China and the Money Question

By Rebecca L. SpangSeptember 30, 2021

China and the Money Question

The Chinese Question: The Gold Rushes and Global Politics by Mae Ngai
Empire of Silver: A New Monetary History of China by Jin Xu
China and the End of Global Silver, 1873–1937 by Austin Dean

WHEN I WAS a small child, I once had a birthday cake decorated with ceramic figures representing the American “Wild West”: a cowboy, a cowgirl, two Indians, and a lone figure in a white jacket and red trousers, with a long black braid. Where my mother found the decorations, why she liked them (or why she thought I would like them), even the flavor of the cake — the questions I now have can probably never be answered. In contrast, Mae Ngai’s superb new book brilliantly explains something I puzzled over repeatedly as I played with the figurines decades ago: why was the Chinese man so far from China, and why was he all by himself?

Cake decorations from author’s childhood (photo: Rebecca L. Spang)

Chinese workers in the American West are often associated with building the transcontinental railroads; even more often, they are assumed to have been “coolies.” One of the most important arguments in Ngai’s persuasive and extremely readable The Chinese Question: The Gold Rushes and Global Politics is that the idea of Chinese immigrants to the United States as unfree labor owed much more to political rhetoric than to social reality. The word “coolie” (possibly derived from a Tamil word meaning “payment”) was first widely used for indentured workers brought from British colonies in South Asia to replace formerly enslaved laborers in Britain’s Caribbean colonies. While a quarter-million Chinese workers, many of them forcibly coerced, did eventually go on indenture contracts to Cuban sugar plantations and to South American guano fields and nitrate mines, an even larger number of Chinese men (and very few women) participated in the California and Australia gold rushes of the middle of the 19th century on much the same terms as anybody else — as individuals hoping to strike it rich, as poor or displaced workers enticed by word of “gold mountains” across the sea.

The third governor of the state of California, John Bigler, nonetheless built his political career on smearing all Chinese workers as “coolies,” a captive workforce no more suited for the free state of California, he claimed, than enslaved (or even free) Black people. Radical political economist Henry George (author of the hugely popular Progress and Poverty) agreed, writing in an 1869 article (“The Chinese in California”) for the New York Tribune that Chinese workers depressed everybody’s wages because they did not form unions, would not socialize with Americans or European immigrants, and were never known to care about their rights. They were the perfect workforce, he warned, for a revived Confederacy with laborers of one “race” and employers of another. “Chinese labor degrades labor just as slave labor did,” wrote the anonymous authors of a pamphlet (Meat vs. Rice; American Manhood against Asiatic Coolieism. Which Shall Survive?) issued by the American Federation of Labor in 1901. That Chinese people looking for work were somehow less “free” than any others — more tied to nefarious secret societies, crime-boss handlers, or opium addiction — entered national policy as a truism with the Chinese Exclusion Acts of 1882 and 1902. At the peak of the so-called “Classical Gold Standard,” in a liberal world order notionally premised on free trade and free migration, the Chinese were the one exception. Yet Ngai notes many instances, in California and Australia alike, where Chinese migrants behaved much like anybody else: they worked with people they knew, they got into fights with each other, and some parlayed small mining profits into successful commercial ventures or profitable investments. They used the same physical tools as other miners and similar political ones (protest, petition, work stoppage).

Well known for her work in United States immigration history — her Impossible Subjects: Illegal Aliens and the Making of Modern America (Princeton University Press, 2004) won the Organization of American Historians’ Frederick Jackson Turner Award (among other prizes) — Ngai might well have written a history of Chinese involvement in the California gold rush alone. Instead, she impressively establishes a global framework for thinking about mining and migration, showing how techniques, individuals, and prejudices traveled between Pacific Coast sites in the United States and Canada and later centers of gold mining in Victoria, New South Wales, and southern Africa. Gold rushes transformed landscapes, built cities (the population of San Francisco grew 35-fold between 1848 and 1852), and altered human migration patterns. Mining itself was never easy work and miners everywhere and of all nationalities preferred working in small groups (so much for Clementine’s father alone in his canyon!). By the time mining engineer Herbert Hoover made his vast fortune (in a career that took him from Stanford to Australia, China, and the Altai Mountains), gold mining had become a heavily capitalized, labor intensive, and ecologically catastrophic industry, requiring two tons of ore to yield a single ounce of gold (worth $20.67). The first United States court ruling on an environmental issue (1884) was one that banned hydraulic gold mining.

In clear and non-technical language, Ngai explains how gold mining was actually done in California, Australia, and South Africa; how geological differences contributed to varied labor regimes; and how local politics shaped racial prejudice. While Chinese workers in California were stereotyped as unfree “coolies,” European settlers in Australia worried that Chinese immigrants were too free, constrained neither in morals nor movement. Lacking, it was said, those European behavioral compasses of Christian faith and middle-class family values, the Chinese threatened to “invade” the continent and turn a sparsely settled British colony into a densely Asian one. The situation in southern Africa was different again: Chinese workers there were deliberately imported on short-term contracts very much like those covering the use of African labor. Workers were subjected to constant surveillance, prohibited from owning property, obliged to live in mining company compounds, and forced to leave the territory again when their stint ended. The system made great wealth for the mining companies and their investors while immiserating the labor force on which it depended. There were 19 recorded suicides among Chinese workers in South African mines in 1904–1905; 49 the following year.

Histories of the British Empire usually link its 19th-century dominance to the gold standard, but the empire was transformed by the gold rushes as well. As Tim Alborn’s All That Glittered (2019) cleverly argued, defining gold as the locked-in-a-vault basis of serious economic activity entailed rejecting visible gold as gaudy, decadent, or nonmodern. Ngai further connects this analysis to settler colonialism, showing that with the discovery of gold, South Africa and Australia rose in strategic importance to overshadow India (where gold was not mined but worn as jewelry and valued in art). In general, though, Ngai’s book is rather thin — as one might expect, given her expertise in American immigration and labor history — on the relationship between the gold rushes, monetary economics, and global capitalism. While a few pages at the end of the book (pp. 284–290) sketch the lines of such an argument, Ngai’s real interest is clearly in how Chinese people experienced emigration and how working-class identities in the United States and the British Empire “nationalized” and became actively racist around anti-Chinese vocabulary and sentiment.

A satirical cartoon from the San Francisco weekly The Wasp reveals that monetary politics and racialized othering were even more closely related than The Chinese Question suggests. Published during the 1896 presidential contest between Republican William McKinley (proponent of the gold standard) and the famous defender of Free Silver, William Jennings Bryan, the caricature shows a working-class couple scrutinizing posters hung at the Democratic Campaign Headquarters. “Vote for Free Silver and Be Prosperous like China. 10 cents a day,” reads one; “Vote for Free Silver and Be Prosperous like India, 2 cents a day,” reads another. “What awful poor wages they get in all those free silver countries, John!” remarks the woman. “That’s so, wife,” replies John, “but the politicians say it will be different in America.” While proponents of minting silver defined it as money for ordinary people (gold denominations being too large in value for daily use), critics asserted that only poor, ignorant, and uncivilized foreigners could imagine any such thing. In the era’s Social Darwinist vocabulary, the eventual success of McKinley and the gold standard simply demonstrated “the survival of the fittest.” (Michael O’Malley’s 2012 Face Value: The Entwined Histories of Money and Race in America is very good on this.)

L. E. Foster, “Dubious,” “The Wasp”(San Franciso; August 22, 1896), photo via Internet Archive

Jin Xu’s sweeping Empire of Silver: A New Monetary History of China oddly enough echoes those turn-of-the-century caricatures, blaming “silverization” for “the Celestial Empire[’s] … fading imperial glory […] and even lagging behind its Asian neighbor, Japan.” Xu, a senior editor at and columnist for the Chinese edition of the Financial Times, writes the history of money as many have written it before her, passing judgment on the wisdom of the past with reference to supposedly timeless laws of economics. While Ngai argues that Chinese migrants had much in common with many others, Xu less convincingly proposes the reverse: that China’s 19th- and 20th-century political upheavals and widespread poverty stemmed from it being too different, from its “failure” to follow the British path to monetary stability and thriving financial institutions.

Xu’s provocative but ultimately unpersuasive central claim is that the “great divergence” in “Western” (read: English) and “non-Western” (read: Chinese) fortunes should be traced not to the accidents of the late 1700s and early 1800s — the thesis of historian Kenneth Pomeranz’s hugely influential The Great Divergence: China, Europe, and the Making of the Modern World Economy (2000) — but to a far longer pattern in monetary history. She suggests that because the Song Dynasty introduced paper money “too soon” (a “cultural flower of ancient empire fated to bloom prematurely”), China then “wasted” centuries with silver when it “should” have been establishing a central bank, property rights, and a stable mechanism for national public debt — institutions identified by Douglass North and Robert Paul Thomas’s The Rise of the Western World: A New Economic History (1973) and later scholarship as supposedly necessary for successful paper money. Throughout, Xu uses “divergence” like German historians once used the term “Sonderweg” [“separate path”] — to show that China took not just a different path but the wrong one. Though critical of “Chinese bias in favor of Big History,” Xu moves her own analysis forward by frequent reference to greed, folly, Shakespeare, and the supposed tendency of the Ming and Qing dynasties to “immobility” and the worship of tradition. In the end, she constructs a morality tale that is sometimes as caricatured in its history (Charlemagne’s empire, we learn, was divided in the year 814 into Germany, France, and Italy!) as it is fascinating in its details.

Empire of Silver may suffer at points from Stacy Mosher’s too literal translation: I stumbled, for instance, over its description of China as a “route-locked civilization” and realized only belatedly that a better translation would have been not “landlocked” (my first, totally illogical, thought) but “path dependent.” Still, its greatest weaknesses are not its alone, but ones shared with far too much financial and economic history: the assumption of monetary uniformity on a regional, national, or “civilizational” basis as both necessary and normal and a related tendency to envision history as a simple tale of progress or decline. General histories of money nearly always proceed in this fashion: they assert that economic life originated with barter and then moved to precious metals, minted coins, paper “backed by” metals, fiat paper, and now electronic payments. Because they are structured around technological change, high-level institutions, and economists’ models, histories like Xu’s struggle with the monetary multiplicity and competition that have in fact almost always existed.

During most of the period covered by Xu’s book, for instance, strings of copper or brass cash coins were the chief money used by peasants in China. While the 16th century’s famous “Single Whip Law” may have mandated the collection of taxes in silver, many were still paid in rice and in Yunnan (conquered by the Ming in the 1380s), cowrie shells remained the ordinary medium of exchange.

As historian Austin Dean explains with crystalline clarity, currency in 19th-century China combined “copper coins provided by the state [and] silver provided by the market, […] the Qing dynasty did not have a central bank, did not mint its own silver coins, [and] did not print its own paper money.” Yet where Xu treats these facts as a source of shame or a sign of “backwardness,” Dean observes “for most of human history, this type of currency system […] was quite normal.” That we see it as anything other tells us more about today’s prevailing monetary ideologies than it does about the past. Or, as Dean wryly and rightly observes, “Despite their privileged position in China during the latter part of the nineteenth century, foreigners liked to complain. The Chinese currency system […] caused particular consternation.” For the people who operated within any one part of the system, in contrast, it was just how things were — no more complicated or in need of reform than French spelling or English verb forms. (Imagine an Asian or African observer complaining that Europeans didn’t speak a single language.)

Dean’s excellent China and the End of Global Silver is a more academic book than Xu’s and narrower in remit than Ngai’s, but by setting Chinese monetary reforms of the 1880s–1930s in global contexts, it addresses the first’s concerns within the latter’s framework. Debate on changing the form and basis of “Chinese” money was, Dean shows, as much a matter of competing political visions as it was of economics: should domestic monetary stability be preserved at all costs or was it worth jeopardizing for the sake of international intelligibility? What would it mean to create a single national money, when China throughout this period was not so much an “empire of silver” as it was a collection of silver provinces, each with its own standard? Moreover, while the late 19th and early 20th centuries are often called “the era of the classical Gold Standard,” Dean emphasizes not one standard but three competing empires (the United States, Great Britain, and Japan), each with a gold-based currency and each actively attempting to bring China within its own orbit. Here too, we see how monetary history intertwines with that of human movements, labor regimes, and geopolitical power. In the aftermath of the anti-Christian and more broadly anti-foreign Boxer Uprising, the Qing Empire’s ruling family (which for a time backed the insurgents) was saddled with an enormous indemnity and forced to pay it by borrowing at high interest from the invading powers that had defeated the uprising. Concern that the payments would not or could not be made led to international debates about Chinese money and proposals to appoint “international experts” as comptrollers of the Qing currency. Western policymakers further hoped that a single national money would facilitate China’s integration into global economic networks; China would hence grow as a market for European- and American-made goods; the increased demand for exports would help reduce labor unrest at home. Capitalism needs markets, and China looked ready (as it does today) for exploiting.

It has been almost exactly half a century since Richard Nixon announced that the US dollar would no longer be convertible into gold at the fixed rate of $35 per ounce, thereby unilaterally ending the quasi-gold standard of the Bretton Woods era. (Named for the hotel in New Hampshire where the international agreement was formulated, Bretton Woods linked the value of nearly every currency to that of the dollar, and the dollar to gold.) National moneys, backed by the laws of the countries that issue them (often derisively referred to as “fiat” money) are today the international norm, while libertarians and others hostile to the rule of law tout the emancipatory possibility of private currencies such as Bitcoin. Mining, of course, is still very big business, with the difference that today Chinese firms are the world’s leading producers of coal, gold, and rare earth oxides. Where once it was Chinese workers who left the country to participate in international gold rushes, today it is enormous Chinese companies that increasingly manage mines and miners all over the world. And while the glitter of gold and the sparkle of silver continue to attract historians and investors alike, the real story today is almost certainly about copper. Essential for electric vehicles and wind turbines alike (today’s electric cars contain six times more copper — up to 175 pounds of it — than vehicles with an internal combustion engine), the metal long disdained for so easily turning green may be about to have its moment.


Rebecca L. Spang is professor of History at Indiana University, where she directs the Liberal Arts and Management Program (LAMP). Her most recent book is Stuff and Money in the Time of the French Revolution (Harvard University Press, 2015).

LARB Contributor

Rebecca L. Spang is Ruth N. Halls Professor of History at Indiana University and currently a Guggenheim Fellow (2022–23) and a National Fellow of New America (2023). Her most recent book is Stuff and Money in the Time of the French Revolution (Harvard University Press, 2015).


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