A_Monetary_History_of_the_Former_German_Colony_of_Kiaochou.pdf

A MONETARY HISTORY OF THE FORMER GERMAN

COLONY OF KIAOCHOU

John E. Sandrock

After China’s crushing defeat by Great Britain and France in the two Opium

Wars (1839-1842 and 1856-1858), the Ch’ing dynasty fell into great decline. After

both of these events, the Manchu government was forced to sue for peace – the

price of which proved to be very dear indeed. Great Britain and France, sensing the

total collapse of civil rule in China, placed exorbitant demands upon China in the

form of repatriations as laid down in the Treaty of Nanking. These took two

distinct forms; the demand for monetary indemnity in silver for expenditures

incurred in the war, and for the outright concession of Chinese territory. The

Chinese eventually handed over twenty-one million ounces of silver to satisfy the

former, and the island of Hong Kong to satisfy the latter. Thus the British territory

of Hong Kong was created. This act proved the forerunner of additional demands

for territorial concessions on the part of the European powers and Japan, who then

proceeded to carve China up into various spheres of influence for commercial

exploitation. French territorial ambitions centered upon south China. The British,

in addition to their trading port of Hong Kong, sought the right to open additional

Yangtze River ports to trade. Russia had ambitions for territorial expansion in the

north, where she craved a warm water Russian port on the Liaotung peninsula as

well as land in Manchuria. The Japanese, seizing upon the opportunity, laid claim

to Korea and the offshore island of Taiwan, which was then renamed Formosa.

China was simply too weak to resist these demands for territorial concessions.

This was pretty much the state of affairs until the turn of the century. For a

millenium the Chinese had considered themselves to be at the center of the universe

insofar as the arts, civil administration and commerce were concerned. It was

therefore understandable that they resented the presence of the “foreign devils” and

their commercial and cultural domination. Continued pressure and agitation by the

foreign powers fanned the flames of hatred against the barbarian outsiders. In an

attempt to provide a national defense against foreign belligerence the Ch’ing

empress Tz’u-hsi acting as regent for the boy emperor Kuang-hsu, ordered the

reinstatement of the militia at the village level. Radicals and secret societies were

soon to infiltrate these units, spreading the rallying cry “Protect the country, destroy

The German Colony of Kiaochou (1897-1914)

the foreigner!” Westerners identified these militia bands by giving them the name

“Boxers”, a loose translation of their Chinese name meaning “Righteous Harmony

Fists”. The Boxers at first began singling out Chinese Christians for persecution,

then went after the missionaries themselves. Isolated posts were attacked resulting

in many missionaries and thousands of their Chinese converts being put to death.

Things rapidly got out of hand, with all foreigners finding themselves in grave

danger. The greatest concentration of foreigners was in the Legation Quarter of

Peking which contained the foreign embassies, and it is there that the Boxers went

seeking revenge. The foreign powers made an unsuccessful attempt in June 1900 to

send additional troops to protect the embassies there. Foreign troops then seized the

fort at Taku bar, on the Yellow Sea, to gain passage to Tiensin and Peking. This

only aggravated the situation. Panicked and against saner counsel, the dowager

empress then ordered all foreigners killed. Heads began to roll. First to be murdered

was the German minister to China, whereupon the other foreign ministers and their

staffs, together with hundreds of Chinese Christians, sought refuge in the legation

quarter of Peking. The area was quickly besieged by the Boxers.

Another international expeditionary force was gathered and in August, 1900

was sent to relieve the Peking siege. This time it was successful. The imperial

court fled to Sian and the Boxers were suppressed. Following these hostilities, the

usual indemnities and concessions were demanded by the foreign powers, further

embarassing China and its people in the eyes of the world. Foreigners now acted as

though they were living in a conquered land, encroaching further upon Chinese

sovereignty. It was obvious to almost all that the days of Manchu rule over China

were now clearly numbered, eventually resulting in the overthrow of dynastic rule

and the establishment of the Chinese republic in 1912.

Germany had been looking for an opportunity to exploit China commercially

for some time but had no plans for territorial acquisition. Her business interests

were concentrated principally in the Shantung peninsula of northeast China. It was

here, in 1897, that two missionaries were murdered by the Chinese. Seizing upon

this incident, Germany occupied the Kiaochow Bay area. The negotiations which

followed resulted in the lease of one hundred seventeen square miles of land on the

Kiaochou peninsula to Germany for ninety-nine years. This foreign enclave on

Chinese soil was named Kiaochou by the Germans.

Kiaochou consists of an eclectic array of coin, banknote, notgeld and token

issues. This microcosm known as Kiaochou seemingly offers something for every

collector.

To this point the principal money of the area had consisted of a myriad of

notes from small private shops which could be found in all principal towns and

villages. These were the shops of the moneylenders. Even though they called

themselves “bankers”, most operated out of pawn shops. There was little or no

control exercised over them from the Manchu government and their note circulation

was strictly limited to the local area of issue. This system of banking had been

prevalent in China for centuries. From the 1830s on, the Ch’ing court did try to

regulate banking in the principal cities through the use of Ch’ien banks which were

responsible to the central government. It was not until 1898 that anything like

central banking appeared in China. To supplement this, the various foreign powers

began imposing their own banking systems upon a China weakened by corruption

and wars.

Private bank issue of Wei Hsing Te Chi in the amount of 1 tiao. “Tiao”was a term for one string

of 1000 copper cash coins. This note is typical of those issued by money lenders in every town

and village during the latter Ch'ing and early Republican period. Translated, the four vertical

characters in the left margin read: “Not to be paid by lamplight”.

Following the German acquisition of Kiaochou in 1898, the colony was

placed under the jurisdiction of the Imperial Naval Office and a trading and naval

port established at Tsingtao, the capital. The Imperial Maritime customs was set up

soon thereafter for collection of duties on goods shipped to and from the interior.

The German government built up the city of Tsingtao, running it as a model colony.

Tsingtao was a center for the flour, paper and cotton milling industries and for

fishing and shipyards. Extensive salt deposits were also mined nearby. Later on

the Germans built a large brewery which today bottles the famous Tsingtao beer.

Educational and agricultural institutions were opened throughout the leased

territory.

To promote its trade interests in the newly acquired territory, several

of the major German banks joined together to form a joint venture to serve their

Chinese interests. The Deutsch-Asiatische Bank was thus established. With a

capital of five million taels (22,500,000 mark) it opened its doors in Shanghai. This

bank soon followed the example and practices of other foreign banks in China,

which had been established for quite some time. (As early as 1872 a branch of the

Deutsche Bank in Berlin was opened in Shanghai but closed in 1875 for lack of

business.) The creation of the Deutsche-Asiatische Bank placed it in direct

competition with other foreign banks, all of whom had been operating in China for

some time. These included two Belgian, three British, two French, one Dutch, one

Portuguese, two Russian, one Scandinavian, three American and three Japanese

banks. In the beginning the German bank was less than successful. After the Boxer

rebellion was suppressed, business grew and branch offices were set up in

Tsingtao, Tientsin, Peking, Hankow, Hong Kong and Canton. The bank, at that

time however, did not have the power to print and issue its own banknotes, a right

enjoyed by all the other foreign banks. This was finally corrected in 1906, when

permission from the German government was obtained. At this time the Chinese

monetary system lacked uniformity, and in 1907, it was not possible to issue

banknotes of uniform denomination. Each Deutsche-Asiatische Bank branch

therefore had to issue its own series of notes because the local monetary unit was

not the same in the different locales. Consequently, different kinds of notes were

issued by the various branch banks (the Hong Kong and Canton branches did not

issue notes). Two major types of banknotes were emitted, one in dollars and the

other in taels. The Chinese tael was an ingot of commercially pure silver in the

shape of a shoe (called sycee by the Chinese) which had a different weight in each

major trading city. The three principal units used in everyday commerce were the

custom’s tael, weighing 38.24 grams, the Shanghai tael, with a weight of 36.64

grams and the Mexican dollar weighing 26.69 grams. The “Mex” got its name

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