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

Abstract

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