TABLES OF MODERN MONETARY HISTORY: ASIA

by Kurt Schuler

www.dollarization.org

Preliminary version, 29 February 2004

This is one in a series of tables that will eventually cover the modern monetary systems of all continents. I intend to summarize some of the information here in spreadsheet form later. For detailed explanations of the categories and terms in the tables, see the accompanying "explanation" file. I welcome comments from knowledgeable readers. Because I read no Asian languages, I was unable to consult official documents and much local scholarship for many countries, so I am more likely to have made errors here than for any other continent. Should you have a suggested correction, please specify the source of your information. I am most interested in information from primary sources, particularly laws and the reports of monetary authorities.

Copyright 2004 by Kurt Schuler. This paper may be printed out for personal use by individuals, but may not otherwise be reproduced. In quotations or citations, please note that this is a preliminary version. As with all the writings on my Web site, the material here reflects my personal views, which are not necessarily those of my employer, the Joint Economic Committee of the U.S. Congress.

Notes

The tables use these abbreviations or symbols: g = grams, £ = pound, $ = dollar, SDR = Special Drawing Right of the International Monetary Fund.

For former Soviet republics that became independent in 1991, the first and second banks are not listed because those countries inherited multiple state banks and in some cases fledgling private banks from the Soviet economic system.

Afghanistan

Political sketch

Independent from the hegemony of the United Kingdom on 19 August 1919.

Afghanistan, previously divided into mostly independent principalities partly within the Mughal empire of India and partly within the Safavid empire of Persia, was united in the 1700s by the Persian leader Nader Shah and his successor Ahmad Khan Abdali (Ahmad Shah Durrani). After Durrani's death in 1772, the empire foundered because of clashing tribal and family loyalties and the imperialist designs of Russia and Great Britain. The British sought to extend control over Afghanistan in a series of wars from 1839 to 1919, but they were unable to subdue the population, and Afghanistan basically retained its independence. The United Kingdom formally recognized Afghanistan's independence by the Treaty of Rawalpindi, signed on 8 August 1919 to end the Third Afghan War. From the 1930s a series of cautious and moderate governments under the Afghan monarchy brought political stability.

A 1973 coup supported by the leftist Parcham ("Flag") Party ended the monarchy and made Afghanistan a republic. The Parcham and the leftist Khalq ("Masses") parties joined to form the People's Democratic Party of Afghanistan in 1977, and together they seized control of the government in a coup of 27 April 1978. But friction arose between the two factions, and their Marxist policies sparked rebellions in the countryside by 1979. Soviet troops invaded Afghanistan on 24 December 1979 to prevent their Afghan clients from being overthrown. A civil war followed in which Afghan rebels supported by the United States and Pakistan resisted the government. Millions of Afghan civilians fled into Pakistan and Iran. The guerrillas controlled most of the countryside, while Soviet troops held the cities. After years of futile effort, the Soviet Union withdrew its troops from Afghanistan from May 1988 to February 1989. In April 1992 several rebel factions succeeded in capturing Kabul, overthrowing the communist government, and establishing a provisional Islamic republic. The Taliban faction eventually emerged on top, though there remained areas of the country in the control of rival groups. In 2001, after the Afghan government failed to satisfy demands by the United States to cease giving refuge to the Al Qaeda terrorist organization responsible for attacks in the United States on 11 September 2001, the United States supported groups opposed to the Taliban. They entered Kabul on 13 November 2001. Afghanistan installed a transitional government on 22 December 2001. Currently (2004) warlords still control large areas of the country and the new government is still trying to exert its authority and lay the foundation for Afghanistan's first full-fledged experience of democracy. Afghanistan's economy is largely agricultural, and its exports include opium.

Wars since 1500

Babur's Capture of Kabul, 1504; Conquests of Babur, 1524-1529 (in India); Mogul-Afghan War of 1565-1581; Mogul-Persian War of 1622-1623; Wars of Aurangzeb, 1636-1657 (against Persia and others); Mogul-Persian War of 1638; Mogul-Persian War of 1649-53; Afghan Rebellions of 1709-1726 (against Persia); Persian-Afghan War of 1726-1738; Afghan-Maratha War of 1758-1761 (in present-day India and Pakistan); Persian-Afghan War of 1798; Persian-Afghan War of 1816; Afghan Civil War of 1818-1826; Afghan-Sikh War, 1836; First Afghan War, 1839-1842 (Afghans against United Kingdom); Persian-Afghan War of 1836-1838; Afghan Civil War of 1850-1855; Persian-Afghan War of 1855-1857; Afghan Civil War of 1863-1879; Second Afghan War, 1878-1880 (Afghans against United Kingdom); Russo-Afghan War of 1885; Third Afghan War, 1919 (Afghans against United Kingdom); Khowst Rebellion, 1924; Afghan Civil War of 1928-1929; Afghan Civil War of 1979-2001 (including war of Taliban against Northern Alliance supported by United States, 2001).

Convertibility

Introduced exchange controls about April 1938.

Other

Defaults on or restructurings of debt to the foreign private sector to private sector to private sector: None.

Economic crisis 1928, seemingly related to the civil war.

Banking crises: None listed, although given Afghanistan's history it is implausible that there have been none.

Frankel and Rose (1996) list of currency crashes: Afghanistan not included.

No exchange rate data in Reinhart and Rogoff (2002).

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Fry (1974), Gregorian (1969).

Monetary authorities: Afghanistan

Exchange rate arrangements: Afghanistan

Note: This history is sketchy except for the period 1955-1979.

Azerbaijan

Political sketch

Independent from Russia from 28 May 1918-27 April 1920 and from the Union of Soviet Socialist Republics on 18 October 1991.

Azerbaijan adjoins the Iranian region of Azerbaijan, and their inhabitants are of common descent. As a result of several wars, Under the Turkmenchay treaty of 1828, Persia ceded to Russia what is now independent Azerbaijan. Azerbaijan differed from the neighboring Christian countries of Armenia and Georgia in that its inhabitants were mainly Turkish-speaking Shiite Muslims. Azerbaijan's rich oil fields, which provide what is still today the country's biggest export, began to be exploited in the 1870s. After the Russian Revolution of October 1917, Azerbaijan declared its independence from Russia on 28 May 1918. As elsewhere in the former Russian empire, Communist forces fought anticommunist forces. In this case, the Ottoman Empire supported the anticommunist forces and helped ensure their victory. There was also an overlapping struggle between Armenians and Azeris for territory. Following the end of the First World War, Azerbaijan was briefly under British protection. In April 1920 the Soviet Red Army invaded Azerbaijan and ended its independence. From 12 March 1922 Azerbaijan was part of the Transcaucasian Soviet Federated Socialist Republic, but on 5 December 1936 Azerbaijan became a union republic in its own right.

Azerbaijan declared independence from the collapsing Soviet Union on 18 October 1991, and its independence was confirmed by the dissolution of the Soviet Union on 26 December 1991. War soon broke out with Armenia over Nagorno-Karabakh, a region of western Azerbaijan with a mostly Armenian population. Nagorno-Karabakh had been an autonomous region under Soviet rule, and ethnic Armenians did not want Azeri rule. Azerbaijan lost control of Nagorno-Karabakh to Karabakh forces supported by Armenia. Discontent over losses in the war enabled Haidar Aliyev to become president on 24 June 1993. Aliyev's presidency hardened into a dictatorship. Ilham Aliyev succeeded his father as president on 31 October 2003 after a fraudulent election. Azerbaijan signed a cease-fire with Armenia concerning Nagorno-Karabakh in May 1994, but the conflict has still not been resolved politically. Azerbaijan continues to claim Nagorno-Karabakh. Azerbaijan has an exclave called Nakhichevan that has an Azeri majority but is separated from the rest of Azerbaijan by Armenian territory.

Wars since 1500

Safavid Conquest of Azerbaijan, 1500-1503; Battle of Chaldiran, 1514 (Turks against Safavids); Turko-Persian War of 1578-90; Turko-Persian War of 1616-1618; Turko-Persian War of 1730-1736; Russo-Persian War of 1722-1723; Russo-Persian War of 1804-1813; Russo-Persian War of 1825-1828; Russo-Persian War of 1911; Russian Civil War, 1917-1920; Armenian-Azerbaijani War of 1988-1994; Azerbaijan Revolt of 1993.

Convertibility

The Union of Soviet Socialist Republics (USSR) established a monobank system in early 1918, soon after the Bolshevik Revolution. It established a two-tier banking system in 1988 as a step away from central planning. The two-tier system was the basis of the national banking systems that former Soviet republics established after the USSR dissolved in late 1991, with the local branch of the State Bank of the USSR typically becoming the new national central bank. The Bank of Russia became the successor to the State Bank of the USSR as the issuer of the ruble. Former Soviet republics used the Russian ruble and were part of the ruble zone until they established their own national currencies. Some countries established coupon currencies as a temporary step, while others proceeded directly to full-fledged currencies. Cash rubles (paper money) were uniform throughout the former USSR, but noncash rubles (deposits) in various republics exchanged at varying rates against one another and against cash in the free or black market. On 24 July 1993, Russia announced that Soviet and Russian notes issued before 1993 would become invalid as of 26 July. In Russia, the period for exchanging notes issued before 1993 lasted until 31 August 1993. Russia's demonetization of notes issued before 1993 notes marked the end of attempts to keep the former USSR largely intact as a ruble zone. In some former Soviet republics, Soviet and Russian notes issued before 1993 remained legal tender for a time even though they had ceased to be legal tender in Russia.

Other

Defaults on or restructurings of debt to the foreign private sector to private sector: None.

Banking crises: numerous banks closed or deemed insolvent 1995-past 1999.

Frankel and Rose (1996) list of currency crashes: Azerbaijan not included.

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Hanke (1998).

Monetary authorities: Azerbaijan

Exchange rate arrangements: Azerbaijan

Bahrain

Political sketch

Formerly part of the Federation of Arab Emirates (most of which is now the United Arab Emirates). Independent from the United Kingdom on 15 August 1971.

Bahrain was under Arab control from the 700s until 1521, when Portugal seized it. In 1602, the Persians took Bahrain and held it against assaults by the Portuguese and the Omanis. In 1783 Ahmad ibn Al Khalifah ousted the Persians, and his family has ruled Bahrain ever since. In the 1800s, the United Kingdom intervened several times to suppress piracy by the Bahrainis and to defeat attempts by neighboring Arabs to assert dominion over the islands. In a series of treaties dating from 1820, the United Kingdom gained extensive control over Bahrain. Pearl diving was an important local industry until the 1930s, when the Japanese began producing cultivated pearls at far less cost of recovery than naturally occurring pearls. Oil, the basis of Bahrain's modern economy, was discovered in 1932.

The United Kingdom withdrew its forces from the Persian Gulf in 1971. Bahrain declared itself independent at about the same time, on 15 August 1971. After independence, tensions between the Shiite and Sunni Muslim communities increased, and Shiites, emboldened by Iran's Shiite revolution in 1979, continued to press for greater participation in government. Sheik Isa bin Hamad Al Khalifa, Bahrain's ruler since 1961, died in early 2002 and was succeeded by his son, Sheik Hamad bin Isa Al Khalifa. The son announced his intention to introduce greater democracy. The first elections in three decades were held in 2002, with women gaining the right to vote.

Wars since 1500

Bahrain-Qatari War, 1867.

Convertibility

On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914, gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925, the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.

The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973, the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong abandoned sterling as its anchor currency. The sterling area ended in 1979 when the United Kingdom abolished exchange controls.

Bahrain left the sterling area on 23 June 1973.

Other

In the states of the Arabian Peninsula, gold and silver coins, particular gold British sovereigns and silver Maria Theresa thalers, continued to be widely used into the 1960s even after local note currencies and coins were established. In late 1965, India ceased making rupee coins from the Persian Gulf region convertible into the pound sterling, although notes remained convertible. For a brief period beginning in mid January 1966, Bahrain made its coins available to other Gulf states to fill the gap left by the withdrawal of Indian coins from circulation (Anonymous 2002).

The Indian rupee was widely used in the countries of the Persian Gulf and Arabian Peninsula in the early and mid 1900s (and in some cases even earlier). The government of India established a separate currency, the Gulf rupee, for circulation exclusively outside the country (India, Reserve Bank of India [Amendment] Act, 1 May 1959). In doing so, the government hoped to reduce the drain on its foreign reserves from gold smuggling with the countries of the Persian Gulf. After India devalued the rupee on 6 June 1966, the countries using the Gulf rupee--Oman, Qatar, and what are now the United Arab Emirates--decided to replace the Gulf rupee with national currencies. Kuwait had already done so in 1961, and Bahrain had done so in 1965.

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: In 1991 the system successfully withstood deposit withdrawals during the Persian Gulf War.

Frankel and Rose (1996) list of currency crashes: Bahrain not included.

No exchange rate data in Reinhart and Rogoff (2002).

Qatar, Bahrain, and the United Arab Emirates had an interchangeability agreement for bank notes starting apparently on 28 January 1978. The rates of interchange were 10 Qatari riyals = 1 Bahrain dinar = 10 United Arab Emirates dinars, up to 5,000 Qatari riyals, 500 Bahrain dinars, or 5,000 United Arab Emirates dinars. The agreement lapsed on 5 May 1979 after Qatar revalued its currency.

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Anonymous (2002), Bahrain Monetary Agency (1994), Darley-Doran and Bahrain Monetary Agency (1996), Presley and Wilson (1991), Wilson (1987).

Monetary authorities: Bahrain

Exchange rate arrangements: Bahrain

Bangladesh

Political sketch

Formerly East Pakistan. Independent from Pakistan on 16 December 1971.

Muslim raids began on northern India at the close of the 900s. In 1338 Bengal, a region that includes Bangladesh, was able to separate itself from the Delhi sultanate and remain independent until its conquest by the Mughals in 1576. During this period the majority of the population became Muslims. In 1651, the British East India Company established a factory (trading settlement) in Bengal. At the Battle of Plassey in 1757, Robert Clive, acting for the company, defeated the ruler of Bengal and placed in office a successor more sympathetic to British interests. By 1765 the British East India Company had secured the revenue rights for Bengal, which marked the beginning of the British Empire's rule in India. The Indian Mutiny (Sepoy Rebellion) of 1857-1858 threatened British dominance and led the British government to take over India from the East India Company, effective 1 November 1858. In 1905 the British created the Muslim-dominated province of East Bengal to reduce friction with the mostly Hindu surrounding area. In 1912 the British reversed the partition, which had been opposed by Hindus, but problems between Hindus and Muslims continued. When Britain granted independence to India and Pakistan on 15 August 1947, East Bengal became East Pakistan. What is now Pakistan was West Pakistan.

Many Bengalis wanted independence from West Pakistan, which was the dominant part of the country. In 1970 the pro-independence Awami League won all East Pakistan seats, and hence a majority of seats nationwide in the National Assembly. On 1 March 1971 the Pakistani government indefinitely postponed the meeting of the Assembly. Violence erupted and guerrilla warfare resulted. Millions of refugees fled to India, whose military then intervened and guaranteed defeat for West Pakistan. On 16 December 1971, East Pakistan became independent as Bangladesh. Bangladesh was and is very poor. The early years of the new nation were marked by political instability, with the assassinations of two presidents and coups. Since 1991 Bangladesh has had civilian rule, though it has been marked by turbulence. After achieving independence, Bangladesh had a heavily government-controlled economy, which failed to deliver economic growth. Starting in 1975 controls gradually loosened. Bangladesh's longstanding extreme poverty has abated moderately as modern agricultural techniques and growing exports from the clothing industry have improved the standard of living. An insurgency in the Chittagong Hill Tracts region by mainly Buddhist tribes began in 1973 and ended only in 1997.

Wars since 1500

Before 1947, see India; Indian Civil War of 1947-1948 (by Hindus and Muslims as India was partitioned); Indo-Pakistani War of 1971; Pakistani Civil War of 1971 (Bangladeshis against Pakistan); Bangladeshi Civil War (Jumma Insurgency) of 1973-1997.

Convertibility

On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914, gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925, the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.

The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973, the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong abandoned sterling as its anchor currency. The sterling area ended in 1979 when the United Kingdom abolished exchange controls.

Bangladesh left the sterling area on 23 June 1972.

Other

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: entire banking system technically insolvent late 1980s-1990s.

Frankel and Rose (1996) list of currency crashes: 1975.

No exchange rate data in Reinhart and Rogoff (2002).

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Hossain and Rashid (1997).

Monetary authorities: Bangladesh

Exchange rate arrangements: Bangladesh

Bhutan

Political sketch

Bhutan probably first became a distinct political entity in the 1600s, when a Tibetan Buddhist priest named Sheptoon La-Pha became king. Successors were persons thought to be reincarnations of the deceased king. In 1907, the monarchy became hereditary, as it has remained since. In 1865 the British invaded Bhutan from neighboring India and incorporated Bhutan into their sphere of influence. In 1910 Bhutan agreed to be guided by Britain in its foreign affairs in return for an annual British subsidy. In 1949 India took over the United Kingdom's role, and the invasion of neighboring Tibet by China in 1950 further strengthened Bhutan's ties with India. Modern roads connecting Bhutan with India in the 1960s ended Bhutan's historic isolation. Bhutan has proceeded cautiously with economic development and remains a predominantly agricultural country. Bhutan is a monarchy, but a constitution that would convert it into a constitutional monarchy is being drafted; the constitution is expected to be presented for ratification in 2005.

Wars since 1500

Battle of Dena Drug Dhhoeding, 1617 (Bhutan against Tibet); Mongol Invasion of Bhutan, 1643; First Tsang Chinese Invasions of Bhutan, 1629; Second Tsang Chinese Invasions of Bhutan, 1634; Third Tsang Chinese Invasions of Bhutan, 1638; First Tibetan Invasion of Bhutan, 1657; Second Tibetan Invasion of Bhutan, 1714; Bhutanese Invasion of Sikkim, 1676-1700; Bhutanese Invasion of Cooch Behar, 1772; Bhutanese-British War of 1774; Bhutanese-British War (Duar War) of 1865; Bhutanese Civil Wars of 1865-1885.

Convertibility

Other

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: nonperforming loans amounted to 7% of total loans in early to mid 1990s.

Frankel and Rose (1996) list of currency crashes: 1991.

No exchange rate data in Reinhart and Rogoff (2002).

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Bank of Bhutan (1992), Bhutan (1995?).

Monetary authorities: Bhutan

Exchange rate arrangements: Bhutan

British Indian Ocean Territory

Political sketch

A British territory.

What is now the British Indian Ocean Territory was part of Mauritius and Seychelles until it was created on 8 November 1965. Its constituent parts were the Aldabra Islands and the Farquhar and Desroches islands (all purchased from the Seychelles) and the Chagos Archipelago (formerly a dependency of Mauritius). The colony was created to the United Kingdom and United States to have a secure base in the Indian Ocean. A large military base was built on Diego Garcia, the southernmost island of the Chagos Archipelago, and the island's transient population was relocated to Mauritius and the Seychelles. On 28-29 June 1976, the islands purchased from the Seychelles were returned to the newly independent Republic of Seychelles. Only the Chagos Archipelago remained. Administrative headquarters were at Victoria, Seychelles, during 1965-1976, and after 1976 they were in London. Today (2004) Diego Garcia remains an important military base. The territory has no permanent population, but the base is staffed by roughly 3,000 British and U.S. military personnel and civilian contractors.

Wars since 1500

To 1965, see Mauritius; no wars since 1965.

Convertibility

Other

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: None.

Frankel and Rose (1996) list of currency crashes: British Indian Ocean Territory not included.

No exchange rate data in Reinhart and Rogoff (2002).

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Apparently none.

Monetary authorities: British Indian Ocean Territory

Exchange rate arrangements: British Indian Ocean Territory

Brunei

Political sketch

Also known as Brunei Darussalam. Independent from the United Kingdom on 1 January 1984.

In the 1400s Brunei broke away from Javanese rule and became an independent sultanate with a mostly Muslim population. By the late 1500s Brunei's power waned as the Portuguese and Dutch exerted influence and the people of the nearby Sulu Archipelago began to control much of the north coast of Borneo previously possessed by Brunei. In the early 1600s the Dutch established settlements in southern Borneo, through by the 1800s British influence had superseded it. By the 1800s Brunei included only Sarawak, present-day Brunei, and part of North Borneo (now Sabah). In 1841 a revolt took place against the sultan of Brunei. A British soldier who helped suppress the revolt, James Brooke, was then proclaimed governor of Sarawak. In 1847 the sultan of Brunei signed a commercial treaty with the United Kingdom. In 1877 Brunei leased its portion of North Borneo was leased to a group of British merchants, with control passing to the British North Borneo Company a few years later. In 1888 Brunei was placed under British protection. During the Second World War, Brunei was occupied by Japanese forces in December 1941 and was liberated by Australian forces on 13 June 1945. The sultan negotiated a new treaty with the British in 1979, and Brunei became independent on 1 January 1984. Present-day Brunei is quite small, but has large reserves of oil (discovered in 1914; a field was discovered in 1929) and natural gas (discovered in 1965), making it one of the world's wealthiest nations per person. Brunei remains a monarchy.

Wars since 1500

Second World War in the Pacific, 1941-1945 (United Kingdom, United States, Netherlands, China, and allies against Japan); Brunei Rebellion, 1962.

Convertibility

During the Second World War, French Indochina (Cambodia, Laos, and Vietnam) and Thailand, though occupied by Japanese troops, did not have Japanese occupation currency; rather, they paid a kind of ransom by creating domestic currency and giving it to Japan to pay for local expenses. In Burma, Hong Kong, western Indonesia (Sumatra and Java), and the Philippines, the Yokohama Specie Bank acted as the issuing agent of occupation currency and the de facto central bank. The Bank of Taiwan had the same capacity in Oceania and eastern Indonesia. The Bank of Japan was made the central bank for the Greater South East Asia Co-Prosperity Sphere by a Japanese law of July 1942, but Japanese occupation currencies were not officially all pegged to one another and to the yen until 1943, when the rate was established at 1 Japanese yen = 1 military yen (China) = 1 Burmese rupee = 1 Javanese gulden = Malayan $1 = 1 Philippine peso = 1 Thai baht = 2 Japanese Oceanic shillings, and 1 Indochinese piastre = 0.976 Japanese yen (Bányai 1974: 8). On 1 April 1942, Japan opened the Southern Development Bank (Nampo Kaihatsu Kinko), which had its headquarters in Tokyo and, from 1 July 1942, a primary regional office in Singapore (renamed Shonan by the Japanese). The Southern Development Bank became the official central bank of the Japanese occupation at various dates in 1943 and 1944 for Malaysia, Indonesia, the Philippines, and Singapore, but this was mainly an administrative change. Notes continued to be printed with the same appearance and the Yokohama Specie Bank and Bank of Taiwan continued as the agents for issuing occupation currency and regulating other banks. Although these currencies were part of a currency zone based on the Japanese yen, convertibility between any pair of currencies was restricted. Taiwan, Korea, and Manchuria were also parts of the Japanese yen currency zone through their older pegs to the yen.

On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914, gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925, the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.

The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973, the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong abandoned sterling as its anchor currency. The sterling area ended in 1979 when the United Kingdom abolished exchange controls.

Brunei left the sterling area on 23 June 1972.

Other

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: Minor banking crisis in mid 1980s, including failure of second-largest bank in 1986.

Frankel and Rose (1996) list of currency crashes: Brunei not included.

No exchange rate data in Reinhart and Rogoff (2002).

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Bányai (1974), Fujita (2003), King (1957), Skully (1984).

Monetary authorities: Brunei

Exchange rate arrangements: Brunei

Burma (Myanmar)

Political sketch

Burma is also known as Myanmar. Independent from the United Kingdom on 4 January 1948.

Burma was first united in the mid 11^th century. It was periodically split up and reunified thereafter, and its last ruling dynasty was founded in the mid 1700s. The United Kingdom went to war with Burma in the 1800s following Burmese occupation of Assam (now part of eastern India). In three wars from 1824 to 1885, the British conquered all of Burma. Under British control, Burma became a province of India. In 1937 mostly Buddhist Burma became a separate colony from mostly Hindu India. Japanese troops occupied Burma during the Second World War, beginning their invasion 11 December 1941 and later retreating but not finally surrendering until Japan itself did in August 1945.

After the war, British rule resumed until Burma became independent on 4 January 1948, less than half a year after India had become independent. A military coup in March 1962 established a revolutionary council intent on creating a centrally planned economy. By the late 1980s, governmental corruption and mismanagement had turned Burma into one of the world's poorest countries. Long-simmering public dissatisfaction erupted in 1987-1988 into antigovernment riots. On 27 May 1990, opposition parties won decisively in national elections, but the army refused to cede control. The military dictatorship continues in power today (2004). Burma's economy is based on agriculture and the extraction of natural resources to benefit its military rulers. The name Myanmar, in use since 1989, was not a change of the country's name in the Burmese language, but just a different translation of the existing Burmese name.

Wars since 1500

Burmese Civil War of 1527; Burmese Civil War of 1535-1546; Siamese-Burmese War of 1548; Burmese Civil War of 1551-1559; Burmese-Laotian War of 1558; Siamese-Burmese War of 1563-1569; Burmese-Laotian War of 1564-1565; Burmese-Laotian War of 1571-1575; Burmese-Laotian War of 1581-1592; Siamese-Burmese War of 1584-1592; Siamese-Burmese War of 1593-1600; Burmese Civil War of 1599; Siamese-Burmese War of 1607-1618; Burmese-Portuguese War of 1613; Burmese-Chinese War of 1658-1661; Siamese-Burmese War of 1660-1662; Burmese-Manipuri War of 1714-1749 (Manipuri is in northwestern India); Burmese Civil War of 1740-1752; Burmese Civil War of 1753-1757; Burmese-Manipuri War of 1755-1758; Burmese-Manipuri War of 1764; Siamese-Burmese War of 1764-1769; Burmese-Manipuri War of 1770; Siamese-Burmese War of 1775-1776; Siamese-Burmese War of 1785-1792; Arakan Uprising, 1811-1815; Burmese Conquest of Assam, 1819; Burmese Invasion of Manipur, 1822; First Anglo-Burmese War, 1824-1826; Mon Uprising, 1838; Second Anglo-Burmese War, 1852; Third Anglo-Burmese War, 1885; Second World War, 1942-1945 (Japan against United States, United Kingdom, Netherlands, China, and allies); Burmese Guerilla War of 1948-present.

Convertibility

During the Second World War, French Indochina (Cambodia, Laos, and Vietnam) and Thailand, though occupied by Japanese troops, did not have Japanese occupation currency; rather, they paid a kind of ransom by creating domestic currency and giving it to Japan to pay for local expenses. In Burma, Hong Kong, western Indonesia (Sumatra and Java), and the Philippines, the Yokohama Specie Bank acted as the issuing agent of occupation currency and the de facto central bank. The Bank of Taiwan had the same capacity in Oceania and eastern Indonesia. The Bank of Japan was made the central bank for the Greater South East Asia Co-Prosperity Sphere by a Japanese law of July 1942, but Japanese occupation currencies were not officially all pegged to one another and to the yen until 1943, when the rate was established at 1 Japanese yen = 1 military yen (China) = 1 Burmese rupee = 1 Javanese gulden = Malayan $1 = 1 Philippine peso = 1 Thai baht = 2 Japanese Oceanic shillings, and 1 Indochinese piastre = 0.976 Japanese yen (Bányai 1974: 8). On 1 April 1942, Japan opened the Southern Development Bank (Nampo Kaihatsu Kinko), which had its headquarters in Tokyo and, from 1 July 1942, a primary regional office in Singapore (renamed Shonan by the Japanese). The Southern Development Bank became the official central bank of the Japanese occupation at various dates in 1943 and 1944 for Malaysia, Indonesia, the Philippines, and Singapore, but this was mainly an administrative change. Notes continued to be printed with the same appearance and the Yokohama Specie Bank and Bank of Taiwan continued as the agents for issuing occupation currency and regulating other banks. Although these currencies were part of a currency zone based on the Japanese yen, convertibility between any pair of currencies was restricted. Taiwan, Korea, and Manchuria were also parts of the Japanese yen currency zone through their older pegs to the yen.

On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914, gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925, the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.

The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973, the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong abandoned sterling as its anchor currency. The sterling area ended in 1979 when the United Kingdom abolished exchange controls.

After British conquest, Burma became part of India monetarily. Second World War exchange controls were imposed starting in 1940. Burma left the sterling area 17 October 1966.

Other

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: Two largest government-owned banks reported to have many nonperforming loans 1996-?.

Frankel and Rose (1996) list of currency crashes: 1975.

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Bányai (1974), Donnison (1956), Fujita (2003), Robinson and Shaw (1980), Tun Wai (1962).

Monetary authorities: Burma

Exchange rate arrangements: Burma

Cambodia

Political sketch

Also formerly known as the Khmer Republic and Kampuchea. Independent from France on 9 November 1953.

From the 800s to the 1400s Khmer kings ruled a military powerful state. From the 1400s onward, though, the Khmer were often involved in wars with Vietnam and Siam and under the domination of one or the other. In 1864 France established a protectorate as part of its conquest of Indochina. At the time the economy was based heavily on rice growing. On 26 September 1940, the Japanese occupied French Indochina, but left the Vichy French administration in place. In December 1940, Thailand tried to seize Cambodian and Laotian territory, but French-led forces resisted. In March 1941 Japan brokered a peace in which Cambodia and Laos ceded land to Thailand, which Thailand returned in 1947. In 1941 the French installed Prince Norodom Sihanouk on the throne. Japan deposed the French administration in Indochina on 9 March 1945. It declared the states of the region nominally independent but administered the region itself until the end of the Second World War in September 1945. On 8 November 1949 Cambodia became an autonomous state in the French Union, and on 9 November 1953 it became independent as a monarchy under Prince Sihanouk, who had suspended the constitution in a seizure of power in June 1952.

During the Vietnam War, Sihanouk tried to avoid making either side angry. He was overthrown in a coup of 18 March 1970 by military officers opposed to the presence of Vietnamese communists in the country. They abolished the monarchy on 9 October 1970. A U.S. bombing campaign along the border with Vietnam, which tried to disrupt North Vietnamese military supply routes, alienated much of the population and contributed to the growth of the communist Khmer Rouge movement. The Khmer Rouge came to power in early 1975. They set about trying to establish their model of a communist peasant state. They emptied the cities and murdered anybody who seemed educated or not poor. The country regressed economically and disease and starvation became widespread. The policies of the Khmer Rouge killed as many as 2 million of Cambodia's precommunist population of 7.3 million people. The Khmer Rouge's aggressive stance toward Vietnam prompted it to invade Cambodia and drive the Khmer Rouge into the western borderlands in December 1978 and January 1979. The Vietnamese established a client Cambodian government composed largely of defectors from the Khmer Rouge. Fighting continued between the government, the Khmer Rouge, and Cambodian royalist and anticommunist factions. Most of the factions signed a peace accord in 1991, and an interim government supervised by the United Nations held free elections in May 1993. Sihanouk returned soon afterward returned as the country's monarch, heading a coalition government opposed only by the Khmer Rouge. The Khmer Rouge leader Pol Pot died on 15 April 1998. At present (2004) Cambodia is an only partly democratic country. Years of conflict disrupted its economy. Agriculture, clothing manufacture, and tourism are important industries.

Wars since 1500

Siamese-Cambodian War of 1587; Siamese-Cambodian War of 1593-1594; Siamese-Burmese War of 1593-1600; Siamese-Cambodian War of 1603; Siamese-Cambodian War of 1622; Siamese-Cambodian War of 1714-1717; Vietnamese-Cambodian War of 1738-1750; Cambodian Rebellion of 1811-1812 (involving Siam and Vietnam supporting rival claimants to Cambodian throne); Siamese-Cambodian War of 1831-1834; Siamese-Vietnamese War, 1841-1845; French Indochina War of 1858-1863; French Indochina War of 1882-1883; Japanese Occupation of Indochina, 1940-1945; French-Siamese War, 1940-1941; Second World War in the Pacific (Japan against United States, United Kingdom, Netherlands, China, and allies), 1941-1945; French Indochina War of 1946-1954; Vietnam War, 1956-1975 (France against North Vietnam, later United States and South Vietnam against North Vietnam); Cambodian Civil War of 1970-1975; Mayaguez Incident, 1975 (Cambodia against United States); Cambodian (Kampuchean)-Thai Border War, 1977-1995; Cambodian (Kampuchean) Civil War of 1978-1998.

Convertibility

Indochina prohibited imports of Mexican silver dollars (also known as pesos or piasters) a governor-general's decree of 3 June 1903. As a result of foreign demand for silver during the Russo-Japanese War, the export of Indochinese piastres was forbidden on 3 January 1905 by a decree of that date by the governor-general. A decree of 1 January 1917 forbade the sale of Indochinese coins at prices exceeding their nominal legal value. This occurred during a run-up in the price of silver against gold that peaked in 1920. The decree of 3 January 1905 was repealed by a decree of the governor-general of Indochina of 30 December 1919.

When the First World War began, France imposed a moratorium of payments on all negotiable instruments starting 1 August 1914. The moratorium was subsequently extended by decrees until 1 March 1915. The central bank, the Bank of France, abandoned the gold standard on 5 August 1914, although no official prohibition on exporting gold existed until by a decree of 3 July 1915, affirmed by a law of 15 November 1915. A decree of 2 April 1918 prohibited capital exports without authorization. A law of 25 June 1928 officially restored the gold standard and repealed exchange controls. When the French franc was an object of currency speculation , a law of 13 August 1936 imposed extensive exchange controls, supplementing some lesser measures that had been implemented in 1935.

France imposed exchange controls on 9 September 1939 by a decree of that date, after the Second World War broke out in Europe. The controls were promulgated in Indochina by a decree-law of 27 September 1939. On 20 May 1940 capital controls within the franc zone were greatly relaxed by a French decree of that date. Exchanges of mail between French Indochina and France were cut off after Japan started the Second World War in the Pacific in December 1941, although telegraph communications continued until November 1942. Communications resumed in August 1945, following Japan's surrender to end the war. Exchange controls within the franc zone were not removed until 6 June 1946. Afterwards, the CFA franc became convertible both for current- and capital-account transactions within the French franc zone (France, Monaco, French possessions, and countries using the CFA franc). Outside the French franc zone it became convertible for current-account transactions when France resumed current-account convertibility, but it was not convertible for capital-account transactions. France had multiple exchange rates from 26 January 1948 until 17 October 1948, and a dual exchange rate from 18 October 1948 to 29 September 1949. On 20 September 1949 it devalued the French franc and unified the exchange rate, taking advantage of the lead offered by the United Kingdom, which had devalued the pound sterling on 18 September 1949. Under French rule, Indochina (present-day Cambodia, Laos, and Vietnam) comprised a unified currency zone. When the countries of the region established national currencies, issued by national central banks, the unified currency zone broke apart. Except in North Vietnam, which rejected continued economic ties with France after independence, some special exchange control arrangements with France persisted for a time afterwards.

During the Second World War, French Indochina (Cambodia, Laos, and Vietnam) and Thailand, though occupied by Japanese troops, did not have Japanese occupation currency; rather, they paid a kind of ransom by creating domestic currency and giving it to Japan to pay for local expenses. In Burma, Hong Kong, western Indonesia (Sumatra and Java), and the Philippines, the Yokohama Specie Bank acted as the issuing agent of occupation currency and the de facto central bank. The Bank of Taiwan had the same capacity in Oceania and eastern Indonesia. The Bank of Japan was made the central bank for the Greater South East Asia Co-Prosperity Sphere by a Japanese law of July 1942, but Japanese occupation currencies were not officially all pegged to one another and to the yen until 1943, when the rate was established at 1 Japanese yen = 1 military yen (China) = 1 Burmese rupee = 1 Javanese gulden = Malayan $1 = 1 Philippine peso = 1 Thai baht = 2 Japanese Oceanic shillings, and 1 Indochinese piastre = 0.976 Japanese yen (Bányai 1974: 8). On 1 April 1942, Japan opened the Southern Development Bank (Nampo Kaihatsu Kinko), which had its headquarters in Tokyo and, from 1 July 1942, a primary regional office in Singapore (renamed Shonan by the Japanese). The Southern Development Bank became the official central bank of the Japanese occupation at various dates in 1943 and 1944 for Malaysia, Indonesia, the Philippines, and Singapore, but this was mainly an administrative change. Notes continued to be printed with the same appearance and the Yokohama Specie Bank and Bank of Taiwan continued as the agents for issuing occupation currency and regulating other banks. Although these currencies were part of a currency zone based on the Japanese yen, convertibility between any pair of currencies was restricted. Taiwan, Korea, and Manchuria were also parts of the Japanese yen currency zone through their older pegs to the yen.

Other

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: Apparently none in the conventional sense, but the Khmer Rouge in 1975 ended conventional banking when they forced a barter economy on the country.

Frankel and Rose (1996) list of currency crashes: Cambodia not included.

No exchange rate data in Reinhart and Rogoff (2002).

In October 1940, shortly after Japanese forces had invaded French Indochina, Japanese forces brought with them Japanese military yen. Only a small amount of Japanese military yen was ever used in French Indochina, though; instead, the Japanese used local currency (Fujita 2003: 8).

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Gang (1993 [1985]), Meuleau (1990), Vickery (1986).

Monetary authorities: Cambodia

Exchange rate arrangements: Cambodia

China

Political sketch

Also currently known as the People's Republic of China.

China is home to the world's oldest continuous civilization and has long been its most populous country. A summary such as this must necessarily omit even many of the highlights of its relevant history. It is important to keep in mind that among the omissions are many of the conflicts among regional warlords, or between warlords and the central government, that occurred periodically until 1949.

The portion of Chinese history relevant to modern monetary systems began during the Sung dynasty, which arose in 960 after a period of disorder. South of the Yangtze River, the Southern Sung dynasty lasted until 1279, when Mongol (Yüan) domination began. The Mongols ruled a huge empire that stretched from the Yellow Sea to Central Asia and beyond, but they were never able to achieve a durable identification with Chinese civilian institutions. They were overthrown in 1368 by the Ming dynasty, which attempted to close off trade and travel to the rest of the world. Up through the Ming dynasty China had a strong claim to be regarded as the world's most advanced civilization, but its deliberate isolation prevented it from absorbing the scientific and technological developments beginning to stir in Europe. In 1644 the Juchen tribes of Manchuria conquered the country and began the Ch'ing, or Manchu, dynasty. In the 1800s the Manchus lost several wars with technologically superior Western powers and with Japan. Those countries established enclaves in major ports where their laws rather than Chinese laws applied, and divided China into spheres of commercial and political influence. The "treaty ports" became centers of a nascent industrial revolution. Besides foreign wars, from 1851-1864 China experienced a civil war, the Taiping Rebellion, which cost as many as 20 million lives.

Resentment at the ineffectiveness of the Ch'ing dynast in resisting foreign military intimidation led to its downfall in 1911. A republic was proclaimed in 1912 under Sun Yat-sen, but soon regional warlords disputed the power of the central government. Sun's successor as leader of the National Party, general Chiang Kai-shek largely unified the country in the 1920, with the support of Chinese communists. When Sun broke with the communists they withdrew to the countryside and organized resistance there. Japan had annexed the Ryukyu Islands in 1879 despite Chin's protests, and it had gained Taiwan in 1895 after a war with China. Japanese forces invaded Manchuria in 1931, northern China proper in July 1937, and the treaty ports on 8 December 1941, at the start of the Second World War in the Pacific. (This was the end of foreign extraterritoriality in the treaty ports.) The brutal Japanese occupation of most of northern and eastern China lasted until the end of the Second World War in 1945. The Communists and Nationalists to some extent put aside their differences to fight the Japanese, with support from the United States and the United Kingdom, via India. The defeat of the Japanese resulted in their total withdrawal from China. After the world war the Communists, led by Mao Zedong, fought the Nationalists in a civil war from 1946 to 1949. The Communists triumphed, and proclaimed the People's Republic of China on 1 October 1949. Chiang Kai-shek retreated to Taiwan and established an independent state there.

The Communists nationalized land and industry. Under the dictatorship of Mao Zedong (older English spelling Mao Tse Tung), a centrally planned economy and political repression caused perhaps 40 million deaths. The Communists made large-scale executions of alleged class enemies and established a network of concentration camps that held millions of people. The Great Leap Forward (1958-1960), a muddleheaded attempt at economic modernization, caused a famine that took an estimated 30 million lives. The Cultural Revolution (1966-1976), which tried to revive revolutionary fervor, resulted in violence close to civil war in some parts of the country and greatly weakened the continuity of Chinese culture. Mao died on 9 September 1976. His successor, Deng Xiaoping, undertook economic reforms that reintroduced a measure of de facto private ownership of farmland and permitted some measure of private enterprise. The successors of Deng Xiaoping have continued economic reforms, making China a mixed economy whose dynamism comes from private enterprises and enterprises owned by provincial or local governments, many of which are in effect partly private. China has boomed, becoming a manufacturing powerhouse. In only a generation, hundreds of millions of its people have moved from grinding poverty largely unchanged for millennia to modest but modern standards of living. The Communist Party continues to exercise a dictatorship, but political repression is far less extensive than under Mao and Chinese now (as of 2004) have more effective freedom than at any time since least the 1930s. In 1997 Hong Kong, ceded to the United Kingdom by the Treaty of Nanking in 1842, was returned to Chinese rule.

Under Mao Zedong, China invaded Tibet in 1950-1951 and has occupied it ever since, murdering dissenters, destroying Tibetan cultural traditions, and peopling the region with Han Chinese, the dominant ethnic group in China.

Wars since 1000

Chinese War with the Khitans, 979-1004; First Chinese War with the Tanguts, 990-1003; Second Chinese War with the Tanguts, 1040-1043; Chinese-Annamese War of 1057-1061; Chinese-Annamese War of 1075-1079; Jungchen Mongol Invasion of Liao, 1114-1122; Jungchen Mongol Invasion of the Sung Empire, 1125-1162; Conquests of Genghis Khan, 1190-1227; Genghis Khan's First War with the Hsia Empire, 1206-1209; Mongol Conquests, 1206-1405; Genghis Khan's War with the Chin Empire, 1211-1215; Genghis Khan's Sack of Peking, 1215; First Mongol-Persian War, 1218-1221; Mongol Invasions of India, 1221-1398; Genghis Khan's Second War with the Hsia Empire, 1226-1229; Second Mongol-Persian War, 1230-1243; Mongol Conquest of the Chin Empire, 1231-1234; Mongol Invasions of Korea, 1231-1241; Mongol Conquest of the Sung Empire, 1234-1279; Vietnamese-Mongol War of 1257-1288; Mongol Civil War of 1260-1264; First Mongol Invasion of Japan, 1274; Mongol-Burmese War of 1277-1287; Second Mongol Invasion of Japan, 1281; Mongol-Burmese War of 1299-1300; Mongol-Chinese War of 1356-1368; Chinese Civil War of 1398-1402; Vietnamese-Chinese War of 1405-1407; Vietnamese-Chinese War of 1418-1428; Burmese-Chinese War of 1438-1446; Manchu Conquest of China, 1618-1650; Chinese Civil War of 1621-1644; Manchu Conquest of Korea, 1627; Chinese War with Koxinga, 1646-1662 (Koxinga was a pirate); Burmese-Chinese War of 1658-1661; Revolt of the Three Feudatories, 1674-1681; Javanese-Chinese-Dutch War, 1740-1743; Sino-Tibetan War of 1750-1751; Mongol Revolts of 1755-1760; Burmese-Chinese War of 1765-1769; White Lotus Rebellion, 1796-1804; First Opium War, 1839-1842 (against United Kingdom); Taiping Rebellion, 1850-1864; Nien Rebellion, 1850-1868; Panthay Uprising, 1855-1861 (by Muslims in Yunnan province) Second Opium War, 1856-1860 (principally against United Kingdom, to a lesser extent France, Germany, Russia, Japan, United States); Ili Provincial Rebellion, 1864; Chinese Revolts of 1865-1881; Muslim Rebellion in China, 1863-1877; Tientsin Massacre, 1870; Sino-French War of 1883-1885; Sino-Japanese War of 1894-1895; Boxer Uprising, 1899-1901; British Expedition in Tibet, 1903; Chinese Revolution of 1911-1912; Mongolian Secession, 1911; Sun Yat-Sen's Rebellion, 1913; Anti-Imperial Revolt, 1915-1916 (against the president's attempt to convert himself into an emperor); Chinese Reoccupation of Mongolia, 1919; Mongolian War of Independence, 1920-1921 (against China and Russian White Guard); Northern Expedition, 1926-1928 (by the Nationalist government against regional warlords and Chinese Communists); Soviet Invasion of Manchuria, 1929; Chinese Civil War of 1930-1934; Japanese Invasion of Manchuria, 1931; Japanese Invasion of Jehol Province, 1933; Long March (by Chinese Communists evading pursuit by Nationalist troops), 1934-1935; Sino-Japanese War of 1937-1945; Second World War in the Pacific, 1941-1945 (Japan against the United States, United Kingdom, Netherlands, Chinese, and allies); Chinese Civil War of 1945-1949; Chinese Invasion of Tibet, 1950-1951; Korean War, 1950-1953 (North Korea and China, supported by The Union of Soviet Socialist Republics, against the United States, South Korea, and allies); Tibetan Uprising of 1954; Sino-Burmese War, 1956; Sino-Indian Border Dispute, 1959-1962; Tibetan Uprising of 1959; Chinese Cultural Revolution, 1966-1969; Sino-Soviet Border Clashes, 1969; Laotian Guerilla War of 1977-1990; Sino-Vietnamese War of 1979; Tienanmen Square Massacre (of protestors favoring democracy), 1989.

Convertibility

China used a number of different monetary standards. Bank notes might be convertible into copper (used in coins for retail transactions, silver (used for wholesale and long-distance transactions within China), or gold (used for transactions with European countries and Japan from the late 1800s). Bank notes might also be inconvertible if the issuing bank was owned by some level of government, or if a local warlord had extracted its metallic reserves through threat of force.

A Chinese government order of about 12 May 1916 prohibited exchange for silver of the notes of two banks with substantial government ownership, the Bank of China and the Bank of Communications. Branches of the Bank of China in Shanghai and some other cities successfully resisted the order, which the Chinese prime minister revoked on 31 May 1916.

China imposed foreign-exchange controls on 14 March 1938. They have persisted ever since in one form or another. Effective 10 October 1948, the Nationalist government forbade private holdings of gold bullion, silver bullion, and foreign exchange, requiring that they be surrendered to the government. On 22 November 1948 the Financial Reform Bill of the same date by the Nationalist government made holding of gold, silver and foreign exchange legal again. However, the Nationalist government was rapidly losing control of mainland China to the Communists.

The Bank of Japan was made the central bank for the Greater South East Asia Co-Prosperity Sphere by a Japanese law of July 1942, but Japanese occupation currencies were not officially all pegged to one another and to the yen until 1943, when the rate was established at 1 Japanese yen = 1 military yen (China) = 1 Burmese rupee = 1 Javanese gulden = Malayan $1 = 1 Philippine peso = 1 Thai baht = 2 Japanese Oceanic shillings, and 1 Indochinese piastre = 0.976 Japanese yen (Bányai 1974: 8). On 1 April 1942, Japan opened the Southern Development Bank (Nampo Kaihatsu Kinko), which had its headquarters in Tokyo and, from 1 July 1942, a primary regional office in Singapore (renamed Shonan by the Japanese). The Southern Development Bank became the official central bank of the Japanese occupation at various dates in 1943 and 1944 for Malaysia, Indonesia, the Philippines, and Singapore, but this was mainly an administrative change. Notes continued to be printed with the same appearance and the Yokohama Specie Bank and Bank of Taiwan continued as the agents for issuing occupation currency and regulating other banks. Although these currencies were part of a currency zone based on the Japanese yen, convertibility between any pair of currencies was restricted. Taiwan, Korea, and Manchuria were also parts of the Japanese yen currency zone through their older pegs to the yen.

Under communist rule the currency was long inconvertible. It became convertible for current-account transactions on 1 January 1994, when the exchange rate was unified. On 1 January 1998, during the East Asian currency crisis, China tightened its capital controls.

Other

Defaults on or restructurings of debt to the foreign private sector: 1921; 1939 (related to Sino-Japanese War); 1949 (by the Communist government, regarding the debts of the previous Nationalist regime).

Banking crises: The Chinese banking system until the communist takeover of China was so diverse and had such a long history that any list is necessarily incomplete. There were numerous local banking crises related to political events. National or important regional crises include run on the Imperial Bank of China branch in Shanghai, 6-7 February 1903; a national crisis in May 1916, especially with regard to the Bank of China and the Bank of Communications (in response to correct rumors that the government was considering merging these two banks, seizing their silver reserves, and using their notes as the basis for a national currency with a floating exchange rate); bank runs in north China in November 192l; a national crisis in April-May 1935; and nonperforming loans estimated at 50% of total loans of banking system at the end of 1998.

Frankel and Rose (1996) list of currency crashes: None.

On 23 March 1935, the Nationalist government undertook what came to be called the "banking coup." The minister of finance announced on that date steps that increased the government's share of ownership from 20% to 50% in one of the country's largest banks, the Bank of China, and from 20% to 66% in another, the Bank of Communications.

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources:

China: Cheng (2003), Chou (1963), History of Chinese Currency (1983), Ji (2003), King (1987-1991), Liew and Xu (2004), Mao (1977), Peebles (1991), Peng (1994), von Glahn (1996), Wagel (1915), Yang (1952). Voluminous material exists in Chinese, which I do not read.

Japanese occupied territory: Bányai (1974), Central Bank of Manchou (1935), Fujita (2003), Yamanari (1936), Yasutomi (1998), Young (1965).

Tibet: Bertsch (1997).

Monetary authorities: China

Special remark: China's long monetary history is complex, and some parts remain murky. Because much material is available only in Chinese, which I do not read, I would particularly welcome comments from knowledgeable readers. Transliterations are in Pinyin where I could find them, otherwise in Wade-Giles.

Monetary authorities: Japanese-occupied territory, 1932-1945

Upon invading Manchuria in 1931, the Japanese initially used notes of the Bank of Chosen (headquarters Seoul, [now South] Korea), since Korea was a Japanese colony at the time. They quickly established a puppet government of Manchuria, which they called Manchukuo. The Central Bank of Manchou (or Manchukuo) (in Chinese, Manchou Chungyang Yinhang) began operations on 1 July 1932 (Manchukuo, law of 11 June 1932). Its headquarters was in Hsinking. Manchukuo, law of 26 October 1942, intended to separate the bank's central banking functions from its commercial banking business. The Kounou Kinko was established in August 1943 in order to take over the ordinary banking business of the Central Bank. The central bank remained in existence until August 1945, when Soviet troops invaded Manchuria.

Before the Japanese invasion, provincial banks in the provinces of Kirin and Heilungkiang had issued notes starting in 1914. The Central Bank of Manchou replaced these issues with its own when it opened.

Upon invading north China in July 1937, Japanese forces initially used Bank of Chosen notes, Bank of Manchukuo notes, and Bank of Japan notes. Later, the Japanese issued military currency (gunpyo) notes. Initially these were Bank of Japan notes overprinted so they would not be good for use in Japan, but in the spring of 1938 the military began issuing notes with a distinctive design. Later, the Japanese established various regional central banks, to take advantage of the longstanding history of regional issuers in China.

In August 1937 the Japanese invaded Chahar province, which borders Manchuria and Mongolia. The Chahar Commercial Bank was still issuing notes, although in accord with China's Currency Reform Decree of 3 November 1935 its notes issues were frozen. Bank officials fled with the bank's reserves before the Japanese could seize them. The Japanese therefore determined to issue their own currency through a puppet central bank to replace the currency of the Chahar Commercial Bank. They therefore established the Channan Bank (Ch'anan Yinhang) (headquarters Kalgan, Chahar province) on 27 September 1937. From 1-20 October 1937 it exchanged its notes for old notes at one-to-one. On 27 November 1937 the Channan Bank was reorganized and merged with two other banks to form the Bank of Inner Mongolia (Mengchiang Yinhang), for Chahar, Sui Yuan, and north Shanshi provinces. The headquarters of the new bank was in Kalgan. The bank began operations on 1 December 1937 and ceased in October? 1945, following Japan's surrender to end the Second World War.

For the remainder of north China, the Japanese established as a central bank the Federated Reserve Bank of China, later called the Federal Reserve Bank of China (Chungkuo Lienho Chunpei Yinhang) ([Japanese puppet] Provisional Government of China, law of 5 February 1938). Its headquarters was in Peking (Peiping). It began operations on 10 March 1938 and ceased in October? 1945, following Japan's surrender to end the Second World War. The Japanese withdrew Bank of Chosen, Bank of Manchuria, Bank of Japan, and Japanese military notes to promote use of the notes of the Federal Reserve Bank of China. Before the invasion, the Japanese were pushing the circulation of notes of the Hopei (Heibei) Provincial Bank (Hopei Sheng Yinhang), whose headquarters was in Tientsin (Tianjin). However, after their invasion, the bank's note circulation shrank to insignificance as the Japanese promoted use of notes of the Federal Reserve Bank of China. By a decree of March 1938, the Federal Reserve Bank of China permitted for one year the circulation of the notes of Nationalist Chinese banks, though the notes of certain other banks were prohibited from circulating after three months. Nationalist Chinese currency was called fapi. In March 1939 Federal Reserve Bank of China currency became the only legal tender and use of Nationalist Chinese currency was prohibited.

The most important city of central China, and the financial center of the whole country, was Shanghai, which Japanese forces conquered in late 1937. Japanese troops who made landings near the city to invade it on November 1937 apparently brought Japanese military yen with them. Japanese military yen circulated alongside locally issued notes of Chinese and to a lesser extent foreign banks. Somewhat later, the Japanese established the China Development Bank (Hua Hsing Shangyeh Yinhang) as a quasi central bank. Its headquarters were in Shanghai. It opened on 1 May 1939 (or perhaps 10 May; sources are contradictory) and issued notes until 18 February 1941. Its notes never achieved widespread acceptance. The Japanese established the Central Reserve Bank of China (Zhongyang Chuxu Yinhang) with headquarters in Nanking (Nanjing). It opened there on 6 January 1941, and in Shanghai on 20 January 1941 ([Japanese puppet] Republic of China, legislation of 19 December 1940). It took over note issuance and other central banking functions in Shanghai from the China Development Commercial Bank on 19 February 1941. Initially the Japanese allowed Nationalist currency to continue circulating in central China, but a decree of 7 June 1942 by the Finance Ministry of the Japanese puppet Republic of China announced that from 21 June 1942 in Shanghai and 30 June 1942 in the rest of the area where Central Reserve Bank of China notes circulated, only its notes would be legal tender, and Chinese Nationalist currency would be prohibited. The Central Reserve Bank of China ceased in October? 1945, following Japan's surrender to end the Second World War.

Japanese forces conquered much of south China in October 1938. The Japanese then took over the Kwangtung Provincial Bank (Kuangtung Sheng Yinhang), in Canton (Guangzhou). It had issued notes since 1931. Under Japanese occupation, it made an issue of notes in 1939 for Hainan Island and starting in 1940 issued notes for elsewhere in south China. In mid 1942, though, the Central Reserve Bank of China opened branches in Canton and other cities of south China and the notes of the Kwangtung Provincial Bank seem to have been frozen. An exchange of Central Reserve Bank of China notes for Chinese Nationalist notes was made starting 10 July 1942 in south China other than Hong Kong. There was also a final exchange period throughout the territory of the Central Reserve Bank of China from 2 November-1 December 1942. After 1 December 1942, Nationalist-issued currency was prohibited in Japanese-occupied central and south China.

There were also a number of other provincial banks that had not yet ceased issuing notes when the Japanese invaded, and the Japanese made some use of these, for instance the Fukien Provincial Bank (Fuchien Sheng Yinhang) in Foochow (Fuzhou). Compared to the issues of the main Japanese puppet central banks, though, their issues were insignificant (Young 1965: 365-6).

Because of the extraterritorial status of the treaty ports, use of Nationalist-issued currency continued to be legal in those areas, which included the most important financial districts in China. The use of Nationalist currency in the treaty ports was an important factor in helping it retain its value. It remained the preferred currency for use in foreign trade even though Japanese puppet currency became more and more widely used over time for domestic trade with the Japanese-controlled areas. Use of Nationalist currency ceased to be legal in the treaty ports when the Japanese overran them on 8 December 1941 to begin the Second World War in the Pacific.

Japanese troops also used Japanese military yen as official currency in various parts of China. They withdrew military yen in 1940 in Inner Mongolia and North China, where puppet central banks took over issuing currency. The exchange rate between the military yen and the replacement puppet currencies was one-to-one. In central and south China except Hong Kong, currency of the Central Reserve Bank of China replaced Japanese military yen on 1 April 1943 (Japanese military authorities in China, decision of 24 March 1943). Hong Kong had a special regime described in its country table. Hainan Island, which Japanese forces had invaded on 10 February 1939, also continued to use Japanese military yen after they had ceased to be issued on the mainland.

Monetary authorities: treaty ports

From 1844 to 1941, a number of foreign powers (France, Germany, Japan, United Kingdom, United States) operated enclaves in the so-called treaty ports that were under home-country rather than Chinese law. I use the term "treaty ports" to include all cities where enclaves existed. These tables do not deal with the treaty ports. The treaty ports generally had free banking, in which various foreign banks issued notes. After 1937, their notes had declining importance because of monetary reforms in China and Japan's invasion of north China. Free banking in the treaty ports ended after Japan invaded them on 8 December 1941 to start the Second World War in the Pacific.

Monetary authorities: Tibet

Exchange rate arrangements: China

Special remark: China's long monetary history is complex, and some parts remain murky. Because much material is available only in Chinese, which I do not read, I would particularly welcome comments from knowledgeable readers, most of all on the details of the years before 1890.

Exchange rate arrangements: Japanese-occupied territory, 1932-1945

Upon invading Manchuria in 1931, the Japanese initially used notes of the Bank of Chosen (headquarters Seoul, [now South] Korea), since Korea was a Japanese colony at the time. They quickly established a puppet government of Manchuria, which they called Manchukuo. The Manchukuo yen came into existence on 1 July 1932 (Manchukuo, law of 11 June 1932). Initially its exchange rate was 1 Manchukuo yen = 23.91g silver. Manchukuo abandoned the silver standard on 1 December 1935, following China's move to do so nearly a month earlier. The Manchukuo yen was pegged to the Japanese yen at 1 Manchukuo yen = 1 Japanese yen. In February 1940, Manchukuo established exchange controls and surrendered its foreign exchange to Japan. The Manchukuo yen remained in existence until August 1945, when Soviet troops invaded Manchuria shortly before the end of the Second World War.

Before the Japanese invasion of Manchuria, provincial banks in the provinces of Kirin and Heilungkiang had since 1914 issued floating currencies denominated in a unit called the tial. The Central Bank of Manchou replaced these issues with its own issues when it opened, but I have found no information on the rate of exchange at which replacement occurred.

Upon invading north China in July 1937, Japanese forces initially used Bank of Chosen notes, Bank of Manchukuo notes, and Bank of Japan notes. Later, the Japanese issued military currency (gunpyo) notes. The Korean won, Manchurian yen, Japanese yen, and Japanese military yen were all nominally equal.

In August 1937 the Japanese invaded Chahar province, which borders Manchuria and Mongolia. The Japanese puppet Channan Bank exchanged its notes for Nationalist Chinese yuan at one-to-one from 1-20 October 1937. On 1 December 1937 the Bank of Inner Mongolia took over the note issue fo the Channan Bank. This bank and the currency it issued ceased in October? 1945, following Japan's surrender to end the Second World War.

For the remainder of north China, the Japanese puppet Federal Reserve Bank of China began operations on 10 March 1938. The Federal Reserve Bank yuan was initially equal to the Nationalist Chinese yuan (fapi) and to Japanese yen circulating in north China. On 7 August 1938, the Japanese puppet Provisional Government of China in Peking announced that the exchange rate would be 0.90 Federal Reserve Bank yuan = 1 Nationalist Chinese yuan. In February 1939, the government announced that the exchange rate would be 0.60 Federal Reserve Bank yuan = 1 Nationalist Chinese yuan. In March 1939, Nationalist Chinese yuan were prohibited from circulating in north China. On 5 October 1938, the Federal Reserve Bank established an exchange rate of 1 Federal Reserve Bank yuan = UK 1 shilling 2 pence (approximately 17.14 Federal Reserve Bank yuan = UK£1). (Officially, the Federal Reserve Bank yuan was also still equal to the Japanese yen..) With the outbreak of the Second World War in the Pacific on 8 December 1941, the exchange rate with the pound sterling became a dead letter. On 8 December 1942, Japanese forces took over the international enclaves in the treaty ports. The Japanese allowed Nationalist Chinese yuan in those areas to be exchanged at 1 Federal Reserve Bank yuan = 4 Nationalist Chinese yuan from 9-13 February 1942. On 22 November 1945, the Nationalist government began a currency conversion at 1 Chinese Nationalist yuan = 5 Federal Reserve Bank of China yuan, and the Federal Reserve Bank yuan went out of existence.

In Shanghai, the Japanese opened the China Development (Hua Hsing) Bank on 1 May 1939 (or perhaps 10 May; sources are contradictory); it issued a small amount of notes until 18 February 1941. Its notes were pegged to the Nationalist Chinese yuan at one-to-one. Likewise, the Central Reserve Bank of China yuan, issued starting 6 January 1941 ([Japanese puppet] Republic of China, legislation of 19 December 1940), was initially pegged at 1 Central Reserve Bank yuan = 1 Nationalist Chinese yuan. The Central Reserve Bank took over note issuance from the China Development Commercial Bank on 19 February 1941, at 1.7575 Central Reserve Bank yuan = 1 China Development Bank yuan. A decree of 7 June 1942 by the Finance Ministry of the Japanese puppet Republic of China altered the official exchange rate to 1 Central Reserve Bank of China yuan = 2 Chinese Nationalist yuan. The Central Reserve Bank of China yuan ceased to exist in November 1945, following Japan's surrender to end the Second World War.

Interregional exchange was conducted at an exchange rate of 1 Central Reserve Bank yuan = 0.18 Japanese military yen = 0.18 Federal Reserve Bank yuan, or approximately 5.55 Central Reserve Bank yuan = 1 Federal Reserve Bank yuan. This official rate persisted until the end of the Second World War, but the black market rate was approximately 16 Central Reserve Bank yuan = 1 Federal Reserve Bank yuan near the end of the war. Exchange controls were in effect that limited the amount of currency people from one currency zone could exchange for the currency of another zone.

After conquering much of south China in October 1938, the Japanese took over the Kwangtung Provincial Bank in Canton (Guangzhou). Under Japanese occupation, it made an issue of notes in 1939 for Hainan Island and starting in 1940 issued notes for elsewhere in south China. Apparently this currency was equal to the currency of the Central Reserve Bank of China. In mid 1942, the Central Reserve Bank of China opened branches in Canton and other cities of south China and the notes of the Kwangtung Provincial Bank seem to have been frozen. An exchange of Central Reserve Bank of China notes for Chinese Nationalist notes at was made starting 10 July 1942 in south China other than Hong Kong. Apparently the exchange rate, as in central China at the time, was 1 Central Reserve Bank of China yuan = 2 Chinese Nationalist yuan. There was also a final exchange period throughout the territory of the Central Reserve Bank of China from 2 November-1 December 1942. After 1 December 1942, Nationalist-issued currency was prohibited in Japanese-occupied central and south China. The Nationalist Chinese government set an exchange rate of 1 Nationalist Chinese yuan = 200 Central Reserve Bank of China yuan for purposes of conversion in October? 1945, and the Central Reserve Bank yuan went out of existence.

Because of the extraterritorial status of the treaty ports, use of Nationalist-issued currency continued to be legal in those areas, which included the most important financial districts in China. The use of Nationalist currency in the treaty ports was an important factor in helping it retain its value. It remained the preferred currency for use in foreign trade even though Japanese puppet currency became more and more widely used over time for domestic trade with the Japanese-controlled areas. Use of Nationalist currency ceased to be legal in the treaty ports when the Japanese overran them on 8 December 1941 to begin the Second World War in the Pacific.

As has been mentioned, Japanese troops used Japanese military yen as official currency in various parts of China, starting in late 1937. In 1938, military yen replaced Japanese yen. In early 1940, military yen notes replaced all other yen notes that had been circulating in the Shanghai area. At the end of 1940, the market rate of exchange was approximately 0.6 Japanese military yen = 1 Nationalist Chinese yuan. The Japanese withdrew military yen in 1940 in Inner Mongolia and north China, where the respective puppet central banks took over issuing currency. The exchange rate between the military yen and the replacement puppet currencies was one-to-one. In central and south China except Hong Kong, currency of the Central Reserve Bank of China replaced Japanese military yen on 1 April 1943 (Japanese military authorities in China, decision of 24 March 1943). Hong Kong had a special regime described in its country table. Military yen were widely used in central and south China. In mid 1942, certain railroads and utilities controlled by the Japanese quoted an exchange rate of 1 Central Reserve Bank of China yuan = 0.18 Japanese military yen. On 24 March 1943, the Japanese authorities decided to cease issuing military yen in central and south China. Effective 1 April 1943, Central Reserve Bank of China notes replaced military yen at 1 Central Reserve Bank of China yuan = 0.18 Japanese military yen.

Exchange rate arrangements: south China

South China introduced its own currency, the Canton yuan, in late 1935 after the Chinese yuan ended convertibility into silver on 4 November 1935. Initially it floated, but it was stabilized in June 1937 at 1 Canton yuan = 1.44 Chinese yuan. The Japanese invasion of October 1938 put an end to it, although the Japanese later issued their own occupation currency in southern China (see above).

Exchange rate arrangements: treaty ports

From 1844 to 1941, a number of foreign powers (France, Germany, Japan, United Kingdom, United States) operated enclaves in the so-called treaty ports that were under home-country rather than Chinese law. I use the term "treaty ports" to include all cities where enclaves existed. These tables do not deal with the treaty ports. For the most part, foreign note-issuing banks in the treaty ports denominated their notes in Chinese currency or in silver dollars rather than in the currencies of their home countries.

Exchange rate arrangements: Tibet

Special remark: Information was hard to find. I welcome comments from knowledgeable readers.

China: Hong Kong

Political sketch

A colony of the United Kingdom de facto from 26 January 1841 until it rejoined China 1 July 1997.

Hong Kong Island was sparsely inhabited before British rule. In 1839 the Chinese government launched a campaign against opium, the major export (grown in India) the British used to pay for Chinese tea. The British retreated to Macau and demanded either a commercial treaty or a small island from which they could conduct trade. Fighting in the waters off Hong Kong Island expanded into the First Opium War (1839-1842). The Treaty of Nanking, which ended hostilities, ceded the island of Hong Kong to the British in 1842. British forces had occupied the islands since 26 January 1841. As Chinese power waned in the late 1800s, the British acquired more territory. They obtained Stonecutters Island and the Kowloon Peninsula in perpetuity in 1860, and in 1898 obtained a 99-year lease on the New Territories, an area comprising 235 islands off the mainland and mainland territory bordering the Kowloon Peninsula. Hong Kong had no significant natural resources other than its fine port, but it thrived under free-market economic policies underpinned by British rule of law. It attracted significant numbers of Chinese immigrants. On 7 December 1941 Japan attacked Hong Kong as part of its strategy to conquer all of East Asia. Hong Kong surrendered on 25 December 1941. It returned to British rule after the war, on 7 September 1945.

After the Communist takeover of China in 1949, many entrepreneurs relocated to Hong Kong from Shanghai and other cities. Hong Kong became one of the few windows for the rest of the world into China, and assumed more importance than ever as a point of intermediation for trade with China. Hong Kong began an economic boom that by the 1980s brought its living standards up to the level of the world's richest countries. Industrialization in the 1960s was based on textile manufacturing and then increasingly on electronics, finance, and trade as relations with China improved from the mid 1970s. In 1982 the United Kingdom and China began talks concerning the 1997 expiration of the lease on the New Territories, with China arguing that all Hong Kong should be returned to Chinese rule at that date. In 1984 the United Kingdom agreed to the Chinese position. Following several years of negotiations, the Chinese government in 1990 ratified a law promising considerable autonomy for Hong Kong for fifty years after return to Chinese rule. Hong Kong returned to Chinese rule on 1 July 1997 as a Special Administrative Region. Its government has a limited form of democracy, which China does not wish to become fully democratic. At almost the same time, East Asia began to experience a financial crisis that affected Hong Kong somewhat. More difficult economic times replaced the long boom that had run since the 1950s. Now that China is more economically open and Hong Kong is no longer under British rule, it is trying to shift its economic base again.

Wars since 1500

First Opium War, 1839-1842 (United Kingdom versus China); Second World War, 1941-1945 (United Kingdom, United States, and China against Japan). Before British rule began in the 1840s Hong Kong was very sparsely inhabited; for wars, see China.

Convertibility

On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914, gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925, the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.

The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973, the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong abandoned sterling as its anchor currency. The sterling area ended in 1979 when the United Kingdom abolished exchange controls.

When the United Kingdom introduced exchange controls on 4 September 1939, Hong Kong was initially exempted because the United Kingdom regarded it as economically a part of China. Hong Kong introduced exchange controls on 21 March 1940 (under Hong Kong, Defence [Finance] Regulations, Government Notification No. 328, 21 March 1940), and became part of the sterling area on 1 August 1941 (Hong Kong, Government Notification No. 897, 31 July 1941). After the Second World War, foreign exchange business was permitted again from 12 November 1945. Government regulations of 1 January 1946 permitted an open market in foreign exchange. Hong Kong had a free market in gold after the Second World War until April 1949, when the British government suppressed it as being inconsistent with Britain's obligations under the International Monetary Fund's Articles of Agreement. A free market in US dollars replaced it; along with the market in Kuwait, it was one of the "holes" in the sterling area. The government initially tolerated it, then gave it official sanction in 1967. The purpose of the free market was to facilitate Hong Kong's status as a trading port. On 5 June 1950 capital movements between Hong Kong and other sterling area countries became subject to controls; the purpose of this regulation was to prevent capital flight from the sterling area through the free US dollar market in Hong Kong. Hong Kong left the sterling area on 23 June 1972. It abolished exchange controls on 1 January 1973 as a result of the United Kingdom's Defence (Finance) Regulations on 31 December 1972. On 24 September 1973 banks in Hong Kong became free to run positions in any currency without consulting the government.

During the Second World War, French Indochina (Cambodia, Laos, and Vietnam) and Thailand, though occupied by Japanese troops, did not have Japanese occupation currency; rather, they paid a kind of ransom by creating domestic currency and giving it to Japan to pay for local expenses. In Burma, Hong Kong, western Indonesia (Sumatra and Java), and the Philippines, the Yokohama Specie Bank acted as the issuing agent of occupation currency and the de facto central bank. The Bank of Taiwan had the same capacity in Oceania and eastern Indonesia. The Bank of Japan was made the central bank for the Greater South East Asia Co-Prosperity Sphere by a Japanese law of July 1942, but Japanese occupation currencies were not officially all pegged to one another and to the yen until 1943, when the rate was established at 1 Japanese yen = 1 military yen (China) = 1 Burmese rupee = 1 Javanese gulden = Malayan $1 = 1 Philippine peso = 1 Thai baht = 2 Japanese Oceanic shillings, and 1 Indochinese piastre = 0.976 Japanese yen (Bányai 1974: 8). On 1 April 1942, Japan opened the Southern Development Bank (Nampo Kaihatsu Kinko), which had its headquarters in Tokyo and, from 1 July 1942, a primary regional office in Singapore (renamed Shonan by the Japanese). The Southern Development Bank became the official central bank of the Japanese occupation at various dates in 1943 and 1944 for Malaysia, Indonesia, the Philippines, and Singapore, but this was mainly an administrative change. Notes continued to be printed with the same appearance and the Yokohama Specie Bank and Bank of Taiwan continued as the agents for issuing occupation currency and regulating other banks. Although these currencies were part of a currency zone based on the Japanese yen, convertibility between any pair of currencies was restricted. Taiwan, Korea, and Manchuria were also parts of the Japanese yen currency zone through their older pegs to the yen.

During the Second World War, Japan established a system of exchange centralization on 21 March 1943 for transactions among Hong Kong, Thailand, French Indochina, north China, and Manchukuo (Manchuria). A separate procedure was established for exchanges among Hong Kong, Singapore, and the Philippines. Trade between Japan and Hong Kong, and between Hong Kong and central China, was settled in Japanese military yen.

Other

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: Five of 11 banks closed as a result of the English and Indian financial panics of 1866; runs against Chinese banks 1926 (mentioned in Mackenzie 1954: 237); failure of a small bank 1961; failure of one bank owned by Hong Kong Chinese and runs on others early 1965; runs 1967 during the turmoil of the Cultural Revolution in China, which had political repercussions in Hong Kongm, but no bank failures; minor failures 1982-1983 and 1983-1986; withdrawals from Chinese government-owned banks 1989 to protest the Tienanmen Square massacre in Peking; failure of the local subsidiary of Bank of Credit and Commerce International and minor runs on other banks 1991; minor runs 1998.

Frankel and Rose (1996) list of currency crashes: None, but Hong Kong was affected by the East Asian currency crisis in 1998 (see below).

Unusually for a British colony, in Hong Kong the Hongkong and Shanghai Banking Corporation was allowed to issue notes for as little as Hong Kong $1 starting in 1872. Typically the British government forbade notes smaller than local £1 (= UK£1), or the roughly equivalent sum of local $5 (= Spanish, Mexican, or US $5) in colonies where the dollar was the unit of account.

Hong Kong's currency reform of 6 December 1935 established a system whereby banks had to obtain Certificates of Indebtedness from Hong Kong's Exchange Fund to issue notes. Over time the conditions for obtaining the certificates have varied, accounting for differences in Hong Kong's monetary authorities. The system of Certificates of Indebtedness still exists today.

From 14-28 August 1998, during the East Asian currency crisis, the Hong Kong Monetary Authority took the highly unusual step for any monetary authority of buying Hong Kong $115 billion of stock to discourage a "double play" of speculation against the Hong Kong dollar and Hong Kong stocks.

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Bányai (1974), Chalmers (1893), Donnison (1956), Fujita (2003), King (1987-91), King and Jao (1990).

Monetary authorities: China: Hong Kong

Exchange rate arrangements: China: Hong Kong

China: Macau

Political sketch

Name also spelled Macao. A Portuguese colony from 1680 until rejoining China on 20 December 1999.

The first Portuguese ship anchored in the Pearl River estuary in 1513, and further Portuguese visits followed regularly. Trade with China was placed on an official basis in 1553, and Macau became the main point for international trade with China and Japan. In 1557 China agreed to a Portuguese settlement in Macau but did not recognize Portuguese sovereignty. The first Portuguese governor was appointed to Macau in 1680. China's trade with the outside world was gradually centralized in Canton (Guangzhou) in the late 1700s, but foreign merchants were allowed into Canton only during the trading season (November to May), so they took up residence in Macau. In 1849 Portugal ceased paying rent to China and closed the Chinese custom house in Macau, in effect declaring Macau to be Portuguese territory; China eventually recognized Portugal's ownership in an agreement of 26 March 1887. By the mid 1800s the nearby British colony of Hong Kong eclipsed Macau in trade, and Macau became a sleepy minor port. During the Second World War, Japanese forces did not occupy Macau, though they easily could have, and the territory temporarily hosted to a large influx of refugees. After the war Macau became known for light manufactured goods and gold smuggling. Tourism from Hong Kong became very important in the 1960s. Casino gambling, not legal in Hong Kong, attracted many day-trippers and continues to do so today (2004). In 1987 Portugal and China reached an agreement to return Macau to Chinese rule in December 1999. The agreement followed a similar agreement of 1984 reached by the United Kingdom and China regarding Hong Kong. They agreed upon provisions to insure the autonomy of Macau, including its right to elect local leaders, the right of its residents to travel freely, and the right to maintain its way of life for 50 years after the start of Chinese rule. Macau rejoined China as a Special Autonomous Region on 20 December 1999.

Wars since 1500

None.

Convertibility

Portugal introduced exchange controls on 24 September 1914 and revoked them on 18 October 1937. There were also a few controls from perhaps 1939 to 1947. Controls were intensified in the summer of 1947, made extensive on 9 February 1948, and removed on 1 January 1993, long after Portugal had ceased to have any colonies except the Chinese city of Macau.

The escudo, introduced in Portugal in 1911 and in its African colonies in 1914, was a chronically weak currency until the currency reform of 1928. Not all colonial escudos were convertible into the Portuguese escudo at par. In 1948 the separate colonial foreign-currency funds were centralized in Lisbon. The currency reform of 1953 unified the Portuguese escudo and the currencies of the Portuguese colonies, making them a true currency area similar to the sterling area or the French franc zone. A Monetary Fund of the Escudo Zone was established by Portugal, Decree-Law 44/703 of 17 November 1962. However, Angola and Mozambique were persistently in deficit to the fund. The result was that high-priority payments were settled immediately at 1 overseas escudo = 1 Portuguese escudo, while low-priority payments experienced delays, which were a form of rationing, until the funds were available to settle them at the official rate. Exchange controls on private transfers from overseas territories to Portugal were imposed by Portugal, Decree-Law 478/71 of 6 November 1971.

Other

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: Failure of a leading Chinese bank 1902; a run on the Banco Luso Internacional in March 1983 (not fatal to the bank); a run on the Wing Hang Bank in September 1985 (not fatal to the bank).

Frankel and Rose (1996) list of currency crashes: Macau not included.

No exchange rate data in Reinhart and Rogoff (2002).

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Banco Nacional Ultramarino (1981), Coehlo (1991), Lacerda (1997), Ma (1987).

Monetary authorities: China: Macau

Exchange rate arrangements: China: Macau

Cyprus

Political sketch

Independent from the United Kingdom on 16 August 1960.

In the 1400s Cyprus was part of the empire of Venice. Ottoman Turks conquered Cyprus in 1571. Uprisings in protest of Turkish policies (especially high taxes) began in the 1700s and continued into the 1800s. An Ottoman crackdown on Greek Cypriots in 1821, when Greeks in several other Ottoman provinces were revolting for a Greek state, left lasting resentment of Ottoman rule. In July 1878 the United Kingdom assumed control of Cyprus in agreement with the Turkish sultan, who remained sovereign. The supposed purpose was to enable the United Kingdom to help the Ottoman Empire contain Russian expansion, but in reality it was more connected with the British desire to acquire territory in the area near the Suez Canal. After the First World War broke out in 1914, the United Kingdom annexed Cyprus on 5 November 1914. On 16 October 1915, the United Kingdom offered Cyprus to Greece if Greece would abandon its neutrality and join the Allied side in the First World War. Greece refused, so the offer lapsed. Cyprus became a British crown colony on 10 March 1925. During the Second World War, Cyprus was an important base of British operations in the eastern Mediterranean.

A Greek Cypriot movement for union with Greece accelerated after the Second World War, punctuated by terrorism against Cypriot and British opponents. The Turkish minority agitated for partition. A compromise joint government with majority Greek representation was approved in 1959, and Cyprus became an independent republic on 16 August 1960, but violence continued, erupting in organized fighting in 1963-1964. In July 1974 the Cyprus National Guard, under Greek officers, staged a coup. Turkish forces then invaded Cyprus to prevent union with Greece. They controlled the northern third of the country when a cease-fire was declared a month later. The Turkish Cypriots established a functioning government but obtained recognition as a sovereign country only from Turkey. An economic gap opened: southern Cyprus moved towards a Western European standard of living from a diversified economy based on tourism, light manufacturing, agriculture, and financial services, while northern Cyprus remained at the much lower level of Turkey. Southern Cyprus will become a member of the European Union on 1 May 2004. As of February 2004, reunification talks are showing some signs of progress.

Wars since 1500

Venetian-Turkish War of 1570-1573; Cyprus Uprising of 1804; First World War, 1914-1918; Cyprus Uprising of 1931; Second World War in Europe, 1939-1945 (Germany and allies against United Kingdom, United States, and allies); Cypriot Guerilla Campaign of 1955-1959 (Greek and Turkish Cypriot terrorist groups against fellow countrymen and United Kingdom); Greek-Turkish Cypriot War of 1963-1964 (Greek Cypriots against Turkish Cypriots); Greek-Turkish Cypriot War of 1974 (Greek Cypriots against Turkey and Turkish Cypriots).

Convertibility

On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914, gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925, the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.

The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973, the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong abandoned sterling as its anchor currency. The sterling area ended in 1979 when the United Kingdom abolished exchange controls.

Before it became independent, Cyprus had exchange controls like those of the United Kingdom. Cyprus left the sterling area on 23 June 1972. On 6 July 1972, the Exchange Control (Amendment) Law and the Exchange Control (the Republic) Order were published in the government gazette and became effective. They empowered the Council of Ministers to treat the pound sterling and sterling area currencies as foreign currencies, therefore subject to exchange controls.

Other

During the Second World War, Palestine Currency Board notes were temporarily declared legal tender (Cyprus, governor's proclamation [possibly No. 467/42], 5 May 1942). At the time, supplies of notes from the United Kingdom were irregular because of problems of transporting them through hostile territory, and the Palestine Currency Board had extra stocks of notes. Palestine notes circulate from 5 May 1942 until 17 November 1942, when they were retired.

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: Run on several locally owned banks in late August 1939, apparently related to the outbreak of the Second World War.

Frankel and Rose (1996) list of currency crashes: Cyprus not included.

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Adler (1937), Eldem (1999a), Phylaktis (1995), Pridmore (1975).

Monetary authorities: Cyprus

Exchange rate arrangements: Cyprus

Cyprus, Turkish Republic of Northern

Political sketch

De facto independent from Cyprus on 19 July 1974.

For the earlier history of the area, see Cyprus. The so-called Turkish Republic of Northern Cyprus was established after Turkey invaded Cyprus in July 1974 to prevent a Greek Cypriot military government, which had just attained power in a coup, from seeking union with Greece. The Turkish Republic of Northern Cyprus occupies nearly 40 percent of the island of Cyprus, a substantially larger proportion than the share of Turks in the population of the island. The country has not received international recognition; only Turkey acknowledges it. The Turkish Republic of Northern Cyprus is in practice an autonomous province of Turkey. It has become closely tied to Turkey economically, with the result that it suffered Turkey's problems and has fallen far behind the Greek southern part of Cyprus. Over the years, the Turkish government has granted large subsidies to the Turkish Republic of Northern Cyprus. Southern Cyprus is preparing to join the European Union on 1 May 2004, which should further enhance its economic growth, while Turkey will remain outside the European Union for the foreseeable future. As of February 2004, there are some signs of progress in reunification talks between Cyprus and the Turkish Republic of Northern Cyprus. Northern Cyprus has had only one president, Rauf Denktash, during its existence.

Wars since 1500

Before 1974, see Cyprus; Greek-Turkish Cypriot War of 1974 (Greek Cypriots against Turkey and Turkish Cypriots).

Convertibility

Uses Turkish lira, about 20 July 1974-present; subject to same exchange controls as Turkey.

Other

Defaults on or restructurings of debt to the foreign private sector: None. The country has never issued internationally traded debt because it has not received international recognition.

Banking crises: Apparently none, though information is sketchy.

Frankel and Rose (1996) list of currency crashes: 1978, 1984, and 1988 for Turkey itself.

No exchange rate data in Reinhart and Rogoff (2002).

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Apparently none in Western European languages.

Monetary authorities: Cyprus, Turkish Republic of Northern

Exchange rate arrangements: Cyprus, Turkish Republic of Northern

India

Political sketch

Independent from the United Kingdom on 15 August 1947.

India has a long history of advanced civilization. Its modern history may be said to have begun when the Portuguese navigator Vasco da Gama reached India by sea in 1498. At the time, the leading states in India were the Muslim sultanate of Delhi in the north and the Hindu kingdom of Vijayanagar in the south. There were also various smaller principalities. The Mughal (Mogul) Empire supplanted the Delhi sultanate in 1526,and by the late 1600s it had expanded over most of India. The Dutch, English, and French followed the Portuguese in search of lucrative opportunities for trade. They established monopoly companies to carry out trade with India and other countries around the Indian Ocean; the best-known was the British East India Company. Territorial acquisition was not a prominent concern until forces under the British East India Company defeated a combined Mughal and French force in 1757, resulting in British supremacy in Bengal (Calcutta and the surrounding area). Thereafter British conquests spread rapidly, and by 1818 the British had defeated the Hindu Marathas, who had risen up against the Mughals in the late 1800s and established their own large empire. By the time of the defeat of the Sikh kingdom in 1849, virtually the whole of India was under the British East India Company. The Indian Mutiny of 1857-8 confirmed the existence of grave deficiencies in the company's administration of India, and on 1 November 1858 the British government took over the rule of India from the company. The French and Portuguese retained small colonial outposts whose importance diminished substantially after the British achieved domination.

Under the rule of the East India Company and later the British government, modern economic institutions such as corporate banks and railways were established. India remained, as it had long been, the center of trade of the Indian Ocean basin. However, the large local weaving industry was demolished by competition from British textile manufacturers.

Indian nationalist sentiments crystallized in the establishment of the Indian National Congress in 1885, which was initially loyal to the British but later pressed for a greater Indian voice in government. Indian Muslims afraid they would be subordinated to those of the dominant Hindu population established the Muslim League in 1906. Despite the granting of limited self-government under the Government of India Act of 1919, the Indian National Congress sanctioned a series of noncooperation and civil-disobedience campaigns, beginning in 1920 under the leadership of Mahatma Gandhi. The Government of India Act of 1935 expanded the powers of the elected provincial and national legislatures and helped lay the groundwork for full independence. By 15 August 1947, when Britain finally granted full independence, the rift between the Muslim League and the Indian National Congress had become unbridgeable. The United Kingdom and the Indian National Congress agreed to Muslims' demand for a separate state of Pakistan, created from the predominantly Muslim northwestern and northeastern portions of India. The partition of India occasioned much bloodshed. The partition of Jammu and Kashmir still has not been peacefully resolved, and has occasioned several wars or near-wars between India and Pakistan. Tensions between the majority Hindu and minority Muslim populations in India continue to be a source of political instability. There are also other ethnic tensions, notably with Sikhs, who have sought to establish an independent state in Punjab.

The leader of the Congress Party, Jawaharlal Nehru, became India's first prime minister. He, his daughter Indira Gandhi (assassinated on 31 October 1984), and his grandson, Rajiv Gandhi, guided India as prime minister or as major political influences for all but a few years until Rajiv's assassination on 21 May 1991. Rajiv Gandhi turned India away from the heavily interventionist economic policies it had followed since independence, which had produced disappointing results and were leaving India farther and farther behind its neighbor and rival China after China began economic reforms in the late 1970s. Later governments have continued the direction Rajiv Gandhi established, though often in fits and starts. India's rate of economic growth has accelerated. Most Indians are today (2004) employed in small-scale farming, but India has become a growing provider of service industries to the rest of the world and has developed a significant middle class.

Here are brief remarks on other territories that comprise part of present-day India.

Andaman and Nicobar Islands: Denmark, the United Kingdom, and other countries made attempts to colonize the Andaman or Nicobar Islands, but the first lasting presence was established by the United Kingdom, in the Andaman Islands, starting 22 January 1858. The United Kingdom annexed the Nicobar Islands in 1869, and joined the two island groups in a single administrative unit in 1872. The islands were part of the British administration of Burma from 1864-1868, but otherwise were part of the British administration of India. They were occupied by Japan from 23 March 1942-9 October 1945, during the Second World War, and given to India at India's independence on 15 August 1947.

Goa: Colony of Portugal 1510-19 December 1961. India invaded Goa starting 18 December 1961 and had the support of most inhabitants.

Hyderabad: Formally joined India 26 January 1950.

Jammu and Kashmir: After periods of Mughal, Afghan, and Sikh rule, the British sold Kashmir to the Hindu ruler of Jammu after they defeated the Sikhs in 1846. When India and Pakistan were created in 1947, the Hindu maharajah of predominantly Muslim Jammu and Kashmir hesitated whether to join India, Pakistan, or remain independent. Fighting between India and Pakistan broke out over control of the region, ending with a cease-fire on 1 January 1949. Further battles occurred in 1965 and 1971, and tension continues to the present (2004).

Pondicherry: In 1666 France created the Compagnie des Indes Orientales. Its first settlement was in Surat in 1668, followed by Chandernagore in Bengal in 1673. The most important French settlement, was Pondicherry, on the eastern coast (Coromandel coast), purchased in 1674. Mahe, located on the Malabar coast, was founded in 1725, Yanaon (Yanam) and Karaikal, both on the Coromandel coast, respectively in 1731 and 1739. France's Indian territories were taken by the United Kingdom during certain wars with France, then returned. Chandernagore was handed over to India on 2 February 1951. The other French enclaves were handed over to India on 1 November 1954 and constitute the Union Territory of Pondicherry.

Sikkim: The United Kingdom made Sikkim a protectorate in 1861 after warfare. It became a protectorate of India rather than an Indian state when India became independent on 15 August 1947. India annexed Sikkim on 16 May 1975.

Denmark established major colonies at Tranquebar in 1620 and Serampore. The Danish presence ended in 1845 when the colony was sold to the British. The Danish also claimed the Nicobar Islands (called by them the Frederik Islands), which they gave to the British in 1868. The Netherlands established its first colony in the city of Pulicat in 1610 and handed over its last colony to the British in 1824. Both the Danish and the Dutch issued coins, although not notes, for their Indian colonies.

Wars since 1500

Bahmani Civil War of circa 1490-1512 (region around Delhi); Portuguese Conquests in India and the East Indies, 1500-1545; Portuguese Campaigns Against Island of Diu, 1509-1547; Vijanyanagar Wars of 1509-1565 (of a southern Indian kingdom with its neighbors); Conquests of Babur, 1524-1529 (Afghan ruler who conquered northern India); First Mogul War against Gujarat, 1535-1536; Early Mogul Wars against the Sur Dynasty, 1535-1536; Later Mogul Wars against the Sur Dynasty, 1556-1557, 1575-1576; Mogul Conquest of Rajasthan, 1561-1595; Second Mogul War against Gujarat, 1572-1573; Mogul Civil War of 1600-1605; Mogul Civil War of 1607; Conquests of Shah Jahan, 1613-1621 (Shah Jahan was a Mogul prince, later emperor); Mogul-Persian War of 1622-1623; Shah Jahan's Revolt, 1622-1626; Mahabat Khan's Insurrection, 1626-1623 (in Bengal); Portuguese-Mogul Wars of 1631-1632; Wars of Aurangzeb, 1636-1657 (Aurangzeb was a Mogul prince, later emperor); Mogul-Persian War of 1638; Maratha-Mogul War of 1670-1680; Mogul-Sikh War of 1675-1708; Rajput Rebellion against Aurangzeb, 1679-1709; Maratha-Mogul War of 1681-1705; Bengalese-British War of 1686; Mogul Civil War of 1707-1708; Mogul-Sikh War of 1709-1716; Mogul Civil War of 1712-1720; Burmese-Manipuri War of 1742 (Manipur is in northeastern India); First Carnactic War, 1744-1748 (United Kingdom and Indian allies against France and Indian allies); Second Carnactic War, 1749-1754 (United Kingdom and Indian allies against France and Indian allies); Burmese-Manipuri War of 1755-1758; Bengalese-British War of 1756-1757; Afghan-Maratha War of 1758-1761; Bengali-British War of 1763-1765; Burmese-Manipuri War of 1764; First Mysore War, 1767-1769 (United Kingdom against Mysore); Burmese-Manicure War of 1764; Rohilla War, 1774 (United Kingdom and Oudh against Maratha Confederation and Rohillas); First Maratha War, 1775-1782 (United Kingdom against Maratha Confederation); Second Mysore War, 1780-1784 (United Kingdom against Mysore); Third Mysore War, 1790-1792 (United Kingdom against Mysore); Fourth Mysore War, 1799 (United Kingdom against Mysore); Second Maratha War, 1803-1805 (United Kingdom and one Maratha faction against another faction); Vellore Mutiny, 1806 (against the United Kingdom's British East India Company); Gurkha War, 1814-1816 (Nepali Gurkhas against United Kingdom); Third Maratha War, 1817-1818 (United Kingdom against Maratha Confederation); Barrackpore Mutiny, 1824; First Sikh War, 1845-1846l; Second Sikh War, 1848-1849; Indian Mutiny (Sepoy Mutiny), 1857-1858 (against the British East India Company); Bhutanese-British War of 1865; Chitral Campaign, 1895 (United Kingdom against local tribes in what is now northern Pakistan); Amritsar Massacre, 1919 (of Indians by British-led troops); Second World War in the Pacific, 1941-1945 (Japan against United States, United Kingdom, Netherlands, China, and allies); Indian Civil War and Indo-Pakistani War of 1947-1948 (by Hindus and Muslims as India was partitioned); Annexation of Hyderabad and Junagadh, 1948; Nagaland Insurgency, 1954-1975; Sino-Indian Border Dispute, 1959-1962; Annexation of Goa, 1961; Indo-Pakistani War of 1965; Indo-Pakistani War of 1971 (India supported the secession of Bangladesh from Pakistan); Annexation of Sikkim, 1975; Siege of the Sikh Golden Temple (by Sikh nationalists), 1984; Kashmiri Insurgency of 1988-present (by Pakistanis and local Muslims supported by Pakistan); Destruction of the Babri Mosque, 1992 (by a Hindu mob).

Convertibility

India introduced restrictions on exchanging local currency for gold starting 5 August 1914, just after the First World War began. Foreign exchange between India and the United Kingdom was restricted in December 1916. India, ordinance of 29 June 1917, require all gold imported into the country to be sold to the government. The government also forbade melting down gold or silver coins was also sometime in June 1917. It forbade importation of solver on private account on 3 September 1917, and forbade the export of silver coin or gold bullion sometime in September 1917. These restrictions were apparently removed by 1925, when the United Kingdom resumed the gold standard after having abandoned it in 1914.

On 2 August 1914, soon after the First World War began, the United Kingdom issued a proclamation imposing a one-month moratorium of payment for bills of exchange accepted before 4 August; an act of 3 August 1914, gave legislative sanction to the proclamation. The moratorium was subsequently extended for a month and ended on 4 November 1914. Legally the pound sterling remained convertible into gold and could be exported, but the risk to shipping from German submarines made the cost of shipment prohibitive, so the United Kingdom was in effect off the gold standard. The British government refused to include private shipments of gold in its war-risk insurance scheme. After the war, the export of gold was prohibited from 1 April 1919 under regulations that were given statutory form in 1920. On 28 April 1925, the government announced that the act would not be renewed when it expired on 31 December 1925. On 13 May 1925 the United Kingdom resumed the gold standard.

The United Kingdom abandoned the gold standard on 21 September 1931. The currencies of British colonies were almost all linked to the pound sterling through currency boards; being on a sterling-exchange standard rather than a gold-exchange standard, they followed the pound sterling off gold. Over the next few years, some former British colonies (Australia, New Zealand, South Africa) and other countries that had important trade links with the United Kingdom switched from gold to the pound sterling as their official or actual anchor. The result was termed the sterling area. The United Kingdom imposed exchange controls on 4 September 1939, the day after entering the Second World War. Most countries that were not current or former British colonies soon left the sterling area. Among the remaining countries, both current- and capital-account transactions were free of restrictions within the sterling area, but were restricted in dealings with outside countries. After the Second World War, the United Kingdom returned to the gold standard under the Bretton Woods system. It removed exchange controls on 15 August 1947, but reimposed them on 20 August 1947 after suffering a large loss of foreign reserves. Sterling had a dual exchange rate from 1961 until the United Kingdom abolished exchange controls. The sterling area remained in existence because sterling was not fully convertible. It began to crumble after the United Kingdom again abandoned the gold standard on 23 June 1972. By January 1973, the sterling area had shrunk to the British Isles and a few small British colonies; even Hong Kong abandoned sterling as its anchor currency. The sterling area ended in 1979 when the United Kingdom abolished exchange controls.

India introduced exchange controls on 3 September 1939, soon after the Second World War began (India, Governor-General, Defence of India Rules, 3 September 1939). These controls also applied to modern-day Bangladesh and Pakistan, which at the time were part of India. As of 1949, when the IMF first records data, India had no exchange controls with Afghanistan, Nepal, Pakistan (which then included present-day Bangladesh), Tibet, or the French and Portuguese colonies in India. India imposed controls with Afghanistan and Pakistan (including present-day Bangladesh) on 27 February 1951.India eliminated the distinction between transfers of capital to sterling area and non-sterling area countries on 25 June 1962. It left the sterling area on 23 June 1972.

For Goa: Portugal introduced exchange controls on 24 September 1914 and revoked them on 18 October 1937. There were also a few controls from perhaps 1939 to 1947. Controls were intensified in the summer of 1947, made extensive on 9 February 1948, and removed on 1 January 1993, long after Portugal had ceased to have any colonies except the Chinese city of Macau.

The escudo, introduced in Portugal in 1911 and in its African colonies in 1914, was a chronically weak currency until the currency reform of 1928. Not all colonial escudos were convertible into the Portuguese escudo at par. In 1948 the separate colonial foreign-currency funds were centralized in Lisbon. The currency reform of 1953 unified the Portuguese escudo and the currencies of the Portuguese colonies, making them a true currency area similar to the sterling area or the French franc zone. A Monetary Fund of the Escudo Zone was established by Portugal, Decree-Law 44/703 of 17 November 1962. However, Angola and Mozambique were persistently in deficit to the fund. The result was that high-priority payments were settled immediately at 1 overseas escudo = 1 Portuguese escudo, while low-priority payments experienced delays, which were a form of rationing, until the funds were available to settle them at the official rate. Exchange controls on private transfers from overseas territories to Portugal were imposed by Portugal, Decree-Law 478/71 of 6 November 1971.

For Pondicherry: When the First World War began, France imposed a moratorium of payments on all negotiable instruments starting 1 August 1914. The moratorium was subsequently extended by decrees until 1 March 1915. The central bank, the Bank of France, abandoned the gold standard on 5 August 1914, although no official prohibition on exporting gold existed until by a decree of 3 July 1915, affirmed by a law of 15 November 1915. A decree of 2 April 1918 prohibited capital exports without authorization. A law of 25 June 1928 officially restored the gold standard and repealed exchange controls. When the French franc was an object of currency speculation , a law of 13 August 1936 imposed extensive exchange controls, supplementing some lesser measures that had been implemented in 1935.

France imposed exchange controls on 9 September 1939 by a decree of that date, after the Second World War broke out in Europe. On 20 May 1940 capital controls within the franc zone were greatly relaxed by a French decree of that date. On 28 January 1941 the Free French government in exile and the United Kingdom concluded an agreement establishing a customs union between the French colonies in India and India itself, and incorporating the French colonies into the sterling area. On 27 March 1945 an Anglo-French agreement withdrew the French colonies from the sterling area and reattached them to the French franc zone, subject to exchange controls for certain purposes. Exchange controls within the franc zone were not removed until 6 June 1946. France had multiple exchange rates from 26 January 1948 until 17 October 1948, and a dual exchange rate from 18 October 1948 to 29 September 1949. On 20 September 1949 it devalued the French franc and unified the exchange rate, taking advantage of the lead offered by the United Kingdom, which had devalued the pound sterling on 18 September 1949.

Other

The small princely states of Dhrangadhra, Morvi, and Nawanagar printed emergency notes during the First World War (1914-1918). Morvi notes circulated, but the notes of the other two states may not have circulated.

The Indian rupee was widely used in the countries of the Persian Gulf and Arabian Peninsula in the early and mid 1900s (and in some cases even earlier). The government of India established a separate currency, the Gulf rupee, for circulation exclusively outside the country (India, Reserve Bank of India [Amendment] Act, 1 May 1959). In doing so, the government hoped to reduce the drain on its foreign reserves from gold smuggling with the countries of the Persian Gulf. After India devalued the rupee on 6 June 1966, the countries using the Gulf rupee--Oman, Qatar, and what are now the United Arab Emirates--decided to replace the Gulf rupee with national currencies. Kuwait had already done so in 1961, and Bahrain had done so in 1965.

Defaults on or restructurings of debt to the foreign private sector: None.

Banking crises: a series of failures 1916-1918 related to the sharp increase in the price of silver relative to gold; nonsystemic problems 1993-past 1999.

Frankel and Rose (1996) list of currency crashes: 1991.

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources:

India: Bagchi (1987, 1997), Balachandran (1998), Chalmers (1893), Gupta (2000), Jain (1933), Kemmerer (1916), Mitra (1991), Reserve Bank of India (1970), Sadeque (1965). There are also histories of a number of individual banks, such as the Chartered Mercantile Bank of India, London, and China (later the Mercantile Bank of India); the Indian Bank; the National Bank of India and Grindlays Bank (which later merged to form National and Grindlays Bank); and the Punjab National Bank. Finally, there are old studies of particular periods that are now long past, such as Keynes (1971 [1913]).

Goa: Da Cunha (1881); very little in Braga Paixão (1964).

Hyderabad: Jung and Iyengar (1946?).

Pondicherry: Mazard (1953), Meuleau (1990).

Sikkim: Apparently none.

Monetary authorities: India

Monetary authorities: Andaman and Nicobar Islands

Monetary authorities: Goa (Portuguese India)

Monetary authorities: Hyderabad

Monetary authorities: Jammu and Kashmir

Monetary authorities: Pondicherry (French India; also includes Mahe, Yanaon, Karikal, and Chandernagore)

Monetary authorities: Sikkim

Exchange rate arrangements: India

Exchange rate arrangements: Andaman and Nicobar Islands

Exchange rate arrangements: Goa (Portuguese India)

Exchange rate arrangements: Hyderabad

Jammu and Kashmir

Pondicherry (French India; also includes Mahe, Yanaon, Karikal, and Chandernagore)

Exchange rate arrangements: Sikkim

Indonesia

Political sketch

Formerly the Netherlands East Indies; also known as the Sunda Islands. Independent from the Netherlands on 27 December 1949.

In the 1200s Indian Muslim traders brought Islam to northern Sumatra, and by the 1400s Islam had spread through most of present-day Indonesia except Bali, which remained Hindu. In the 1500s Muslim trading kingdoms fought among themselves for supremacy. When the Portuguese arrived in the Moluccas (Spice Islands) in 1511, followed by Spaniards, Dutch, and British, they easily seized control by setting local rulers against each other. The Dutch East India Company, eventually acquired colonial control over Java, Sumatra, and the Moluccas. By 1700 the Dutch controlled almost all the islands, although they did not fully subjugate Aceh, at the northern tip of Sumatra, until 1904. They retained control with only two brief interruptions during the Napoleonic Wars. British forces took over most of the outer islands under Dutch control by 1799 to 1802,and took over all areas, including the central island of Java, from August 1811 to 1816. The reason for the British conquest was that the Netherlands were then under the domination of France, which was at war with the United Kingdom. The Treaty of London, signed on 17 March 1824, established British and Dutch spheres of influence in Southeast Asia. Under Dutch rule, Indonesia became a significant agricultural exporter, but the Dutch made little effort to educate Indonesians or otherwise accelerate economic development by Indonesians. Dutch and Chinese merchants dominated trade. In 1927 the Indonesia Nationalist Party was formed under the chairmanship of Sukarno (who like many Indonesians had only one name). In 1942 the Japanese invaded Indonesia with only limited opposition because they were regarded as liberators from Dutch colonialism, but they proved to be as brutal as the Dutch.

After the Japanese surrendered to the Allies in September 1945, Sukarno declared the independence of Indonesia. The Dutch tried to regain control, but on 27 December 1949 they granted Indonesia independence with nominal union to The Netherlands. The United States of Indonesia were formed, and Sukarno became president. The future of Irian Barat (West New Guinea; now called Irian Jaya) was left unresolved in the 1949 agreement and proved detrimental to Dutch-Indonesian relations. In view of continuing Dutch control of Irian Barat, Indonesia dissolved the union with the Netherlands in 1954. On 1 October 1962 the Netherlands transferred Irian Barat transitionally to the United Nations, on 1 May 1963 Indonesia became the administering power of the territory, and on 17 September 1969 it became an Indonesian province.

Sukarno's policies, such as nationalization of Dutch-owned companies, discrimination against ethnic Chinese, and confrontation with Malaysia over territory in Borneo (Kalimantan), resulted in high inflation and economic problems. The Communist Party of Indonesia gained growing influence as a rival center of power. On 30 September 1965, communists attempted a coup. It failed, and in retaliation there were massacres of Chinese and suspected Communists. On 11 March 1966 General Suharto in effect took power from Sukarno; Suharto became president in 1968. The Suharto government invaded the former Portuguese colony of East Timor in December 1975, months after it became independent, and brutally incorporated it into Indonesia until ceding control to the United Nations in late 1999; East Timor officially reattained independence on 20 May 2002. Suharto moved the economic policy in a less interventionist direction (although corruption remained rampant), and Indonesia enjoyed strong growth as an exporter of raw materials and, increasingly, light manufactures. The East Asian financial crisis of 1997 became a depression in Indonesia after the government made mistakes in handling a banking and currency crisis, compounded by bad advice from the International Monetary Fund. Riots resulting from the depression led Suharto to resign on 21 May 1998. After a transition, Indonesia had its first democratic elections in 1999. The economy began growing, but at a slower pace than before. Megawati Sukarnoputri, the vice-president and daughter of Sukarno, was elected president by the parliament on 23 July 2001 to succeed her erratic predecessor.

Wars since 1500

Portuguese Wars Against Ternate, 1550-1588 (Ternate was one of the Molucca Islands); Portuguese-Dutch Wars in the East Indies, 1601-1641; Amboina Massacre, 1623 (of 21 English, Japanese, and Portuguese prisoners by the Dutch); Siege of Malacca, 1640-1641 (Netherlands and Acheh against Portugal); First Javanese War of Succession, 1704-1707 (Netherlands and some Javanese kingdoms against other Javanese kingdoms); Second Javanese War of Succession, 1719-1723 (Netherlands and some Javanese kingdoms against other Javanese kingdoms); Javanese-Chinese-Dutch War, 1740-1743; Third Javanese War of Succession, 1749-1757 (Netherlands and some Javanese kingdoms against other Javanese kingdoms); Anglo-Dutch War in Java, 1810-1811; Padri War, 1821-1837; Great Java War, 1825-1830 (Netherlands against Javanese forces); Achinese War, 1873-1907 (Netherlands against Acheh); Second World War in the Pacific, 1942-1945 (Japan against United States, United Kingdom, Netherlands, China, and allies); Indonesian War of Independence, 1945-1949 (Netherlands against Indonesians); Achinese Rebellion of 1953-1959; Indonesian Wars of 1957-1962; Indonesian-Malaysian War of 1963-1966; Indonesian Massacre of 1965 (of suspected Communists); Indonesian War in East Timor, 1975-1999; Civil unrest in Aceh and some other provinces, 1998-present.

Convertibility

In 1830, the government of the Netherlands Indies imposed a tax of 4 percent on the export of silver in an attempt to prevent it from leaving the colony. During the First World War, export of gold and silver was prohibited on 7 August 1914 (by legislation in Netherlands Indies, Staatsblad, No. 543, 1914).

Various quota and licensing arrangements existed in the 1930s, but I have not found good information on the extent of exchange controls.

The Netherlands East Indies introduced exchange controls on 11 May 1940, during the Second World War in Europe (Netherlands Indies, emergency decree [noodverordenung] of 11 May 1940). The Netherlands had introduced exchange controls the previous day.

During the Second World War, French Indochina (Cambodia, Laos, and Vietnam) and Thailand, though occupied by Japanese troops, did not have Japanese occupation currency; rather, they paid a kind of ransom by creating domestic currency and giving it to Japan to pay for local expenses. In Burma, Hong Kong, western Indonesia (Sumatra and Java), and the Philippines, the Yokohama Specie Bank acted as the issuing agent of occupation currency and the de facto central bank. The Bank of Taiwan had the same capacity in Oceania and eastern Indonesia. The Bank of Japan was made the central bank for the Greater South East Asia Co-Prosperity Sphere by a Japanese law of July 1942, but Japanese occupation currencies were not officially all pegged to one another and to the yen until 1943, when the rate was established at 1 Japanese yen = 1 military yen (China) = 1 Burmese rupee = 1 Javanese gulden = Malayan $1 = 1 Philippine peso = 1 Thai baht = 2 Japanese Oceanic shillings, and 1 Indochinese piastre = 0.976 Japanese yen (Bányai 1974: 8). On 1 April 1942, Japan opened the Southern Development Bank (Nampo Kaihatsu Kinko), which had its headquarters in Tokyo and, from 1 July 1942, a primary regional office in Singapore (renamed Shonan by the Japanese). The Southern Development Bank became the official central bank of the Japanese occupation at various dates in 1943 and 1944 for Malaysia, Indonesia, the Philippines, and Singapore, but this was mainly an administrative change. Notes continued to be printed with the same appearance and the Yokohama Specie Bank and Bank of Taiwan continued as the agents for issuing occupation currency and regulating other banks. Although these currencies were part of a currency zone based on the Japanese yen, convertibility between any pair of currencies was restricted. Taiwan, Korea, and Manchuria were also parts of the Japanese yen currency zone through their older pegs to the yen.

Sabang, in Aceh province, was outside the Indonesian exchange control system as of 1970 even though the Indonesian rupiah was legal tender there.

Other

Defaults on or restructurings of debt to the foreign private sector: None; Indonesia had almost no foreign debt until the East Asian currency crisis of 1997-1998.

Banking crises: De Javasche Bank almost failed in 1841; bank run in 1884 after the failure of the London-based Oriental Bank Corporation, which was a leading bank in eastern and southern Asia (De Javasche Bank and Dutch financiers rescued local banks that experienced problems); some problems in state banks in 1994; out of a total of 240 banks, 61 were closed and 54 were nationalized from 1997-past 1999 as a result of the East Asian currency crisis.

Frankel and Rose (1996) list of currency crashes: 1979, 1983; also East Asian currency crisis, 1997-1998.

Financial stringencies or crises in 1862, 1866 (related to the worldwide crisis of that year), and 1883-1884.

References

Primary sources: See the publications of the monetary authorities, and the laws listed in the "Legal basis" column.

Main secondary sources: Bányai (1974), Berg (1907), Bree (1928), Cole and Slade (1996), Donnison (1956), Fujita (2003), Handjaja and others (1996), van der Borght (1896), Vissering (1920).

Monetary authorities: Indonesia

Monetary authorities: West Irian (Netherlands New Guinea, Irian Barat, Irian Jaya, West Papua)