this reduction
could only save Anhui a mere Tls. 500 each year.
393
Contrary to those who quickly obeyed the court’s order, many other provincial
officials, including Ding Zhenduo 丁振鐸 —the governor of Yunnan, Duanfang—the
acting Provincial Administration Commissioner of Shaanxi, Huang Huaisen 黃槐
森—the governor of Guangxi, and Liu Shutang 劉樹堂—the governor of Zhejiang,
refused to reduce the remittances fees, which were already the lowest possible rates, paid
391
Memorandum by Ye Boying 葉伯英, 8 January 1888, SPS, 212.
392
Memorandum by Kuijun, 26 January 1900, SPS, 273.
393
Memorandum by Wang Zhichun, 20 May1900, SPS, 273.
181
for piaohao to successfully remit provincial taxes. In a memorandum penned in February
1900, Ding Zhenduo disclosed that piaohao charged Tls. 53 for remitting every Tls.
1,000 from Mengzi 蒙自, a southwestern inland port of Yunnan, to Shanghai. Such rate,
according to him, was much lower comparing to the method of overland silver shipment
to Shanghai, which required provincial delegate to escort bulky silver ingots across the
hilly areas of Sichuan and Hubei for over 2,000 miles.
394
Ding did not lie to the court. According to Ikenaga Rin'ichi, assistant consul of the
Japanese Consulate in Chongqing, to ship every Tls. 1,000 of silver ingots from
Chongqing to Hankou by water would cost Tls. 3.7 in 1906. Yet the distance between
Chongqing and Hankou was less than 600 miles, and shipping silver by water was much
cheaper and easier than doing so by land.
395
In the end, Yunnan, Shaanxi, Guangxi and
Zhejiang did not obey the court’s order to slash the spending on piaohao’s remittance
fees.
Nevertheless, the court’s determination to prevent piaohao from making profits
remained unchanged. In January 1906, the Board of Revenue again wired various
provinces and ordered:
Previously, there were few firms that were able to remit provincial taxes, so
piaohao usually received decent pay. Nowadays, however, there are so many
firms competing against each other for such business, so time is now ripe for a
reduction in our remittance fee expenditure.
396
394
Memorandum by Ding Zhenduo, SPS, 730.
395
Ikenaga Rin'ichi, “Financial Report from the Consulate-general of Japan in Chongqing, Year 1907”, in Pan trans. &
ed., Zhongguo zhi jinrong, vol. 2, 6-7.
396
Telegram sent by the Board of Revenue to provincial authorities regarding the reduction in remittance fees, January
182
Last but not least, the court also forced piaohao to lend money to it. In November
1894, the Board of Revenue successfully borrowed a million taels from local piaohao and
cash shops in Beijing as military funds for the ongoing battle against Japan on the
Sino-Korean border.
397
Although the court issued loan certificates to piaohao and
stipulated a profitable annual interest rate of 7% guaranteed by future land taxes and
customs revenues, whether the court repaid piaohao in the end evaded the extant sources.
In fact, chances was very rare that the court actually paid off the loans taken out from
piaohao in 1894, especially taking the fact of Qing’s ultimate collapse after fifteen years
into consideration.
Before proceeding to delineate piaohao’s financial loss at provincial levels, I must enter
one caveat by debunking a widespread myth, which wrongly portrayed the relations
between the court and piaohao as mutually beneficial patron and clients. By doing so I
reinforce the argument that the court’s hostile attitudes towards piaohao had been
consistent since 1862, and neither did piaohao gain political protections nor financial
benefits at the central level.
The myth goes as the follows: in August 1900, Beijing was besieged by the ruthless
Eight-Power Allied Army, forcing the Empress Dowager Cixi and the Guangxu emperor
flee westwards in panic to their temporary residence in Xi’an. When the royal family
passed by the Qi County, Cixi spent a night staying in the extravagant lodgings reverently
1906, in Duzhibu dang’an 度支 部檔案 [Archive of the Ministry of Finance], vol. 649, reprinted in SPS, 274.
397
Board of Revenue’s response to Liao Shouheng’s 廖壽恒 appeal for borrowing from provincial treasuries, in
Duzhibu dang’an, vol. 266, reprinted in SPS, 275.
183
arranged by Dadetong piaohao’s head office. In addition, Jia Jiying 賈繼 英 , the
manager of Dadetong’s sister firm—Dadeheng, even gifted Cixi and her retinue with Tls.
400,000 as travel expenses. When Cixi finally managed to return back to the Forbidden
City, she granted Jia Jiying a palace audience and an yellow jacket—the symbol of
highest imperial honor—to express her appreciation for Jia’s substantial help.
398
In 1908,
when the court reformed the Bank of Board of Revenue into the empire’s first-ever
central bank—the Ta-Ching Government Bank, Cixi appointed Jia Jiying the Bank’s
founding Chief Manager. The achievements of Jia Jiying’s financial career and personal
interaction with Cixi were so remarkable that in the present day Qi County, an old saying
is still circulating:
It is a rule that a true royal sovereign should arise in the course of five hundred
years. Yet no rule will guarantee that another Jia Jiying be born in the course of a
thousand years (wubai nian biyou wangzhe xing, yiqian nian meiyou jia jiying
五百年必有王者興，一千年沒有賈繼英 )”.
399
Unfortunately, the aforementioned myth of Jia Jiying is entirely false, except the
plain fact that Cixi did pass by and spent one night at the Qi County on 9 August 1900,
recorded in the Veritable Records of the Qing.
400
The only extant source hinting that Cixi
might have spent a night at Dadetong piaohao was a business letter written three days
before Cixi’s arrival at the Qi County. The letter was penned by Gao Jue 高玨 , the chief
398
Kong, “Shanxi piaohao yu qing zhengfu de goujie” 8. Ordinary people were forbidden to wear the yellow color
which was reserved for emperors only.
399
Wei Jihou 魏繼侯, “Qiannian yiyu Jia Jiying” 千年一遇賈繼英 [Jia Jiying: one of a kind in a thousand years], in
Yingcai 英才, 2009 (February):126.
400
Dezong shilu, vol. 470, 20-21 (Qingshilu, 2462)
184
manager of Dadetong’s head office by then, to Gui Chun 桂春 (courtesy name Yueting
月亭), one of Cixi’s most-trusted Manchu officials who accompanied her all the way to
Xi’an as the vice chief minister of the Board of Revenue.
401
Yet, instead of testifying to Cixi’s stay at Dadetong, a careful reading of Gao Jue’s
letter only ambiguously indicated that on 9 August 1900, Gui Chun might have stayed at
the lodgings provided by Dadetong. The entire letter is worth being translated verbatim as
follows:
On 6 August, To Mr. Gui Yueting
Dear Honorable Minister,
I have always been feeling honored after I paid a recent visit to you.
While I was about to write you a humble letter to express my immense
appreciation of hearing your precious instructions in person, I reverently
received a mail from you informing that the imperial carriage (i.e. Cixi and
Guangxu) is currently inspecting the West (i.e. fleeing to Xi’an). While
appreciating your letter, I expect that Your Honorable might also be traveling
along with the imperial carriage, so I have already happily informed the
magistrate of the Qi County of such great news. Meanwhile, a mansion
(gongguan 公館) also gets ready for Your Honorable, so once you pay an
inspection trip (yijie 移節) to our Qi County, I earnestly wish you might
401
Wei Juxian, “Shanxi piaohao zuijin zhi diaocha (6)” 山西票號最 近之調查( 六) [Recent studies on Shanxi
piaohao], Zhongyang yinhang yuebao [The Monthly of the Central Bank of China], 6 (November 1937): 1872-1873
(1864-1899).
185
consider staying with us.
402
One only needs rudimentary knowledge about classical Chinese to judge whether
this letter invited the official Gui Chun or the Empress Dowager Cixi to stay at Dadetong.
The keywords here were “gongguan”—a noun referring only to residences for rich people
but never for emperors, and “yijie”—a verb only describing officials’ trips but never
emperors’. As a result, contrary to previous scholars’ misunderstanding, Cixi’s stay at
Dadetong can never by evidenced by Gao Jue’s letter.
Furthermore, authoritative sources indicated that Jia Jiying had nothing to do with
the first-ever Chief Manager of the Ta-Ching Government Bank in 1908. According to
the Ta-Ching Government Bank’s numerous official documents preserved in the First
Historical Archives, the founding Chief Supervisor (zhengjiandu 正監督) of the Bank
appointed in 1908 was Zhang Yunyan 張允言, son of the governor-general of
Guangdong and Guangxi Zhang Renjun 張人駿 during the early 1900s.
403
Jia Jiying’s real identity in relation to the Ta-Ching Bank was merely a manager of
the Bank’s Shanxi branch after 1908. In March 1913, the Ministry of Finance of the
Beiyang government conducted an investigation regarding a corruption scandal of the
Bank’s Shanxi branch on the eve of the Qing’s collapse in 1911. Contrary to the
mythologized past of Jia Jiying, the investigation disclosed that Jia’s financial career had
been rather notorious ever since he started working in Dadeheng piaohao as a lower-rank
employee. In a letter penned on 27 March 1913, the Clearance Office of the Ta-Ching
402
Wei, “Shanxi piaohao zuijin zhi diaocha (6)”, 1872-1873.
403
Daqing yinhang dang’an, vol. 3, 5, 14, 18, 26, 27, 34, 39, 46, First Historical Archives, Beijing, last accessed by
author in December 2006; Daqing yinhang, Daqing yinhang xuetang zhangcheng 大清銀行學堂章 程 (Beijing: Tongyi
yinshu ju, 1908), 1.
186
Government Bank under the aegis of the Republican Ministry of Finance disclosed that in
1904, Jia Jiying was fired by Dadeheng owing to embezzlement. In 1908, Wanyiyi 萬億
義 piaohao, opened in 1905 by Qu Benwei 渠本 謂 (brother of prominent piaohao and
coal mining merchant Qu Benqiao), helped Jia land the job at the Taiyuan branch of
Ta-Ching Bank.
404
On 8 September 1911, when Taiyuan was besieged by the anti-Qing
army led by Yan Xishan 閻錫山, Jia Jiying, who was by then one of the associate
managers of the Bank’s Shanxi branch, conspired with his college named Tao Xiangchen
陶向臣 to embezzle about Tls. 9,000.
405
Recent archeological findings further verified that Jia Jiying was only a branch
manager of the Ta-Ching Bank’s Shanxi branch rather than the Chief Supervisor of the
Bank’s headquarters. In 2004, the tomb inscriptions of Jia’s father, Jia Jiantang 賈鑒堂
who died in 1911, was excavated at the Yuci County. Penned by three local literati
including Chang Zanchun (Table 6) whose family also engaged in piaohao business, the
father’s epitaph introduced the son as follows:
Jiying ranked the third of Jia Jiantang’s sons, and devoted to remittance business
at an early age…In the 34
th
year of the Guangxu Reign (1908), Jia was hired as a
manager of the Ta-Ching Government Bank’s Shanxi branch.
406
In sum, the underlying reason for debunking Dadetong’s mythologized interaction
404
“Daqing yinhang qinglichu wei micha Shanxi daqing yinhang wubi qingxing shanju qingzhe zhi caizhengbu han”
大清銀行清理處為密查山西大清銀行舞弊情形繕具清摺致財政部函 [Detailed report on the scandals of the Shanxi
branch of the TCGB by the Clearance Office of TCGB to the Ministry of Finance] , in Beiyang zhengfu dang’an 北洋
政府檔案, Caizhengbu juan yi 財政部卷一, V ol. 60, ed. Zhongguo di er li shi dang an guan (Beijing: Zhongguo
dang’an chubanshe, 2010), 447.
405
Ibid., 438.
406
Liu Junli 劉俊禮, “Jia Jiying daqing yinhang renzhi kao” 賈繼英 大清銀行任職考, in Zhongguo Jinrong 中國金
融 [China Finance] Issue 6 (22 March 2012):85.
187
with the Empress Dowager Cixi as well as Jia Jiying’s glorified career is to reinforce the
argument that the business relations between piaohao and the court had remained
inconsistent since the 1860s. Neither was court willing to nor did it condescend to
interact with piaohao officially or privately, because piaohao disturbed the empire’s
normal order of delivering provincial taxes through overland silver transport.
2, Suffering from loan requests and defaults
In an ideal world, by handling remittances for provincial officials, piaohao would gain
access to provincial taxes that they could temporarily utilize and reinvest in their own
financial business. In reality, however, piaohao were frequently obliged to lend money in
advance to provincial authorities, and the chances to ever get repaid were always meager
and contingent. After the 1860s, provincial officials frequently underwent financial
constrains because of the court’s extraordinary financial needs for modern industries and
military expenditure. In no time, they started forcing piaohao, with which they
maintained frequent contacts regarding tax transfers, to lend large amounts of loans to
meet the financial exigencies at both the central and local levels.
Although provincial officials always offered profitable interest on loans taken out
from piaohao, and guaranteed repayment by land taxes and customs revenues, they
frequently defaulted on piaohao’s loans, although not always deliberately. Sometimes
officials had collected enough taxes and got ready to repay piaohao, but before long they
were forced to postpone doing so in order to meet the court’s new financial demands. A
few examples will illustrate the increasing frequency and enormous amount of loans that
188
provincial governments obtained from piaohao.
In Guangdong, Mao Hongbin, governor-general of Guangdong and Guangxi,
reported in 1864 that the Guangzhou Maritime Customs borrowed Tls. 50,000 from
Xiechengqian and another Tls. 50,000 from Zhichengxin piaohao in order to deliver the
Customs’ tax quota of Capital Acquisition. A year later, the succeeding governor-general
of Guangdong and Guangxi named Ruilin 瑞麟 revealed that the Guangzhou Customs
again encountered financial constrains after repaying France and Britain the seventeenth
installment on the Second Opium War Indemnity. As a result, the Customs was unable to
deliver taxes in the form of silver ingots by land to Beijing, and must rely on local
piaohao such as Xiechengqian to remit taxes in advance from the their own pockets.
407
In 1877, Liu Kunyi, the governor-general of Guangdong and Guangxi, borrowed up
to Tls. 166,000 from Zhichengxin, Xiechengqian, Qianjisheng, and Yuanfengjiu piaohao,
in order to submit the forth batch of Guangdong’s tax quota of Capital Acquisition. Liu
stipulated that he would pay off the loans from future provincial land taxes.
408
In 1892,
the local branches of Rishengchang, Baichuantong, Weichanghou, Weitaihou and
Xintaihou in Guangdong province lent money to the Taiping Inland Customs (present-day
Shaozhou 韶州 of Guangdong) frequently. Without such financial help from piaohao,
the Taiping customs would have been unable to deliver a penny to Beijing.
409
In August
1903, Cen Chunxuan 岑 春煊, the governor-general of Guangdong and Guangxi,
recorded that he was forced to borrow 120,000 silver dollars from local piaohao as
407
Memorandum of Mao Hongbin, 1864, SPS, 99.
408
Memorandum of Liu Kunyi on remitting the fourth batch of Capital Acquisition for Guangxu Reign 3, 15
November 1877, SPS, 101.
409
Memorandum of Li Hanzhang, 15 October 1892, SPS, 102.
189
military expenditure on quelling rebellions in western Guangdong. Yet no further
evidence indicated that Cen managed to repay piaohao.
410
Fujian provincial officials were also big borrowers of piaohao. On 25 August 1884,
the general of Fuzhou named Mutushan 穆圖善 reported that although the annual
income of the Maritime Customs of Fujian was only Tls. 1,450,000, it had managed to
submit various kinds of taxes including the Capital Acquisition of up to Tls. 1,700,000
thus far. The only reason he was able to accomplish such arduous task was because local
piaohao including Xintaihou and cash shops such as Fukang agreed to lend out money to
it in advance.
411
In 1891, the General of Fuzhou named Xiyuan 希元 revealed that the
debts Fujian Customs owed to piaohao and other financial firms soared up to Tls.
500,000. Yet chances for repaying piaohao were very meager because of the recent
recession in trade, although he originally promised to repay piaohao by customs
revenues.
412
On 12 July 1910, the eve of the Qing’s collapse, the governor-general of
Fujian and Zhejiang Songshou 松壽 estimated the total amount of silver he borrowed
from piaohao, local cash shops and modern banks was more than a million taels.
Although the exact amount of money that piaohao lent to Fujian is shrouded in extant
sources, the insolvency of the nearly bankrupt provincial government was more than
obvious.
413
Piaohao were also frequently obliged to lend money to Zhejiang province. In
410
Memorandum of Cen Chunxuan, 10 August 1903, SPS, 101.
411
Memorandum of Mutushan, 11 September 1880, SPS, 103.
412
Memorandum of Xiyuan on provincial financial deficits and efforts to raise funds, 16 October 1891, SPS, 104.
413
Memorandum of Songshou, 12 July 1910, in Zhupi zouzhe 朱批 奏摺 [Palace Memorials], Finance vol. 38,
reprinted in SPS, 106.
190
February 1875, Yang Changjun 楊昌浚, governor of Zhejiang, recorded that in order to
submit this year’s tax quota of the Capital Acquisition, the Maritime Customs in Ningbo
had obtained loans of up to Tls. 100,000 from piaohao and other local financial firms. A
year later, Yang revealed that the Zhejiang Customs forced piaohao to lend out another
Tls. 200,000 for the same purpose. In 1880, the succeeding Zhejiang governor Tan
Zhonglin disclosed that local financial firms including piaohao were depleted after
constantly advancing money to the Zhejiang Customs. Nevertheless, the customs still
squeezed another Tls. 100,000 out of these financial firms to submit the annual Capital
Acquisition to Beijing.
414
In Sichuan, the governor-general Ding Baozhen 丁寶楨 borrowed Tls. 80,000 in
1884 from local piaohao and offered them profitable daily interest on these loans, in
order to raise military funds for General Bao Chao’s 鮑超 troops fighting against France
in Vietnam.
415
In 1903, Xiliang 錫良, by then the governor-general, stated that although
Sichuan had already owed piaohao over Tls. 300,000, it recently forced piaohao to remit
another Tls. 180,000 to Shanghai in advance to repay the Boxer Rebellion Indemnity.
416
Although most provincial officials promised to repay piaohao by land taxes and customs
revenues, they frequently defaulted on piaohao’s loans in order to prioritize the court’s
infinite new financial demands. In 1873, Bao Yuanshen 鮑源深, the governor of Shanxi,
recorded that in previous years he endeavored to take out loans of Tls. 300,000 from
414
Memorandum of Yang Changjun on remitting Capital Acquisition, 6 February 1875, SPS, 106.
415
Memorandum of Tan Zhonglin on remitting Assistant Funds for Shaanxi and Gansu, 16 December 1880, SPS, 108.
416
Memorandum of Xiliang, 24 December 1903, SPS, 109.
191
piaohao to support military campaigns of General Jinshun 金順 fighting against Muslim
rebels in Gansu and Xinjiang. Although Bao just finished collecting provincial land taxes
and prepared to repay piaohao, he ultimately retained the repayment and set it aside for
the court’s future financial demands.
417
In 1877, Pan Dingxin 潘鼎新, the governor of Yunnan, calculated that because of
the soaring military expenditure on quelling local uprisings, the provincial treasury had
owed Tls. 166,000 to piaohao and other financial firms. On the one hand, Pan planned to
pay off the old debts he owed piaohao once the financial assistance from other provinces
arrived. On the other hand, however, Pan was ready to borrow from piaohao again
immediately after repaying them.
418
In 1880, Zuo Zongtang, the imperial envoy on
Xinjiang affairs, informed his proté gé Shen Yingkui 沈應奎 (courtesy name Jitian 吉田)
that although he had successfully repaid piaohao the previous loans, he immediately took
out another Tls. 250,000 from piaohao to fund the ongoing crackdown against the
Muslim rebels in the northwest.
419
In August 1885, General Bao Chao, who was fighting against France on the Yunnan
border, withheld Tls. 80,000 that the Sichuan provincial treasury just repaid piaohao, and
spent it instead on relocating retired soldiers from Yunnan to Sichuan. Furthermore, he
arranged another loan of Tls. 100,000 from piaohao and other financial firms in order to
inject military funds into his troops.
420
In fact, the leeway in postponing loan repayments to piaohao was exactly why
417
Memorandum of Bao Yuanshen, 25 December 1873, in Zhupi zouzhe, Military vol. 14, reprinted in SPS, 112.
418
Memorandum of Pan Dingxin, 7 May 1877, SPS, 110.
419
Zuo Zongtang, “Da Shen Jitian” 答沈吉田 [In response to Shen Jitian], in Zuo Zongtang Quan Ji, Letters vol. 24.
420
Memorandum of Bao Chao, 28 January 1885, SPS, 111.
192
provincial officials preferred to borrow from them rather than from foreign banks,
although the latter were actually able to lend out greater amount of money. In a letter sent
to his proté gé Hu Guangyong in 1880, Zuo Zongtang listed three advantages of
borrowing from piaohao in comparison with foreign banks. First, piaohao did not (dare
to) stipulate that how many years Zuo needed to repay them in full. Second, there were
also no fixed dues dates for installments on loans taken from piaohao. Third, when
borrowing from foreign banks, Zuo was required to repay both interest and installments
on principal for the first several years, whereas he only needed to pay interest but no
principal to piaohao when borrowing from them. As a result, Zuo concluded that
borrowing from piaohao was more flexible and convenient than from foreign banks.
421
Because of provincial officials’ frequent postponement of loan repayments as well as
the borrower-centered loan policies, piaohao resisted lending money to provincial
governments whenever possible. In April 1878, Liu Kunyi — the governor-general of
Guangdong and Guangxi — stated that the Guangdong Maritime Customs had already
borrowed Tls. 500,000 from local piaohao as drought and famine relief for Shaanxi
province. Before long, the court requested the Customs to send another Tls. 100,000 to
Shanxi. When the overwhelmed Guangdong Customs turned to piaohao for loans again,
none of piaohao was unwilling to lend, because they were also encountering severe
shortages because of the financial constrains in the local market. Liu then spent several
months rhetorically repeating to piaohao the moral goods of lending to relieve Shaanxi’s
disasters. Nevertheless, Liu did not obtain a penny until he promised to pay piaohao
421
Zuo, “Yu Hu Xueyan” 與胡雪 岩 [To Hu Xueyan], Zuo Zongtang Quan Ji, Letters vol. 24.
193
higher loan interest rates.
422
In 1891, Xiyuan, General of Fuzhou, also reported with
frustration that because the Fujian Maritime Customs had already owed staggering Tls.
500,000 to piaohao, the latter refused to lend out money from now on.
423
Notwithstanding compulsory loans and frequent defaults, from the 1860s until the 1900s
some provincial officials did endeavor to repay piaohao in full as well as the promised
loan interest—this was perhaps the only reason that piaohao continued to lend money to
them. In other words, although piaohao were very vulnerable to provincial officials
financial requests, they were not always helpless lenders by nature, because they did
expect to make profits from government loans.
In 1876, Pan Dingxin, the governor of Yunnan, successfully repaid Tls. 177,100 out
of a loan of Tls. 397,100 to Qianshengheng piaohao and other financial firms. Although a
year later Pan borrowed another Tls. 166,000 from them, he did pay piaohao lucrative
interest of Tls. 30,000, which was equivalent to an annual rate of 18% and tripled the
normal interest rates (6% to 8%) charged by HSBC when lending to the Qing dynasty.
424
In April 1887, Bian Baodi 卞寶第, the governor of Hunan, had successfully repaid Tls.
48,000 to Tianchengheng and Xietongqing piaohao which remitted the money in advance
a year ago as military funds to Gansu.
425
In July 1906, Zhang Zhidong, the governor of
Hubei, recorded that Gansu provincial treasury borrowed Tls. 100,000 from local
piaohao to supplement military expenditure on northwest China one year ago. Then
422
Memorandum of Liu Kunyi, 10 September 1878, SPS, 100.
423
Memorandum of Xiyuan, 16 October 1891, SPS, 104.
424
Memorandum of Pan Dingxin, 7 May 1877, SPS, 110; Frank King et al, The History of the Hongkong and Shanghai
Banking Corporation, Vol. 1, 548-549.
425
Memorandum of Bian Baodi, 21 April 1887, in Zhupi zouzhe, Finance vol. 37, reprinted in SPS, 113.
194
following the court’s instruction, Zhang’s Hubei government repaid piaohao in full on
behalf of the Gansu treasury.
426
In February 1890, Liu Bingzhang, the governor-general
of Sichuan, collected salt garbelle of Tls. 22,400 and repaid it to piaohao for a previous
loan of Tls. 30,000. Nevertheless, the remaining Tls. 7,500 that Liu still owed was rolled
over to a new loan of Tls. 50,000 that Liu recently obtained from piaohao.
427
Nevertheless, no matter how hard provincial officials tried to repay piaohao, the
amount of loans that they took out far exceeded the amount they actually repaid. Yet, as
long as the Qing stayed in power, piaohao’s chances for getting paid off still existed.
Unfortunately, the Qing collapsed in 1911, and the new Republican government quickly
wrote off all the outstanding debts that the demised Qing provincial governments owed to
piaohao. Piaohao’s futile attempts during the 1910s to appeal the Republican government
to settle the old debts of the Qing’s Shanxi provincial government illustrated this situation
very well.
On 29 December 1915, the Bureau of Public Debts (gongzhaisi 公債司) of the
Beiyang government recorded that on behalf of the entire piaohao community in the
Pingyao, Qi and Taigu County, Fan Yuanshu, senior manager of Tianchengheng piaohao,
petitioned the Beiyang government for repaying the loans that the Qing’s Shanxi
government previously took out from piaohao. From 1907 to 1908, Shanxi piaohao lent
Tls. 570,000 to Baofen 寶棻, the governor of Shanxi, to help him raise funds for the
Tongpu Railroad (tongpu tielu 同蒲鐵路) connecting north and south Shanxi. In 1908,
426
Memorandum of Zhang Zhidong on repaying loans from the Chartered Bank of India, Australia and China, 21 April
1906, SPS, 115.
427
Memorandum of Liu Bingzhang on raising funds for Navy, 16 February 1890, SPS, 108.
195
Qu Benqiao (the primary investor of Sanjinyuan and Baichuantong piaohao and the
founding chief manager of the Baojin Coal Mining Company) and Liu Dujing 劉篤敬
(the manager of the Shanxi Trade Bureau) successfully persuaded piaohao to lend Tls.
270,000 to the Shanxi Trade Bureau, in order to pay the third installment to Pekin
Syndicate on the redemption of Shanxi’s coal and iron mining rights.
428
According to Tianchengheng’s petition, when obtaining both loans, Shanxi provincial
government guaranteed to repay piaohao both principal and interest with future land tax
income. Nevertheless, until 1915,the Qing Shanxi government’s debt had been running
up to about a million taels but piaohao did receive a penny as loan repayment. As a result,
piaohao appealed to the Beiyang government to urge the Republican Shanxi government
to repay old debts owed by its predecessor from the provincial land income of the recent
four years.
To the dismay of piaohao, the response of the Bureau of Public Debts to their
petition was shockingly cold and indifferent. The Bureau simply said that no extant
documents filed under the archives could verify both loans took out by the Qing Shanxi
government from piaohao during the 1900s. As a result, the Bureau would do nothing to
help piaohao with loan repayment.
429
428
The Shanxi Bureau of Trade (Shanxi shangwu ju) was a government-supervised, merchant-managed institution
established in the late 1890s, which aimed at administrating industrial investments and developments in Shanxi
province. In 1898, the Bureau signed an Agreement with the Pekin Syndicate, Limited (more well-known as Fugongsi
in China)—an Anglo-Italian joint company—for working coal and iron in the five following places, namely Yu County
(yuxian), Pingding, Lu’an, Zezhou and Pingyang (Tim Wright, Coal Mining in China's Economy and Society,
1895-1937, Cambridge: Cambridge University Press, 1984). Yet because of the radical local anti-Pekin Syndicate
movements and the constant campaigns for recovering the coal mining rights, in 1908, the Bureau and the Pekin
Syndicate signed another Agreement which allowed the Shanxi province to redeem the coalmining rights, though
Shanxi had to pay Tls. 2,750,000 for the redemption, see John Van Antwerp MacMurray, Treaties and Agreements with
and Concerning China, 1894-1919, vol.1 New York: Oxford University Press, 1921), 698-699.
429
“Caizhengbu diaocha gesheng caizheng jinrong youguan wenshu” 財政部調查各省財政金融有關文書 [Ministry
of Finance’s investigation into the fiscal affairs of various provinces], in Beiyang zhengfu dang’an, Second Historical
196
Of course, the Bureau of the Public Debts might not intentionally default on loans
from piaohao, because many of the Qing’s original documents got lost during the chaotic
transition from the Qing empire to the New Republic after 1911. But did piaohao ever
lend to the Qing Shanxi government? At least it was evidenced by one memorandum
penned by the Shanxi governor Baofen. On 8 July 1908, Baofen suggested the throne
reward Qu Benqiao for providing generous loans to reclaim the coal mining rights in
Shanxi, which resulted in Qu’s reception of a fourth-ranking honorary official title.
430
Notwithstanding the failure to get repaid, piaohao did not give up easily. In
February 1916, on behalf of the piaohao community, Fan Yuanshu again traveled from
Pingyao to Beijing and petitioned the Beiyang government for clearing the Qing’s old
debts. Upon receiving the instruction from the central government in response to
piaohao’s appeal, the Republican Shanxi government replied as follows:
Previously, piaohao lent money to the Qing Shanxi government generously
because of their enthusiasm for local affairs. This deserves our highest praise. Yet,
whether we are going to clear the Qing’s old debts depends on the status quo of
our provincial treasury, which is depleted and thus unable to settle old debts at
the moment.
431
From that point, piaohao’s request for loan repayment was rejected again and forever,
because of the shifting sands of the Beiyang government from 1916 to 1927, when no
Archives, vol.248, reprinted in SPS, 345.
430
Memorandum of Baofen, 8 July 1908, SPS, 339.
431
“Shanxi huishang Tianchengheng deng hao lichen shou zhanshi yingxiang shangye dianwei gongken jiuji youguan
wenjian” 山西匯商天成亨等號瀝陳受戰事影響商業顛危公懇救濟有關文件 [Tianchengheng’s petition for
government help with war-afflicted Shanxi remittance business], in Beiyang zhengfu dang’an, Second Historical
Archives, vol. 206, reprinted in SPS, 512.
197
rulers would genuinely care about repaying private financial firms such as piaohao
outstanding debts left by a demised dynasty.
Last but not least, piaohao suffered from all sorts of trivial extortions at the local level
while providing remittance for provincial officials. For example, when receiving silver
from the provincial treasury to be remitted, piaohao had to make monetary gift as a token
of appreciation to clerks in charge of disbursing treasury funds. Furthermore, when
finally delivering silver ingots to the Capital Treasury, Treasury clerks would deliberately
undervalue the silver fineness as substandard, unless piaohao bribed them.
In 1889, a letter penned by Hou Zhongzhu 侯中鑄, who once worked for the
Fuzhou and Lanzhou branches of Xietongqing piaohao, elaborated how piaohao were
extorted by petite clerks over the course of remitting provincial taxes: after the General of
Fuzhou requested Xietongqing to send Capital Acquisition to Beijing, piaohao would
then proceed to the treasury of the Fujian Maritime Customs which disbursed such funds.
The remittance fee paid to piaohao for sending every Tls. 1,000 to Beijing was Tls. 53, in
addition to another Tls. 12 as meltage fee (huohao 火耗). Nevertheless, upon getting
paid, piaohao would immediately credit half of the meltage fee (i.e. Tls. 6 for every Tls.
1,000 piaohao remitted) to the bank account of a treasury scribe surnamed Mr. Liang. In
addition, Mr. Liang also extracted Tls. 50 from every Tls. 50,000 he dispensed to
Xietongqing. As a result, Xietongqing was asked to pay the treasury clerks no less than
Tls. 350 as bribery for remitting every Tls. 50,000 from the Fujian Customs.
432
432
Hou Zhongzhu’s family letter, 19 July 1889, copy of the original letter obtained from Hou Qinggou 侯清枸 of the
198
Hou disclosed further that when transferring salt taxes from Fujian to Beijing, for
every Tls. 1000 remitted, piaohao must contribute Tls. 14.2 to clerks of the Imperial
Treasury who were in charge of inspecting and collecting silver ingots turned in by
piaohao. Second, it also had to give Tls. 4 as the expenditure on stationary (zhibifei 紙筆
費) back to the provincial Salt Administration in gratitude for giving piaohao the
remittance opportunity. In the end, the actual fee that piaohao earned for remitting every
Tls. 1,000 was Tls. 34.8, 35% less than the original amount of Tls. 53.
433
3, Confidence in outstripping modern banks
When the Imperial Bank of China opened door in 1898, the founder of the Bank —
Sheng Xuanhuai — had the intention of recruiting outstanding accountants from piaohao
and working with piaohao to co-found some of the Bank’s local agencies. In a letter sent
to his friend Feng Bianzhai 馮砭齋 on 4 April, Sheng planned ambitiously:
I have set my mind on recruiting piaohao experts from the Taigu County
and Fenyang 汾陽 prefecture.
434
Even if I could not find anyone to
work in my Bank at the moment, I still plan to invite piaohao to
co-establish some of our Bank’s branches and agencies in Hubei, Hunan,
Sichuan, Shaanxi and Shanxi. This is because I sincerely hope that the
daily financial operation of our local branches could be modeled on that
of piaohao…Nevertheless, right now I am unable to make contact with
History and Gazetteer office of the Jiexiu County by Huang Jianhui in 4 April 1998, SPS, 1265.
433
Ibid.
434
Pingyao and Jiexiu counties where piaohao originated all belonged to the Fenyang prefecture.
199
any piaohao, and I am wondering whether you could help me with
making contact with piaohao because you foster good relations with
them in Beijing.
435
Unfortunately, no extant records indicated that Sheng Xuanhuai ever succeeded in getting
in touch with piaohao, nor did any piaohao cooperate with the Imperial Bank of China on
setting up local branches.
Furthermore, when the Board of Revenue prepared to establish the Bank of the
Board of Revenue in 1904, the Provisional Preparatory Committee also invited piaohao
to subscribe to shares of the Bank. According a report of Dagongbao on 19 April 1904,
during a meeting convened by the Committee, representatives of piaohao’s Beijing
branches unanimously refused to purchase any shares from the Bank because they could
not assume such heavy responsibility imposed by the court.
436
Now the question is: as financial firms that had always been working at the
cutting-edge of financial markets in late imperial China, why did piaohao not only
hesitate to contribute to but also reject the Qing’s modern financial reforms after 1895? In
fact, at the turn of the twentieth century, piaohao were still so confident that they could
coexist with modern Chinese banks, because they had been engaging in banking business
for over a century and had successfully established an empire-wide financial network
linking coastal areas with the interior. In contrast, modern Chinese banks just made their
debut in and the financial services they could provide were still far from comprehensive.
435
Beijing daxue lishixi 北京大學 歷史系 ed., Sheng Xuanhuai weikan xingao 盛宣懷未刊信稿 [Unpublished letters
of Sheng Xuanhuai] (Beijing: Zhonghua shuju, 1960), 73.
436
“Jiang Xingfu yushi zoucan moudi yuanzhe” 蔣性甫禦史奏參 某邸原折 [The original copy of the memorandum
by the imperial censor Jiang Xingfu], in Dagongbao, 24 April 1904, reprinted in SPS, 380.
200
Furthermore, although foreign banks arrived in China as early as in the 1840s, their
financial business was pretty much confined to treaty ports in the coastal areas and their
banking networks were rather limited especially in the interior. As a result, without
modern hindsight such as scholars of the late twentieth century who wrongly blamed
piaohao for not being able to transform into modern banks, how could the owners and
managers of piaohao in the early 1900s foresee that the Chinese central state would soon
prioritize the development of modern banks without giving native financial firms a
second chance?
Actually, many senior managers of piaohao firmly believed that piaohao were
superior to modern banks. When the Ministry of Finance compelled all piaohao to
register with it in 1908, Li Hongling, manager of Weifenghou, contended that such policy
on piaohao was simply unnecessary, because piaohao had maintained an incomparable
creditworthiness and should not be treated as financial neophytes such as modern Chinese
banks which had yet built any sound reputations.
437
Indeed, at the turn of the twentieth century, many modern Chinese banks relied
heavily on emulating the businesses of piaohao in order to advertise themselves in the
financial market. For example, as discussed earlier, Sheng Xuanhuai was eager to work
with piaohao to building local branches for the Imperial Bank of China. In addition, a
modern private bank named Xinmao 信茂 which newly opened in Shanghai, Beijing
and Tianjin, advertised in Dagongbao on 28 November 1904 as follows, “Our Bank
provides same banking services as Shanxi piaohao do (yiqie wanglai juyu piaohao
437
Li, Tongzhou zhonggao, 164.
201
xiangtong 一切往來俱與票號相同).”
438
In 1905 when Yuan Shikai started to set up a
vocational school for modern banks in Tianjin, the school’s most sought-after candidates
were former employees of piaohao, because “everything about Shanxi piaohao is similar
to modern banks”.
439
In conclusion, after 1895, the Qing government started to reclaim the long-lost financial
sovereignty from private banking firms, prioritized the development of modern banks,
and also adopted a modern interventionist financial approach to piaohao. Although
piaohao were given the chance to engage in the state’s brave new modern financial
reforms, they opted out of it because of their contingent and contentious business
relations with the court as well as provincial governments. In addition, they were also
quite optimistic about their future as native Chinese banking firms. Nevertheless, piaohao
did make the “wrong” decision in modern hindsight, and their remittance business
gradually shrank in size and scope after 1895 accordingly. Yet, the history of piaohao did
not end here especially when examining their post-1895 business and non-business
histories from a family-centered perspective, which is the main content of the next
chapter.
438
“Xinmao yinhang jinbai ”信 茂銀行謹白 [Public announcement by the Bank of Xinmao], in Dagongbao, 28
November 1904, reprinted in SPS, 381.
439
“Zhidu chiyu huishang baosong xuetu” 直督飭諭匯商保送學徒 [The Zhili governor’s appeal to remittance
merchants for recommending banking employees], in Dagongbao, 30 June 1905, reprinted in SPS, 379.
202
Chapter 5: Fortunes of the firms or families: reappraisal of
piaohao’s decline, 1895-1930s
Drawing on family genealogy and Qing’s local gazetteers, this chapter posits that
although piaohao’s remittance business shrank in size and scope after 1895, they and
their families did not decline if “decline” only means “failure to transform into
western-style banks”. The arbitrary connection between piaohao and modern banks
forecloses piaohao’s diversifying futures except a conservative image of inland native
banking firms. In fact, when the Qing court imposed tighter restrictions on piaohao after
adopting a modern interventionist financial approach in1895, many piaohao merchants
immediately opted out of remittance business and invested in modern industries, such as
filature, lithography printing house, and coal mining company.
Furthermore, the businessmen of piaohao should not be merely viewed as rational
economic men who pursued profit maximization endlessly. In contrast, academic and
social achievements, including studying for imperial examinations, supporting local
disaster relief, and pursuing modern degrees in Japan, were more attractive to wealthy
piaohao merchants and their descendants rather than merely reforming piaohao into
modern banks. By rescuing the diversifying histories of piaohao from the hegemonic
financial modernist historicism, it is plausible that the striking contrast between backward
inland provinces such as Shanxi and modern coastal areas such as Shanghai after the
1840s is not appropriate.
203
Li Hongling: two books and three myths of piaohao’s decline
In 1917, six years after the Qing collapsed, Li Hongling (1847-1918), a senior employee
of Weitaihou piaohao, who had for over fifty years managed branches in Beijing,
Shanghai and Wuhan, edited and published two books at his own expense. They were
Tongzhou zhonggao (Admonitions to fellow piaohao businessmen) and Shanxi piaoshang
chengbaiji (The success and failure of Shanxi piaohao merchants).
440
These books consisted of Li’s autobiography as a senior manager and business
letters sent to Weitaihou’s head office in the Pingyao County from the 1890s to 1912.
441
Drawing on these selective texts, Li offered an interpretation of piaohao’s decline as the
following: after the 1850s, modern foreign banks seized half of piaohao’s remittance
business opportunities, and piaohao thus appeared the first sign of potential decline. In
1905, the new central bank of the Qing dynasty, the Bank of the Board of Revenue, began
to handle remittances, backed by fiscal revenues of the entire empire. After these
developments, in 1906, Li complained in a letter sent to the Pingyao head office:
“Modern banks operated by either westerners or Chinese are outstripping our piaohao
everyday. If owners and managers still do not work together to redress this predicament,
our remittance business will worsen.”
442
Finally in 1908, Li decided to prevent the
collapse of piaohao by proposing that the current twenty-odd Shanxi piaohao merge into
440
Li, Tongzhou zhonggao and Shanxi piaoshang chengbaiji.
441
Many historians argued that one distinct characteristic of piaohao’s management is the separation between owners
and managers. In other words, piaohao owners relied on professional managers to run daily business. Nevertheless,
existing sources indicate that this is not always true. In some cases, the owners of piaohao directly participated in daily
operations, so there was no clear distinction between the owners and chief managers in piaohao’s head offices. For
example, Qiao Zhiyong 喬致庸, who established Dadetong piaohao in 1884, was both the owner and chief manager of
that piaohao (Huang Jianhui, “Qixian qiaojiapu Qiaojia” 祁縣喬 家堡喬家 [The Qiao family from Qiaojiapu of the Qi
County], SPS, 780).
442
Li, Tongzhou zhonggao, 136.
204
a limited liability western-style modern bank—the Shanxi Remittance Bank (jinsheng
huiye yinhang 晉省匯業 銀行). In Tongzhou zhonggao, Li preserved all of his letters
written in 1908 under the title called “Letters regarding the preparation of the [modern]
Bank (chouban yinhang xinjian 籌辦銀行信件)”, which documented his endeavor to
persuade the owners and investors in the Pingyao County to accept his reform proposal.
Nevertheless, Mao Honghan 毛鴻瀚, the big boss of Weitaihou’s Pingyao head
office, was unmoved by Li’s logic and vehemently rejected the reform. According to Li
Hongling, Mao maliciously commented that piaohao would not benefit from Li’s
proposal except Li himself.
443
A few years later, the remittance business of most
piaohao shrank in size and scope; many even went bankrupt. As a result, Li ascribed the
decline of piaohao to the conservative and shortsighted piaohao owners and investors
who refused to keep pace with the financial modernity of the outside world. When editing
his books in 1917, Li thus intentionally selected some of his old letters to illustrate how
inward looking the big bosses of the head offices were. For example, in a letter penned in
November 1907, Li suggested the owners travel to big cities such as Beijing, Tianjin,
Shanghai and Hankou, which would have immersed them in the modern socio-economic
environment beyond the Pingyao County and Shanxi province.
444
Because Li’s books were the only account left by an immediate participant, his
narrative of piaohao’s decline soon became the standard interpretation of piaohao’s
“failure” after the books’ release in 1917, which mythologized the “decline” of piaohao
from three aspects.
443
Li, Tongzhou zhonggao, 157, 178.
444
Ibid., 131-133.
205
The first myth is that all of piaohao’s owners and chief managers residing in Shanxi
were irrevocably conservative. In contrast, piaohao’s branch managers such as Li himself,
who worked in large treaty ports such as Tianjin, Shanghai and Hankou, were strikingly
open-minded and could have prevented the tragic decline of piaohao if the owners had
listened to their suggestions. The second myth is that the owners of piaohao must always
make decisions as rational economic men who maximized profits endlessly through
innovations. The third myth is that the decreasing remittance orders from the Qing
government and the subsequent contraction of piaohao’s financial business at the turn of
the twentieth-century were immediately translated into their ultimate decline. Li
Hongling thus arbitrarily linked piaohao’s future to the transformation into modern
banks.
In fact, Li Hongling did nothing wrong by blaming the conservative owners or
connecting piaohao’s future with modern banks, because this was what he believed as the
reason for piaohao’s “decline” when looking back in 1917. Nevertheless, scholars after
Li who studied piaohao really should take his personal narrative with a grain of salt.
From Li’s letters we only know that the big boss Mao Honghan mistrusted him personally
and thus opposed the reform. Yet, no other sources from Mao’s side were left to reveal
why he had done so. It might be true that Mao was as biased and conservative as Li
described, but generalizing this personal tension as the overall tension between
conservative owners and open-minded branch managers and ascribing it to the decline of
piaohao are wrong.
Scholars also ignored that Li Hongling told his story in 1917 with the
206
twentieth-century modern hindsight. Looking back at Li’s letters in 1908, he was not yet
convinced that piaohao must develop into western-style modern banks. Instead, he firmly
believed that these two types of banking institutions could coexist, and therefore penned
in a letter that “as far as I know, piaozhuang 票莊 (i.e. piaohao) were very different from
modern banks…Piaohao have been holding onto solid creditworthiness since the 1850s
regardless of how many financial troubles they encountered…As a result, Duzhibu
should not force us (piaohao) to register with it as what it requires modern banks to do”.
445
Debunking Li Hongling’s three modern myths, this chapter contends that first of all,
the owners of piaohao and their family members had been keeping pace with the
changing modernizing world and were surprisingly forward-looking, although they did
not reform piaohao into western-style modern banks. When the Qing court started to
reclaim financial sovereignty from private financial institutions after 1895, many piaohao
owners soon opted out of the remittance market and successfully invested in other
profitable modern industries, such as silk filature, lithography printing house, and coal
mining company.
Second, the owners of piaohao and their descendants should not be viewed as
rational entrepreneurs pursuing endless business profits and technological breakthroughs.
In fact, after accumulating wealth to a certain level, many family members of piaohao
diverted their attention to studying for imperial examination degrees, earning social
reputations as local gentry, or simply traveling across the empire to enjoy the beauty of
445
Li, Tongzhou zhonggao, 164.
207
life.
Third, piaohao persistently exerted influences on the Chinese financial market after
1895, when the Qing court began to prioritize modern western-style banks. From that
point until the eve of the Second Sino-Japanese War in the 1930s, many piaohao retained
their original firm names and continued to engage in banking activities in northern China
including Beijing and Shanxi, though now operating under the category of cash
shops—financial firms with smaller scales. Furthermore, not only did former piaohao
employees become sought-after financial experts of modern Chinese banks after 1900s,
many family members of piaohao held modern degrees in finance and accounting and
worked accordingly.
Conservative or adventurous piaohao owners?
As mentioned earlier, Li Hongling’s analysis that the “decline” of piaohao was because
of the conservative owners was wrong. At least the histories of two piaohao families
demonstrated that not only did the owners fully grasp the socio-political and economic
changes from the 1720s to the 1900s, they also swiftly adapted to them. One family was
the Changs that owned Dadeyu and Dadechuan piaohao, and the other was the Qus that
owned Sanjinyuan, Baichuantong, Changshengchuan and Cunyigong piaohao.
1, The Changs: from frontier trade to modern silk filature and printing house
In 1920, Chang Zanchun started compiling the Genealogy of the Chang family (Changshi
jiasheng 常氏家乘), and in 1924 he published this 500-page book in the family’s own
208
Fanhua Lithography Printing House (Fanhua zhiban yinshua chang 範華 製版印刷廠).
According to the Genealogy, the first generation of the Changs—Chang Zhonglin 常仲林,
a destitute bachelor, migrated from Taigu to Yuci County during the mid-Ming dynasty
(1368-1644).
446
Earlier generations are shrouded in lack of detail and mystery, because
the Genealogy only provided biographies, epitaphs and eulogies after the eighth
generations, but this does not matter here. For the purpose of debunking the myth of
conservative piaohao owners, I focus on the clan headed by Chang Wanda (1718-1796),
spanning from the ninth to the fourteenth generations.
Table 6 The clan of Chang Wanda
Generation
Name, date of birth/death, and occupations/major achievements
9
th
Chang Wanda
常萬達 (1718-1796)
Merchant
10
th
Chang Huaipei
常懷珮 (1760-1822)
Merchant
Chang Huaijie
常懷玠 (1750-1819)
Merchant
11
th
Chang Bingcong
常秉聰
(1797-1857)
Merchant, sojourned in
Zhangjiakou
Chang
Bingzhou 常秉
州
(1778-1836)
Merchant
Chang
Bingshi
常秉式
(1795-1844)
Occupation
unknown
Chang Bingjun
常秉郡
(1777-1844)
Merchant
12
th
Chang Yi
常懌 (1822-1886)
Merchant, sojourned in
Zhangjiakou
Chang Ling
常齡
(1798-1877)
Apothecary
Chang Xing
常惺
(1835-1895)
Merchant
Chang Dun
常惇
(1806-1874)
Occupation
unknown
13
th
Chang Liping
常立屏(1844-1905 )
Student of the County
School
Chang Lixun
常立訓
(1846-1918)
The Founder of
Chang Liying
常立瀛
(1873-1923)
Founder of
Chang Liren
常立仁
(1844-1897)
Merchant,
446
Chang Zanchun ed., Jiasheng shengyu 家乘剩餘, in Changshi jiasheng(The Genealogy of the Chang Family) 常
氏家乘 (Taiyuan: Fanhua zhiban yinshua chang, 1924), 1-5.
209
Dadeyu
piaohao,
sojourned in
Zhangjiakou
and Huhhot
Dunyihe
Filature
sojourned in
Yingkou,
Changtu
(northern
Liaoning),
Zhangjiakou,
Tianjin, Beijing,
Wuhan, and
Huhhot.
14
th
Chang Linshu
常麟書(1869-1927)
The only jinshi degree
holder (1903) of the
Chang family
Chang
Wangchun 常望
春
(1866-1883)
Member of the
poetry society
of the Chang
family,
promoter of the
Dunyihe
Filature
Chang
Yanchun
常彥春
(1899-n/a ）
Graduated
from Peking
Normal
University,
majored in
Natural
Science
1, Chang
Zanchun 常 贊春
(1872-1941)
Juren degree
holder; gradated
from Peking
University;
professor of
literature at
Shanxi
University.
2, Chang Xuchun
常旭春
(1873-1949)
Juren degree
holder; the fourth
general manger
of Baojin
(protecting
Shanxi) Coal
Mining
Company
From the 1720s to the 1940s, Chang Wanda and his descendants had always been
ahead of their times and thus maintained the family prosperity for generations. With sharp
business acumen and adventurous spirit, they continued to search for new commercial
opportunities, regardless of unpredictable hardships. In 1727, the Qing and the Russian
empire signed the Treaty of Kiakhta that appointed Kiakhta as the border town for
duty-free Qing-Russian barter trade at the northern frontier of the Mongolian steppes.
447
Soon after, Chang Wanda followed his father Chang Wei and traveled more than a
447
Joseph Fletcher, “Chapter 7: Sino-Russian Relations, 1800-62”, in The Cambridge History of China: Late Ch'ing,
1800-1911, Part I, ed. John K. Fairbank et al. (Cambridge: Cambridge University Press, 1978), 318.
210
thousand miles from the Yuci County—their hometown—to Zhangjiakou (Kalgan),
Guihua (Huhhot) and Kulun 庫倫 (Ulaanbaatar) that were all burgeoning inland transit
towns connecting Kiakhta with the China proper.
448
They engaged in fur, cloth and tea
trade and soon made a fortune. From the 1730s to the 1740s, the father and son
established several chain trading firms named Dadeyu, Dadechuan and Dadechang in
these inland towns.
449
After Chang Wanda passed away, his sons, grandsons and great
grandsons continued to sojourn in Zhangjiakou, Guihua and Kulun, and the family’s
long-distance trade thus thrived for another hundred years. In the 1780s, the Changs
started to glorify their business achievements by building fifty-odd magnificent mansions
that consisted of over 5,000 rooms and took up more than 600,000 square meters (about
148 acres) in the Yuci County.
450
Figure 13 Refurbished Mansion Gate of the Chang family in present-day Yuci County,
Shanxi (photo by author, July 2010)
448
See “Ode to Chang Wanda’s 80th Birthday” (YWC I: 3-4); “Eulogy of Chang Wanda” (YWC II: 40-41).
449
“Epitaph of Chang Wanda” (YWC II: 2).
450
Xie and Liu, Changjia zhuangyuan, 2, 5.
When I visited the Changs’ Mansions in 2010, at least one third of the mansions are preserved, including a large
man-made lake. This is very impressive, when considering numerous destructions that the mansions might have
encountered after 1911. See the Mansions’ official tourist website http://www.cnchang.com/, accessed on 26 November
2011. Of course, the clan of Chang Wanda only own part of these mansions. Chang Wanda’s siblings also engaged in
inter-regional trade and spent money in building the rest of the mansions.
211
Although becoming the most affluent family in Yuci, some descendants of the
Changs refrained from indulgence and maintained the momentum of family prosperity.
Chang Liren (1844-1897), four generations after Chang Wanda, sojourned in Yingkou,
Changtu 昌圖 (northern Liaoning), Zhangjiakou, Tianjin, Beijing, Wuhan, and Huhhot
to supervise the family’s inter-regional trade between China and Russia.
451
When opening piaohao became the most lucrative business for big Shanxi merchants
owing to huge profits earned from providing remittance for the Qing government, the
thirteenth generation Chang Lixun (1846-1918) established Dadeyu piaohao
headquartered in the Taigu County (twenty-five miles away from their hometown--Yuci)
no later than 1879. The family’s century-old cloth and tea firm bearing the same name
injected the startup capital into the newly-established Dadeyu piaohao.
452
451
“Biography of Chang Liren’s wife, née Fan” (XSL: 25); “Epitaph of chang liren” (YWC II: 16).
452
The Epitaph of Chang Lixun did not mention the exact founding date of Dadeyu piaohao because the Genealogy
of the Chang Family usually emphasized the family members’ Confucian virtues more than their business achievements.
As a result, scholars only speculated about the founding date according to the remaining business letters. Wei Juxian
believed the date should be around the Tongzhi reign, whereas Huang Jianhui argued that it was in 1885. In fact,
Dadeyu piaohao conducted remittances no later than 1879 because one letter of Yuanfengjiu piaohao mentioned
Dadeyu in that year. So probably Wei was correct; see Wei, Shanxi piaohao shi, 17; Huang, “Table 1-2-7: Gebang de
shili”, 660-661.
212
Nowadays it is hard to estimate how prosperous Dadeyu’s remittance business was,
but according to business letters left by a fellow piaohao called Rishengchang, Dadeyu
was able to handle substantial amounts of remittances within a short period of time—an
indicator of large-scale and prosperous piaohao. For example, during one winter quarter
(three months) in the early 1890s, Dadeyu fulfilled remittance orders of over Tls.
40,000.
453
Before long, the Changs also opened Dadechuan piaohao with the financial
support of the same-name trading firm.
454
Dadeyu and Dadechuan piaohao closed down in 1912 and 1913 respectively. If one
follows Li Hongling’s logic, then it will be easy to assert that these closedowns indicated
the decline of piaohao and the Changs. Yet, the Genealogy of the Chang Family told
stories differently. In 1895, the Qing dynasty and the Meiji Japan signed the Treaty of
Shimonoseki that legalized foreign industry in treaty ports. From that point,
Chinese-owned manufacturing enterprises also mushroomed.
455
One year later, the
Chang family jumped on the bandwagon of modern industries. In 1896, Chang Liying
(1873-1923), a cousin of Dadeyu piaohao’s founder Chang Lixun, established the
Dunyihe Filature (Dunyihe cansang ju 敦義和蠶 桑局) in the Yuci County.
456
Liying
then traveled to Beijing and Tianjin with his nephew Wangchun, son of Lixun, recruited
silk-reeling professionals and purchased machinery.
457
Initially Liying tested the Filature only in the his neighborhood: he bought raw silk
453
Letter of Rishenchang’s Beijing branch to Pingyao office, c. 1890, SPS, 907.
454
Wei, Shanxi piaohao shi, 17.
455
Albert Feuerwerker, “Economic Trends in the late Ch’ing Empire, 1870-1911”, in The Cambridge History of China
Vol.11, Part 2. Late Ch'ing 1800-1911, ed. Denis Twitchett et al. (Cambridge: Cambridge University Press, 1980),
29,33.
456
“Biography of Chang Liying”, Changshi xingshi lue, 14.
457
“Epitaph of Jichun”, Changshi yiwencun Part II, 34.
213
from the local market, hired dozens of workers including family members who were not
good at studying the Confucian classics, and successfully wove the first batch of silk
fabric. Liying then decided to officially open the Filature for profits. In order to secure
sufficient cocoons at a lower cost, he planted hundreds of mulberry trees near the factory,
established a fixed-temperature cocoon house fully equipped with barometers, and raised
hundreds of thousands of silkworms. Building an on-site cocoon house was the biggest
commitment that Liying made to this modern industry, because it required a huge amount
of working capital, and not many Chinese filatures could afford this even as late as the
1930s.
458
Chang Liying’s hard work eventually paid off. The silk fabric made by Dunyihe
soon became the sought-after textile in the adjacent counties, including Pingyao, Fenyang,
Qi, and Taigu. In 1908, when other family members of the Changs set up the Dunmu
Cotton Mill (Dunmu zhibu ju 敦睦織佈局), Liying, now as the experienced industrial
entrepreneur, supervised the affiliated night-school that trained over a hundred skilled
workers for the Mill.
459
Although Dunyihe Filature stopped operation in 1921 owing to
insufficient working capital, Chang Liying’s foray into modern industry rebutted Li
Hongling’s allegation that piaohao owners and their descendants refused to adapt to any
changes of the outside modernizing world.
The Chang family’s creativity and innovation continued. In 1921, Chang Zanchun
and his younger brother Xuchun established the Fanhua Lithography Printing House in
458
Tomoko Shiroyama, China During the Great Depression: Market, State, and the World Economy, 1929-1937
(Cambridge, Mass: Harvard University Asia Center, 2008), 56.
459
“Biography of Chang Liying”, Changshi xingshilue, 14-15.
214
Taiyuan, the capital of Shanxi province and invested 25,000 yuan in it. Zanchun’s son
Chang Fengzhu, majoring in engineering at Shanxi’s Preparatory School for Japanese
Polytechnic, provided the House with substantial technical support.
460
In 1924, the
Printing House published the 500-page Genealogy of the Chang Family for the family.
Not only did the House cater to the family’s private demand for publication, it also
published a wide-selection of works for profits, including professional books, study
guides and leisure readings. In 1930, Fanhua accepted an order from the Bureau of
Agriculture and Mining of the Shanxi province, and printed the Introduction to Mineral
Prospecting (yankuangxue dayi 驗礦學大意).
461
In addition, the Printing House
published The Guide for Students Preparing For the Entrance Exam of Junior High
School—Advanced Mathematics (toukao chuzhong xuesheng de daoshi—suanshu jinjie
投考初中學生的導師-- 算術進階) in 1931, and the Guide to Shanxi Shrine (Jinci zhinan
晉祠指南) in 1935.
462
In 1956, Fanhua Printing House stopped operation because of the
Collectivization Movement in the Maoist China.
460
Changshi zongpu 常氏宗譜, 14; Shixitu shisan zhi shiqi shi, in Chang Zanchun ed., Changshi jiasheng,
277.
461
Book information from http://www.worldcat.org/oclc/122988846 and
http://zy.lib.sx.cn/Refbook/book.aspx?bi=m.20110412-m300-w001- 008&cult=CN, accessed on 19 November 2011.
462
Book information from http://www.worldcat.org/oclc/45158507, accessed on 19 November 2011.
215
Figure 14 Biography of Chang Liying in The Genealogy of the Chang Family
2, The Qus: from frontier trade to the Baojin Coal Mining Company
In addition to the Changs, the Qu family who owned and operated Sanjinyuan,
Baichuantong, Changshengchuan and Cunyigong piaohao also demonstrated
extraordinary talents for grasping opportunities and making profits, from the 1700s to the
1900s.
Similar to the Changs’ path to prosperity, the founding patriarch of the Qus migrated
to the Qi County as a desperately poor peasant in the early Ming dynasty. After the 1750s,
generation after generation of the Qus sojourned in Baotou (another inland transit town
between the China proper and Kiakhta) and conducted tea and grocery business there. In
the 1860s, Qu Yuanzhen established the Sanjinyuan piaohao, and invested in
Baichuantong, Changshengchuan and Cunyigong simultaneously. After Yuanzhen died,
his son Qu Benqiao took over the management of these piaohao. Around 1918, the last
216
existing piaohao of the Qus—Baichuantong—stopped operation. Yet, the family
prosperity did not end here.
463
In 1898, the Shanxi Bureau of Trade (Shanxi shangwu ju 山西商務 局) signed the
Agreement with the Pekin Syndicate, Limited (more well-known as Fugongsi 福公司 in
China)—an Anglo-Italian joint company—for working coal and iron in the five following
places, namely Yu (yuxian 盂縣), Pingding 平定, Lu’an 潞安, Zezhou 澤州 and
Pingyang 平陽 counties.
464
Yet, the Syndicate was forced to delay its initial plans for
the exploitation of its concessions because of the Boxer Uprising in 1900 and the
subsequent floods in the mines. Furthermore, the Agreement contained a clause making
actual mining activities subject to a permit for each site, which was to be issued by the
Shanxi Governor provided local conditions remained suitable.
465
In 1905, the Syndicate planned to open a coal mine in Pingding, but found out that
local people had already mined the minerals there. Afraid of further escalation of the
conflict between foreigners and local residents, the Shanxi governor Zhang Renjun
suspended the issuing of the mining permit for the Syndicate, resorting to the right given
by the additional clause of the Agreement. Nevertheless, the Pekin Syndicate, supported
by the British Minister Sir. John Jordan, continued to push Zhang. This made Shanxi
gentry—primarily merchants and scholars—furious. They soon motived fellow Shanxi
people and convened public gatherings aiming at reclaiming the coal mining rights from
463
Huang, “Qixian chengnei Qujia”, in SPS, 779.
464
Percy Horace Kent, Railway Enterprise in China: An Account of Its Origin and Development (Edward Arnold,
1907), 235; Tim Wright, Coal Mining in China's Economy and Society, 1895-1937 (Cambridge: Cambridge University
Press, 1984).
465
Frank King, “Joint Venture in China; the experience of the Peking Syndicate, 1897-1961”, In Business and
Economic History, Second Series, V olume 19 (1990), 113.
217
the Syndicate.
466
By then, Qu Benqiao, the wealthy owner of two Shanxi piaohao, was the leader of
the Shanxi gentry community. While the provincial government was still negotiating with
the Syndicate to redeem the coal mining rights, Benqiao and his fellow businessmen had
already planned to establish a company to take over the mines once the negotiation
concluded. In the spring of 1907, the Baojin (protecting Shanxi) Coal Mining Company
(baojin kuangwu gongsi 保晉礦務公司) with limited-liability was founded,
and Qu
Benqiao became the first chief manager.
467
Yet, Baojin Company soon encountered the problem of raising the stipulated paid-in
capital of five million yuan. Qu Benqiao then successfully tackled it by persuading
twenty-odd piaohao, including Weitaihou (where Li Hongling worked), Rishengchang,
Dadetong, and Dadeheng, to purchase shares of Tls. 52,000 (approximately 72,000 yuan)
from the Company.
468
Quite interestingly, the family histories of the Changs and Qus
also intertwined at this point. In 1908, the Changs collectively subscribed to 11,700 yuan
of the Company’s shares. In 1923, Chang Xuchun became the fourth chief manager of the
Company, and held that position until 1937 when the it was closed by the Japanese.
469
466
King: “Joint Venture in China”, 114; Liu Cunshan 劉存善, “Cong zhengkuang yundong dao baojin kuangwu gongsi”
從征礦運動到保晉礦務公司, in Wenshi yuekan 文史月刊, July 2007, 32-43.
467
The complete name of the Baojin Company is the Commercial Coal Mining Corporation of Shanxi Province
(Shanxi shangban quansheng kuangwu zong gongsi 山西商辦全省礦務總公司). Initially Baojin Company planned to
raise paid-in capital of five million yuan, but it only received 1.9 million yuan in the end (Liu, “Cong zhengkuang
yundong dao baojin kuangwu gongsi”, 41).
468
The Company stipulated the exchange ratio as 1 yuan=0.72 Tael (Liu, “Cong zhengkuang yundong dao baojin
kuangwu gongsi”, 41).
The complete list of piaohao which subscribed the shares included: Weitaihou, Baichuantong, Tianchengheng,
Rishengchang, Weichanghou, Xintaihou, Baofenglong, Dadetong, Dadeheng, Sanjinyuan, Cunyigong, Dashengchuan,
Heshengyuan, Shiyixin, and Zhongxinghe. The rest of unnamed piaohao in Pingyao collectively subscribed shares of
Tls. 6,000. See the Archive of Yanquan Steel Company, “Baojin gongsi touzi sanbaigu yishang huamingce” 保晉公
司投資三百股以上花名冊 [Honorary list of shareholders who subscribed more than 300 shares] , in SPS, 338.
469
Hou Dewang 侯德旺 and Wang Sixian 王思賢, Shanxi baojin kuangwu zonggongsi he datong diqu meikuang qiye
218
Now go back to the story of redeeming the coal mining rights. On 21 January 1908,
the Shanxi Bureau of Trade, on behalf of the Shanxi government, finally concluded the
Agreement for the Redemption of the Syndicate’ s Mining Rights in the Province of Shansi
with the Pekin Syndicate. The Agreement stipulated that the Syndicate now allowed
Shanxi province to redeem the rights for mining, working of iron and transporting of
minerals. Nevertheless, the Shanxi Bureau of Trade undertook to pay 2,750,000 taels of
silver to the Syndicate for the redemption, and half of the amount (Tls. 1,375,000) had to
be paid in cash on 21 February 1908.
470
But where on earth could the Bureau of Trade serendipitously find Tls. 1,375,000
within a month? Again, Qu Benqiao lent it a helping hand with a loan of Tls. 1,100,000
borrowed from the paid-in capital of his own Baojin Company. For the rest of the money,
Benqiao turned to piaohao owners again. Owing to his good reputation among the
piaohao community, most piaohao soon lent out money to the Bureau.
471
Before long,
the provincial Governor Baofen helped Benqiao obtain a fourth-ranking honorary official
title from the Throne, as the reward for his substantial help throughout the process of
reclaiming the coal mining rights.
472
So far, the stories of Qu Benqiao and his fellow piaohao owners had completely
contradicted Li Hongling’s myth of conservatism from two aspects. First, Qu Benqiao
fully grasped the principles and practices of modern limited-liability company by
山西保晉礦務總公司和大同地區煤礦企業, in Shanxi wenshi ziliao, vol. 4, Shan xi wen shi zi liao bian ji wei yuan
hui ed. (Taiyuan: Shan xi ren min chu ban she, 1962), 148.
470
John Van Antwerp MacMurray, Treaties and Agreements with and Concerning China, 1894-1919, vol.1 (New York:
Oxford University Press, 1921), 698-699.
471
Liu, “Cong zhengkuan yundong dao baojin kuangwu gongsi”, 41.
Unfortunately, the Shanxi government never repaid piaohao the loans. See my other chapters on the uneasy
negotiations between piaohao and government for more details.
472
Huang, Shanxi piaohao shiliao, 339.
219
establishing the Baojin Company. Second, most of the big bosses of piaohao were ready
to invest in modern industries in the 1900s, regardless whether they truly understood the
underlying reasons for doing so. Nevertheless, this mere fact had already portrayed an
open-minded image of piaohao owners who strived to keep pace with their times.
Before concluding this section, I must enter one caveat. Ironically, even Li
Hongling’s own narratives reinforced the image of forward-looking piaohao owners.
When Li was planning to reform piaohao into modern banks, it was Qu Benqiao from
whom he sought help. In Shanxi piaoshang chengbai ji, Li recalled with joy that in the
spring of 1908, “I am working for (Weitaihou’s) Beijing branch, where I met Gentleman
Qu Chunan 渠楚南 (courtesy name of Qu Benqiao) and discussed my reform plan with
him……In the winter, Gentleman Chu got back to the Pingyao County and explained my
proposal to several owners.”
473
Although it is now hard to know how much effort Qu had
put into Li’s modern reform, Li’s own narratives were already sufficient to confirm that
piaohao owners were far from diehard conservatives.
Simply put, from frontier trade of the Changs and the Qus during the 1720s, to their
financial interest in piaohao in the 1860s, and to their investment in modern industries
after 1895, piaohao owners competently kept pace with the changing political and
socio-economic environment, and adeptly seized new business opportunities. Even Li
Hongling’s own records revealed an innovative image of piaohao owners. More
important, piaohao’s success in modern industries revealed their diversifying business
473
Li, Shanxi piaoshang chengbaiji, 178.
220
paths to modernization rather than transforming piaohao into modern banks. We should
now understand that not embarking on the path to modern banks should not be translated
into the conservatism of piaohao owners.
Seeking after the sublime “wealth”: the other histories of piaohao owners
Whoever believed in Li Hongling’s myth also ignored that in addition to maximizing
business profits, wealthy merchant families in late imperial China pursued many other
non-commercial achievements that were also part and parcel of their daily life, such as
promoting family education especially the girls’, studying for imperial examination
degrees, pursuing modern degrees in Japan, doing charity, donating honorary official
titles, composing poems, and even just touring around to enjoy the beautiful landscape of
the empire.
In the field of peasant studies, scholars had been criticizing the analysis of
“peasant-as-capitalist-entrepreneur” since the late 1960s. They contended that peasants
were never rational “Economic Man” who only concerned about profit maximization. In
contrast, peasants might prioritize producing for the satisfaction of their consumption
wants, avoiding risk and defending against threats to intrusions. In the context of the
Qing dynasty China, Philip Huang found out that well-to-do peasants who could gain
substantial breakthroughs in farm productivity actually never achieved so.
474
He
explained that this was because these peasants were only village rich. Yet, “superimposed
474
These scholars were A.V. Chayanov, Karl Polanyi and James Scott, and were usually regarded as “substantivists”
who challenged the “formalists”. The latter advocated the application of the categories and analytical tools of
conventional economics to the study of non-western and preindustrial communities (Huang, The Peasant Economy and
Social Change in North China, 4-5).
221
on this farming world was another in which wealth and power derived from sources
outside of agriculture. At the top……were the court and the imperial officials, the top of
an elite that included a much larger group of degree-holding gentry and of merchants who
could buy their way into elite status”. Fortunately, late imperial China’s status system was
quite fluid with a few possibilities of moving upward. This was why many well-to-do
peasants decided to abandon agriculture and entered into the world of commerce and
officialdom, which they considered as true paths to wealth and status.
475
I believe the aforementioned anti-functionalist approach is appropriate for the study
of piaohao owners as well. Comparing with the well-to-do Chinese peasants, piaohao
merchants had already attained greater wealth and climbed higher on the social ladder
through commercial activities. Nevertheless, piaohao owners were still dreaming of the
ultimate position in late imperial China, which could only be obtained through becoming
well-versed scholars, accumulating political capital, and building social reputation
instead of merely focusing on remittance business. Even if some owners were indeed
indifferent to transforming piaohao into modern banks, this had nothing to do with
conservatism. For wealthy piaohao owners and descendants, seeking after the sublime
social wealth satisfied them more than committing themselves to piaohao.
1, Confucian scholar-merchant and its transcendence
It is striking that the Genealogy of the Chang Family kept on emphasizing the family’s
475
Huang, The Peasant Economy, 178.
For more study on salt merchants who manipulated the fluidity of status system and gained upward mobility from
Ming to early Qing dynasty, see Ping-ti Ho (He Bingdi), The Ladder of Success in Imperial China: Aspects of Social
Mobility, 1368-1911 (New York: Columbia University Press, 1962), 53-91.
222
success in literacy and education instead of wealth. The family motto that “our Chang
family thrives because we are rugu (Confucian scholar-merchants) (wu changshi yi rugu
qijia 吾常氏以儒賈起家)” appeared on almost every page of the Genealogy. A special
section of the Genealogy listing all of the academic achievements revealed that this
wealthy merchant family indeed caught the gist of “rugu”: it nurtured one jinshi
(metropolitan-level examination degree holder), several juren (provincial-level
examination degree holder) and xiucai (county-level examination degree holder).
Nonetheless, only in the spring of 1885 did the Changs make their debut in the
county-level examination: the thirteenth generation Chang Liji was awarded a scholarship
to study at the county school.
476
So before then, how did this merchant family construct
the image of rugu? First, the biographies and epitaphs adeptly manipulated Confucianism
to glorify the commercial activities of their ancestors. The tenth generation Chang Huaiyu,
who followed his father Wanda and engaged in frontier trade, was extolled as the
contemporary Zigong 子貢 (a merchant-turned-disciple of Confucius) by his eulogy.
477
The twelfth generation Chang Yi 常懌 immersed in reading Confucian classics at an
early age. But he soon felt guilty of not fulfilling filial piety, because his addiction to
books prevented him from helping his father Chang Bingcong with family business in
remote inland towns. Before long, Yi quit study and became a sojourning merchant, only
for the sake of practicing Confucian virtues in reality.
478
Second, because the merchants of the Changs were “forced” to quit school at an
476
Changshi zongpu, 12; Shixitu shisan zhi shiqi shi, in Chang Zanchun ed., Changshi jiasheng,101.
477
“Eulogy of Chang Huaiyu”, in Changshi yiwencun Part II, 41.
478
“Epitaph of Chang Yi”, Changshi yiwencun Part II, 8.
223
early age, they strived to compensate for their loss of scholarly life in various ways.
When Chang Yi’s younger brother Yi 怡 (a different character also pronounced yi) was
admitted to the county school, Yi, the elder brother, was overjoyed and kept all the menial
housework from interrupting his younger brother’s study. In addition, Yi’s cousin Chang
Xing, also a frontier merchant, wrote numerous poems describing the scenic landscape
while en route to Zhangjiakou.
479
As a young teenager, the thirteenth generation Chang
Liren was addicted to the neo-Confucian classic Minor Learning of Master Zhuxi (Zhuzi
xiaoxue 朱子小學).
480
But he eventually gave up his favorite hobby because as a filial
son, he had to help his aging father and uncles to manage the family’s frontier trade by
sojourning in half a dozen of cities. After becoming a successful merchant, Liren hired
the best teacher in town to educate his offspring and constantly emphasized the
importance of obtaining imperial examination degrees.
481
Unfortunately Liren died in
1897, so he did not live to enjoy the success when his two sons—Chang Zanchun and
Xuchun—both received the juren degree during the provincial-level examination held in
1902.
The Changs’ persistent pursuit of literacy and advanced degrees got more rewards.
In the summer of 1885, the thirteenth generation Chang Lijiao passed the provincial-level
imperial examination and became the first juren degree holder in the family. Lijiao’s
success opened the floodgate to more imperial examination degrees for the family. The
rest of the juren degree holders and the years that they received them were: Chang Linshu
479
Jiasheng shengyu, 9.
480
Zhuzi xiaoxue was edited by Zhuxi. It inculcated readers with the complete set of Confucian ethical codes including
three cardinal guides (ruler guides subject, father guides son and husband guides wife) and the five constant virtues
(benevolence ;righteousness, propriety, wisdom and fidelity).
481
“Biography of Chang Liren”, Changshi xingshi lue, 6.
224
(1891), Chang Dichun (1897), Chang Zanchun (1902)—the editor of the Genealogy,
Chang Xuchun (1902)—the forth chief manager of the Baojin Coal Mining Company and
Chang Lintu (1902), all of whom belonged to the fourteenth generation.
482
Among them,
Chang Linshu kept the momentum of pursuing the highest imperial examination degrees.
In 1903, he ranked the 87
th
among the “jinshi degree holders of the third class of the
Palace Exam” (tong jinshi chushen 同進士出身), and became a candidate for officials of
the Board of Revenue.
483
Chang Linshu, the first and the only jinshi degree holder of the
family, eventually glorified the asset-rich degree-hungry Changs.
Figure 15 Chang Linshu’s jinshi degree essay for the Palace Examination, 1903
484
Notwithstanding of the Changs’ self-presentation as Confucian scholar merchants,
they were not confined to it and would transcend it when time was ripe. Even before the
abolishment of the Imperial Examination in 1905, the Changs had already been adding
482
Changshi zongpu, 2.
483
Changshi zongpu, 3.
484
This picture came from a website of an auction company in China which is selling the Palace Exam Essay of Chang
Linshu with a minimum bid price of RMB 6,720 (about USD 1,000), accessed on 25 November 2011,
http://pm.findart.com.cn/2222957-pm.html.
225
modern subjects to their family education and even established a girls’ school. Such
courage positively influenced the future academic career of the family members, who
began to major in natural sciences and engineering at China’s earliest modern universities
and eventually went across the sea to study in Japan at the turn of the twentieth century.
As a result, similar to the family’s two-hundred-year highly adaptable businesses, the
Changs’ success in family education further demonstrated that Shanxi piaohao owners
never lagged behind of their counterparts in the coastal areas.
In 1903, the Changs converted the family’s Confucian private school (sishu 私
塾) into Duchu Academy (Duchu xuetang 篤初學 堂), which admitted school-age boys
of the family.
485
Chang Linshu, the only jinshi degree holder, served as the Provost.
Chang Wangchun, son of the founder of Dadeyu piaohao, and his cousin Chang Jichun
served as managers. The new Academy hired professional teachers to instruct Confucian
classics, Chinese history, the Book of Odes, and mathematics. In 1906, it made a timely
addition—English—to the Academy’s curriculum.
In 1904, the Changs set up the Zhichi Academy for Girls (zhichi nü xuetang 知恥
女學堂) which instructed literature, mathematics and the cultivation of good virtues.
486
The Academy placed a high priority on educating female school-age family members, but
it also admitted girls from the same village.
487
Some of the senior female family
members played a significant role in guaranteeing a smooth running of this brave new
Academy. At the very beginning, young girls felt awkward to have face-to-face daily
485
Duchu literally means “reinforcing the human nature”.
486
Zhichi literally means “possessing a sense of shame”.
487
Changshi zongpu, 11.
226
contact with male instructors. Then Chang Zanchun’s mother née Fan decided to stay
together with the girls in the classroom, which reassured them about trusting their
instructors.
488
In 1909, Chang Zanchun was recommended by the Shanxi Superintendent of
Education to study at the Imperial University of Peking (jingshi daxuetang 京師大學堂),
where he majored in literature with a focus on The Book of Odes.
489
Notwithstanding
the Qing’s transition into the New Republic two years later, Zanchun carried his study
through. In 1913, he graduated from the Peking University—the successor of the Imperial
University of Peking—and became the acquisition editor of the Qing archives for the
Republican Institute of the Qing History (qingshiguan 清史館). Zanchun later worked as
an editor for a modern newspaper. In 1917, he returned to Taiyuan, where he taught
literature in the University of Shanxi as a professor.
490
Although Chang Zanchun’s study
in the Peking University still focused on the Confucian classics, his willingness to receive
and teach old knowledge in modern institutions proved his open mind.
Furthermore, although bing the Confucian scholar merchants had been the Changs’
self-representation for over a century, the descendants started to transcend it by majoring
in natural sciences, engineering and other modern degrees at the turn of the twentieth
century. Among the fourteenth generation, Chang Jianchun and Xiangchun both
graduated in 1906 from the Imperial Shanxi University with the degree in mining and
metallurgy. Chang Yanchun (1899-?), perhaps influenced by the career of his father
488
“Ode to the 50
th
birthday of Chang Lixin’s wife née Cao” (YWC I: 27).
489
“Ode to the 70
th
birthday of Chang Liren’s wife nee Fan, mother of Zanchun”, Changshi yiwencun, Part I, 26.
490
“Biography of Qiao Yingyi, wife of Chang zanchun”, Changshi xingshi lue, 19.
227
Liying who founded the Dunyihe Filature, graduated from the Peking Normal University
with a degree in natural sciences (bowu 博物).
491
Chang Puchun studied at the
Tongcheng Railroad School (yuci tongcheng tielu xuexiao 榆次同成鐵路學校) in the
Yuci County.
492
Among the fifteenth generation, Chang Fengqi held a bachelor’s degree
in mechanical engineering, and Chang Guoyan obtained a degree in law and political
sciences (fazhengxue 法政學), both from the University of Shanxi.
493
As mentioned
earlier, Chang Zanchun’s son Fengzhu majored in engineering and provided technical
support for the family’s own Printing House during the 1920s.
494
Last but not least, the Chang family members’ pursuit of modern advanced degrees
transcended national borders. Although born in inland Shanxi province, they went across
the sea and studied in Japan, similar to their counterparts coming from nearby coastal
areas such as Zhejiang province. This indicated that, contrary to the common belief, the
wide disparity between hinterland and coastal China at the turn of the twentieth century
did not really exist, at least at the elite level. In particular, the fourteenth generation
Chang Yunchun obtained a bachelor’s degree in law from the Meiji University (Meiji
daigaku 明治大學). The fifteenth generation Chang Fengzhou 常鳳洲 studied at the
Kobe Higher Commercial School (Kōbe Kōtō shōgyō gakkō 神戸高等商 業學校).
495
The sixteenth generation Chang Naiqin 常乃欽 graduated from the preparatory school
for the Waseda University, whereas Chang Nairui 常乃銳 held a diploma from the Seijo
491
Shixitu shisan zhi shiqi shi, 312.
492
Changshi zongpu, 13.
493
Changshi zongpu, 13, The new name of the Imperial University of Shanxi after 1912.
494
Changshi zongpu, 14, Shixitu shisan zhi shiqi shi, 277.
495
This school later became Kobe University.
228
Academy (Seijō gakkō 成城學校)—Japan’s best military preparatory school whose
alumni included the famous Chinese General—Cai E 蔡鍔 (Class of 1903).
496
2, Earning social respect: charity and militia
In addition to exchanging family wealth for knowledge, piaohao owners avidly sought
recognitions and respects from the late imperial Chinese society. They generously
purchased honorary official titles to gild their epitaphs, offered disaster relief and
organized local militias to keep their community safe in chaos. For late imperial
merchants, doing all these were not rare, especially after the 1840s when the Qing was
threatened by internal rebellion and foreign invasion and thus ignored the provision of
comprehensive social services at the local level. For example, Kwan Man-Bun showed
that Tianjin salt merchants were active in funding city wall maintenance, soup kitchens
and fire brigades.
497
For Kwan, providing urban social services signified salt merchants’
willingness to acquire respect of the poor and the needy that viewed these merchants’
profit as tainted.
498
Yet, my purpose here is to contend that profit maximization did not
occupy the entire life of piaohao owners.
The Genealogy of the Chang Family consisted of over ninety biographies, odes to
birthdays, epitaphs and eulogies of sixty-odd family members ranging from the eighth to
the fifteenth generations. All of the ancestors and protagonists in these writings held
496
Changshi zongpu, 14.
For information on Seijo Academy, Marius Jansen, “Japan and the Chinese Revolution of 1911” In Cambridge
History of China, Late Ch’ing, 1800-1911, vol.11, 351 (339-374); Marianne Bastid-Bruguiere, “Current of social
change” in Cambridge history of China, Late Ch’ing, 1800-1911, vol 11, 546 (535-602).
497
Kwan, Salt Merchants of Tianjin, 89-90.
498
Ibid., 90.
229
titular official titles resulting from donations either by themselves or by offspring. For
example, the thirteenth generation Chang Weifeng, a sojourning merchant in Zhangjiakou,
donated Tls. 300 to the court and received an honorary military official title during the
first Opium War (1839-42).
499
This was a huge amount of the money considering the
purchasing power during that time. In 1844, the local gentry spent Tls. 659 to build the
Chaoshan Academy (chaoshan shuyuan 超山書 院) in Pingyao. This amount of money
covered both the costs of labor and construction materials.
500
In addition to the Changs, the Li family of the Pingyao County which owned the
oldest and the largest piaohao Rishengchang also demonstrated a huge commitment to
purchasing official titles after the 1840s. According to the Gazetteer of the Pingyao
County compiled in 1882, the owner of Rishengchang piaohao named Li Zhenshi
donated two official titles for himself, which were the Director of a Section in a Certain
Ministry (langzhong 郎中) and the Prefecture Magistrate (zhifu 知府).
501
He also
purchased a fourth-ranking titular title “zhifu” for his father. Zhenshi’s son later bought
Zhenshi an additional fifth-ranking langzhong title (Wu and En ([1882], 2005: 159). Li
Zhenyan 李箴言, Zhenshi’s youngest brother, was awarded a second-ranking official
title called the Superintendent of Salt Transportation, owing to the generous donation of
his son.
502
The family of Mao Honghui, who helped to establish Weitaihou piaohao and
served as the first chief manager, also followed this trend. Three of Mao Honghui’s
grandsons: Lü tai 履泰, Lü xiang 履祥 and Lü gong 履恭 all donated titles such as the
499
“Epitaph of Chang Weifeng”, Changshi yiwencun Part II, 12.
500
Wu & En ed., Guangxu Pingyao Xianzhi, 96.
501
Ibid., 152-153. For the translation of langzhong, see Hucker, 1985:301.
502
Wu & En ed., Guangxu Pingyao Xianzhi,159.
230
Vice Prefecture Magistrate (tongzhi 同知).
503
Not only did piaohao owners spend money on themselves, they also donated lavishly to
relieve local disasters. From 1877 to 1878, an incredible drought-turned-famine (dingwu
qihuang 丁戊奇荒) plagued the entire Shanxi province. According to an estimation of
foreign relief workers, nearly 9.5 million people died as of 1879.
504
In the Yuci County, the entire Chang family immediately assumed the responsibility for
disaster relief. The twelfth generation Chang Ke set up soup kitchens and shelters for
refugees from adjacent counties, and Chang Bing motivated the entire family to donate
Tls. 30,000 as relief.
505
Among the thirteenth generation, the sojourning merchant Chang
Liren contributed two warehouses of grain to soup kitchens.
506
Liren’s cousin, merchant
Chang Weifeng alone contributed Tls. 10,000, one third of the family’s total amount of
donation.
507
In Pingyao, Rishengchang’s owners and chief managers assumed the same
responsibility for famine relief as the Changs did in Yuci. The Gazetteer of the Pingyao
County recorded that Li Zhenshi gave Tls. 17,000 as relief on behalf of his deceased
mother né e Zhao
508
. Li Wuchang 李五常, son of Li Zhenyan, donated Tls. 20,000 to
honor his mother née Liang. If considering the construction cost of Pingyao’s Chaoshan
503
Ibid., 152, 154.
504
Kathryn Edgerton-Tarpley, Tears from Iron: Cultural Responses to Famine in Nineteenth-Century China (Berkeley:
University of California Press, 2008) , 29.
505
Changshi zongpu, 11; “Biography of Chang Ke”, in Changshi xingshi lue, 21-22; “Biography of Chang Ke” (SXL:
21-22); “Epitaph of Chang Bing” (YWC II, 7).
506
“Biography of Chang Liren”, Changshi xingshilue, 4.
507
“Epitaph of Chang Weifeng, Changshi yiwencun, Part II, 12.
508
Wu & En ed., Guangxu Pingyao Xianzhi, 113.
231
Academy in 1844 as the standard unit of measurement, then Li Wuchang’s donation
could build about thirty academies. Piaohao’s chief managers and their families were
also generous donors. Mao Lü tai, the oldest grandson of the first chief manager of
Weitaihou piaohao, contributed over Tls.8,400. Rishengchang’s senior manager and one
of the co-founders named Cheng Qingpan 程清 泮 donated Tls. 2,800.
509
Besides
individual contributions, the entire piaohao community collectively donated Tls. 27,000
as relief.
510
Indeed, wealth was being translated into social power. One record indicated
explicitly that some piaohao owners gained recognitions from local officials and exerted
great influences over their communities. Over the course of relieving the unprecedented
famine in 1877, the County Magistrate of Pingyao named Wang Shouzheng 汪守正
frequently consulted Liu Qinghe 劉慶和 (n/a-1890) about how to distribute relief grains.
Liu was the owner and manager of Tianchengheng piaohao, yet the Gazetteer of the
Pingyao County reverently addressed him as “county gentry” (yishen 邑紳).
511
The owners of piaohao also spent time and money defending for themselves and their
neighborhood. In 1900, when the Boxers started killing innocent residents suspected as
Christians near the Chewang 車輞 village of Yuci where the Changs lived, the thirteenth
generation juren degree holder Chang Lijiao was soon appointed as the organizer of the
village militia, and led corps to finish building fortifications around the village. Before
509
Ibid., 114.
510
Ibid., 118.
511
Ibid.,113; Wei, Shanxi piaohao shi, 83-84.
232
long, Chang Zanchun, Xuchun, Dichun and Zhaochun 肇春 collectively contributed Tls.
2,000 to reinforce Lijiao’s defensive construction. During the Xinhai Revolution in 1911,
when defeated soldiers began to ransack the village, Lijiao again assumed the role of
organizing the village militia and guaranteed his neighborhood a peaceful transition to the
new Republic.
512
3, The hedonists
Some of piaohao’s family members preferred a more laid-back lifestyle to pursuing exam
degrees and seeking social respect. Followers of Li Hongling’s myth would view this as
decadence and as the real cause of piaohao’s decline. But I view it differently. Every
member of wealthy piaohao families was an individual, and thus retained the right not to
choose piaohao as his career. When the majority of the family members had already been
striving to maintain the family prosperity and reputation, why must we blame the rest for
their self-indulgent lifestyle?
In 1895, the thirteenth generation Chang Lifang attended the county-level imperial
examination, but only received the degree of second-class tribute student (fubang
gongsheng 副榜貢生).
513
Yet, he did not subsequently decide on a career as a merchant,
as what his cousin Chang Lixun—the founder of Dadeyu piaohao—had done. Instead,
Lifang showed passionate interests in history, the studies of stone and bronze inscriptions,
ink-wash paintings and calligraphy. Furthermore, Lifang spent his leisure time traveling
around the empire. He climbed the Taihang Mountain in Shanxi, then crossed the Yellow
512
Changshi zongpu, 12; “Biography of Chang Lijiao”, Changshi xingshi lue, 11-12.
513
Huncker, A Dictionary of Official Titles, 224.
233
River to pay homage to the Shrine of Yuefei in Henan. He later went down south to the
Chibi of Hubei province to revere the history of the Three Kingdoms. In Suzhou and
Hangzhou, Lifang pondered on the lost civilizations of the Wu and Yue Kingdoms. From
there he sailed for Cheefoo by sea. Of course, he did not forget to visit Zhangjiakou,
Tianjin and Beijing—important commercial cities where his family’s business prosperity
depended upon.
514
Similar to Lifang, his cousin Chang Lijing 常立經 also “looked
down upon studying for the imperial examinations at an early age, as well as his lavish
daily life.” As a result, he modeled himself on Lifang and toured around the empire from
Hubei to Chahar.
515
In the summer of 1887, four well-versed young men of the Changs’ fourteenth
generation—Wangchun, Linshu, Zanchun, and Dichun—created a poetry club named
Fanhua, whose name was later shared by the family’s Lithography Printing House.
Perhaps being inspired by what the beautiful heroines always did in the Dream of the Red
Chamber, the club members met every five days, enjoyed tea and composed poems on
designated topics. Later on, more family members were attracted to the club and
participated in it regularly, which led to the publication of a four-volume Anthology of
Poems.
516
Figure 16 Members of Chang family’s Poetry Club, c. 1900
517
514
“Epitaph of Chang Lifang”, Changshi yiwencun Part II, 21-22.
515
“Epitaph of Chang Lijing”, Changshi yiwencun Part II, 25.
516
“Biography of Chang Wangchun”, Changshi xingshi lue, 5-7.
517
Xie and Liu, Rushang mendi, Changjia zhuangyuan, 111.
234
Notes: Chang Linshu (third from right); Chang Zanchun (third from left); Chang Xuchun (second
from right).
In conclusion, it was common for wealthy merchants who yearned for literacy, social
respect, and leisure in late imperial China. Kwan Man-Bun’s study on Tianjin salt
merchants illustrated this point well. Yet, it is surprising that when discussing another
group of wealthy merchants—Shanxi piaohao owners, scholars ignored their other
non-banking histories, and viewed them only as rational economic men. After all,
piaohao owners and their descendants were social and cultural creatures who kept
searching for greater meanings of life from studying for the imperial examinations, doing
charity, and wandering around the country rather than merely investing in Li Hongling’s
proposal for modern banks. Life is multi-faceted, so is the choice of individual family
members of piaohao.
235
Disaggregating piaohao’s future in the new Republic, 1911-1937
The last myth that Li Hongling created is that transforming into modern banks was
piaohao’s only legitimate future. When following this deterministic view, it is easy to
label piaohao’s contraction of remittance business during the 1900s as the ultimate
decline. But this is not true. Indeed, when the Qing court started to reclaim its financial
sovereign from private financial firms, many piaohao shrunk in size and scope and some
stopped operation. Yet, the owners of piaohao continued to engage in financial services in
northern China until Japanese invaded China in the late 1930s.
In 1918, a survey named the List of Associations of Merchants and Members in
Beijing (jingshi shanghui yilan biao 京師商會一 覽表) recorded that thirteen former
Shanxi piaohao, now registering with the Beijing government under the financial
categories of “qianpu 錢鋪” (cash shops) and “yinhao 銀號 ” (silver houses)—banking
firms of smaller scale in comparison with piaohao, still stationed in the southern city of
Beijing and continued to provide remittance services. Together they administered the
Association of Remittance Merchants (huiduizhuang shanghui 匯兌莊商 會). These
piaohao-turned-yinhao were: Weifenghou, Dashengchuan, Sanjinyuan (Qus’),
Dadechuan (Changs’), Baichuantong (Qus’), Xintaihou, Tianchengheng, Cunyigong
(Qus’), Dadeheng, Dadetong, Weishengchang, Weitaihou (Li Hongling’s former
employer), and Weichanghou.
518
Among them, the banking activities of Dadetong and Dadeheng continued until
518
Zhongguo renmin yinhang 中國人民銀行 et al. ed., Beijing jinrong shiliao: Dian dang, qianzhuang, piaohao,
zhengquan pian 北京金融史料 ： 典當 ， 錢莊 ， 票號 ， 證券篇 (Beijing: Beijing shi renmin yinhang jinrong yanjiusuo,
1994), 190, 222.
236
1947. In 1909, they obtained business licenses from the Qing government as private
financial firms. In 1931, they joined the Association of Cash Shops of Beijing (Beiping
shi qianye gonghui 北平 市錢業公會) and officially changed their names from piaohao
to cash shops. After Japan waged the full-scale war against China in 1937, these firms’
branches in Shanghai, Wuhan, Suiyuan and Baotou were affected by the War and soon
disappeared. Nevertheless, their Beijing branches continued to offer banking services
even in wartime. In 1947, Dadetong and Dadeheng had headquartered in Beijing for over
a decade, and administered branches in Tianjin and Jinan. All of the owners and managers
still belonged to the Qiao family of the Qi County that formerly operated the same-name
piaohao before the 1900s.
519
Furthermore, Li Hongling’s construction of conservative Shanxi piaohao owners created
a fallacy that piaohao’s transformation into modern banks was so difficult to the point of
impossibility. In contrast, however, the imagined solid boundary between piaohao and
modern banks was actually quite fluid from three aspects.
First, at least one piaohao called Weifenghou successfully transformed into a
limited-liability western-style modern bank, though it turned out to be very short-lived. In
1916, with the startup capital provided by Yuan Shikai’s brother, the limited-liability
Weifeng Commercial Bank (Weifeng shangye yinhang 蔚豐商業銀行), built on
Weifenghou piaohao, was founded. Yet, it never got the chance to officially open because
Yuan Shikai died during the same year, and the Bank lost further financial support
519
Zhongguo renmin yinhang et al. ed., Beijing jinrong shiliao, 269, 274, 288.
237
subsequently. In 1921, Weifeng Commercial Bank closed down permanently.
Second, former piaohao employees continued to hold important positions in modern
Chinese banks. The most famous one among them was Fan Chunnian, who became a
sought-after modern banking expert in the new Republican China. Before 1912, Fan had
been working for Weifenghou piaohao. Four years later, the Guangxi warlord Lu
Rongting invited him to direct the Guangxi Provincial Bank.
520
In 1934, owing to the
recommendation of the Shanxi warlord Yan Xishan, Fan started to work in the Central
Bank of China in Nanjing, where he served as chief manager for several branches and
wrote research articles on Shanxi piaohao on behalf of the Bank’s flagship
journal—Monthly of the Central Bank of China.
521
Third, some descendants of piaohao owners did not abandon their family tradition of
banking, and thus earned modern degrees in finance and accounting as well as found
decent jobs in modern banks. Chang Fengzhao, a grandson of Chang Lixun (the founder
of Dadeyu piaohao), graduated from the School for Modern Banking Bookkeeping in
Beijing (Beijing yinhang buji zhuanmen xuexiao 北京銀行簿記專門學校), and worked
in the Provincial Bank of Shanxi as the section head of the Accounting Department by
1924.
522
Li Binting 李斌 廷, the second son of Li Hongling (the myth-making manager
of piaohao’s decline), worked in the Jinan branch of the Central Bank of China during the
1930s. Li Hongling must be overjoyed at this good news if he could have lived to know it
(Li passed away in 1918), because his filial son eventually realized his unfinished dream
520
Shi and Niu, Ping, Qi, Tai jing ji she hui shi liao yu yan jiu , 656, 658.
521
Fan, “Shanxi piaohao zhi zuzhi ji yange” 山西票號之組織及沿革, in Zhongyang yinhang yuebao, vol. 5 (1), 1935:
1-10.
522
Changshi zongpu, 14; Shixitu shisan zhi shiqi shi, 273.
238
of working in modern banks, though the son also debunked the father’s myth of
piaohao’s formidable transformation into modern banks at the same time.
In conclusion, Shanxi piaohao never declined, if “decline” only means “the failure to
transform into modern banks”. The assumption that modern banks were the only rational
choice for Chinese native banking firms is wrong. Even the contraction of piaohao’s
remittance business after 1895 could not be understood as “decline”, because it resulted
from the Qing dynasty’s modern socio-political transformation that went beyond the
control of piaohao. Furthermore, the owners and descendants of piaohao were people
with social networks and personal agendas rather than rational economic men. As a result,
they aimed at many other meaningful life goals instead of merely reforming piaohao into
modern banks. In fact, only after we appreciate piaohao’s diversifying futures after the
1900s, could we eventually transcend the teleological financial modernist discourse and
realize that piaohao’s segue into the modern world was rather seamless in comparison
with their mythologized “decline”.
239
Conclusion
The history of Shanxi piaohao paints a picture of how inland native banking firms
successfully built a financial empire across China in the age of imperialism after the
1820s. Yet, such history also enlightens us about the shifting principle and practice of the
Qing dynasty’s banking policies, the dynamic relations between late imperial Chinese
sociocultural factors and family business firms, and the (limited) influence of imperialism
on the Chinese interior after the nineteenth century.
Empire to nation-state: piaohao under the Qing dynasty
Piaohao’s half-century interaction with the Qing government revealed that until 1895, the
empire’s decentralized financial and banking administration still bespoke the nature of an
agrarian empire, which downplayed financial sovereignty and (reluctantly) relied on the
mediation of third-party private financial firms in terms of the transfer and collection of
fiscal revenues.
523
After the 1850s, the central government instigated a series of modern
523
Many scholars contended that there is no clear distinction between empires and nation-states. Peter Purdue
postulated that the eighteenth-century Qing empire already resembled many aspects of a modern nation state, and some
of post-Qing nation building techniques were not distinctively modern products but evolved out of their historical
predecessors. See Purdue, China Marches West: The Qing Conquest of Central Eurasia (Cambridge: Belknap Press of
Harvard University Press, 2005), 15-50. In a somewhat similar fashion, Prasenjit Duara and Krishan Kumar both
argued that modern nation-building efforts were actually interconnected with (extra-) territorial expansions which were
commonly associated with multi-ethnic empires; see Duara, Sovereignty and Authenticity: Manchukuo and the East
Asian Modern (Lanham: Rowman & Littlefield, 2003), 7-40, and Kumar, "Nation-States As Empires, Empires As
Nation-States: Two Principles, One Practice?", in Theory and Society. 39 (2010), 119-143. In contrast, Joseph Esherick
posited that the so-called transformations from heterogeneous agrarian empires to homogenous modern nation-states
have yet concluded even at the turn of the twenty-first century. In other words, such transition might not exist at all. See
Joseph Esherick, Hasan Kayali, and Eric Van Young ed., Empire to Nation: Historical Perspectives on the Making of
the Modern World (Lanham: Rowman & Littlefield, 2006), 1-34. For
For the scope of this dissertation, however, the differences between an empire and nation-state in the realm of
finance and banking could be distilled as follows: 1), the supply of silver and, to a broader extent, credits was under the
control of private financial firms and merchants, and the central government did not regulate and supervise
financial/capital markets on a regular basis; 2), the central government of empires frequently relied on ad hoc liturgical
240
tax reforms, with the lijin transit tax as the prime example, aiming at expanding the state
power at local markets and extracting more revenues from commercial sectors instead of
from land.
524
In fact, the primary reason that Shanxi piaohao rose to national prominence
from that point was because they seized up the stupendous remittance opportunities
resulted from the central government’s extraordinary fiscal demands on provincial
authorities.
Yet, the Qing’s financial administration failed to match up with its modern fiscal
policies after the 1850s. As taxation on commerce soared, no corresponding financial
institutions were set up to manage these new fiscal resources. Meanwhile, when the
two-hundred-year old method of transferring provincial tax quotas through overland
silver shipment was constantly disrupted by internal rebellions and bandit activities, the
central government reluctantly compromised with provincial authorities which preferred
to remit their taxes instead of shipping them by land. Grappling with persistent financial
constraints, since 1862 the court had de facto lifted the ban on employing third-party
private financial firms, including Shanxi piaohao, to handle the empire’s fiscal revenues
to make sure it would receive provincial taxes without severe delays.
roles played by merchants when collecting taxes and regulating local financial markets. By doing so empires
maintained the delicate balance between state interest and local authorities. In contrast, modern nation-states usually
attempted to break such balance and reach down directly into local markets to extract greater revenues. In a word,
rulers of empires usually tried to avoid the ills of prodigal bureaucracy by keeping taxes low and state administration
small, whereas modern states tended to raise greater taxes and build a larger state bureaucracy (Mann, Local merchants
and the Chinese bureaucracy, 1-28).
524
Mann, Local merchants and the Chinese bureaucracy, 94-120.
Between 1841-1849, commercial taxes constituted only 11% of the Qing’s annual revenues, whereas by 1890 they
accounted for about 65%. The increased commercial taxes included customs revenues (a source of income that
expanded greatly after the opening of treaty ports), salt taxes, lijin (a new kind of domestic tariff created in 1853),
opium taxes (introduced after 1858), and native tariff taxes. In 1890, land tax accounted for 28.2 percent of the total tax
collection, customs revenues 24.7, salt taxes 15.35, lijin 14.56, opium taxes for 9.25 percent, and native tariff 1.12.
(lijin was kept for provincial uses, native tariff for central government use) (Lin, China Upside Down, Currency,
Society, and Ideologies, 140-141).
241
Only after 1895 did the Qing, burdened with 200 million taels of war indemnity
imposed by Japan, realize that a centralized modern financial administration was the very
first step to pay off its heavy debts and overhaul the staggering empire into a strong
modern nation-state. As a result, the court accelerated its financial centralization process
by patronizing western-style modern Chinese banks and ultimately establishing China’s
first-ever modern central bank in 1905. As native private banking firms, Shanxi piaohao
were gradually deprived of the contentious privilege of handling government remittance
when rejecting the state’s modern interventionist financial policies, hence diminished
from the financial market after the 1900s.
Piaohao’s unique business relations with the Qing dynasty—serving it without
being regulated prior to 1895, and their decreased influence over government remittance
market after 1985 indicated that the empire’s shifting financial policies—be it
laissez-faire or interventionist and however ineffective they seemed to be in
hindsight—always had the direct impact on the continuity or disrupture of private
banking entities. Furthermore, although the Qing empire might have started to transform
from agrarian empire to modern nation state in the realms of technology, industry and
military after the 1860s, different from the interventionist approach to private banks
adopted by British and European states, the Qing court retained an agrarian empire’s
stance on financial matters, and had meager interest in consolidating national financial
market and incorporating private banks into a modern financial entity. Yet, when the court
finally realized the imperative to centralize its banking administration after 1895, it
succeeded in doing so without much cooperation of the existent private banking firms.
242
This again demonstrated that the Qing court’s authority over private banking firms was
far more arbitrary than that of the British and European states, which must adapt more
transparent financial policies and practices in order to accommodate the
politico-economic interests of the rising bourgeois and capitalist wealth holders when
nationalizing the states’ financial administration after the seventeenth century.
525
Rethinking piaohao’s “decline”: Confucian culture and family business firms
Because most Shanxi piaohao were gradually eclipsed by western-style modern Chinese
banks after the 1900s, they were constantly blamed for failing the transformation into
modern banks and the competition against foreign counterparts. In fact, even I used to
wrongly entitle my research “The rise and decline of Shanxi piaohao”.
526
But since then
one question has always haunted me: what really happened to the owners, managers and
employees when most piaohao closed down after the 1900s? The apocalyptic term
“decline” sounded like everyone relating to piaohao disappeared pathetically from that
point.
Of course they did not. Numerous piaohao owners, managers and family members
actually continued to lead a normal and even more exciting life in the post-piaohao era.
When the Qing court’s tightening regulations on private banking firms made piaohao’s
remittance business difficult to prosper after 1985, many piaohao owners immediately
diverted their investments to modern industries, such as silk filatures, match companies,
525
Sylla et al., “Introduction: comparative historical perspectives”, 1-19; P. L. Cottrell and Lucy Newton, “Banking
Liberalization in England and Wales, 1928-1844”, 75-117; Forrest Capie, “Banking in Europe in the 19th Century: the
Role of the Central Bank”, 118-133 in The State, the Financial System, and Economic Modernization, ed. Sylla et al.
526
Luman Wang, The rise and decline of Shanxi piaohao in late Qing dynasty China, 1820-1911, MA thesis, National
university of Singapore, 2007. http://scholarbank.nus.edu.sg/handle/10635/13111, accessed on 24 April 2014.
243
coal mines and modern printing houses. In addition, as sought-after banking experts,
former employees and family members of piaohao made a smooth transition to working
at western-style modern Chinese banks. In fact, these post-piaohao scenarios were
obscured by the prevailing financial modernist discourse that piaohao, as native Chinese
banking firms, were so conservative that they failed to understand the gist of the modern
world.
Besides treating piaohao as successful financial business entities, we must also view
them through the prism of family firms operating in the late imperial sociocultural
context. As the interconnection between Confucian culture and commerce had already
been demonstrated by market brokers of the Confucian lineages in central Shandong, the
penchant for social charities and high Confucian culture of Tianjin Changlu salt
merchants, and the book trade in Confucian primers conducted by Hakka merchants of
rural Fujian, Shanxi piaohao and their families’ business and non-business decisions
could neither evade the omnipresent influence of the Confucian culture and society of
late imperial China.
527
In fact, piaohao merchants did not merely comply with the
conduct code of profit-maximizing entrepreneurs, but usually prioritized diversifying
non-business strategies that could bring long-term prosperity to their families rather than
to remittance firms. For example, after their parents made a fortune in banking business,
many descendants of piaohao families gradually transitioned out of finance and became
avid readers of Confucian classics and generous donors of social charity. Some achieved
the lofty goal of earning the highest imperial examination jinshi degree, whereas others
527
Brokaw, Commerce in Culture: The Sibao Book Trade; Mann, Local merchants and the Chinese bureaucracy,
70-93; Kwan; The salt merchants of Tianjin.
244
went abroad to pursue modern military degrees.
Nevertheless, reconstructing the history of piaohao only from the angle of the late
imperial Confucian culture and society would re-impose the financial modernist
straightjacket upon it again. Family firms bearing the characteristics of Chinese society
notwithstanding, piaohao shared universal business principles and practices with other
financial enterprises across the world. In particular, the bookkeeping method adopted by
Shanxi piaohao allowed them to keep track of bad debts by recording assets and
liabilities concurrently, and was thus functionally equivalent to the western-style
double-entry bookkeeping method. Furthermore, piaohao’s preference for insider lending
(i.e. inter-piaohao remittance transactions to help absorb fellow piaohao’s floating cash),
aversion to loans based on collaterals, and diverse investments in non-banking
commercial activities such as tea trade were also not just confined to family firms
operating in late imperial China. As Naomi Lamoreaux pointed out, bankers of
Antebellum New England were also interrelated by kinship ties—not only did they parcel
out their funds among a number of diverse non-banking ventures to reduce the risk of
financial investment, but also practiced insider lending to avoid “…heavy losses, because
it was difficult during this period to obtain accurate information about the
creditworthiness of strangers”.
528
In fact, the only way to avoid the vicious cycle of interpreting piaohao, i.e. native
Chinese banking firms, by the financial modernist discourse is to weave the dual images
of piaohao together: family firms molded by the unique Confucian culture and society of
528
Naomi Lamoreaux, "Banks, Kinship, and Economic Development: The New England Case", in Journal of
Economic History, 46 (3), 653, and Lamoreaux, Insider Lending: Banks, Personal Connections, and Economic
Development in Industrial New England (Cambridge: Cambridge University Press, 1994), 79.
245
late imperial China, and successful financial entities that shared common business and
banking strategies with their counterparts across the world in a pre-industrial era.
Inland China as center of changes in the age of imperialism
Since British gunboats successfully opened the door of free trade on China’s east coast in
1842, the Qing empire had been undergoing profound socio-political and economic
changes, such as the expansion of import and export trade with the rest of the world, the
birth of new commercial elites including compradors and industrialists, and the
emergence of cacophonous colonial modernity associated with the accelerated
urbanization in treaty ports. Unfortunately, most scholars stubbornly examined these
changes in the age of colonialism/imperialism from a treaty-port-centered perspective,
and rarely traveled beyond the urban-coastal areas to explore the corresponding
ramifications emerging in the Chinese interior. As a result, the stark contrast between
inland China as socio-economic and cultural backwater and coastal areas as the frontline
of industrialization and modernity is perpetuated.
In contrast, I believe the history of Shanxi piaohao re-enlightens us about the
dynamics of inland China after the 1840s. As private banking firms originating from the
barren Shanxi province far from waterways and coasts, piaohao and their remittance
business adeptly seized the rare opportunity of the expansion and intensification of
treaty-port trade and made distinct contributions to it. By linking inland marketplaces to
coastal trading cities and financing local cash shops in treaty ports, piaohao accelerated
monetary flow across the empire. Suffice it to say that the Sino-western trade after the
246
1860s would never reach the peak, provided that piaohao did not facilitate and accelerate
financial transactions between the interior and treaty ports, and vice versa. On the other
hand, families and descendants of piaohao also benefited from their business interaction
with treaty ports. Not only did they maintain and reinforce the prosperity of their
localities in Shanxi province, they understood the gist of modernity by investing in
modern industries and sending children abroad to pursue professional degrees.
By restoring inland China as center of changes, I suggest the influence of western
financial imperialism over China especially in the interior should also be reappraised.
Contrary to the common belief that modern colonial banks such as the Hongkong and
Shanghai Banking Corporation suppressed the development of native financial firms
including piaohao after the 1840s,
piaohao’s role as the linchpin of the Chinese financial
market was reinforced upon the arrival of colonial banks, whose financial activities were
confined to six treaty ports and thus depended heavily on piaohao’s inland extensive
financial networks to exert greater financial influence there.
Rewriting histories of piaohao and Shanxi province through storytelling
I strive to purge the word “decline” and its teleological derivatives from my
reconstruction of Shanxi piaohao, because this arbitrary concept forecloses the most
fascinating part of piaohao’s history—the stories of real merchants and families rather
than the lifeless “rise and decline” of certain financial institutions. After all, history is “all
about stories of the people……and stories that explore the intended and unintended
247
consequences of the choices people make.”
529
In fact, I would identity myself be part of
the recent biographical-turn of the historiography, which attempts to reconnect the bridge
between larger political, economic and social changes with individuals who lived through
and interacted with these changes.
530
Lastly, I suggest that the history of Shanxi province after the nineteenth century
should be rewritten through the prism of Shanxi people’s real life. So far Henrietta
Harrison had done an excellent research by exploring the changes of Shanxi from the
1850s to 1940s through the story of Liu Dapeng, who was a gentry, a merchant and a
peasant at the same time, and thus did not easily fit into any single class. Yet, Harrison
still asserted that Liu’s life illustrated Shanxi’s change from “a major trading corridor into
an isolated and inaccessible province”, and most Shanxi villages did not benefit from
urban industrialization and the export-oriented commerce.
531
Perhaps Liu Dapeng might
represent Shanxi’s position in modern China more precisely than the wealthy piaohao
families, which could afford the luxuries of investing in modern coal mines and studying
in Japan. Nevertheless, I suggest readers at least combine the image of a poor and
declining Shanxi with the polar opposite image of adventurous piaohao merchants when
examining the history of Shanxi. At least from the perspective of piaohao, Shanxi was
never hinterland from the very beginning, and the stark contrast between conservative
inland provinces and modern coastal areas of China after the 1840s never existed.
529
William Cronon, “Storytelling”, in American Historical Review 118 (2013):19.
530
Henrietta Harrison, The Man Awakened from Dreams: One Man's Life in a North China Village, 1857-1942.
(Stanford: Stanford University Press, 2005); Susan Mann, The Talented Women of the Zhang Family (Berkeley:
University of California Press, 2007); “AHR Roundtable Biography As History”, In American Historical Review,
114(2009), no. 3: 573-595; Joseph Esherick, Ancestral Leaves: A Family Journey Through Chinese History (Berkeley:
University of California Press, 2011).
531
Harrison, The Man Awakened from Dreams, 7.
248
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Appendices
Appendix I: List of Shanxi Piaohao
532
Name
Opening
Year
Close-down
year
Head
office
Location Investors
Prominent
managers
Pre-piaohao
business
Approximate
Founding Capital
(unit: Tls. 1,000)
Rishengchang 日升 昌 1823 1914 Pingyao Li Daquan 李大 全 Lei Lü tai 雷履 泰;
Liang Huaiwen
梁懷文
(1857-?)
(Pingyao)
Dye firm 360 (200-300)
533
Weifenghou 蔚 豐厚 1826 Transformed
into a
modern
bank in
1916
Pingyao Hou Chongji 侯崇
基
Silk firm 綢緞
莊
100 (200-300)
Weishengchang 蔚盛 長 1826 1921 Pingyao Hou Chongji 侯崇
基, Wang Peinan 王
培南 (Pingyao)
Silk firm 120-160
(200-240)
Xintaihou 新泰 厚 1826 Pingyao Hou Chongji 侯崇
基, Zhao Yidi 趙一
第 et al.
Mao Honghui ；
Hou Wangjin 侯
王晉 (Pingyao),
younger brother
of Hou Wangbin
Silk and
brocade firm
160 (150-260)
Tianchengheng 天 成亨 1826 1921 Pingyao Hou Chongji 侯崇
基 (Jiexiu) Ma Zhu
馬鑄
Hou Wangbin
侯王賓
(Pingyao)
Cloth shop or
grocery store
150-200
532
Wei, Shanxi piaohao shi, 15-26; Huang, “Table 1-2-7: Gebang de shili”, SPS, 639-662.
533
The number in black is Wei Juxian’s estimation of piaohao’s working capital, where the red is Huang Jianhui’s.
262
Rixinzhong 日 新中 1838~42 Late
Xianfeng
Reign
(1851-61)
Pingyao N.A.
Xiehexin 協和 信 Before
1853
changed its
name into
Xietongxin
in 1901
Pingyao Wang Dong 王棟
(Yuci)
Xietongqing 協 同慶 1856 1913 Pingyao Liu Qinghe 劉慶 和
(?-1890) (Pingyao);
Wang Dong 王棟
Liu Qinghe 劉
慶和 (?-1890)
(Pingyao)
360 (120-240)
Qianshengheng 乾 盛亨 1862~64 1894 Pingyao Ji Yihe 冀 以和
(Jiexiu)
Wu Rizhong 武
日中(Pingyao)
100
Qianjisheng 謙吉 升 1862~64 Late
Guangxu
Reign
Pingyao Li Daquan 李大 全
(Pingyao)
100
Weichanghou 蔚長 厚 1864 1920 Pingyao Mao Honghui 毛鴻
翽; Hou Chongji 侯
崇基
Mao Honghui
毛鴻翽
Cloth shop or
tea firm
150-250
Qidechang 其德 昌 1862~64 1912 Pingyao Ji Yihe 冀 以和 Song Juyuan 宋
聚源
N.A.
Baichuantong 百川 通 1860 1918 Pingyao Qu Yuanzhen 渠源
湞; Qu Yuanchao 渠
源潮; Qu Yuanluo
渠源洛; Qu Benli
渠本立 (Qi
County)
武大德 ， 渠 川至 160 (300)
Baofenglong 寶豐 隆 1906 1921 Pingyao Zhao Erfeng 趙爾 豐
(Qing official),
Qiao Yingfu 喬英
甫, Xu Handu 許涵
度
Song Guihua 宋
桂華
260 (130)
263
Heshengyuan 合盛元 1837 1914 Qixian Guo Fengyuan 郭逢
源, Zhang
Tingjiang 張 廷將
Tea firm 100-500
Dadetong 大 德通 1884 post-1949 Qixian Qiao family of Qi
county
Gao Jue 高玨
(1854-1919)
Tea firm 大德
興 茶 莊 （ 上 海
匯 業 公 所 光 緒
8 年 仍 爲 大 德
興）
500 (120-350)
Yuanfengjiu 元 豐玖 1859 1893 Qixian Sun Zhi 孫郅 100
Dadeheng 大德 恒 1881 Post-1949 ，
relocatd its
head office
to Beijing in
1934
Qixian Qiao family of Qi
county, Qiao
Zhiyong 喬致庸
500 (260)
Sanjinyuan 三晉源 1862~65 Qixian Qu Yuanzhen 渠源
湞; 渠本 翹 Qu
Benqiao
渠本 翹 Qu
Benqiao
200
Cunyigong 存義 公 1862~65 1916 Qxian Qu Yuanzhen 渠源
湞 ; Qu Baoting 渠
寶庭 ，Qu Xiaozhou
渠小舟
Jie Xianwu 頡
鮮五
Cloth shop 160 (240)
Changshengchuan 長 盛川 Early
Guangxu
reign
Late
Guangxu
Reign
Qixian Qu Yuanchao 渠源
潮
Tea firm 160-200
Dashengchuan 大 盛川 Mid
Guangxu
reign
1929 Qixian
Dashengkui 大 盛魁
firm
Cash shop 200 (100)
Dadeyuan 大德 源 1888 1892 Qixian Qiao Lansan 喬蘭
三 (Qi county)
Tea firm 100
Zhichengxin 志 成信 1850 1914 Taigu The hall of Kong
Rensu ( 孔仁 素堂)
Qi Mengbiao 齊
夢彪
(Dingxiang)
Silk firm and
grocery store
260
264
Xiechengqian 協成 乾 1869 1931 Taigu Wu Zunzhong or
Daozhong 吳 遵仲
(or 吳道 仲) ,Cao
family of Taigu
240
Shiyixin 世義信 1893 1921 Taigu Yang Shengcun or
shengtai ( 楊生 春
or 楊生 泰）
Cash shop 200
Jinshengrun 錦生 潤 1903 1917 Taigu Cao Shixian 曹師
憲
72
Dadechuan 大 德川 1907 1913 Taigu Chang family
(Yuci)
200
Sanheyuan 三和 源 1875 Taigu Chang family
(Yuci)
Dadeyu 大德 玉 1885 1912 Taigu Chang Lixun 常立
訓 (1846-1918)
(Yuci)
Chang Yun 常惲 Cloth and tea
firm
200
265
Appendix II: Sources of Rishengchang piaohao’s profit (Unit: Tls., amounts are
rounded)
534
Year Branch
Profit
from
remittance
fees
From loan
interest
rates
and usance
From
arbitrage Miscellaneous
1853 Jiangxi 1,472
124
1852 Qingjiangpu 3,745
1,219
1856 Suzhou 3,341
882
1867 Yangzhou 7,084
83
1906 Beijing 6,189 16,629 1,215 224
Tianjin 9,574 19,357 1,339
Kaifeng 10,020 1,525
Daokou 5,242
Xi'an 8,201
Shanghai 6,342 22,560
Yangzhou 4,649 10,459
Hangzhou 7,278 15,314
Hankou 17,426 11,519
103
Shashi 10,227 6,902
Changsha 3,943 6,371
8,748
534
Huang Jianhui, “Table 1-2-6: Rishengchang yinian nei lirun laiyuan yu bianhua tongjibiao” 日昇 昌一年內利潤的
來源與變化統計 表 [Statistics on Rishengchang’s annual profit changes], in SPS, 630.
266
i
Rishengchang, Weitaihou, Weifenghou, Tianchengheng, Xintaihou, Weishengchang, Rixinzhong, SPS
1278.
ii
Rishengchang,Weitaihou,Weifenghou,Tianchengheng,Xintaihou,Weishengchang, Xiehexin,
Xietongqing, Baichuantong, SPS, 1279.
iii
Rishengchang, Weitaihou, Weifenghou, Tianchengheng, Xintaihou, Weishengchang, Xiehexin,
Xietongqing, Baichuantong, Qianshengheng, Weichanghou, Qichangde, 1279.
iv
Heshengyuan, Juxinghe, SPS, 1279.
v
Heshengyuan, Juxinghe, Dadexing, Yuanfengjiu, SPS 1279
vi
Heshengyuan, Dadetong, Dadeheng, Cunyigong, Changshengchuan, Sanjinyuan, 1279.
vii
Zhichengxin, Dadeyu, 1278
viii
Zhichengxin, Dadeyu, Xiechengqian, SPS 1279.
ix
Zhichengxin, Dadeyu, Xiechengqian, Shiyixin, SPS 1279.
x
Baichuantong, Cunyigong, Dadexing, Dadeyu, Heshengyuan, Huiyuanyong, Juxinghe, Juxinglong,
Qianjisheng, Qianshengheng, Rishengchang, Sanjinyuan, Weishengchang, Weichanghou, Weitaihou,
Weifenghou, Xiechengqian, Xietongqing, Xiehexin, Xintaihou, Yuanfengjiu, Zhichengxin. The list was
made according to Ge yuanxi 葛元煦, Huyou zaji 滬遊雜記 (Jottings of the journey to Shanghai) ,
vol.4, Shanxi huiye 山西匯 業 (Shanxi remittance business) in 1876, and the stela erected by the
Shanxi Guild of Remittances of Shanghai (Shanghai Shanxi huiye gongsuo 上海 山西 匯業公 所) in
1882, SPS, 58-59.
xi
Dadetong, Heshengyuan, Zhongxinghe, Weitaihou, Baichuantong, Zhichengxin, Dadeheng,
Rishengchang, Xunyigong, Weichanghou, Xintaihou, Sanjinyuan, Yuanfengrun, Xiechengqian,
Weifenghou, Xietongqing, Dadeyu, Weishengchang. Nagataki hisakichi 永瀧 久吉, “Financial Report
from the Consulate-general of Japan in Shanghai, Year 1906”, in Pan Cheng’e ed., Zhongguo zhi
jinrong, vol.1, 53.
xii
Xietongqing, Xintaihou, Weichanghou, Shenbao, 6 July 1888, re-quote from SPS, 60.
xiii
Weitaihou, Xintaihou, Weichanghou,Xietongqing, and so forth. This report did not exhaust all
piaohao doing business in Xiamen, but based on the number of piaohao in previous years, the number
should not exceed five. Ueno Senichi 上 野專 一, “Financial Report from the Consulate-general of Japan
in Xiamen, Year 1907”, Pan Cheng’e ed., Zhongguo zhi jinrong, vol. 2, 60. Huang Jianhui’s estimation
was five, SPS, 469.
xiv
Weichanghou, Xintaihou, Weitaihou, Xiechengqian, SPS, 60.
xv
Xintaihou, Weichanghou, Xietongqing, SPS, 64.
xvi
SPS, 469.
xvii
Rishengchang, Baichuantong, Weitaihou, and so forth. The report of Ueno Senichi, consul of
Guangdong in 1907, did not exhaust all piaohao which were doing business in Xiamen. Ueno Senichi
上野專 一, “Financial Report from the Consulate-general of Japan in Guangdong, Year 1907”, Pan
Cheng’e ed., Zhongguo zhi jinrong, vol2, 64. And Huang Jianhui’s estimation was 9.
xviii
Due to lack of sources, it is now hard to list how many piaohao opened branch here. But at least
Rishengchang opened a one in Tianjin before the 1850s.
xix
Zhichengxin, Xiechengqian, Zhongxinghe, Dashengchuan, Cunyigong, Baichuantong, Xintaihou,
Weitaihou, Weishengchang, Weifenghou, Xietongqing, Weichanghou, Rishengchang, Dadeyu,
Dadetong, Jinshengrun, Shiyixun, Heshengyuan, Dushenyu, Dameiyu. Ijuin Hikokichi ( 伊集院 彥吉),
“Financial Report from the Consulate-general of Japan in Tianjin, Year 1905”, Pan Cheng’e ed.,
Zhongguo zhi jinrong, vol. 1, 8-9.
xx
Juxinglong, Yuanfengjiu, Dadexing, Qianshengheng, Xiehexin, Weitaihou, Tianchengheng, Juxinghe,
Weichanghou, Weishengchang, Xiechengqian, Rishengchang, Weitaihou ,Qianjisheng, Qichangde,
Xintaihou, Xietongqing, Sanjinyuan, Cunyigong, Zhichengxin, Baichuantong, Heshengyuan, from
Guangxu qi nian Hankou shanshaan huiguan zhi 光緒 7 年漢口 山陝 會館 志[The annals of the guild
267
of Shanxi and Shaanxi in 1881], vol.2, 14, re-quoted from SPS 64.
xxi
Weitaihou, Weifenghou, Weichanghou, Xintaihou, Zhichengxin, Tianchengheng, Xietongqing,
Xiechengqian, Zhongxinghe, Dadetong, Dadeyu, Dadeheng, Cunyigong, Sanjinguan, Baichuantong,
Heshengyuan, Rishengchang, Dashengchuan, Qianshengheng, Eino Yukiyoshi 永野幸 吉, “Financial
Report from the Consulate-general of Japan in Hankou, Year 1907”, Pan Cheng’e ed., Zhongguo zhi
jinrong, vol.1, 33-34.
xxii
The actual number evaded extant sources. But at least Rishengchang established a branch here, SPS,
848.
xxiii
SPS, 469.
xxiv
SPS, 469.
xxv
Honbu Iwahiko 本 部岩 彥, “Financial Report from the Consulate-general of Japan in Shashi, Year
1907”, Pan Cheng’e ed., Zhongguo zhi jinrong, vol. 2, 47.
xxvi
Yuanfengjiu, Rishengchang, Qianjisheng, Weichanghou, Qianshengheng, Xietongqing,
Zhichengxin, SPS, 59.
xxvii
Consul Takasu Tasuke 高 洲 太助 of the Consulate-general of Japan in Hangzhou reported that cash
shops were the major financial force in Hangzhou, and his report did not mention piaohao at all.
Takasu Tasuke, “Financial Report from the Consulate-general of Japan in Hangzhou, Year 1906”, Pan
Cheng’e ed., Zhongguo zhi jinrong, vol. 2,30.
xxviii
Tianchengheng, Xietongqing, Weifenghou, Xiehexin, Xintaihou, Yuanfengjiu, Baichuantong,
Rishengchang, Weitaihou, SPS, 64.
xxix
SPS, 469.
xxx
Rishengchang, Rixinzhong, and Weitaihou, Huang , “Table 1-1-10: Sanjia piaohao fenbu tongji”,
SPS, 43.
xxxi
Weitaihou, Weifenghou, Weishengchang, Xietongqing, Zhichengxin, Xiechengqian, Cunyigong,
Qianshengheng, Rishengchang, Xintaihou. Ikenaga Rin'ichi, “Financial Report from the
Consulate-general of Japan in Chongqing, Year 1907”, Pan Cheng’e ed., Zhongguo zhi jinrong, vol. 2,
27.
xxxii
Weishengchang, Yuanfengjiu, Cunyigong, Xiechengqian, Weichanghou, Xintaihou, Baichuantong,
Zhichengxin, Rishengchang, SPS, 64.
xxxiii
SPS, 469.
xxxiv
Weitaihou, Weifenghou, Weishengchang, Tianchengheng, Rishengchang, Xintaihou,
Baichuantong, Dadetong, Xietongqing. Ihara Masumi 井原真澄, “Financial Report from the
Consulate-general of Japan in Changsha, Year 1906”, Pan Cheng’e ed., Zhongguo zhi jinrong, vol. 2,
44.
xxxv
Tianchengheng, Xietongqing, SPS, 64.
xxxvi
SPS, 469.
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Money and trade, hinterland and coast, empire and nation-state: an unusual history of Shanxi piaohao, 1820-1930
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