2 Jiao – Szechuan Province

In 1932, Szechuan (Sichuan) Province existed in a state of profound monetary fragmentation and instability, characteristic of the broader Chinese warlord era. The nominal authority of the Nationalist government in Nanjing did not extend effectively into the region, which was dominated by competing local militarists like Liu Xiang and Liu Wenhui. These warlords, needing to finance their armies and administrations, freely issued their own unbacked paper currency, known locally as Sichuan or Chuan notes. These notes were not convertible to silver and were issued in excessive volumes, leading to severe and rapid depreciation. Merchants and the public held them with great distrust, and their value could vary drastically from one military district to another.

The situation was further complicated by the continued circulation of older imperial copper coins (cash), silver dollars (including foreign coins like Mexican Eagles), and sycee (silver ingots), which were hoarded as a hedge against the worthless paper. This created a multi-tiered currency system where large transactions used silver, daily small-scale commerce relied on copper, and the depreciating warlord notes were forced upon the populace for taxes and local trade. The lack of a unified monetary standard stifled inter-regional commerce within Szechuan and created a heavy burden on peasants, who often had to pay taxes in silver while earning income in devalued paper.

This chaotic financial environment was a direct reflection of Szechuan's political disunity and contributed to the province's economic stagnation and social hardship. It would persist until the mid-1930s, when the central government began to exert more control, culminating in the 1935 currency reform that outlawed local issues and established the fabi as the national currency. However, in 1932, Szechuan remained a stark example of a failed monetary sphere, where warlord power was literally printed onto worthless paper, imposing an invisible tax on the entire provincial economy.