China has rigidly adhered to a silver standard. One of her great officials recently stated the reasons. Here are his own words :
“As to the gold standard, we all know that it is a good standard, but China cannot adopt it, firstly because the amount of gold in China is not enough to make gold coins for circulation. If we buy gold from abroad, great expenses will be incurred. Should we purchase foreign gold, what are we going to do with the large amount of silver now in the market, which will cause a great panic in the financial world if the amount is not well disposed of. Secondly, because it is the temperament of the Chinese people to hoard precious metals. Those who see gold coins which are attractive will keep them if they are financially able to do so.

They will probably hide the gold coins somewhere. The coins are the medium of exchange, and when they are thus stored up, the result will be great inconvenience to the public. For these various reasons, though
knowing that the gold standard is a good one. we believe that it is not wise to adopt it abruptly. With regard to the gold exchange standard, it is usually adopted in countries where gold is scarce for the purpose of levelling the rate of foreign exchange. It serves its purpose, and such a standard is mostly adopted in the colonies, where it proves useful. The reason is that the colony can always look up to the mother country for relief in time of need. The condition in our country is quite different, and thus no comparison can be formed’ between a colony and China. Supposing that we contract a big loan and that we put the borrowed money on the foreign market for the purpose of levelling in the rate of exchange, what will happen to us ? It is most probable that we will experience the injury of the dealing before there is hope of profit therefrom.”