It should have been the duty of a well organized Government to have put an end to these kinds of issues, knowing what they were and what they meant for the future. The Manchu Government was both unwilling and unable to take any step of the kind mentioned above. There was perennial want of money in Peking, where efforts were being made to obtain money by hook or crook. After a long period of isolation from the rest of the world the people and the Government were feeling acutely the impact of Western civilization and commerce. Within a very short period they had several conflicts with the foreign powers culminating as it did in the disastrous reverses suffered in the course of the Chino-Japanese war. Ever since Commissioner Lin commenced his ill-fated attempt to drive foreigners out of the Middle Kingdom by burning the 20,000 chests of opium in Canton, China has had to suffer losses, mainly as the result of the indiscreet actions of her officials. The greatest of all indiscretions was the quasi-official support given to the Boxers - both by the Court and most of the provincial administrations; the result was the practical doubling of China's foreign obligations, besides the inordinate amount of loss and humiliation she had to submit to. The effect of such a situation on the relations between Peking and the provinces was that the provinces had to dispatch nearly twice the usual amount to Peking, in order to enable the latter to meet all the newly acquired foreign obligations. The Central Government, being hard pressed for money, pressed the provinces. The latter tried to do their best; in view of the condition prevailing and the general inefficiency of the administration it was found difficult even to despatch the usual quota of provincial contributions. The central and provincial authorities were indulging in bitter mutual recriminations; the provinces, however, knew that there was no means of forcing them to do anything else but what they chose to do. The result was that the Central Government had to make the best shift it could, as also arrange some other means of meeting the outstanding obligations.
It was at this stage theft the provincial Government banks flooded the country with large amounts of note issues, and the provincial Government sent their contributions to Peking in the shape of notes. Peking was both chagrined and ill at ease at this new step - especially as it was unable to take any step to check the evil. Naturally, the next best course for Peking was to profit out of this; along with the provinces it was assiduous in pushing the circulation of these notes, especially as it had plenty to pay out.* For a considerable time any method of obtaining relief was welcomed by the Manchu Government; and it was well known that but for its embarrassed situation, the Central Government would certainly have taken steps to repudiate the indiscriminate issue of paper money.
* The Government bank-notes usually had a decree printed on the back, making them good for payment of all taxes and duties and likin; but other offices took them at a discount with the result that the people paid them into the treasuries instead of paying silver.