Even to-day, although there is a sort of silver currency, cash or copper coins almost rule the roost. The history of the introduction of silver as currency in China is given in my book "Finance In China " and it is needless to repeat it again. But it is admitted on all hands that a great deal of the silver now in circulation in this country came in through the medium of foreign commerce. In the early years of foreign trade, even as late as 1860, imports of foreign goods rarely equalled exports of tea and silk - which were at one time practically the only articles of export, and which were available only in this country. During a number of years in the latter half of the eighteenth century the imports of foreign articles amounted to one-fifth of the exports. Trade had to be balanced somehow, and the balance in values had to be paid in silver. It is useless to speculate on the total amount of silver that entered this country through these means; nor is such speculation of any practical value, as it is impossible to calculate the total of silver that went out of the country in the early decades of the nineteenth century on account of the increase in the importation of opium. As is well known, the balance of trade in the latter half of the nineteenth century has been uniformly unfavourable to China. The effect of such a situation was not, however, a large increase in the exportation of silver. As a matter of fact, in the very worst years from the point of view of China trade, as for example in 1906 to 1907, the export of silver was less than one-twentieth of the total adverse balance. The reason why export of treasure became unnecessary in spite of the large increase of imports over exports was that, owing to political and other causes, China started to borrow heavily from foreign countries.

A little explanation is necessary to make this point clear to my readers. Supposing that China contracts a loan in London or Paris for 10,000,000, it follows, as a matter of course, that this amount is to be sent in silver to this country; supposing that at the same time the balance against China in trade is about Tls. 70,000,000, or, in other words, merchants trading in China owe manufacturers in Europe the sum of Tls. 70,000,000 or approximately 8,500,000. The account under such circumstances is adjusted in the following manner; instead of a double transaction of the transmission of 10,000,000 to China and 8,5000,000, to Europe, the operation is simplified by Europe remitting 1,500,000 in silver to China.