#13 1823 · Rishengchang (日升昌) · Banking and remittancerisk-transfer
Rishengchang stopped moving silver across bandit country and moved a coded slip of paper instead
the problem
Merchants had no safe way to move silver between distant cities
background
In the early nineteenth century, a Chinese merchant with money in one city and business in another had one real option: send the silver itself, under armed escort, along trade routes thick with bandits. Guards, insurance and the occasional total loss were a standing cost of doing business at any distance, and the risk did not fall as volume grew — every shipment was its own gamble.
Lei Lutai, manager of the Pingyao dye firm Xiyucheng, proposed converting it into a dedicated remittance house instead: a merchant would deposit silver at one branch and draw the equivalent at another on a paper draft, so the thing that traveled was ink, not metal. To stop the drafts themselves from being forged or cashed by whoever intercepted them, the sum, date and unit were encoded with rotating poem-based ciphers in place of plain numerals — a code the receiving branch could check and a thief holding the paper could not.
the move
Rishengchang, converted from a Pingyao dye firm by owner Li Daquan and manager Lei Lutai, let a merchant deposit silver at one branch and collect the same sum at another branch hundreds of miles away on a paper draft (汇票) — no coin ever left the vault. The draft's amount, date and denomination were written not as plain numerals but in cipher: fixed poems stood in for the months, the days and the digits, and the code was changed periodically so a forger copying an old draft's wording would compute the wrong sum.
the payoff
The piaohao model Rishengchang pioneered grew into a national network of roughly thirty houses and several hundred branches, reaching Russia, Mongolia, Japan and Southeast Asia; Rishengchang itself operated for over a century, surviving into the 1910s before finally closing in 1932, and the format only lost ground once the telegraph and modern foreign-style banks offered faster transfers.
what came after
Rishengchang's draft-and-cipher model became the template for the entire piaohao industry, which financed trade — and for a time, significant government transfers — across Qing China until the 1911 revolution and the rise of modern banks ended the trade.
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references
- [1]RishengchangWikipedia, 2026en.wikipedia.org
- [2]PiaohaoWikipedia, 2026en.wikipedia.org
- [3]日升昌票号的兴衰人民日报, 2017paper.people.com.cn