Gold Yuan Note Coin History

Author: Ji Changyou
Publisher:
Publishing Date: 2001-06-01
Features: The Gold Yuan note is one of the shortest-lived currencies in monetary history. The deception and predatory nature of the Gold Yuan note are rarely matched in history. The author personally witnessed the entire process of its issuance, circulation, and collapse, and it remains vivid in his memory to this day. To help readers understand what the Gold Yuan note was, where its deception and predatory nature were evident, and to raise awareness of the necessity of strengthening research on modern Chinese monetary and financial history, this book was written. In 1946, the Kuomintang launched a full-scale civil war, which was contrary to the will of the people. Those who win the people's support prosper, while those who lose it perish, making failure inevitable. In the first half of 1948, the Nanjing Nationalist government suffered repeated military defeats, incurring heavy losses and gradually shrinking its control area. Politically, it faced constant crises and was on the brink of collapse. Financially, its revenue was less than one-tenth of its expenditures, with both domestic and foreign debts piling up. Its credit was completely lost, and it had no access to loans, forcing it to rely on issuing currency to cover the deficit, which led to hyperinflation and pushed the entire industrial and commercial sector to the brink of bankruptcy. Rural areas were in a state of decay, and public anger boiled over. The Nanjing Nationalist government was surrounded by enemies. The Kuomintang was unwilling to accept defeat and decided to reform the currency system by issuing Gold Yuan notes. The purpose was:
1. To drastically reduce the face value by three million times to alleviate public aversion to hyperinflation.
2. To set the exchange rate of Gold Yuan notes to the Legal Tender at one to three million, effectively issuing larger-denomination banknotes to alleviate the crisis of cash shortage.
3. To prohibit the public from holding gold, silver, silver coins, and foreign currency, and to forcibly redeem them within a limited period, aiming to plunder a final round before fleeing the mainland.
Although the Gold Yuan note was nominally backed by gold, it could not be redeemed and was essentially an empty value symbol, no different from the Legal Tender. Moreover, the Gold Yuan notes issued were essentially small-denomination Legal Tender notes that could not enter circulation. The Gold Yuan metal subsidiary coins, except for the one-cent copper coin, were all old Legal Tender subsidiary coins. The so-called "Gold Yuan" was merely a deception. The preparation for the issuance of Gold Yuan notes was nominally five billion U.S. dollars, but most of it was empty, making it another deception. Through the issuance of Gold Yuan notes, people of all strata lost approximately two billion U.S. dollars in gold, silver, silver coins, and foreign currency, with indirect economic losses impossible to calculate. Due to the rapid collapse of the Nationalist government, people's foreign currency assets stored abroad were spared. Before fleeing the mainland, the Kuomintang secretly transported its gold, silver, and issuance reserves to Taiwan. According to incomplete statistics, there were over 2.96 million taels of gold, over 69,000 taels of silver, over 53,000 taels of silver coins, and all foreign currency.
The Gold Yuan note was issued on August 20, 1948, and officially entered circulation on August 23. Over seventy days later, on November 11, the government announced the "Modification of the Issuance Measures for Gold Yuan Notes," along with corresponding modifications to the other three measures. The Gold Yuan note depreciated by 80%, essentially declaring the failure of the Gold Yuan policy. In March 1949, the market began to reject the Gold Yuan note, and the trend quickly spread. By April, it had been widely rejected across the country (including state-owned railways, postal services, electricity, transportation, and tax departments), replaced by silver coins, foreign currency, copper coins, and even physical goods like grain and cotton cloth. In other words, the Gold Yuan note had, in fact, collapsed completely.
From its issuance to its collapse, the Gold Yuan note did not last long, but it left an unforgettable scene in the history of money.