Asia’s Silver Absorption through the Triangular Settlement System, 1846–1870

This study reveals the operation of the triangular settlement system for Asia’s silver absorption over the 1850s–60s, which contributed to the stabilization of the pre-1870 global monetary system. First, we demonstrate that the triangular settlement system among Britain, India, and China was establi...

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Bibliographic Details
Published inThe Journal of economic history Vol. 82; no. 2; pp. 442 - 479
Main Author Kobayashi, Atsushi
Format Journal Article
LanguageEnglish
Published New York, USA Cambridge University Press 01.06.2022
Subjects
Absorption
Arbitrage
Currency
Economic history
Exports
Foreign exchange rates
Gold
International trade
Profits
Silver
Stabilization
United Kingdom > UK
Asia
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Summary:This study reveals the operation of the triangular settlement system for Asia’s silver absorption over the 1850s–60s, which contributed to the stabilization of the pre-1870 global monetary system. First, we demonstrate that the triangular settlement system among Britain, India, and China was established based on exchange operations. Second, we validate the bullion point method for Asia’s settlement analysis and devise the triangular silver point mechanism. Third, through reconstructing silver points and comparing the arbitrage profits with the silver trade, we found that silver was imported into Asia from Britain through both the bilateral and triangular settlement systems.
ISSN:0022-0507
1471-6372
DOI:10.1017/S0022050722000092