Chapter 53: The Coinage Process

In truth, the Government Administration Council, including most of the people in the financial sector, were very much in favor of the “Mithril faction,” but the objective facts could not be changed. Therefore, the final plan that was approved was still to mint silver dollars and implement a silver standard.

Once the tone was set, the construction of the mint officially began. In the past, all kinds of paper securities issued by Delong were printed at the printing house. Now that they were going to issue minted coins, it was naturally not feasible to simply add another workshop to the printing plant as before. A new site had to be found for the factory.

According to the opinion of the financial sector, the new mint should be located in Hong Kong. Whether it was the market for the minted coins or the source of the coin materials, Hong Kong, which was adjacent to Guangdong, was obviously more suitable than Lingao on Hainan Island. The financial sector predicted that once they landed on the mainland, the demand for the new currency would be enormous. If the mint could not supply it sufficiently and in close proximity, it would be a huge embarrassment if a currency shortage occurred.

Although Hong Kong lacked resources, its transportation was convenient, and the transshipment of various materials was also more convenient than from Hainan. In terms of security, it was also safe to say it was worry-free.

After consultation between the Planning Institute and the industrial sector’s elders, the basic scale of the mint and the required equipment were finally determined.

The Hong Kong mint was divided into two phases, a minting plant and a printing plant. When fully completed, it would have the complete capability to design and manufacture securities, banknotes, and coins. Due to the urgency of time, and the fact that the Lingao printing plant already had the ability to print banknotes, it was decided that the first phase of the project would be the minting plant.

The minting plant included a small metal smelting workshop, a minting workshop, a metalworking workshop for designing and manufacturing coin stamping dies, as well as independent supporting steam power, factory buildings, security, and other supporting facilities.

A preliminary estimate showed that the main new equipment needed included: smelting furnaces, rolling mills, punching machines, cleaning machines, rimming machines, coining presses, and reduction lathes. Except for a few pieces of equipment, most of it needed to be designed and manufactured from scratch. However, machinery manufacturing was no longer a problem for the current machinery factory, and basically all of it could be self-made.

After several months of construction, the factory buildings and equipment have now been roughly installed, and coin materials and fuel are currently being gathered. The workers have also arrived one after another, so it can be said that everything is ready. In the conference room of the Ministry of Finance in Lingao, the final working meeting before the official start of production was being held.

Although it was called a working meeting, it was actually very important. The final details of the new currency, from the currency itself to the manufacturing process, were to be finalized at this meeting and put into practice.

Cheng Dong, the Minister of Finance, stood up and cleared his throat.

“Comrades! Some time ago, our new currency system reform plan was approved by the Central Government Administration Council and the Senate. The Ministry of Finance sought opinions from the industrial departments on the issue of manufacturing our own coins. After receiving your affirmative replies, we have formally documented your ideas in the memorandum you have in your hands.”

Cheng Dong’s eyes swept over the faces of the crowd. Some were listening to him intently, while others were studying the documents in their hands. He continued with satisfaction, “With the approval of the Government Administration Council, we will officially begin the manufacturing of the new currency. Within a month, we will have the capacity for mass production of stamped metal coins and produce the first batch of coins for circulation.” A murmur of approval went through the conference room.

“Next, I will make a few brief explanations about this memorandum. If you have any questions, please raise them at this meeting. The mainland campaign will be launched soon. As you may already know, our new banknotes are already in mass production and have been shipped to Guangdong for issuance. However, without the support of coins, it is feared that these banknotes will be difficult to circulate truly. So we need to produce the finished product as soon as possible.”

No one present had ever worked in a mint, but they still knew the general process of coinage. Strictly speaking, modern coins are not “cast” but are the product of “stamping.” They are actually manufactured by stamping metal sheets on steel dies with a press, which is “cold working.” Therefore, the weight is accurate and the patterns are exquisite.

Before the advent of modern coinage, silver coins, both Chinese and foreign, were “cast,” which is a “hot working” process. This includes the Spanish silver dollars that flowed into China in large quantities in this time and space: the cross and shield COB was actually cast. The difference is that the patterns and characters on Chinese cast coins are directly cast from the mold, while most European coins are first cast into silver blanks, and then the patterns are struck with a hard die, commonly known as “hammered coins.”

Because COB were hammered coins, although there were certain regulations for their fineness and weight, in the actual casting process, cases of debasing the silver and reducing the weight were common. This point is quite similar to Chinese silver taels. Therefore, for nearly 200 years after COB came to China, they were circulated by weight as silver bullion and did not serve as counting silver coins. The Senate received a large amount of COB in wars and trade, and many of the silver taels paid by merchants from the Ming Dynasty were COB cut into small pieces for use.

It was not until the 18th century that the machine-stamped Spanish pillar dollars flowed in. Because of their standard fineness and shape, exquisite patterns, and convenient carrying, the concave and convex patterns on both sides and the pressed “milled edge” greatly restricted the fraudulent practices of “clipping” and “filing” in the past. The weight of the silver coins was guaranteed, and they could be valued by the piece. It is no exaggeration to say that the large-scale circulation of pillar dollars in China played a pioneering role in the replacement of weighed sycee with silver dollars as the standard of accounting in coastal areas during the Qianlong reign.

The reason why Cheng Dong strongly promoted machine-made silver coins was largely due to the success of the circulation of pillar dollars in China: it was not that there was no demand for counting silver coins among the people, but that the conditions were not available. The great success achieved by pillar dollars purely through commercial circulation fully demonstrated the superiority and feasibility of machine-made silver coins.

The coinage plan proposed by the Ministry of Finance was to mint three types of silver coins: one dollar, half a dollar, and a quarter of a dollar. Banknotes of the same denomination would be issued simultaneously. Small-denomination subsidiary coins would all be issued as banknotes, in units of fen, with denominations of 10 fen, 5 fen, 2 fen, 1 fen, and half a fen. One dollar was equivalent to one hundred fen.

The reason for issuing a half-fen subsidiary coin was mainly because one tael of silver on the market was worth several thousand wen. Even for “good coins” like the Song or Yongle coins, the exchange rate was seven or eight hundred wen. If the value of 1 fen was too large, it would be difficult for it to function as a small-denomination subsidiary coin.

The one-dollar silver coin, as the base currency, was to be stamped from an alloy of 87.5% silver and 12.5% purple copper, with each coin weighing 27 grams and having a diameter of 31mm. The size, fineness, and weight were roughly the same as the pillar dollars, Yuan Datou, and Mexican eagle dollars that were widely circulated in China in the old time and space.

As for the half-dollar and quarter-dollar coins, in addition to their correspondingly smaller sizes, the silver content was also reduced proportionally. The silver content of the half-dollar and quarter-dollar coins was reduced to 60%.

The reason for the lower silver content in the subsidiary coins was that the cost of minting them, excluding the cost of the coin material itself, was almost the same as that of the one-dollar coin, but their circulation value was discounted.

The silver and purple copper used as coin materials were both 99% pure materials smelted by electrolysis at the non-ferrous metal smelter in Lingao to ensure the accurate proportioning of the coin’s fineness.

“There’s no problem with this proportion and size,” said Liang Xin, who was in charge of making the molds. “But how do we handle the dies? I’ve never made coin dies before. The pattern is quite complex. Although it’s not micro-carving, it’s still quite small…”

On the table was a drawing of the silver coin’s design, created by atransmigrators with an art background. The obverse featured the regular script “壹元” (One Dollar), surrounded by a wheat ear pattern, with the year of issue in small Arabic numerals below. The reverse showed the Earth under the light of the Morning Star. A ribbon was wrapped around the Earth with four Latin words: S.P.Q.M. (Senatus Populusque Magnus - The Great Senate and People).

The other half-dollar and quarter-dollar coins had the same pattern on the obverse except for the different denominations. The reverse pattern was the Holy Ship for the half-dollar and the national emblem, which thetransmigrators privately called the “Iron Fist and Chrysanthemum,” for the quarter-dollar.

“You don’t have to worry about engraving the pattern. We have skilled craftsmen to do this. We’ll first carve a large one, and then use a reduction method to make the small ones,” said Wang Luobin. Although he had become the Chairman of the Senate, he still couldn’t resist the itch in his hands in this area and personally came to attend the meeting.

The designed coin pattern was first made into a three-dimensional plaster model by a craftsman. The plaster model was huge, usually between half a meter and one meter in diameter. Such a large size allowed the coin pattern to be very detailed. Once the model was completed, another plaster mold was made from it, and then the mold was carefully covered with a very thin layer of gold foil by a native craftsman. This gold-foiled mold was then sent for electroplating to be coated with a thicker and stronger layer of copper.

The copper-plated mold was placed on a reduction lathe to transfer the pattern from the mold to a steel master die of the same size as the actual coin. The reduction lathe was actually manufactured using the principle of levers and was equipped with a platform that used a four-bar linkage mechanism to control the clamping of the die.

The mold was placed on a rotating rack, and a stylus was held tightly against it. As the mold rotated, the stylus moved up and down with the high and low relief of the pattern’s surface. The movement of the stylus was transferred through a lever to a small-diameter, hard-tipped milling cutter rotating on the other side of the lathe. For every revolution the stylus made on the mold, the cutter head correspondingly left a circle of the pattern on the surface of the steel workpiece. When the stylus had scanned every part of the mold, the cutter head had also machined a proportionally reduced master die. This master die was trimmed and then used to press the coin dies.

Since the steel used for the dies was quite hard, the pressing process could not be completed in one go. For every one-fifth of the stroke pressed, the die needed to be taken out and placed in a tempering furnace to be annealed. After the material softened, it was pressed again until the pressing was fully completed. Each completed coin die could press about one hundred thousand coins. Just twenty dies were enough to press twenty thousand coins in a day, and within a few weeks, all the gold and silver of the Senate could be pressed into coins.