Hermann Schwarzwald, Sinn und Aussichten einer Europäisierung des chinesischen Geldwesens (1914)

Published in three installments in Die Bank, Schwarzwald’s article treats Chinese monetary reform as a struggle over economic autonomy, state power, and foreign financial control. Moving from Chinese monetary history through British India to monetary theory, it reverses the conventional hierarchy of modernization: China’s supposedly disorderly silver-weight system preserves safeguards that European monetary institutions have weakened.

Das Geldwesen eines Landes von rein ökonomischen Gesichtspunkten anzusehen, es nur auf seine technische und wirtschaftliche Zweckmäßigkeit hin zu prüfen, ist eine heute kaum mehr statthafte Naivität.

English translation: To regard the monetary system of a country from purely economic points of view, to examine it only with respect to its technical and economic expediency, is a naivety scarcely permissible any longer today.

This opening makes currency arrangements inseparable from political interests. Schwarzwald argues that governments and concentrated banking organizations replace circulating metal with fiduciary instruments to obtain resources and expand credit. In China, Yuan Shikai’s centralizing ambitions converge with foreign lenders’ interests. A national currency and issuing bank would finance a military-bureaucratic apparatus while increasing dependence on external capital.

The first installment reconstructs silver-weight accounting as a response to official debasement and depreciating paper. Silver circulated according to weight and fineness rather than sovereign denomination; the tael designated a weight, not a coin. Foreign dollars likewise acquired value through their metallic content, sometimes authenticated by bankers’ stamps. Monetary diversity thus represented more than technical backwardness: it constrained arbitrary authority.

Dem allen gegenüber war die neue Silbergewichtsrechnung eine Rückkehr zum Soliden, Echten, Unzweideutigen, Einfachen.

English translation: As against all this, the new reckoning by weight of silver was a return to the solid, the genuine, the unambiguous, the simple.

Schwarzwald’s contrast between metallic quantity and nominal designation draws on Eugen Dühring’s criticism of Münzaberglaube, the belief that a coin’s name possesses value independently of its material content. Chinese practices, he argues, protect contractual claims against manipulation of the monetary unit. He nevertheless acknowledges divergent local weights, fineness standards, and testing costs. His alternative is standardization and reliable certification, not preservation of every existing custom.

The second installment examines British India as the model for a Chinese gold-exchange standard. Schwarzwald locates India’s fiscal difficulties in the mismatch between silver revenues and gold-denominated obligations, rather than in silver itself. Closing the mints to private silver coinage in 1893 enabled an artificially maintained rupee value and generated minting profits accumulated in London. Exchange stability consequently depended on political authority, favorable international payments, and access to British credit. Depreciation threatened wages, savings, and contractual claims, especially those of less informed holders.

For China, Schwarzwald proposes collecting import duties in gold while retaining silver for domestic taxation and payments. Matching gold receipts to foreign gold liabilities would address the fiscal problem without imposing gold valuation throughout domestic circulation. Uniform refining, weighing, and truthful weight inscriptions would simplify transactions while preserving interchangeability between minted and unminted silver.

The concluding installment scrutinizes the yuan and Vissering’s proposed central bank. Notes redeemable domestically in silver but supported internationally by drafts on foreign gold balances would place monetary reserves under overseas financial influence. Schwarzwald doubts the scheme’s feasibility because China lacks India’s strongly favorable trade balance, entrenched coin usage, and authoritative colonial administration. Resistance to imposed nominal values appears in the concessions needed to circulate new coins:

Man mußte sich schließlich zu Kompromissen bequemen, um sie mit erheblichen Kursabschlägen (bis zu 30 und 40%) in Umlauf zu bringen.

English translation: In the end one had to resign oneself to compromises in order to bring them into circulation at considerable discounts (of up to 30 and 40 per cent).

Such compromises suggest that reform could multiply coin varieties without displacing weight accounting. Successful enforcement, conversely, could make domestic monetary values dependent on continuing foreign advances. The danger is not merely administrative failure but a restructuring of financial sovereignty.

The final theoretical discussion extends this criticism to Europe and Keynes’s defense of the gold-exchange standard. Stable international exchange, Schwarzwald maintains, does not establish the security of domestic money: concentrating gold abroad can protect foreign recipients while exposing domestic holders to political and credit risks. Drawing on Dühring, he distinguishes precious-metal money, grounded in material properties and scarcity, from credit, which depends on confidence and institutions. His defense of Chinese autonomy is also a polemic for metallic money. Linking currency design to imperial dependence and distributive power, the article proposes developing China’s practices into a standardized, publicly verifiable system rather than replacing metal with nominal promises.