In the earliest ages of which history professes to take cognizance, persons who wished to dispose of their goods were obliged to have recourse to barter.  By and by shells were adopted as a medium of exchange, and then pieces of stamped silk, linen, and deerskin.  These were followed by circular discs of copper, pierced with a round hole, the forerunners of the ordinary copper coins of a century or two later, which had square holes, and bore inscriptions, as they still do in the present day.  Money was also cast in the shape of “knives” and of “trouser,” by which names specimens of this early coinage (mostly fakes) are known to connoisseurs.  Some of these were beautifully finished, and even inlaid with gold.  Early in the ninth century, bills of exchange came into use; and from the middle of the twelve century paper money became quite common, and is still in general use all over China, notes being issued in some places for amounts less even than a shilling.

Measures of length and capacity were fixed by the Chinese after an exceedingly simple process.  The grain of millet, which is fairly uniform in size, was taken as the unit of both.  Ten of these grains, laid end-ways, formed the inch, ten of which made a foot, and ten feet a chang.  The decimal system has always prevailed in China, with one curious exception:  sixteen ounces make a pound.  How this came to be so does not appear to be known; but in this case it is the pound which is the unit of weight, and not the lower denomination.  The word which for more than twenty centuries signified “pound” to the Chinese, was originally the rude picture of an axe-head; and there is no doubt that axe-heads, being all of the same size, were used in weighing commodities, and were subsequently split, for convenience’s sake, into sixteen equal parts, each about one-third heavier than the English ounce.  For measures of capacity, we must revert to the millet-grain, a fixed number of which set the standard for Chinese pints and quarts.  The result of this rule-of-thumb calculation has been that weights and measures vary all over the empire, although there actually exist an official foot, pound and pint, as recognized by the Chinese government.  In one and the same city a tailor’s foot will differ from a carpenter’s foot, an oilman’s pint from a spirit-merchant’s pint, and so on.  The final appeal is to local custom.

With the definitive establishment of the monarchy, two hundred years before the Christian era, a system of government was inaugurated which has proceeded, so far as essentials are concerned, upon almost uniform lines down to the present day.

It is an ancient and well-recognized principle in China, that every inch of soil belongs to the sovereign; consequently, all land is held on consideration of a land-tax payable to the emperor, and so long as this tax is forthcoming, the land in question is practically freehold, and can be passed by sale from hand to hand for a small conveyancing fee to the local authorities who stamp the deeds.  Thus, the foreign concessions or settlements in China were not sold or parted with in any way by the Chinese; they were “leased in perpetuity” so long as the ground-rent is paid, and remain for all municipal and such purposes under the uncontrolled administration of the nation which leased them.  The land-tax may be regarded as the backbone of Chinese finance; but although nominally collected at a fixed rate, it is subject to fluctuations due to bad harvests and like visitations, in which cases the tax is accepted at a lower rate, in fact at any rate the people can afford to pay.

The salt and other monopolies, together with the customs, also contribute an important part of China’s revenue.  There is the old native customs service, with its stations and barriers all over the empire, and the foreign customs service, as established at the treaty ports only, in order to deal with shipments on foreign vessels trading with China.  The traditional and well-marked lines of taxation are freely accepted by the people; any attempt, however, to increase the amounts to be levied, or to introduce new charges of any kind, unless duly authorized by the people themselves, would be at once sternly resisted.  As a matter of fact, the authorities never run any such risks.  It is customary, when absolutely necessary, and possibly desirable, to increase old or to introduce new levies, for the local authorities to invite the leading merchants and others concerned to a private conference; and only when there is a general consent of all parties do the officials venture to put forth proclamations saying that such and such a tax will be increased or imposed, as the case may be.  Any other method may lead to disastrous results.  The people refuse to pay; and coercion is met at once by a general closing of shops and stoppage of trade, or, in more serious cases, by an attack on the official residence of the offending mandarin, who soon sees his house looted and levelled with the ground.  In other words, the Chinese people tax themselves.

The nominal form of government, speaking without reference to the new constitution which will be dealt with later on, is an irresponsible autocracy; its institutions are likewise autocratic in form, but democratic in operation.  The philosopher, Mencius (372-289 B.C.), placed the people first, the gods second, and the sovereign third, in the scale of national importance; and this classification has sunk deep into the minds of the Chinese during more than two thousand years past.  What the people in China will not stand is injustice; at the same time they will live contentedly under harsh laws which they have at one time or another imposed upon themselves.

Each of the great dynasties has always begun with a Penal Code of its own, based upon that of the outgoing dynasty, but tending to be more and more humane in character as time goes on.  The punishments in old days were atrocious in their severity; the Penal Code of the present dynasty, which came into force some two hundred and fifty years ago, has been pronounced by competent judges to take a very high rank indeed.  It was introduced to replace a much harsher code which had been in operation under the Ming dynasty, and contains the nominally immutable laws of the empire, with such modifications and restrictions as have been authorized from time to time by Imperial edict.  Still farther back in Chinese history, we come upon punishments of ruthless cruelty, such as might be expected to prevail in times of lesser culture and refinement.  Two thousand years ago, the Five Punishments were ­branding on the forehead, cutting off the nose, cutting off the feet, mutilation, and death; for the past two hundred and fifty years, these have been ­beating with the light bamboo, beating with the heavy bamboo, transportation for a certain period, banishment to a certain distance, and death, the last being subdivided into strangling and decapitation, according to the gravity of the offence.

Two actual instruments of torture are mentioned, one for compressing the ankle-bones, and the other for squeezing the fingers, to be used if necessary to extort a confession in charges of robbery and homicide, confession being regarded as essential to the completion of the record.  The application, however, of these tortures is fenced round in such a way as to impose great responsibility upon the presiding magistrate; and in addition to the risk of official impeachment, there is the more dreaded certainty of loss of influence and of popular esteem.  Mention is made in the code of the so-called “lingering death,” according to which first one arm is chopped off, then the other; the two legs follow in the same way; two slits are made on the breast, and the heart is torn out; decapitation finishes the proceedings.  It is worthy of note that, although many foreigners have been present from time to time at public executions, occasionally when the “lingering death” has been announced, not one has established it as a fact beyond a doubt that such a process has ever been carried out.  Not only that; it is also well known that condemned criminals are allowed to purchase of themselves, or through their friends, if they have any, spirits or opium with which to fortify their courage at the last moment.  There is indeed a tradition that stupefying drinks are served out by the officials to the batches of malefactors as they pass to the execution ground at Peking.  It would still remain to find executioners capable of performing in cold blood such a disgusting operation as the “lingering death” is supposed to be.  The ordinary Chinaman is not a fiend; he does not gloat in his peaceful moments, when not under the influence of extreme excitement, over bloodshed and cruelty.

The generally lenient spirit in which the Penal Code of China was conceived is either widely unknown, or very often ignored.  For instance, during the excessive summer heats certain punishments are mitigated, and others remitted altogether.  Prompt surrender and acknowledgment of an offence, before it is otherwise discovered, entitles the offender, with some exceptions, to a full and free pardon; as also does restitution of stolen property to its owner by a repentant thief; while a criminal guilty of two or more offences can be punished only to the extent of the principal charge.  Neither are the near relatives, nor even the servants, of a guilty man, punishable for concealing his crime and assisting him to escape.  Immense allowances are made for the weakness of human nature, in all of which may be detected the tempering doctrines of the great Sage.  A feudal baron was boasting to Confucius that in his part of the country the people were so upright that a son would give evidence against a father who had stolen a sheep.  “With us,” replied Confucius, “the father screens the son, and the son screens the father; that is real uprightness.”  To another questioner, a man in high authority, who complained of the number of thieves, the Master explained that this was due to the greed of the upper classes.  “But for this greed,” he added, “even if you paid people to steal, they would not do so.”  To the same man, who inquired his views on capital punishment, Confucius replied:  “What need is there for capital punishment at all?  If your aims are worthy, the people also will be worthy.”

There are many other striking features of the Penal Code.  No marriage, for instance, may be contracted during the period of mourning for parents, which in theory extends to three full years, but in practice is reckoned at twenty-seven months; neither may musical instruments be played by near relatives of the dead.  During the same period, no mandarin may hold office, but must retire into private life; though the observance of this rule is often dispensed with in the case of high officials whose presence at their posts may be of considerable importance.  In such cases, by special grace of the emperor, the period of retirement is cut down to three months, or even to one.

The death of an emperor is followed by a long spell of national tribulation.  For one hundred days no man may have his head shaved, and no woman may wear head ornaments.  For twelve months there may be no marrying or giving in marriage among the official classes, a term which is reduced to one hundred days for the public at large.  The theatres are supposed to remain closed for a year, but in practice they shut only for one hundred days.  Even thus great hardships are entailed upon many classes of the community, especially upon actors and barbers, who might be in danger of actual starvation but for the common-sense of their rulers coupled with the common rice-pot at home.

The law forbidding marriage between persons of the same surname is widely, but not universally, in operation.  No Smith may marry a Smith; no Jones may marry a Jones; the reason of course being that all of the same surname are regarded as members of the same family.  However, there are large districts in certain parts of China where the people are one and all of the surname, and where it would be a great hardship ­not to mention the impossibility of enforcing the law ­if intermarriages of the kind were prohibited.  Consequently, they are allowed, but only if the contracting parties are so distantly related that, according to the legal table of affinity, they would not wear mourning for one another in case of death ­in other words, not related at all.  The line of descent is now traced through the males, but there is reason to believe that in early days, as is found to be often the case among uncivilized tribes, the important, because more easily recognizable, parent was the mother.  Thus it is illegal for first cousins of the same surname to marry, and legal if the surnames are different; in the latter case, however, centuries of experience have taught the Chinese to frown upon such unions as undesirable in the extreme.

The Penal Code forbids water burial, and also cremation; but it is permitted to the children of a man dying at a great distance to consume their father’s corpse with fire if positively unable to bring it back for ordinary burial in his native district.  The idea is that with the aid of fire immediate communication is set up with the spirit-world, and that the spirit of the deceased is thus enabled to reach his native place, which would be impossible were the corpse to remain intact.  Hence the horror of dying abroad, common to all Chinese, and only faced if there is a reasonable probability that their remains will be carried back to the ancestral home.

In spite of the above law, the cremation of Buddhist priests is universal, and the practice is tolerated without protest.  Priests who are getting on in years, or who are stricken with a mortal disease, are compelled by rule to move into a certain part of their monastery, known as the Abode of a Long Old Age, in which they are required ­not to die, for death does not come to a good priest, but ­to enter into Nirvana, which is a sublime state of conscious freedom from all mental and physical disturbance, not to be adequately described in words.  At death, the priest is placed in a chair, his chin supported by a crutch, and then put into a wooden box, which on the appointed day is carried in procession, with streaming banners, through the monastery, and out into the cremation-ground attached, his brother priests chanting all the while that portion of the Buddhist liturgies set apart as the service for the dead, but which being in Pali, not a single one of them can understand.  There have, of course, been many highly educated priests at one time and another during the long reign of Buddhism in China; but it is safe to say that they are no longer to be met with in the present day.  The Buddhist liturgies have been written out in Chinese characters which reproduce the sounds of the original Indian language, and these the priests learn by heart without understanding a word of their meaning.  The box with the dead man in it is now hoisted to the top of a funeral pyre, which has been well drenched with oil, and set alight; and when the fire has burnt out, the ashes are reverently collected and placed in an urn, which is finally deposited in a mausoleum kept for that purpose.

Life is remarkably safe in China.  No man can be executed until his name has been submitted to the emperor, which of course means to his ministers at the capital.  The Chinese, however, being, as has been so often stated, an eminently practical people, understand that certain cases admit of no delay; and to prevent the inevitable lynching of such criminals as kidnappers, rebels, and others, caught red-handed, high officials are entrusted with the power of life and death, which they can put into immediate operation, always taking upon themselves full responsibility for their acts.  The essential is to allay any excitement of the populace, and to preserve the public peace.

In the general administration of the law great latitude is allowed, and injustice is rarely inflicted by a too literal interpretation of the Code.  Stealing is of course a crime, yet no Chinese magistrate would dream of punishing a hungry man for simple theft of food, even if such a case were ever brought into court.  Cake-sellers keep a sharp eye on their wares; farmers and market-gardeners form associates for mutual protection, and woe to the thief who gets caught ­his punishment is short and sharp.  Litigation is not encouraged, even by such facilities as ought to be given to persons suffering wrongs; there is no bar, or legal profession, and persons who assist plaintiffs or defendants in the conduct of cases, are treated with scant courtesy by the presiding magistrate and are lucky if they get off with nothing worse.  The majority of commercial cases come before the guilds, and are settled without reference to the authorities.  The ordinary Chinese dread a court of justice, as a place in which both parties manage to lose something.  “It is not the big devil,” according to the current saying, “but the little devils” who frighten the suitor away.  This is because official servants receive no salary, but depend for their livelihood on perquisites and tips; and the Chinese suitor, who is a party to the system, readily admits that it is necessary “to sprinkle a little water.”

Neither do any officials in China, high or low, receive salaries, although absurdly inadequate sums are allocated by the Government for that purpose, for which it is considered prudent not to apply.  The Chinese system is to some extent the reverse of our own.  Our officials collect money and pay it into the Treasury, from which source fixed sums are returned to them as salaries.  In China, the occupants of petty posts collect revenue in various ways, as taxes or fees, pay themselves as much as they dare, and hand up the balance to a superior officer, who in turn pays himself in the same sense, and again hands up the balance to his superior officer.  When the viceroy of a province is reached, he too keeps what he dares, sending up to the Imperial exchequer in Peking just enough to satisfy the powers above him.  There is thus a continual check by the higher grade upon the lower, but no check on such extortion as might be practised upon the tax-payer.  The tax-payer sees to that himself.  Speaking generally, it may be said that this system, in spite of its unsatisfactory character, works fairly well.  Few officials overstep the limits which custom has assigned to their posts, and those who do generally come to grief.  So that when the dishonesty of the Chinese officials is held up to reprobation, it should always be remembered that the financial side of their public service is not surrounded with such formalities and safeguards as to make robbery of public money difficult, if not almost impossible.  It is, therefore, all the more cheering when we find, as is frequently the case, retiring or transferred mandarins followed by the good wishes and affection of the people over whom they have been set to rule.

Until quite recently, there has been no such thing in China as municipal administration and rating, and even now such methods are only being tentatively introduced in large cities where there are a number of foreign residents.  Occupants of houses are popularly supposed to “sweep the snow from their own doorsteps,” but the repair of roads, bridges, drains, etc., has always been left to the casual philanthropy of wealthy individuals, who take these opportunities of satisfying public opinion in regard to the obligations of the rich towards the poor.  Consequently, Chinese cities are left without efficient lighting, draining, or scavengering; and it is astonishing how good the health of the people living under these conditions can be.  There is no organized police force; but cities are divided into wards, and at certain points barriers are drawn across the streets at night, with perhaps one watchman to each.  It is not considered respectable to be out late at night, and it is not safe to move about without a lantern, which is carried, for those who can afford the luxury, by a servant preceding them.

One difference between life in China and life in this country may be illustrated to a certain extent in the following way.  Supposing a traveller, passing through an English village, to be hit on the head by a stone.  Unless he can point out his assailant, the matter is at an end.  In China, all the injured party has to do is to point out the village ­or, if a town, the ward ­in which he was assaulted.  Then the headman of such town or ward is summoned before the authorities and fined, proportionately to the offence, for allowing rowdy behaviour in his district.  The headman takes good care that he does not pay the fine himself.  In the same way, parents are held responsible for the acts of their children, and householders for those of their servants.