Robert Neff has authored and co-authored several books, including Letters from Joseon, Korea Through Western Eyes and Brief Encounters.
New bill for old problem in 1891
Namdaemun (South Gate) in the early 1900s / Robert Neff Collection
By Robert Neff
What did Namdaemun and Gyeongbok Palace have in common in 1891?As part of the currency reforms, their images were proposed for the design of a paper bill that would make business transactions easier.
Foreigners often complained about the unwieldiness of Korean currency; one literally had to have a pony and several servants carry enough money to complete small transactions. This new bill, however, would alleviate the need to have so many servants and ponies. According to one foreign resident: The bill would be for 10,000 cash — which in 1891 was worth about $4 — and would have an image of the “Great South Gate” on the front and a picture of Gyeongbok Palace’s Audience Hall on the back.
The bill’s inscriptions on the front would be in Korean and English. The other side of the bill would have a warning against counterfeiting — the penalty for this crime was death.
Gyeongbok Palace in the early 1900s / Robert Neff Collection
At the time, there was a great need for currency reforms. Korean trade was suffering horribly from the rapidly fluctuating exchange rate. In June 1891, a dollar was worth from 2,550 to 2,700 in small cash but in August 1892, the rate had climbed to just over 3,200 cash. Many Chinese and Japanese merchants had lost their fortunes due to the sudden rise and fall of the unstable Korean currency.
At about this time, a Korean national bank was proposed. The main office would be located in Seoul with a branch office in Jemulpo — near the Korean mint. The bank would serve as a guarantee for the new Korean currency but many expressed doubts that it would inspire trust with the public. In the end, the bank project, as well as the 10,000 cash note, never got off the ground.
Korean currency of the past / Robert Neff Collection
In 1898, the Russo-Korean Bank was established for a very short time. It failed, not because of fluctuating currency rates, but because of the fickleness of international politics.
According to professor Andrei Lankov, a Korean institution known as Hanseong Bank was officially established in March 1897 (a year previous to the Russo-Korean Bank) but did not begin regular operations until 1903. Legend has it, Hanseong Bank’s first customer was a provincial merchant who managed to secure a loan using his donkey as collateral.
There were other banks, such as Daehan Cheonil which was established in 1899 as a private royal bank. Lankov’s description of its operation is priceless:
“In 1901 King Gojong appointed his fourth son and future heir designate as the bank’s director, despite the fact that the boy was only four years old at the time! With this appointment, the king challenged the centuries-old notion of propriety and demonstrated that banking was an occupation eminently suitable for a person of good breeding, even a prince.”
Robert Neff has authored and co-authored several books, including Letters from Joseon, Korea Through Western Eyes and Brief Encounters.