Professor Jeremiah Jenks of Cornell University and the 1903 Chinese Monetary Reform

The Boxer uprising in China (1900) killed quite a number of foreigners and missionaries, which induced the armies of eight Western powers to invade China and they imposed an indemnity of 400 million silver taels. The international silver price around the 1900s was slumping, and these indemnity-treaty powers (e.g. France, UK, Germany, and Belgium) strongly wished China to establish a silver monetary system that would be maintained at parity with gold. Professor Jeremiah Jenks (1856-1929) of Cornell University was mandated to establish a gold-exchange standard for China. This paper begins with Jenks's life and work and the background of his mission to China. Section 2 presents the basic principle of this reform project and its specific designs. Section 3 assesses reactions and criticisms on Jenks's proposal. Possible arbitrage activities between gold and silver are analyzed in Sections 4 in order to evaluate the sustainability of Jenks's system. We conclude that: (1) Jenks's new systemm ight have been stable in 1904-16 and 1928-30; (2) technically speaking, this was a remarkable design.Professor Jeremiah Jenks (1856-1929), Chinese monetary reform of 1903, gol-dexchange standard, silver standard

The Chinese silver standard economy and the 1929 Great Depression

It is often argued that the silver standard insulated the Chinese economy from the Great Depression that prevailed in the gold standard countries during the period 1929-1935. Using econometric testing and counterfactual simulations, this article shows that if China had been on the gold standard (or on the gold-exchange standard), the balance of trade of this semiclosed economy would have been ameliorated, but the general price level would have declined significantly. Due to limited statistics, two important variables (GDP and industrial production) are not included in the analysis, but the general argument that the silver standard was a lifeboat to the Chinese economy remains defensible. Copyright Blackwell Publishing Asia Pty Ltd and the Economic History Society of Australia and New Zealand 2003.