Chapter 1708 - Coinage Technology

In truth, the State Council, including most people in Finance, largely agreed with the "Mithril Faction," but objective facts couldn't be changed. So the final approved plan was still to mint silver dollars and implement a silver standard.

Once the basic approach was settled, construction of the mint formally began. Previously, the various paper securities issued by Delong had all been printed at the printing works. Now that they would be producing coins, simply adding a workshop to the printing plant as before would not do. A separate facility had to be established.

In Finance's view, the new mint should be located in Hong Kong. Whether for the market where the coins would circulate or the source of the coinage metal, Hong Kong—adjacent to Guangdong—was obviously more suitable than Lingao on Hainan Island. Finance projected that once they landed on the mainland, demand for the new currency would be enormous. If the mint couldn't supply enough nearby and a currency shortage arose, it would be deeply embarrassing.

Though Hong Kong lacked resources, transport was convenient, and transshipment of various materials was easier than from Hainan. As for security, there was nothing to worry about.

After consultations between the Planning Board and the Industrial Department transmigrators, the basic scale and required equipment for the mint were finalized.

The Hong Kong Mint was to be built in two phases, with separate facilities for coining and printing, to form a complete design and production capability for negotiable instruments, paper money, and coins. Due to time constraints—and since the Lingao Printing Works already had the capacity to print banknotes—Phase One would be the coinage plant.

The coinage plant included a small metal smelting workshop, a coining workshop, a metalworking shop for designing and manufacturing stamping dies, and independent supporting facilities: steam power, factory buildings, security, and other ancillaries.

A preliminary estimate indicated that the main equipment to be newly manufactured included: smelting furnace, plate-rolling press, punch press, washing machine, edge-rolling machine, stamping press, and reducing lathe. Aside from a few pieces, most had to be designed and built from scratch. But machinery manufacture was no longer a problem for the current machine works; virtually everything could be made in-house.

After several months of construction, the factory buildings and equipment were now largely installed. At present they were gathering coinage metal and fuel. Workers had also begun arriving in succession. All was ready. In the Finance Ministry conference room in Lingao, the final working meeting before formal operations was being held.

Though called a working meeting, it was actually very important. The final details of the new currency—from the coins themselves to the manufacturing process—would be settled at this meeting and then put into action.

Minister of Finance Cheng Dong rose and cleared his throat.

"Comrades! Recently, our new monetary reform plan was approved by the Central State Council and the Yuan Council. The Ministry of Finance solicited opinions from the Industrial Department on manufacturing our own coins. After receiving your affirmative replies, we formalized your proposals into the memorandum you now have before you."

Cheng Dong's gaze swept across the faces of those assembled. Some were listening intently; others were studying the documents in hand. He continued with satisfaction: "With State Council approval, we will now formally commence manufacture of the new coins. Within one month we will have the capacity for mass-producing stamped metal coins and will produce the first batch ready for circulation." A murmur of agreement rose in the conference room.

"Below, I will offer a brief explanation of the memorandum. Please raise any questions at this meeting. The mainland offensive is about to begin. As you may already know, our new banknotes are being printed in volume and have already been shipped to Guangdong awaiting issuance. However, without coins to back them up, this paper money will have great difficulty circulating, so we must produce finished coins as quickly as possible."

No one present had ever worked at a mint, but they had a general idea of the coinage process. Strictly speaking, modern coins are not "cast" but "stamped." They are produced by stamping metal sheet on steel dies using a punch press—a "cold-working" process. Hence the precise weight and beautiful designs.

Before modern coinage, silver coins—whether Chinese or Western—were "cast," a "hot-working" process. This included the Spanish silver dollars that flooded into China in this timeline: the Cross-and-Shield COB was also a cast coin. The difference was that on Chinese coinage the design and characters were directly cast from the mold, whereas most European coins were first cast as blank discs and then struck with hard dies to impress the pattern—so-called "struck coins."

Because COBs were struck coins, although fineness and weight were nominally regulated, in actual production debasement and short-weighting occurred frequently—much like Chinese bullion silver. For that reason, despite nearly two hundred years of flowing into China, COBs had always circulated on a by-weight basis and never functioned as counted coins. The Yuan Council had received large quantities of COBs through war and trade; much of the silver paid by Ming merchants had been COBs cut into fragments for use as broken silver.

It was not until the eighteenth century, when machine-struck Pillar Dollars from Spain began to arrive, that things changed. Their uniform fineness and design, their convenience, and the raised patterns and milled edges that made clipping and filing nearly impossible all ensured a reliable weight. Coins could finally be counted rather than weighed. It was no exaggeration to say that the Pillar Dollar's widespread circulation in the Qianlong era, displacing weighed silver as the accounting standard along the coast, was an epoch-making achievement.

Cheng Dong advocated machine-struck silver coins largely because he saw the success of the Pillar Dollar in China: the populace was not without demand for counted silver coins—they simply lacked the conditions. The Pillar Dollar's success through purely commercial circulation fully demonstrated the superiority and feasibility of machine-struck silver coins.

The Ministry of Finance's coinage plan called for three denominations of silver coins: one yuan, half yuan, and quarter yuan. Paper notes of equivalent value would also be issued. All small-denomination subsidiary currency would be paper notes, denominated in fen, in denominations of 10, 5, 2, 1, and half fen. One yuan was equivalent to one hundred fen.

The reason for issuing a half-fen subsidiary note was that on the current market, one tael of silver exchanged for several thousand copper cash. Even for "good cash" such as Song or Yongle coins, the rate was seven or eight hundred cash. If the smallest denomination had too high a value, it couldn't function as subsidiary currency.

The benchmark currency, the one-yuan coin, would be struck from an alloy of 87.5% silver and 12.5% copper, weighing 27 grams with a diameter of 31 mm. The size and fineness roughly matched the Pillar Dollars, Yuan Shikai "Fat Man" dollars, and Mexican Eagle dollars that had circulated widely in China in the original timeline.

As for the half yuan and quarter yuan, in addition to proportionally smaller sizes, silver content was also reduced: 60% for both denominations.

The reason subsidiary coins had lower silver content was that their minting cost—aside from the metal itself—was about the same as for the one-yuan coin, yet their circulation value was discounted.

The silver and copper used for coinage would be 99% pure material refined by the Lingao nonferrous metals smelter using electrolysis, to ensure precise alloy formulation.

"The proportions and dimensions are fine," said Liang Xin, who was responsible for die-making. "But how do we make the dies? I've never done coin dies. The designs are quite intricate—not quite microengraving, but still pretty small..."

On the table lay coin designs drawn by a transmigrator with an art background. The obverse read "One Yuan" in regular script, encircled by a wheat-ear motif, with the year of issue in small Arabic numerals below. The reverse showed the Morning Star shining over the globe. Around the globe ran a ribbon bearing four Latin letters: S.P.Q.M. (senatus populusque magnus—"the Great Senate and People").

The other denominations—half yuan and quarter yuan—had identical obverses except for the denomination. On the reverses, the half yuan featured the Holy Ship, while the quarter yuan bore the national emblem the transmigrators privately called "Iron Fist Bursting Chrysanthemum."

"You don't need to worry about the engraving. We have skilled craftsmen for that. We'll make it large first, then use a reducing lathe to scale it down." Although Wang Luobin had become Chairman of the Yuan Council, he still couldn't resist the itch to get involved in technical matters and had come to attend the meeting in person.

Once the coin design was finalized, engravers would create a three-dimensional plaster model. The plaster model was enormous, typically between half a meter and a meter in diameter. This large scale allowed the coin design to be extremely fine. Once the pattern was complete, a reverse mold was made in plaster. The reverse mold was then carefully covered with extremely thin gold leaf by naturalized craftsmen. This gold-leafed reverse mold was then electroplated with a thicker, sturdier copper layer.

The copper-plated reverse mold was placed on a reducing lathe, which transferred the pattern onto a steel master die matching the coin's actual size. The reducing lathe used a lever principle, with a four-bar linkage controlling a platform that held the die.

The reverse mold was mounted on a rotating frame, and a stylus traced closely along its surface. As the mold turned, the stylus rose and fell with the contours of the pattern. The stylus's motion was transferred via lever to a small-diameter hard-tipped milling cutter rotating on the other side of the lathe. For each full rotation of the stylus over the mold, the cutter carved a corresponding ring of pattern onto the steel workpiece. By the time the stylus had traced every part of the mold, the cutter had carved a proportionally reduced master die. After finishing, this master die was used to stamp coin dies.

Because the die steel was quite hard, stamping could not be completed in one pass. After every one-fifth of the required depth, the die had to be removed and tempered in an annealing furnace. Once the material softened, stamping resumed until fully complete. Each finished coin die could stamp approximately one hundred thousand coins. Merely twenty dies were enough to stamp twenty thousand coins a day—within a few weeks, all the Yuan Council's gold and silver could be coined.

(End of Chapter)