The proposal came to naught as the Government was not prepared to accept the gold standard and the Board was guided largely by the strong expressions of opinions of Chang Chih-tung, and Yuan Shih-kai, who was then Viceroy of Chihli. The Government decided in favour of having the Treasury or the Kup'ing tael as the unit. A special edict adopting the Kup'ing tael as a standard was issued on November 19, 1905 and the regulations of the edict may be briefly summed up as follows:
"The new silver currency should be purer in quality than the dollar hitherto coined in various provinces and the standard unit of value must be heavier, in order that it may serve as a national coin. The purest silver in circulation in China to-day is shown by chemical analysis to contain not more than 98 or 99 per cent. of pure silver; but a reduction of 2 to 3 per cent. should be allowed while minting the new coins, in order to cover the cost of coinage. It is proposed, therefore, to coin a new tael of 9 mace 6 candareens of pure silver mixed with 1 mace weight of pure copper; this coin will be equivalent to 1 Kup'ing tael, full touch.
"The fractional currency shall consist of (1) a piece containing 4 mace 8 candareens weight of Kup'ing silver mixed with 5 candareens' weight of pure copper - which shall be declared equivalent of 5 mace Kup'ing silver, full touch; (2) A piece of 1 mace 7 candareens' weight of Kup'ing silver mixed with 3 candareens of pure copper, to be the equivalent of 2 mace Kup'ing silver, full touch; and (3) a piece of the weight of 8 candareens 5 li of pure Kup'ing silver mixed with 1 candareen 5 li of pure copper, which will be the smallest silver piece, and the equivalent to 1 mace Kup'ing silver, full touch. It is also decided that in every 10 pieces minted 4 shall be of 1 tael value, 2 of the denomination of 5 mace, 2 of 2 mace and 2 of 1 mace. But if there should be a demand for a larger proportion of any particular denomination of coins, orders shall be issued to make a careful investigation as to the real amount in circulation and report upon the matter to the Financial Commission and the Board of Revenue; only upon their consent could the proportion be changed at any mint. The coins of the central and branch mints must be uniform in weight and in fineness; assay and inspection to be made according to the rules for the regulation of coinage already submitted by them and approved by the Throne.
"The 1 tael coin shall be equal to 2 five-mace coins or 10 one-mace coins. The subsidiary coins shall exchange among themselves at the same rate and under no circumstances may a discount be charged in all monetary transactions, public or private; any disobedience will be punished according to law.
"The 1 tael coin being the standard monetary unit there shall be no limit to its circulation. The 5 mace and other fractional silver pieces shall be legal tender in every transaction to the amount of 10 taels, i.e., to the value of 10 of the 1 tael coins. They must not be used for payment in full amounts for over 10 taels and if offered under such condition they may be refused. The rate of exchange between the copper coins and the silver coins and the limit of circulation of the former will be determined after the provincial authorities have complied with the regulations already submitted, by which they are required to investigate and report to the Board of Revenue the facts relating to the circulation of copper coins.
"The Board of Revenue has been ordered to coin silver and the central mint will coin several million pieces and send them to the Bank; the Board of Revenue shall also send dies to the provincial mints of Chihli, Kiangsu, Hupeh and Kwangtung, which shall at the same time mint several million pieces, whereupon the Bank of the Board of Revenue shall print paper money to the full amount of the silver coins minted and fix the day upon which it shall be put into circulation. After its issue the Treasury of the Board of Revenue and the treasury of the provinces mentioned shall first receive it in a fixed proportion and thereafter all the provinces, the railways, the China Merchants' Steam Navigation Co., and the Telegraph Administration shall receive it in the same proportion. There must be no discrimination against it by the said official companies on the ground that it is not issued in their provinces. The method of arranging the proportions shall follow the regulation of the Bank of the Board of Revenue; for the present the proportion of silver may be paid in lump silver or old dollars. But when there is a sufficient amount of new coins the proportion payable in new coins may be increased until finally all silver payments may be required to be made exclusively in the new silver coins.
"All provincial taxes levied in Kup'ing taels shall be payable in the same amount of the new tael coins. The collectors shall have salaries definitely fixed and they are not to be allowed to make their living by charges for exchange, etc., as heretofore. Apart from the legal charge of meltage no other charges shall be added to the assaying charges. All other monies heretofore collected or paid in taels of the existing scales shall be converted according to the value of the tael used, into their equivalent in Kup'ing taels of full touch. And the conversions having once been made this sum shall for ever hereafter be receivable and payable in that amount of the new 1 tael coins - no variation from the rule being allowed.
"As China is now entering into new commercial treaties with the various foreign powers, which provide for the adoption of a uniform national coinage, which the merchants of the foreign nationalities residing in China shall use, the Board of Foreign Affairs will be instructed, when the new coins are issued, to send dispatches to the various foreign ministers and consuls at the various treaty ports. Notification must also be made to the commissioners of Customs that they shall hereafter use the new coins uniformly. Custom duties have heretofore been levied and collected in Haikwan taels; orders must now be issued to the commissioners of Customs hereafter, in accordance with the provision of commercial treaties, to convert duties levied in Haikwan taels into their equivalent in Kup'ing taels and collect accordingly.
"On the day when the new coins are put into circulation the viceroys and governors of the various provinces must issue instructions to the local authorities to put out proclamations informing the merchants and all people that whatever coins they may have, old or new, and whatever commercial transactions may take place in the markets, the original amount, according to the value of the tael in which they may be reckoned, must be converted to their equivalent in Kup'ing taels of full touch and paid in that amount of new silver coins - such payment being absolutely valid and not to be refused.
"As all viceroys, governors and other officials, merchants, soldiers and common people in all the provinces must use the new silver coins, all may send their silver to be minted; the central mint and the branch mints at Tientsin, Nanking, Wuchang and Canton will coin it for them. Every tael of Kup'ing silver of full touch will be refined to pure silver 985 fine, or finer; in return for it they will receive one of the new tael coins. Fractional coins of the denominations of 5 mace, 2 mace and 1 mace will also be minted for them in the proportion set forth above. The excess in the fineness of the silver will pay the cost of the mintage. Silver of inferior quality, foreign silver coins and the silver dollars heretofore minted in the various provinces may also be sent in to be re-minted, the amount of the new coins given in exchange being determined by the amount of pure silver contained in the coins thus given; that is, their value will be determined in Kup'ing taels of full touch and new coins issued accordingly.
"When the new coins are first issued and the people are unfamilar with them, there will almost surely be attempts made among the merchants to discriminate against, and discount, them. The Bank of the Board of Revenue, the Customs banks in the various provinces and other official banks and cash shops must be charged with the responsibility of seeing that every one bringing the new coins to exchange for paper money, bullion or copper coins, or desiring to exchange paper money, silver bullion or copper coins for the new silver coins, shall receive just treatment on the basis of one Kup'ing tael being the equivalent of one tael in the new coinage."
This act, which was promulgated with a fanfare of trumpets was never put into effect, and the question of the reform of currency had again to be reconsidered; every question including that of the standard, the size of the silver unit and the treatment of the copper currency was again reopened. The people who favoured the gold standard did not give up hope, but for the moment the disagreement was over the size of the unit and the fineness of the silver in the unit. Even among those who favoured the silver standard the leaning was toward having the dollar which was 72/100 of the tael as the unit of coinage - the principal consideration being that the dollar was less heavy and would be found most suitable to fulfill the purpose of supplanting the Mexican dollar, whose circulation was extending all over the country. There was further the question of the suitability of the standard coin to the economic condition of the country; considered in this light the dollar or even a coin smaller than the dollar should certainly be more acceptable than the tael, which should have proved altogether too heavy for ordinary purposes. The fineness of silver in the standard coin was also one which led to considerable discussion. The general idea was that there should be free coinage of the standard, either without charge or with a small charge to cover the cost of coining and expense of assaying. The latest regulation provided for a coin 960 fine, but as Kup'ing standard was 987.5 fine the confidence of the public in the coin could not be complete. The high seigniorage would lead to counterfeiting, although, of course, it would be extremely difficult, when the coins were turned out of a mint equipped with modern machinery. There was also another point which was of vital importance to the Government; the currency scheme as a rule dangled before the eyes of the Government the high profit arising out of the mintage of the standard and subsidiary coins; but when it was found that the high profit carried with it other dangers, the result was the indefinite postponement of a definite action with regard to currency reform.