10 Cash – Republic of China

In the early 1920s, the Republic of China was mired in a severe and complex monetary crisis, characterized by extreme fragmentation and hyperinflation. Following the collapse of the imperial system and the descent into the Warlord Era, there was no unified national currency. Instead, the financial landscape was a chaotic patchwork: old imperial silver coins (yuan), foreign banknotes (especially from British and Japanese banks), and a flood of unbacked paper notes issued by various provincial warlord governments and private banks. This lack of a central monetary authority meant exchange rates and values fluctuated wildly from region to region, crippling inter-provincial trade and economic stability.

The core of the problem was the relentless printing of paper currency, known as fabi (legal tender), by both the beleaguered Beiyang Government in Beijing and competing warlord regimes to finance their military campaigns and administrative costs. These notes were not backed by sufficient silver reserves, leading to a catastrophic loss of public confidence. As a result, the paper money depreciated rapidly, while silver coinage, seen as a reliable store of value, was hoarded, disappearing from circulation—a classic example of Gresham's Law. This divergence created a dual-system where daily transactions became a gamble, and prices could skyrocket within weeks.

This monetary disintegration had devastating social and economic consequences. Hyperinflation eroded savings and wages, plunging urban workers and civil servants into poverty and triggering widespread social unrest. It also severely handicapped any efforts for national industrial development or coherent fiscal policy. The currency chaos of the 1920s fundamentally undermined the legitimacy of the central government and highlighted the country's political disunity, setting the stage for the monetary reforms later attempted by the Nationalist Government (Kuomintang) after its nominal unification of China in 1927-28.