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

Published online by Cambridge University Press:  08 March 2022

Atsushi Kobayashi*
Affiliation:
Assistant Professor, Centre for Southeast Asian Studies, Kyoto University, 46 Yoshidashimoadachicho, Sakyo Ward, Kyoto, 606-8304. E-mail: greysh-black.zg14@hotmail.co.jp.

Abstract

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.

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Article
Copyright
© The Author(s), 2022. Published by Cambridge University Press on behalf of the Economic History Association

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Footnotes

This research was supported by JSPS KAKENHI, Grant Numbers 17H06116 and 20K13539. A preliminary version of this paper was presented at the session “Exchange Rates, Growth and Convergence in Historical Perspective” at World Economic History Congress 2018 Boston. The author is very grateful for the discussion and comments from the session participants. The author also thanks the anonymous referees and the editor Dan Bogart for many comments and suggestions. The author is responsible for any errors.

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