the Mexican dollar had been made (January 9, 1869) a legal tender. But, side by side with the dollar, the local Chinese community had all along employed the national Chinese tael standard (0.717 taels' weight of sycee silver being counted equal to one dollar), and European merchants, in dealing with Chinese in Hongkong or with any merchants in the open ports of China, had likewise to use the tael standard, side by side with the dollar standard in which they kept their own accounts. The Chinese, having no faith in foreign dollars, bored and cut them for purposes of testing and stamped or, as it is locally called, chopped them for purposes of identification. Every dollar became thus after a short time terribly defaced and mutilated or, as it was called, a chopped or chop dollar. Moroever, as the Chinese looked upon every coin, even when known to be genuine, only as so much sycee silver, they took dollars, clean or chopped, only by weight, broke chopped dollars into pieces, and used broken particles of dollars in place of small coins. Chop dollars, in different stages of laceration, and broken pieces of silver, weighed out from hand to hand and re-assayed (shroffed) by experts in every transaction, were thus the medium of business. Undefaced dollars, fancied for special purposes, were always at a premium. For small transactions, the Chinese used their national copper cash, but these cash had likewise a fluctuating value and the proportion of clean and defaced, whole and broken cash, intermixed in every hundred, also affected the value of every string of cash. At the beginning of this period there was thus, apart from banknotes, virtually no fixed money currency in the Colony, and it is one of the merits of his administration that it partially remedied this defect.
The annual circulation of local banknotes (from five dollars upwards) averaged, from 1864 down to 1872, about two and a half million dollars. But although these notes were popular among the Chinese, the experience of the past had shewn that the Chinese mercantile community are liable to sudden panics. For twelve months after the collapse of the Agra and Commercial Banks, which was followed by a run upon the Oriental and
