Collecting Rare Pre-1950 Chinese Currency by Dr. Richard S. ……

Part I | Part II | Part III

The Central Bank of China was officially established in November 1928. This was the year after Chiang Kai-shek assumed leadership of the Republic of China’s (1912-1949) government. The bank’s mandate was to set economic policy for the Republic, but their later hidden agenda was to become the sole issuer of banknotes for the entire country to fund the government’s needs.

Earlier, and before this scheme took full effect, currency was issued by many entities. Numerous provinces, cities, foreign and private banks, and others printed paper money. Most were solely recognized and accepted where the banknotes were issued. Until the mid-to-late 1930s, hundreds of different local currencies simultaneously circulated throughout China.

These banknotes, along with the other Republic notes, are widely collected worldwide. Like many banks that issued currency during the Republic’s existence, Central Bank of China notes are printed with both English and Chinese text and titles and are often denominated in U.S. dollars. This is a major plus that attracts English-speaking collectors to the area.

During its tenure on the mainland from 1928 until 1949, the Central Bank of China issued over 200 different banknotes. This does not include the signature, issuing bank, overprints, and other interesting and important varieties that are often quite rare and excite collectors and investors.

The bank produced five primary classes of currency. This was due to the inflation that increasingly plagued the country during Chiang Kai-Shek’s rule. A combination of two wars and his government’s mismanagement of the country’s finances were primarily financed by the printing press. This drove Chiang and his government to issue new currencies to replace earlier ones that had become nearly or totally worthless.

Under Chiang’s control, China was faced with numerous challenges, threats, and problems from the beginning of the Civil War with the Communists in late 1927 until 1949. Almost immediately after taking control, Chiang’s Kuomintang government initiated a purge of their Communist opposition. The first phase of the Civil War ensued until 1937. That was when Japan invaded China. At one time Japanese soldiers occupied and controlled 1/3 of the Chinese mainland. In 1931, Japanese forces had conquered Manchuria in northeastern China. Only after Japan lost World War II did they retreat from China.

From 1937 until the end of World War II, the conflict with Japan became the primary focus of the Republic’s government and spending. This proved a boon for the Communists. It gave them the opportunity to resume their war against Republican forces after they regrouped, and gained strength, followers, and momentum. An extended violent conflict with the Communists ensued until 1949 when Mao Zedong’s troops prevailed and gained control of the country.

Prior to the formation of the Central Bank of China and Chiang Kai-shek’s control, the Bank of China and the Bank of Communications were China’s two largest banks. They acted as China’s de facto dual National Banks and were the main issuers whose currencies were used nationally. By mid-1935 the Central Bank of China gained control of both the Bank of China and the Bank of Communications as well as most smaller banks. Finally, in 1942 the Central Bank of China assumed the role of the sole issuer of China’s currency. When the Communists won the Civil War, the bank and most high government officials fled to Taiwan to escape the Communist wrath. The Bank survives today in Taipei.

Why Are Many Pre-1950 Chinese Banknotes so Rare?

The extremely costly and bloody on again, off again Chinese Civil War sapped the strength of the government and the Chinese People. This was magnified by their effort to remove the Japanese from their country.From Valuable to Worthless and Back Again: Pre-1950 Chinese Currency, Part IV

The wars with the Communists and Japan were initially funded by bank loans. Later, after the Central Bank of China became the prime issuer of the country’s money, Chiang’s government was largely financed by the printing press. This led to massive, devastating inflation that destroyed the economy, allowed the Communists to prevail, and ruined or caused the death of untold millions of Chinese lives.

In June 1937, when Japan invaded China, one U.S. dollar bought 3.7 yuan. By December 1941 the yuan had sufficiently depreciated to require 18.9 yuan to acquire one dollar. As inflation continued to soar at the end of 1945, it took 1,220 yuan to purchase one sole dollar. Finally, in May 1949, when the Communists were on the verge of winning the war and gaining control of the country, 23.3 MILLION yuan were needed to purchase one U.S. dollar. Needless to say, the Chinese People were devasted economically, financially, and emotionally. Wealthy individuals became poor, and the middle class and poor became hopelessly destitute.

In November 1935, Chiang’s government announced the Currency Decree. This mandated the Central Bank of China, the Bank of China, the Bank of Communications, and later the Farmer’s Bank of China, to become the sole issuers of the nation’s banknotes. This act created a new currency; the Fabi or fai-pei. It also removed silver from backing their money. This effectively eliminated all constraints and gave Chiang absolute control of the issuance of the country’s money. The notes of the remaining smaller banks were allowed to be used for a time but were quickly phased out, thereby making them worthless.

Later, to make matters even worse for the people, when the Communists took power, all previous Chinese banknotes became worthless!

Witnessing their paper money becoming completely valueless led the citizenry to wantonly destroy their banknotes. Why not? They were already worth less than the paper upon which they were printed. For over a decade, as inflation skyrocketed and destroyed the value of their money they had already discarded or destroyed an untold number of banknotes. These were issued by the banks that no longer existed to redeem them.

Now, all their currency had no value and only reminded them of the pain and suffering they had already endured while they saw their life’s savings evaporate before their eyes. Individuals burned, buried, and otherwise discarded millions upon millions of earlier valuable banknotes. The issuing bank didn’t matter. In some cases, virtually the entire issuance of some notes was gone. This is the reason some previously scarce or even common banknotes are essentially impossible to acquire. In fact, many rarer specimens are not only of lower grade but also have problems. In many cases, the only reason they survive is they were pinned or taped to a wall or rescued from a fire.

I believe the widespread destruction of millions of pre-1950 Chinese banknotes has created a rare opportunity for the collector or investor. Additionally, many Chinese collectors have gravitated towards collecting the banknotes of the People’s Republic of China (1948 to present) rather than those of the Republic.

Not only are many Republic notes far rarer than their Communist counterparts, but they normally sell for a small fraction of PRC notes of similar rarity. This leaves numerous rarer Republic notes extremely undervalued in my opinion.

For the collector, banknotes of the China Republic offer the opportunity to acquire a diverse collection of important, unusual, and historic remnants of the nation credited with issuing the world’s first paper money, and at reasonable prices. For the investor, it offers the ability to buy rare Chinese banknotes before more Chinese citizens enter the market to compete with them.

Historically, the collectibles of major countries have risen in price and have often been exceptional investments. This is because as a nation advances their citizenry acquire more free time and extra money to use at their whim. This gives people who once lived a subsistence life the opportunity to collect objects of their nation’s heritage, and the capital to do so. The new money entering the markets drives up the prices of the limited supply of desirable historical mementos. And China and its citizens are certainly in the beginning stages in that regard. If I am correct, pre-1950 banknotes of the Republic of China will be one of the primary beneficiaries of this condition.

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About Dr. Richard Appel

Dr. Richard S. Appel has been a numismatic expert for 50 years. He offers his personal services as a rare coin broker or rare coin consultant to both beginner and experienced consumers alike. Please visit, or contact him at his website He can also be reached by phone at (800) 782-2646. For a modest fee he will treat every purchase or sale of your coins as if they were his own, and will negotiate the best possible prices on your behalf.

中国, 中國, 蔣介石


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