Chapter 1709 - Coinage Technology (Continued)
The group offered various opinions on the entire process and the coinage specifications. Someone suggested that coins of this specification were too thick—in fact, the Yuan Shikai dollar was 39 mm in diameter and 2.3 mm thick; if reduced to a 31 mm diameter, the coin's thickness would become 3.64 mm. Moreover, it wouldn't "ring" properly—the blow-and-listen test was a key method for laypeople to check whether a silver coin was genuine. If the coin was too thick, it would actually make counterfeiting easier.
He proposed changing the one-yuan specification to 25 grams per coin, 2.5 mm thick, with a diameter of 35.2 mm. The advantage was that coin dimensions would be completely standardized: a stack of 40 coins would be exactly 10 cm high and weigh exactly 1 kg—easy to count and package.
Subsidiary coin dimensions should be adjusted accordingly. The Metallurgy Department pointed out that electrolytic silver and copper were not strictly necessary for coinage metal. Fire-refined silver and copper could also achieve 99% purity. The trace impurities in fire-refined metal mainly affected conductivity but had no impact on coin stamping.
Regarding subsidiary coins, one transmigrator suggested that the concept of "one quarter yuan" was not intuitive enough for natives. It might cause confusion in use. Better to mint 20-fen and 10-fen silver subsidiary coins instead.
"Changing 25 fen to 20 fen poses no production problems, but we'd lose some seigniorage," Cheng Dong mused.
"How would we lose?"
"The production cost of a 25-fen coin and a 20-fen coin is nearly identical. Even if we reduce size and weight slightly to cut costs, the savings are minimal. It's as if every 20-fen coin we mint loses us 5 fen in revenue. By the same logic, we can't mint 10-fen coins either."
"Why not?"
"The margin is too small. From a coinage standpoint, it's a loss." Cheng Dong explained that the face value difference between 10 fen and 20 fen was only twofold. Setting aside the negligible difference in minting cost, the metal cost alone for two 10-fen coins was actually higher than for one 20-fen coin.
In the Republican era, Guangdong had issued large quantities of silver subsidiary coins in 20, 10, and 5 fen denominations, but the widely minted and circulated coin was the 20-fen "double dime." The latter two were rarely issued and even less used because of high cost and rapid wear.
"If we cut metal costs too far, the fineness will be too low. Frankly, if silver content drops below 50%, the coins become meaningless."
"Why not issue a 10-fen copper coin? That way the cost would work. The copper coin could be made from brass with a small amount of lead—copper content could be held at 60%."
"The demand for subsidiary currency is enormous. How much copper would it take to meet that demand...?"
"We're issuing paper notes of equivalent denominations, aren't we? Mint fewer copper coins, issue more paper notes—problem solved."
As for copper reserves, the Planning Board actually held quite a lot. Years of near-obsessive copper hoarding had built up considerable stocks. However, demands from the electrical, refrigeration, telecommunications, and some mechanical industries meant copper was not exactly in surplus—and minting silver coins itself consumed large quantities of copper.
"The memorandum also proposes using electrolytic silver and copper. Our production capacity is already stretched to meet that."
"If we had enough electricity now, I wouldn't object to using electrolytic silver and copper across the board. After all, electrolytic refining of nonferrous metals leaves behind anode slime containing many rare metals that are otherwise hard to obtain. But our power shortfall is still large, and there's barely enough copper for the electrical industry..." The representative from Metallurgy looked pained.
Then another transmigrator raised the point that the coins lacked an issuing institution, which seemed improper. Though modern coins generally bore neither the country name nor the issuing bank, in this timeline it seemed appropriate to add the relevant markings.
"I have a suggestion: right now, S.P.Q.M. is meaningless not only to Chinese but to foreigners too. At least Spanish coins have a mint abbreviation. Even if we don't add the country name, we should at least include an issuing bank—so people know where these coins come from."
Wang Ruixiang proposed: "Using carbide tooling to cut dies every time is too wasteful. Our domestic tooling is a weak point—low output, poor quality, short lifespan. How about this: use carbide tools to cut copper, make a copper master of the coin, then electroform once to produce matching male and female dies. After that, we just keep electroforming from the master. After all, chemical batteries and metals are easier to come by than carbide tooling."
Wang Luobin shook his head. "Each die has to last a long time. Your process has extremely high cost, extremely low efficiency, and the die surface chips too easily—especially against steel. And the base of the electroformed die deforms too readily—insufficient strength. Besides, if we want to build an industrial base, we have to clear the tooling-alloy hurdle—there's no way around it. The sooner the better. If we can't do it well, that's fine—keep trying. Our conditions now are much better than before."
After much discussion, the final decision was to modify the coin specifications to fit a "standardization" approach. Additionally, the issuing bank would be printed on the coins: Central Reserve Bank of the Yuan Council. As for the coinage metal, the requirement for electrolytic silver and copper was dropped; only 99% purity was mandated. It was also decided to change the 25-fen denomination to 20 fen; minting of 10-fen coins would be shelved for now, with only paper notes issued in that denomination.
"How long until we have finished samples?" Cheng Dong asked, seeing that broad consensus had been reached.
"With equipment ready, two weeks to produce samples. Adjustments afterward will take some time. A month should be enough," Liang Xin said. "The question is whether the coinage metal can be supplied in full."
"Don't worry about that," Cheng Dong said. "Once the new monetary system was decided, we began remelting all the silver in our inventory, casting it into 99% silver bars—one kilogram each. What I don't know is the mint's monthly production capacity."
"Design capacity is 40,000 coins of various types per day," Liang Xin said. "At full capacity, 80,000 per day is achievable. It all depends on whether the metal supply is sufficient. That figure is actually quite low—in the early twentieth century, the Nanjing Mint could produce 120,000 Yuan Shikai dollars per day, or double that with overtime."
"At 1.2 million coins per month, our silver reserves would be exhausted after one month," Cheng Dong thought with a start. All the silver in the Planning Board's warehouses—ignoring fineness—amounted to only 700,000 tael (at 37 grams per tael). Even after remelting and adding copper, zinc, and other alloys, that was only one month's production.
Would 1.2 million assorted coins be enough to meet circulation needs? The Yuan Council's monetary reform was, in plain terms, "abolishing the tael and adopting the dollar"—a huge shock to the old weighed-silver-plus-copper-cash standard. What kind of reaction would appear on Guangdong's markets? Would there be some kind of "currency war" or financial struggle? He had no idea.
What worried him most was that someone might hoard silver dollars, or worse, that the coins produced simply couldn't meet circulation demand. The Ministry of Finance could only release a limited number of silver dollars onto the market. Though war spoils might provide a supplement, he couldn't expect too much from the treasuries of Guangdong's various government offices. As for tax revenue—that wouldn't come in until summer.
The transmigrators of the Ministry of Finance were, in fact, all counting on "striking down the local tyrants." But that income was completely unpredictable.
The meeting ended with Cheng Dong still worried. Afterward, Liang Xin and several other transmigrators from the Machinery Department immediately set to work making the dies.
Given that the Hong Kong plant lacked sufficient naturalized technicians and its equipment and materials were not as complete as Lingao's, the steel dies for all coin types were manufactured in Lingao, then packed in special cases and brought by Liang Xin to the Hong Kong Mint.
The Hong Kong Mint was located near Central. This new facility was temporarily under Liang Xin's management, to be handed over to the Ministry of Finance after formal operations began. According to the organizational chart, the mint director and chief accountant would be appointed by the Currency Bureau of the Ministry of Finance. The factory was divided into General Affairs and Production sections. General Affairs comprised a secretarial office, cashier's office, materials warehouse, coal depot, metal warehouse, and calibration station. Additionally, special police—employed by the Ministry of Finance and dispatched by the National Police—served as factory guards. The Coining Section had a technical office with workshops for power, smelting, rolling, stamping, polishing, pickling, die-making, weighing, and embossing. Though each workshop was small, the whole operation was a sparrow—small but complete.
Apart from a few laborers, nearly all Hong Kong Mint workers were skilled technicians trained by the Yuan Council itself. Due to the special location and the sensitive nature of mint work, worker selection was extremely careful: not only did technical skills have to be up to standard, but political ratings had to be high, family backgrounds clean, and each worker had to have immediate relatives living in Lingao. Those with no ties were rejected outright.
Upon arriving in Hong Kong, Liang Xin immediately began calibrating machinery and training workers on the process, awaiting only the arrival of coinage metal to begin production. The greatest difficulty in coin manufacture was die-making; once qualified dies were produced, manufacturing the coins themselves involved little technical challenge—virtually any machining enterprise with a punch press of adequate tonnage could make coins.
Before long, the first shipment of coinage metal arrived in Hong Kong. This was material specially smelted by Metallurgy for the mint: 99% pure one-kilogram metal bars. Besides silver and copper, there was a small quantity of zinc bars. The zinc was added to improve coin durability.
The coinage metal, apportioned by coin type, was charged into dedicated crucibles and smelted in a reverberatory furnace. By rights, such smelting should have used an electric furnace; if using crucibles, at least coke should have been the fuel. But Liang Xin had neither electric furnaces nor sufficient coke, so he made do with high-quality Hongji anthracite coal. Fortunately, the reverberatory furnace and blowers together could provide adequate temperatures for alloying.
(End of Chapter)