An important point which ought to be noted with regard to the reluctance of China to accept any silver coin is the belief that coinage always implies a loss in the purity of silver. Such a fear has been due to the enormous alloy which was found in the coins issued out of the Chinese mints. It is admitted on all hands that no coin could have the purity or fineness of the best sycee; but people would not have noticed the difference in purity and fineness but for the desire on the part of the provincial officials to make undue profit on coinage. In view of the popularity and the large measure of success which attended the issue of the copper coins and subsidiary silver pieces, the authorities were led to believe that they had only to issue dollars in order that they might be accepted. As a matter of fact, the people drew a line between the copper and subsidiary silver coins, which they were more or less inclined to consider as mere mediums of exchange, and the big silver coin which was proclaimed to be the standard. Even copper and small silver pieces circulated at vastly depreciated values.

A mistake which militated against any measure of success in currency reform was the fact of the Central Government allowing the provincial authorities to have the entire control of mintage. Although the Central Government was issuing regulations from time to time and was supposed to be exercising some sort of control over coinage it is a notorious fact that the mints were used by the provincial authorities as means of raising revenue, which they badly needed. Thus, it came about that, while there was no central authority guiding the issue of coins, there was no means of putting the coins minted into circulation in the proper manner. This function of putting money or coins into circulation is scrupulously controlled by the central authority in every country in the world. As a matter of fact a district or a province can never adequately do it, even when there is no such large territory as that of China to be covered.

For any new coin to attain a partial measure of success in circulation it should at least be a money of account in particular places or in some important branch of trade. It is well known that none of the coins issued in this country have ever been accepted as the coin of one single city; as for trade in China no coin has ever been recognized by it - the measure of value being the tael which is a pure weight, varying with different places. The mistake made by the Chinese authorities arose out of the fact that the Mexican dollar was the money of account in the retail trade, especially in the foreign ports.