Page 33 - The South China Business Journal
P. 33
still quoting prices in 1/8s until the latter part of
the 20th century.
The currency survived the demise of the Manila
galleon and lived on in independent Mexico’s “eagle”
dollar: prices in China were regularly quoted in
“dollars mex”. A continued commitment to the purity
of the coinage meant that Mexican coins traded at
significant premiums to their value as bullion, as well
as to other coins. US traders had to purchase Mexican
dollars at a premium to their value in gold and such
was the demand that the government was able to levy
a significant tax on their export.
The Mexican dollar saw off several erstwhile
competitors, including a US trade dollar and the
first Hong Kong dollars. The 1866 Hong Kong
mint established to produce coins on the Mexican
model closed down two years later. The machinery
went to Japan where it was to mint yen coins from
1870. The yuan was introduced a bit later with the
same specifications. (Both “yuan” and “yen” mean Left: Mexican Dollar with Chinese Chop Mark
“round”, a reference to the form of currency they Right: Theodore de Bry, miners in Potosí, engraving (1590)
were based on.) Background: An early map of Southeast Asia by Matthias Quad (Cologne, 1600)
Although Britain rather than Mexico ruled trade it
in the 19th century, it was the Mexican peso, not
the Pound, that dominated transactions, at least
in East Asia. The reasons are not hard to discern:
quality, liquidity and familiarity, factors disjoint
from Mexico’s lack of international political and
economic prowess. Yet Mexico was still able to reap
Willthe financial benefits of producing the most widely
accepted currency.
When, after a reign of some three centuries, the
Spanish/Mexican dollar finally, and gradually, passed
the baton of global acceptance, it was to the US
dollar. Since these were in effect the same coin, it was
— at the time — perhaps more a matter of labelling
than anything very fundamental. The US dollar has
remained largely unchallenged since; only now do
Speaksome observers see a possible role for the renminbi.
But the dollar’s ancestry is a reminder that the status
of global currency is awarded by the market not so
much by weighing economic or geopolitical influence
but rather on the basis of practical considerations of
liquidity, security, reliability and convenience. As we
plot the possible future trajectories of the dollar and
renminbi, it is important not to omit consideration
of the period when the dollar spoke Spanish rather
than English.■
Chinese?Peter Gordon & Juan José Morales are co-authors of
The Silver Way: China, Spanish America and the Birth of
Globalisation, 1565–1815 (Penguin 2017).
South China Business Journal 31
the 20th century.
The currency survived the demise of the Manila
galleon and lived on in independent Mexico’s “eagle”
dollar: prices in China were regularly quoted in
“dollars mex”. A continued commitment to the purity
of the coinage meant that Mexican coins traded at
significant premiums to their value as bullion, as well
as to other coins. US traders had to purchase Mexican
dollars at a premium to their value in gold and such
was the demand that the government was able to levy
a significant tax on their export.
The Mexican dollar saw off several erstwhile
competitors, including a US trade dollar and the
first Hong Kong dollars. The 1866 Hong Kong
mint established to produce coins on the Mexican
model closed down two years later. The machinery
went to Japan where it was to mint yen coins from
1870. The yuan was introduced a bit later with the
same specifications. (Both “yuan” and “yen” mean Left: Mexican Dollar with Chinese Chop Mark
“round”, a reference to the form of currency they Right: Theodore de Bry, miners in Potosí, engraving (1590)
were based on.) Background: An early map of Southeast Asia by Matthias Quad (Cologne, 1600)
Although Britain rather than Mexico ruled trade it
in the 19th century, it was the Mexican peso, not
the Pound, that dominated transactions, at least
in East Asia. The reasons are not hard to discern:
quality, liquidity and familiarity, factors disjoint
from Mexico’s lack of international political and
economic prowess. Yet Mexico was still able to reap
Willthe financial benefits of producing the most widely
accepted currency.
When, after a reign of some three centuries, the
Spanish/Mexican dollar finally, and gradually, passed
the baton of global acceptance, it was to the US
dollar. Since these were in effect the same coin, it was
— at the time — perhaps more a matter of labelling
than anything very fundamental. The US dollar has
remained largely unchallenged since; only now do
Speaksome observers see a possible role for the renminbi.
But the dollar’s ancestry is a reminder that the status
of global currency is awarded by the market not so
much by weighing economic or geopolitical influence
but rather on the basis of practical considerations of
liquidity, security, reliability and convenience. As we
plot the possible future trajectories of the dollar and
renminbi, it is important not to omit consideration
of the period when the dollar spoke Spanish rather
than English.■
Chinese?Peter Gordon & Juan José Morales are co-authors of
The Silver Way: China, Spanish America and the Birth of
Globalisation, 1565–1815 (Penguin 2017).
South China Business Journal 31
