Social Actors, Cultural Capital, and The State The Standardization of Bank Accounting Classification and Terminology in Early Twentieth Century China 2008 Accounting, Organizations and So

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Accounting, Organizations and Society 33 (2008) 73102

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Social actors, cultural capital, and the state:

The standardization of bank accounting classication
and terminology in early twentieth-century China
Yin Xu
b
a,*
, Xiaoqun Xu
a
Department of Accounting, Old Dominion University, Norfolk, VA 23529, USA
Department of History, Christopher Newport University, Newport News, VA 23606, USA
Abstract
In 1920 the Shanghai Bankers Association launched an initiative to standardize Chinese bank accounting classication and terminology, which in 1924 led to the rst standard terminology that was gradually adopted by all Chinese
banks. This paper examines that neglected experience by employing a framework informed by Pierre Bourdieus theory
of practice. We delineate the relations among foreign banks, Chinese modern banks, and native banks in the eld of
Chinese banking; explore the habitus of modern bankers that motivated the standardization initiative; and analyze
how the initiative accrued cultural capital and social legitimacy to modern bankers and how social actors interaction
with the state determined the interaction among them, resulting in the domination of modern banks in the eld and the
domination of the state over the eld.
2006 Elsevier Ltd. All rights reserved.
Introduction
In the early decades of the twentieth century,
western style accounting methods were gaining
considerable ground in China. They were adopted
in modern banks, large companies and government institutions (Chen, 1998; Gao, 1985; Gardella, 1992; Xu & Xu, 2003). One of the earliest
Corresponding author. Tel.: +1 757 683 3554.

E-mail address: yxu@odu.edu (Y. Xu).
and largest Chinese modern banks, the Bank of

Communications, for example, switched to western style accounting in 1917 (JYS, 1987, p.
1456). At the same time, many small Chinese
enterprises, including native banks called qian
zhuang (lit. money shop), continued to operate
with traditional bookkeeping methods, the more
sophisticated variety of which was close to western
style accounting (Gardella, 1992, pp. 323332; Lin,
1992). Nationwide, a standard or uniform
accounting terminology, let alone accounting rules
and principles, did not exist among all business
0361-3682/$ - see front matter 2006 Elsevier Ltd. All rights reserved.
doi:10.1016/j.aos.2006.09.011
74
Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102
enterprises, modern banks, companies and government institutions that used western style accounting. In 1920 a movement was launched by the
Shanghai Bankers Association (SBA) to standardize bank accounting classication and terminology
in the country, resulting by 1924 in the rst such
terminology to be gradually adopted among Chinese modern banks and later native banks. This
critical development in the history of accounting
and of banking in China has not received the
scholarly attention it deserves, despite a growing
Chinese and English language literature on the
subject (for banking, see Chen, 1998; Cheng,
2003; Dong, 2000; Ji, 2003; Sheehan, 2003; Sun,
2003; Wu, 2002; Ye & Pan, 2001; for accounting,
see Chen, 1998; Gao, 1985; Gardella, 1992; Lin,
1992; Xu & Xu, 2003).1 To ll the gap in the scholarship, this paper will examine how a uniform
bank accounting classication and terminology
came into being in early twentieth-century China,
providing an analysis of the cultural capital that
certain social actors possessed and the role that
the state played in the process. The consideration
of what type of capital was available to the actors
is essential to an understanding of the eld of Chinese banking and its transformation. A decisive
step in this evolution was taken with the intervention of the state, which contributed to legitimate
the capital certain actors possessed. Although the
role of the state in the rise of accountancy is a
familiar issue in the literature on the history of
accounting, especially the professionalization of
accountancy (e.g., Chua & Poullaos, 1993, 1998;
de Beelde, 2002; Hao, 1999; Macdonald, 1995;
Uche, 2002; Walker, 1995; Willmott, 1986; Xu &
Xu, 2003), we hope the case here is refreshing in
that contrary to what one might expect, the driving force for uniform bank accounting terminology was not the professional groupChinese
accountants and their organizationsthat was in
theory the best technically equipped, but a group
of individuals prone to act because of their particular social characteristicsChinese modern bankers and their organization.
1
Chengs work on Chinese banking mentioned it in passing
(Cheng, 2003, pp. 193194).
Another contribution we hope to make is that in

analyzing the standardization of Chinese bank
accounting terminology, we employ the concepts
habitus, eld, and capital that Pierre Bourdieu developed. Although there have been criticisms
of Bourdieus theory of practice from scholars of
linguistics, cultural studies, sociology and philosophy, his theoretical constructs have been widely
inuential and provided useful analytical tools in
many disciplines far beyond sociology. Not surprisingly, a number of recent studies in accounting
research have utilized Bourdieus theory. Kurunmaki (1999) used Bourdieus concepts of eld
and capital to interpret how various social actors
with dierently valued capitals in health care (politicians, government planners, physicians and hospital administrators) competed for power and
control. Ramirez (2001) used those same concepts
to analyze the social closure attempted by accounting practitioners in France. Applying Bourdieus
notions of symbolic capital and cultural good,
Neu, Friesen, and Everett (2003) produced an
insightful analysis of the externally and internally
legitimating functions of the ethics discourses in
the Canadian accounting profession. In a similar
vein, this paper oers an historical study of the standardization of Chinese bank accounting terminology that is underpinned by Bourdieus theory.
As will be shown, the standardization of bank
accounting classication and terminology in early
twentieth-century China was not merely a matter
of developing accounting techniques; it also
involved power relations between certain social
actors, that is, Chinese modern bankers (modern
bankers hereafter) and Chinese native bankers
(native bankers hereafter) under particular political, economic, social and cultural conditions. We
will explore how the uniform bank accounting classication and terminology came to pass in the eld
of Chinese banking where social actors competed,
using their respective capitals; how economic capital interacted with cultural and social capitals, and
how the interaction resulted in changes in power
relations in the eld. Specically, we will reveal that
when western accounting concepts were translated
into the Chinese language and adopted as standard
terminology in bank accountingseemingly a
purely technical developmentsubstantial cultural
capital was accrued or transferred by and between

the social actors in Chinese banking, which, among
other variables, impacted on their respective economic capitals and nancial powers. We will illuminate how modern bankers interacted with the
state, and what they were able to achieve when
the Chinese state was weak and unresponsive in
the early 1920s and when there was a relatively
strong and interventionist state after 1927.
To present the story and analysis, the rest of the
paper is organized as follows. The second section
lays out the theoretical framework we apply from
Bourdieu to this study, particularly the concepts of
habitus, eld, and capital. The third section provides an historical overview of Chinese banking
as a eld in which three groups of social actors
foreign bankers, modern bankers, and native
bankers coexisted and competed. The fourth section examines the life experiences of modern bankers which inculcated certain predispositions that
constituted their habitus. The fth section traces
the founding and agenda of the Shanghai Bankers
Association (SBA), which manifested a conscious
pursuit of social capital by modern bankers. The
sixth section details the SBAs eorts to establish
a uniform bank accounting terminology that was
enabled by modern bankers cultural capital on
the one hand and was to accrue their symbolic capital on the other. The seventh section oers a brief
overview of the uniform bank accounting classication and terminology approved by modern
banks in 1924 and examines responses to it in
the eld of Chinese banking, especially the resistance by native banks. The eighth section illustrates the interaction between the Chinese state
and the eld of Chinese banking that led to the
adoption of the standardized terminology by
native banks in 19361937. The conclusion summarizes our ndings and highlights the usefulness
of Bourdieus theory to this case study.2
This study is mainly based on three types of sources with

regard to the early twentieth century: (1) Chinese and English
language primary sources on Chinese modern banks and native
banks; (2) English language primary sources on the uniform
accounting movement in the US; and (3) secondary sources on
Chinese banking and accounting and on uniform costing and
accounting systems and ideas in European countries.
75
Habitus, eld, and capital

A starting point of Bourdieus theory is to transcend the dichotomy between two intellectual orientations in social theories, which he called
subjectivism and objectivism. In brief, subjectivism
seeks to grasp the way the world appears to the
individuals who are situated within it, while
objectivism, such as structuralism, seeks to construct the objective relations which structure practices and representations (Bourdieu, 1991, p. 11).
To Bourdieu, both approaches are useful but
awed: subjectivism fails to take into account the
close connection between the objective structures
of a culture and the specic tendencies, activities,
values and dispositions of individuals; and objectivism fails to give sucient consideration to intentionality and individuality or agency (Bourdieu,
1990).
To move beyond subjectivism and objectivism
and avoid the pitfalls of either, Bourdieu proposes
the concept of habitus. This refers to a set of dispositions that predispose agents to act and react in
certain ways in various situations. Habitus is
formed or produced through long processes of
inculcation in conditions of existence, including
socialization and formal education. It is internalized as second nature, but with an ability to generate meaningful practices and meaning-giving
perceptions adapted to specic situations (Bourdieu, 1990, p. 53). Habitus is both a structuring
structure, in that it organizes practices and the perception of practices, and a structured structure, in
that the principle that organizes the perception of
the social world is itself the product of internalization of the social world (Bourdieu, 1984, pp. 170
173, 1990, pp. 5356). Thus habitus is systems of
durable, transposable dispositions, as principles
which generate and organize practices and representations that can be objectively adapted to their
outcomes without presupposing a conscious aiming at ends or an express mastery of the operations
necessary in order to attain them (Bourdieu,
1990, p. 53). In other words, the habitus generates strategies which can be objectively consistent
with the objective interests of their authors without having been expressly designed to that end
(Bourdieu, 1993b, p. 76). Moreover, all the
76
practices and products of a given agent are objectively harmonized among themselves, without any
deliberate pursuit of coherence, and objectively
orchestrated, without any conscious concentration, with those of all members of the same class
(Bourdieu, 1984, pp. 172173). In this perspective,
the practice or action of social actors is not necessarily, and usually is not, a self-consciously calculated move, but is preconditioned or predisposed
by their habitus, even though the practice or action
actually results in prot of one kind or another.
Habitus does not function and practices do not
take place in a vacuum, but in a set of social contexts or social spaces. All social spaces are conceptualized as elds, such as economic, political,
educational, cultural, etc. and may be further
divided into narrower elds (the cultural eld,
for example, may include linguistic, literary, artistic, musical, and scientic elds). Fields outside
politics and economy have their own laws of functioning, independent of the political and economic
elds. Each eld is a structured space and its structure is determined by the relations between positions that social actors or agents occupy. As
such, a eld is never a leveled playing ground,
but a social space where actors or agents are situated in dierent positions and endowed with dierent resources, powers or capitals and where certain
power relations among agents and the domination
of some over others obtain. In other words, the
structure of a eld is essentially one of unequal distribution of capital; and its eect was the appropriation by dominant agents of prots and of the
power to impose the laws of functioning of the
eld most favorable to the distribution of capital
and its reproduction. At the same time, however,
domination is to be understood not as a conspiracy, but as the result and functioning of the structure. Domination is not the direct and simple
action exercised by a set of agents (the dominant
class) invested with powers of coercion. Rather,
it is the indirect eect of a complex set of actions
engendered within the network of intersecting constraints which each of the dominants, thus dominated by the structure of the eld through which
domination is exerted, endures on behalf of all
the others (Bourdieu, 1998, p. 34). Moreover,
power relations in a eld are not static, but
dynamic. A change in agents positions and relations with each other necessarily entails a change
in the elds structure (Bourdieu, 1990).
The resources or capitals available to social
actors in a eld are conceptualized in dierent categories, such as economic capital, cultural capital,
and social capital; and the volume of capital, the
composition of capital, and the change between
the two properties vary in dierent elds (Bourdieu, 1984, p. 114). Economic capital that is most
easily recognized underlies other forms of capital
that are often misrecognized, but economic capital
does not necessarily correspond to other forms of
capital that particular agents possess in particular
elds. Moreover, one kind of capital can convert
to another, such as cultural capital being one of
the conditions for access to control of economic
capital, and conversely economic capital being
transmitted through generations in forms of cultural capital. Such conversions are important conditions or mechanisms for the reproduction of
capital, social structure, and domination (Bourdieu, 1986, 1990, 1993b, 1998).
Social capital means resources acquired through
possessing a durable network of more or less institutionalized relationships or membership of a
group. The volume of the social capital possessed
by a given agent depends on the size of his network
and on the volume of the capital possessed by each
of those to whom he is connected. As such, social
capital is never completely independent of economic and cultural capitals and it exerts a multiplier eect on those capitals. The network of
relationships is the product of investment strategies aimed at transforming contingent relations
into necessary and elective relationships implying
durable obligations. The relationships may exist
in material and/or symbolic exchanges that maintain and reproduce them, and may also be socially
instituted with a common name (a party, a school,
a family, a club, etc.) and a set of instituting acts
(ceremonies, parties, meetings, resolutions, pledges,
etc.) designed to form and inform those who
undergo them (Bourdieu, 1986).
Cultural capital refers to various kinds of cultural knowledge, competences, and dispositions.
Cultural capital exists in three forms: (1) as longlasting dispositions of the mind and body, such
as prociency in a dominant language, ability to

consume a piece of sculpture or a piece of music,
competence in commenting on or participating in
certain sports, etc. (the embodied state); (2) as cultural products, such as books, paintings, music
records, concerts, fashion shows, etc. (the objectied state); and (3) as objectication, i.e., academic
qualications, such as diplomas, certicates,
degrees, etc. (the institutionalized state) (Bourdieu,
1986). Because the appropriation of cultural
products presupposes dispositions and competences which are not distributed universally
(although they have the appearance of innateness),
these products are subject to exclusive appropriation, material or symbolic, and functioning as cultural capital (objectied and internalized), they
yield a prot in distinction, proportionate to the
rarity of the means required to appropriate them,
and a prot in legitimacy, the prot par excellence,
which consists in the fact of feeling justied in
being (what one is), being what it is right to be
(Bourdieu, 1984, p. 228, 1993a). To Bourdieu, cultural capital is as important a category as economic capital in understanding the social world.
Linguistic capital is considered a form or subset
of cultural capital. This refers to an agents competence in a particular linguistic environment or market, which accrues authority, prestige, legitimacy,
etc. Bourdieu shows how the process of a language
being established as national language, while other
languages are reduced to the status of dialects, for
example, is not socially neutral, but one that legitimates a dominant language and de-legitimates
alternative languages (Bourdieu, 1991). Because
any language that can command attention is an
authorized language, invested with the authority
of a group, the things it designates are not simply
expressed but also authorized and legitimated
(Bourdieu, 1994, p. 166). While the legitimacy of
the dominant language accrues power to the group
who possesses competence in that language, it is
the social conditions under which the legitimacy
is established that need be examined in a given
social space. According to Bourdieu, the eects
of domination which accompany the unication
of the [linguistic] market are always exerted
through a whole set of specic institutions and
mechanisms, of which the specically linguistic
77
policy of the state and even the overt interventions

of pressure groups form only the most supercial
aspect (Bourdieu, 1991, p. 50). All linguistic interactions therefore are micro-markets dominated by
an overall structure; and given the power relations
in a linguistic market, producers of linguistic products (or possessors of linguistic competences) are
not equal (Bourdieu, 1993b, pp. 8081). It is worth
noting that what Bourdieu mostly refers to as linguistic capital is not the ability to speak several
languages, but are dierent levels of prociency
in one single language, especially the recognized
ocial or national language. This point has immediate relevance to the case presented below about
competition between classical and vernacular Chinese languages associated with dierent social
groups.
Linguistic capital, among other forms of capital, also functions as symbolic capital or symbolic
power, in the sense of accumulated prestige, celebrity, consecration, honor, recognition or legitimacy. In Bourdieus words, the weight of
dierent agents depends on their symbolic capital,
i.e., on the recognition, institutionalized or not,
that they receive from a group (Bourdieu, 1991,
p. 72). Any property or any form of capital, when
it is perceived as such and given value by social
agents, may be conceived as symbolic capital
(Bourdieu, 1998, p. 47). Again, for linguistic capital to function as symbolic capital presupposes certain
social
conditions,
institutions,
and
mechanisms that allow agents possessing those
capitals to be recognized or misrecognized as such.
Words can have symbolic ecacy only because the
person subject to it recognizes the person who
exercises it as authorized to do so, or because the
former has contributed to the establishment of
the symbolic ecacy by submitting to it (Bourdieu, 1990, 1991, p. 116). As we shall see in our
case, such recognition does not always come about
voluntarilythe subjection of native bankers to
the authorized status of bank accounting terminology advanced by modern bankers largely resulted
from the function of the state.
The state plays a critical role in the transformations of capitals and power relations in various elds, as it controls the most important
eld and forms of capital. The social conditions,
78
institutions, and mechanisms to be examined in

understanding linguistic and symbolic capitals
under most circumstances would necessarily
include the role of the state. Bourdieu regards
the government bureaucracy as a eld where
agents (political professionals and bureaucrats)
occupy dierent positions and master a cultural
literacy in its structures, institutions, discourses,
regulations, rules, etc. At the same time, the state
may be conceptualized as an entity vis-a`-vis society or all other elds, and as such, the state represents the concentration of dierent species of
capitalseconomic capital (unied taxation),
informational capital (census, surveys, archives,
maps, budgets, etc.), symbolic capital (recognized
authority), and military capital or instruments of
coercion (armed forces and police). The historical
emergence of the modern state culminated in the
concentration of dierent forms of capital; and
the legitimacy or symbolic power of the state is
more important than the coercive power in its
functioning.3 Bourdieu writes:
Concentration of the dierent species of capital (which proceeds hand in hand with the
construction of the corresponding elds)
leads indeed to the emergence of a specic,
properly statist capital (capital etatique)
which enables the state to exercise power
over the dierent elds and over the dierent
particular species of capital, and especially
over the rates of conversion between them
(and thereby over the relations of force
between their respective holders) (Bourdieu,
1998, pp. 4142).
That is to say, whenever the state intervenes in
or exercises power over a particular eld, the
action is bound to make a dierence in the power
relations among agents and their relative capitals
in that eld. Agents in all other elds, therefore,
try to interact with the state, either competing
3
Bourdieu used the examples in the European history.
Because his analysis depends probably on the role the state
plays in the society in which he lived, Bourdieu downplays other
modes of legitimating than the ocialisation by a strong and
centralized power. But his point applies to other historical
contexts, and certainly to the Chinese context in our case.
for inuence on the state and its policies or trying

to resist or deect them, for their own benetsto
maintain or accrue their own capitals, which constitutes an important dimension of the dynamics
in various elds.
The above exposition of the most important
concepts in Bourdieus theory of practice is
unavoidably cursory, but will suce for the purpose of this study.4 In light of those concepts,
the Chinese banking industry in the early twentieth
century can be usefully conceived as a eld, where
social actors or groups thereinforeign bankers,
modern bankers, and native bankerscompeted
for capital, power, and market share, even though
they functionally supplemented each other to varying degrees over time. The concept of habitus will
be used to explain the behavior of modern bankers
and native bankers in their responses to the changing economic, social and political conditions they
encountered and to the issue of uniform bank
accounting terminology. The concept of capital,
in its economic, social, cultural, linguistic and symbolic forms, will serve as analytical tools for
understanding the origins, development and outcome of the movement for uniform bank accounting classication and terminology. Linguistic and
symbolic capitals are concepts especially relevant
to this study. We shall see how the uniformity initiative would privilege modern bankers linguistic
competence in foreign languages (and the vernacular Chinese language) over native bankers linguistic competence, as uniform bank accounting
terminology was translated from the English lan4
Michel de Certeau opines that Bourdieus concept of
habitus has to be assumed to be immobile memory in order
to reproduce the social structure in practices and that the
concept allows the circular movement of the theory: from
structures to habitus to strategies (which are adjusted to
situations) to situations (which are particular states of structures) to structures (de Certeau, 1984, pp. 5060); and Liu also
sees tautology in some of Bourdieus discussions about the
value of linguistic capital and symbolic capital (Liu, 1999, pp.
3334). These readings of Bourdieus theory, not in its entirety,
are debatable. Works that provide more systematic and critical
review of Bourdieu include Calhoun, LiPuma, and Postone
(1993), Swartz (1997), Shusterman (1999), and Webb, Schirato,
and Danaher (2002). These works attest to the fact that
Bourdieus complex and profoundly insightful theory has a
great deal to oer.
guage into the vernacular Chinese vocabularies,

and as native bankers were forced to adopt the
new terminology and abandon their accounting
concepts and terms rooted in the classical Chinese
language and tradition. And one vital aspect of
this development is that the Chinese state played
a decisive role in establishing the legitimacy of
the uniform bank accounting terminology nationwide and therefore accruing modern bankers linguistic and symbolic capitals while subjecting
modern bankers and their economic capital to
the demands of the state.
The eld of Chinese banking

Why did the Shanghai Bankers Association, as
opposed to a professional accounting association,
lead the movement for uniform bank accounting
terminology? For one thing, the Chinese accounting profession was immature in the late 1910s and
early 1920s. The Chinese government did not ocially recognize the accounting profession until September 1918 with the Provisional Regulations on
Accountants. The ocial recognition did not lead
to a rapid growth of the profession, partly because
government regulation required formal training in
business schools for licensed accountants, while
unregulated traditional bookkeeping did not
require its practitioners to have school training. In
other words, the higher entrance cost for wouldbe western-style accountants slowed the growth of
the profession. By 1926 there were only 183 licensed
Chinese accountants in the country, of whom ftythree were in Shanghai. The Chinese accountants
professional organization in Shanghai, the Institute
of Chartered Accountants of Shanghai (ICAS), did
not ocially come into being until 1925, years after
the movement for uniform bank accounting terminology was launched. Besides, after it was founded,
the ICAS was busy addressing other issues more
closely related to the interests of the accounting
profession (Xu & Xu, 2003). That is why the
Chinese accounting profession as a whole and its
organization did not play the leading role in this
movement, even though some individual accountants were involved in the standardization of bank
accounting terminology at a technical level.
79
In contrast, Chinese bankers were one step

ahead of the accounting profession as promoters
of modern banking and economic development.
Modern Chinese banking was born in Shanghai
with the establishment of foreign banks and their
branches after the city became a treaty port in
1844. The rst foreign bank established in China
was a branch of the Oriental Banking Corporation
that was opened in Shanghai in 1847. It was followed by the Chartered Bank of India, Australia,
and China in 1858, the Hong Kong and Shanghai
Banking Corporation in 1865, the Deutsch-Asiatische Bank in 1889, the Yokohama Specie Bank in
1893, the Russo-Chinese Bank (later Russo-Asiatic Bank) in 1895, the Banque de lIndochine in
1898, Banque Belge pour lEtranger in 1902, and
Nederlandsche Handel-Maatschappij in 1903 (Ji,
2003, pp. 4253, 7074, 7778). Between 1847
and 1911 twenty-six foreign banks established
branches in Shanghai and one (the Deutsch-Asiatische Bank) headquartered there. In the 1910s and
1920s there was a further expansion of foreign
banks in China, especially from Japan and the
United States (Sheng, 1988, pp. 710, 1314).
When foreign banks were operating in China
between 1847 and 1897, two types of traditional
Chinese nance and credit institutions, ticket
stores (piaohao), and money shop (qianzhuang), were also active. Ticket stores dealt in promissory notes and credit papers (tickets) and
originated in Shanxi Province in northern China.
Money shops originally dealt in copper coins and
were native to Shanghai.5 These Chinese institutions coexisted with foreign banks for over fty
years because they performed functions in dierent
spheres, each taking about a one-third share of the
nancial market in China. Foreign banks monopolized the nancing of trade between China and
other countries; ticket stores specialized in
inter-provincial remittance and some government
services; and money shops mainly functioned
as local commercial banks doing such business as
money exchange, issuance of promissory notes,
5
Another variety of money shops was called silver shop
(yinhao) referring to shops that initially dealt in silver (yin) or
jewelry and originated in Guangzhou, a treaty port in southern
China and Tianjin, a treaty port in northern China.
80
and making short-term loans (Cheng, 2003, pp.

1020).
The balance of power in the eld of Chinese
banking started to shift around the turn of the
twentieth century. With the rst Chinese modern
bank, the Great Qing Bank, established by the
Qing government in 1897, the era of modern banks
began. By 1911, when the Qing dynasty was overthrown, ten modern banks or bank branches had
been established in Shanghai. By 1920 another
nineteen had been added and by 1935 there were
seventy-three Chinese banks in operation in the
city (Xu, 2001, pp. 2830; cf. Ji, 2003, p. 129). In
1922 forty-eight Chinese banks (either public or
private) employed 5226 people. Twenty-one of
those banks or their branches were located in
Shanghai and employed 1953 people, not including the employees of the Bank of Communications
Shanghai Branch that employed a total of 1200
people in Beijing and Shanghai (YZ, September
15, 1922, pp. 34). The total cash position of all
Chinese modern banks in Shanghai increased from
T38,630,000 and 17,500,000 in 1915 to
T53,612,000 and 64,800,000 in 1925 (NCH, October 15, 1935, p. 125).6
The development of modern banks in Shanghai
was accompanied by the decline of traditional
ticket stores. Ill-adapted to the changing
socialeconomic environment, they all but disappeared by the 1910s, as their functions and market
shares were taken over by the emerging modern
banks. On the other hand, Chinese money shops,
now exclusively known as native banks, managed
to continue their operations, supplementing foreign and modern banks functions and occupying
an important position in the trade between China
and world market and a decent share of the
nancial market in the country (Cheng, 2003, pp.
6
T means silver tael and means yuan or silver dollar.
Those were the two major Chinese currencies in use at the time.
After 1933 silver dollar would become the only standard
currency (see Conclusion). Per the exchange rate set by the
government in 1933, 1 yuan equals 0.715 tael (Ji, 2003, p. 184).
The exchange rate between British sterling and silver tael
uctuated during the period under study. To give an idea of the
range, we cite the following: 1 tael equals 1.11 and 1/2 in 1912;
4.4 in 1920; 1.2 in 1930; and 1.4 and 1/2 in 1934 (NCH,
October 23, 1935, p. 170).
3738; CWR, June 30, 1923, pp. 3132; Du,

1991, 7279, 159181; Ji, 2003, Chap. 24; McElderry, 1976, pp. 1012; Rawski, 1989, pp. 128
145).
Native banks were able to survive the advent of
foreign banks and modern banks in no small part
because of native bankers cultural capital and
social capital. The cultural capital partly lay in
their knowledge of Chinese social-cultural practices, traditional book-keeping methods and
related terminology based on the classical Chinese
language. The social capital partly lay in their
native place based personal ties and business networks and partly in some of their time-honored
business practices rooted in Chinese culture and
tradition. The practices included relying on personal trust in borrowers instead of investigating
their credit history when deciding on a loan, exible business hours (virtually no weekends and holidays) and friendly personal services, and
willingness to deal with small businesses and lowprot customers. These human relationship (renqing) oriented practices were appreciated in Chinese
business circles and contributed to enhance their
symbolic capital. As late as 1927 the Native Bankers Monthly of the Shanghai Native Bankers Guild
was able to claim that the practices mentioned
above were the reasons why Chinese merchants
were willing to deal with native banks instead of
modern banks (QY, 5, 7 (June 1927), p. 1923).
Thus in the eld of Chinese banking a triangular relationship existed among three playersforeign banks, modern banks, and native banks.
The relationship was cooperative to a degree, but
nonetheless competitive. Modern banks were newcomers, and foreign banks and native banks
attempted to retain their established positions in
the eld. The following statistics illustrate the relative economic capitals and nancial powers of
the three groups. In 1921, when the movement
for uniform bank accounting terminology was
under way, modern banks held deposits in the
amount of 534.4 million, while foreign banks
held 429.1 million and native banks, 329.7 million (Rawski, 1989, p. 392), reecting a rough
equilibrium among the three groups.
Although the numbers cited above do not show
foreign banks as dominant, the advantages they
enjoyed lay elsewhere. First, established in Chinas

foreign concessions and protected by extraterritoriality, foreign banks attracted deposits from the
rich Chinese who sought security for their money
from the vagaries of Chinese political turmoil, in
exchange for very low or no interest at all, which
meant a larger prot margin for foreign banks.
Second, foreign banks handled the debts the Chinese government paid to the foreign powersthe
debt payment was guaranteed by custom duties,
salt tax, and railway receipts, the three main revenue sources of the Chinese central government.
Third, foreign banks wielded inuence in the Chinese nancial market with its short-term loans on
which native banks had relied to operate since
the nineteenth century,7 and with its manipulation
of exchange rates between Chinese currencies that
were based on silver and foreign currencies that
were based on gold (Cheng, 2003, pp. 7273).
A signicant aspect of the changing relations in
the eld of Chinese banking was, therefore, that
both modern and native banks began to compete
with foreign banks and consciously challenge their
domination in the eld. The desire to be able to
compete with foreign banks was one of the most
important reasons for the emergence of modern
Chinese banks (Cheng, 2003, p. 75). Not surprisingly, native bankers shared modern bankers
nationalistic sentiments. As a result, the earlier
cooperation between native banks and foreign
banks was gradually replaced by cooperation
between native banks and modern banks. At the
same time native banks were increasingly overshadowed by the expansion of modern banks. It
is against this background of competition between
Chinese and foreign banks and between Chinese
modern and native banks that the movement for
a uniform bank accounting classication and terminology took place.8
7
Historically, foreign banks and rms relied on Chinese
native banks to penetrate the market in the Chinese interior
where barriers of language, customs and local connections
hampered foreign access.
8
Although we will not mention foreign banks very much
hereafter, the competition between foreign banks and all
Chinese banks remained part of the background of the story
unfolded in this paper.
81
The habitus of Chinese modern bankers

One aspect of the competition between modern
banks and foreign banks was the fact that modern
banks were established after the western model. To
be able to compete with foreign banks, modern
banks had to adopt similar business rules, procedures and techniques, including accounting methods. The eorts at bringing about a uniform
accounting terminology were part of a general
strategy of keeping abreast of business practices
in the West.
In fact, the trend towards uniform accounting
terminology or standardization in accounting
practices was not a unique and isolated phenomenon in China. In the late nineteenth and early
twentieth century, for instance, there was an international movement to standardize accounting
methods in the mineral industry, and after 1915
the movement became largely American (Vent &
Milne, 1989). In Britain the movement for uniform
costing in the printing industry was launched at
the very beginning of the twentieth century by
the British Federation of Master Printers (Walker
& Mitchell, 1997). By 1923 interest in uniform cost
accounting in wider industrial circles was
expressed by the Institute of Cost and Works
Accountants (Most, 1961, pp. 4042). In France
ideas about uniform accounts in balance sheets
and standardization in accounting were proposed
and explored between 1880 and 1914 (Lemarchand, 1995; Standish, 1990, pp. 339340). It may
be noted that there was a dierence between uniform costing systems and uniform accounting systems, as the former concerned internal reporting
and the latter, nancial and integrated system of
accounts. Yet, the fact that both kinds of systems
were moving towards standardization and uniformity would suggest that a wider phenomenon
was taking place. One aspect, and an explanation,
of the phenomenon were government eorts to
regulate industries. In the late nineteenth century
Britain, for instance, the crash of the City of Glasgow Bank due to fraudulent accounting practices
precipitated the legislative struggles to regulate
banks and companies, leading to the Company
Act of 1879. Such legislation was aimed at correcting the absence of independent auditing and
82
unregulated disclosure in the nancial statements

of banks (Walker, 1996, 1998). In early twentieth-century America, lawmakers and government
regulators regarded the lack of uniformity as the
underlying source of fraud and irregularities in
accounting practices and identied the establishment of a uniform standard as the solution. Calls
for uniform accounting within particular industries were especially common (e.g., Manning,
1919; Pasley, 1920; Union, 1920). Although the
movement was opposed by some accounting professionals and business leaders, there appeared to
be little controversy over uniform accounting terminology as opposed to uniform accounting rules
and principles (Preinreich, 1933).9 The Special
Committee on Accounting Terminology of the
American Institute of Accountants (AIA) was able
to claim that It is superuous to speak of the need
for greater uniformity in accounting terminology,
for this is admitted on all sides and is dwelt upon
by practically all the recognized authorities on
accounting matters (Terminology Department,
1922a, p. 467).10
The western experience of developing uniformity in accounting practices is relevant here for
an understanding of Chinese modern bankers
habitus. As students of western-style banking
and accounting, Chinese modern bankers were
9
The opponents argument was that professional judgment
was the essential quality and function of accountants in an
uncertain business environment and that uniform accounting
rules and principles was not the solution to all problems in
accounting practices (see May, 1950; cf. Merino & Coe, 1978;
Previts & Merino, 1998, pp. 228234).
10
The movements toward uniformity went beyond the 1920s
and none of those movements in Europe and America went
forward smoothly or achieved results quickly. False starts,
detours, and setbacks were common. In Germany the Goring
Plan was adopted in 1937 and inuenced the French formulation of the Plan Comptable General in 1941 (Laerty, 1975, p.
51; Standish, 1990). Originated in the late nineteenth century,
standardization in accounting in France resulted in the Plan
Comptable General by 1947 and became increasingly mandatory between 1959 and 1962, and even then it still did not
constitute accounting standards as dened by the UK accountancy profession; and in the UK, national accounting principles
were issued no earlier than 1942 (Laerty, 1975, pp. 9, 12, 230
231). The uniform cost accounting in Britain did not come to
full fruition until after the Second World War (Most, 1961, pp.
4648).
concerned about the validity of nancial statements because their nancial interests were at
stake, just like nanciers elsewhere. For instance,
American bankers were credited with the trend
towards truthful accounting practices because they
were rst to demand valid nancial statements
from borrowers (Marsh, 1922). As the US Federal
Reserve Board noted in issuing the document
Uniform Accounting, in 1917, bankers,
through their associations and otherwise, played
an important role in bringing about uniformity
in nancial statements (Uniform Accounting,
1917). These words would apply equally to the
Chinese situation. To understand the habitus of
modern bankers, however, an elaboration is in
order.
The growth of Chinese modern banks was
accompanied by the rise of a new generation of
Chinese nanciers. They were trained in and familiar with western banking and accounting practices,
were active in promoting the Chinese banking
industry and economic development, and were
instrumental in the movement for uniform bank
accounting terminology. To comprehend their
habitus, we will take a brief look at the family
background, life, educational experience and
career patterns of some leading modern bankers
(mostly in Shanghai).
Zhang Jiaao (18881979) was born in Banshan,
Jiangsu, and studied French at the Institute of
Modern Languages in Shanghai before going to
Japan to study nance and economics at Keio
University. He became the deputy manager of
the Bank of China Shanghai Branch in 1913
(MRD, p. 962). Chen Guangfu (18811976), the
founder of the Shanghai Commercial and Savings
Bank, was born into a merchant family in Zhenjiang, Jiangsu. He went to the US in 1904 and studied at Simpson College in Iowa, Ohio Wesleyan
University, and nally at the Wharton School,
University of Pennsylvania till 1909. He worked
for the Jiangsu Bank rst, and then founded his
own bank in 1915 (MRD, p. 1020). Qian Yongming (18851958) was born in Shanghai. He went
to Japan in 1903 to study nance at Kobe Commercial College and graduated in 1908. In 1917
he entered the Bank of Communications Shanghai
Branch as a deputy manager and became the
general manager in 1919 (MRD, p. 1532). Li Ming

(18871966) was born into a silver merchant
family in Shaoxing, Zhejiang, and enrolled in an
American missionary college in the provincial capital Hangzhou in 1902. He went to Japan in 1905
and majored in banking and commerce at Yamaguchi Commercial College. He began to work for
the Zhejiang Industrial Bank in 1912 and became
the deputy manager of the banks Shanghai branch
in 1913 and the general manager in 1916 (MRD, p.
248). Wu Dingchang (18841950), a native of
Wuxing, Zhejiang, went to Japan in 1903 to study
commerce till 1910. He served in various governmental and banking positions before becoming
the general manager of the Salt Industry Bank in
1917 (MRD, p. 365).
Two of the leading modern bankers in Shanghai, Song Hangzhang (18721968) and Ye Jinggui
(18741949), being about ten years senior to the
modern bankers above mentioned, did not have
formal education in the West or Japan, but they
were familiar with western banking and commercial practices and were procient in English. Song
studied English at the Shanghai Chinese-Western
School and worked at the Shanghai Telegraph
Bureau. He began his banking career in the Imperial Bank of China in 1898 and in 1906 became
the manager of the Shanghai Branch of the Great
Qing Bank which became the Bank of China in
1912 (MRD, p. 448). Ye, a native of Hangzhou,
Zhejiang, studied English, mathematics, and
other western subjects in Beijing for ve years
before obtained a jinshi degree in 1903.11 He
began to work as the manager at the National
Commercial Bank in 1909. In 1911 he was
appointed the general supervisor of the Great
Qing Bank, and became the chairman of the
National Commercial Bank (based in Shanghai)
in 1915 (MRD, pp. 12581259). Signicantly,
Yes treasurer and manager at the bank, Xu Jiqing, was a graduate from Yamaguchi Commercial
College in Japan.
11
Under the traditional civil service examination that tested

Confucian classics and existed until 1905, jinshi was the highest
degree whose holders were eligible for ocial appointments.
83
The brief biographical survey shows that the

leading Chinese modern bankers shared several
common traits in their conditions of existence that
produced their habitus. First, they were all born
and grew up in or near Shanghai, the most westernized Chinese city that was sandwiched between
Zhejiang and Jiangsu, two coastal provinces that
were economically more developed in China. Second, they all received their higher education in
Japan and the West or at least possessed English
language prociency and knowledge of western
banking and commercial practices. Although the
majority of leading Chinese bankers were educated
in Japan, the western inuence was unmistakable
since Japans banking and accounting practices
too were modeled on western lines.12 Third, they
were at the same time familiar with Chinese cultural tradition because they were trained in Chinese classics at least in their elementary and
secondary education, and grew up in Chinese business circles. Hence, they were able to combine western knowledge with Chinese business traditions as
their cultural capital. The traditions included the
following: an emphasis on native-place ties, which
led to institutional loyalty and solidarity; the idea
of serving society, which enhanced the public
image of the bank; identication of individual
interest with group interest, which reinforced loyalty to the bank one was working for; cultivation
of moral character, which was in line with banking
business ethics; and a nationalistic sentiment,
which sought a China that was wealthy and strong
(Cheng, 2003, pp. 225238). In contrast, while
sharing those traditional practices (McElderry,
1976, 1986), most native bankers did not have sufcient knowledge of, training in and familiarity
with western-style practices and foreign languages.
This was a huge and critical dierence in native
12
As early as 1872 the Japanese government employed

Alexander Allan Shand, a former manager of the Chartered
Mercantile Bank Yokohama Branch to be an adviser. Shand
wrote a textbook, Detailed Accounts of Bank Bookkeeping, in
ve volumes, which was quickly translated into Japanese and
published in December 1873. In 18741879, with his book and
other materials, Shand trained 341 Japanese students who
would become bank ocers and government ocials (Tamaki,
1995, p. 34).
84
bankers conditions of existence which formed

their dierent habitus from modern bankers.
Simply put, the conditions of existence that produced the habitus of modern bankers predisposed
them to act and react in the eld of Chinese banking. The Chinese nanciers were looking up to
western models on the one hand, and making their
own judgment and taking their own initiatives on
the other. They apparently believed that a uniform
accounting terminology was scientic and eective, the path to modern banking and bank
accounting. The Bankers Weekly, the publication
of modern bankers in Shanghai, was punctuated
with articles advocating uniformity in accounting
methods, terminology and book formats, all in
the name of achieving better, more scientic
accounting results (e.g., YZ, March 20, 1923, pp.
812; July 3, 1923, p. 26; October 4, 1923, pp.
1112). While some writers noted the diculty in
achieving uniformity in accounting beyond uniform terminology, no one questioned the desirability of uniformity (YZ, July 31, 1923, pp. 2122;
October 9, 1923, pp. 2628). Importantly, all the
discussions on improving bank accounting methods (including the standardization of the terminology) were explicitly based on European and
American models. Modern bankers did not feel it
necessary to justify the adoption of western-style
accounting methods and terminology and took it
for granted that such changes would lead to more
scientic and truthful accounting results. Before
looking at how modern bankers tackled the issue
of bank accounting terminology, however, we
shall examine their eorts at enhancing their social
capital through building a formal organization,
one that would play an instrumental role in the
uniformity initiative.
Bank of Communications Shanghai Branch, Chen

Guangfu of the Shanghai Commercial and Savings
Bank, Li Ming of the Zhejiang Industrial Bank,
and Ye Jinggui of the National Commercial Bank
and Wu Dingchang of the Salt Industry Bank. Soon
Xie Zhiting of the Chungfoo Union Bank also
joined. The luncheon meetings were occasions
where the bankers would discuss business and
the nancial situation in the city and the country.
It was at such meetings that they discussed and
then pursued a joint venture, the Shanghai Public
Warehouse, where companies could store their
inventories as collateral for loans from the seven
banks (SYGN, 1921, p. 1).
The association of those bankers would have
remained informal had it not been for an intervention from the state. In 1915 the Ministry of
Finance issued the Regulations for Bankers Associations requiring the establishment of bankers
associations in the various cities where modern
banks and native banks (including silver shops)
operated. The regulations stated that bankers
associations were authorized by the Ministry and
local ocials to take care of banking-related public aairs (ZG, August 29, 1915). This, in eect,
delegated to local elites certain public functions
that the state recognized as important but was
unable to perform itself.13 It thus created a new
space for modern bankers to play a public role in
the eld of Chinese banking, which would allow
an expansion of their social capital, symbolic
power, and ultimately economic capital. The
boundary of that space was not clearly dened,
or rather, was to be dened by actions of bankers
themselves.
Modern bankers did not hesitate to take the
legitimating opportunity to expand their social
capital and assert themselves in a more public
and proactive fashion. In response to the said reg-
Social capital and the rise of the SBA

The Shanghai Bankers Association (SBA) originated from informal luncheon meetings of modern bankers which started in 1915. These
meetings were the occasion to enhance the participants social capital. Initiated by Zhang Jiaao of
the Bank of China Shanghai Branch, the daily luncheon meetings included Qian Yongming of the
13
This was not the only time the Chinese state delegated
public functions to local elite. In January 1914, the Ministry of
Justice and Ministry of Industry and Commerce issued the
Regulations on Commercial Dispute Arbitration Oces, which
required chambers of commerce in the country to set up such
oces, at their own expenses, to arbitrate local commercial
disputes (see ZG, January 30, 1914).
ulations, Zhang Jiaao and his fellow bankers

decided to turn their informal gathering into a formal association and publish a professional journal.
The Bankers Weekly was launched in 1917, with
Xu Cangshui and Xu Yongzuo, two leading
accountants in Shanghai, as chief editor and editor, respectively (Xu Yongzuo would become chief
editor after Xu Cangshui died in late 1925). The
SBA was ocially founded on July 8, 1918, with
twelve institutional members (SYGN, 1921, p. 1
2; Xu, 1925, p. 2; YZ, October 22, 1928, pp. 15
16). The number of member banks would reach
twenty-six in 1926 (NCH, February 20, 1926, p.
334). In the few years since its founding, the
SBA proved to be one of the most inuential organizations of the Chinese business class in Shanghai, in the same league as the Shanghai General
Chamber of Commerce (established in 1902) and
the Shanghai Native Bankers Guild (1911).
While having many business and personal ties
with the other two organizations (Bergere, 1992,
pp. 2326), the SBA was established with its own
purpose and functions. The by-laws of the SBA
adopted in July 1918 provided that its members
were limited to banks that were invested with complete Chinese capital and had been in business for
three years, which emphasized Chinese national
identity and solid nancial footing of the participating institutions. The stated missions of the
association included: To unite member banks in
researching banking business and economic issues;
for member banks to assist each other in promoting the development of banking enterprise; and to
solve problems in banking business (Xu, 1925; YZ,
July 16, 1918, pp. 1720, Fulu [attachment]).
Thus, besides its role in improving the banking
industry as a whole, the SBA was founded to help
its members accumulate social capital and enhance
their symbolic capital through the prestige of the
organization.
To augment the social and political inuence of
Chinese banking circles and to push for nancial
reform more eectively, the SBA initiated the
founding of the Federation of Bankers Associations (FBA), in the same fashion as the National
Federation of Chambers of Commerce. In December 1920 at the invitation of the SBA, delegates
from bankers associations in Beijing, Tianjin,
85
Hankou, Hangzhou, Jinan, Bengbu, and Guangzhou arrived in Shanghai to found the FBA. The
newly founded Federation immediately petitioned
the Ministry of Finance to rationalize government
debts and unify Chinese currencies.14 In subsequent years the FBA addressed the central government on various issues, often initiated by the SBA,
including a set of rules on banking business practices in Shanghai, a public reserve fund to deal
with nancial crises, the founding of the Shanghai
Clearing House, a joint loan for building the
Shanghai Mint, and last but not the least, the standardization of bank accounting terminology
(SYGN, 1921, pp. 2537; Xu, 1925, pp. 232,
12932; YZ, April 15, 1924, pp. 18).
When the SBA and the FBA addressed issues of
nancial and monetary reforms to the central government, they found a limited response. The factional strives and civil wars among Chinese
warlords after the death in 1916 of Yuan Shikai,
the rst president of the Republic, prevented the
eective functioning of a central government. In
other words, the concentration of all forms of capital for the Chinese state was far from completion.
In spite of repeated announcements by the government about nancial and monetary reforms, no
actions followed. It did not help that the regional
satrapies under warlords were hostile to any
attempts at centralizing national nance and unifying Chinese currencies. All this would explain
why the state appeared little interested in promoting the accounting profession and standardizing
accounting methods and terminologywhat
would be the point of verifying the nancial data
of businesses through disclosure when the state
was incapable of collecting national revenue in
the country? It was this situation which prompted
modern bankers to be assertive in advocating
change. What Xu Cangshui wrote, in arguing
for the founding of a national federation of
bankers associations, exhibits both a sense of elite
14
At the time China saw a variety of currencies in circulation,
including silver ingots, silver coins, copper coins, paper
banknotes issued by Chinese and foreign banks, all having
local and regional variations.
86
responsibility as well as frustration in the face of a

weak Chinese state:
With regard to nancial aairs, in view of the
dismal political conditions, we can expect little of the state on the one hand, and on the
other hand, we hope public associations that
have a stake in these matters would pull their
resources and wisdoms together to make
concerted eorts. In all elds, what we are
able to do should neither wait to be forced
to by the state, nor is it necessary to rely
on the state. If we neither take initiative to
reform nor push the government to take
action, while blaming everything on the politics that was o the right track and on the
people who were nave and uneducated,
and never trying to carry out partial and
gradual reform, then it is not that we are
unable to do anything, but that we are
unwilling (YZ, July 6, 1920, p. 28).
Here the we and the public associations
Xu referred to represented unmistakably the selfconscious Chinese elites, and Chinese modern
bankers and their organizations in particular, as
opposed to the uneducated common people
and the dismal state. As agents in the eld of
Chinese banking, modern bankers considered that
it would be up to them to address issues in the
nancial sector and advance their individual and
group interests, which, in their view, coincided
with the public interests of national economic
development. At the same time, when the state
was unable to confer them symbolic powerwhat
a modernizing state would normally do by fostering the banking industrymodern bankers acted
on their own to seek further public recognition
of their professional authority through various
projects. Such was the circumstance under which
the SBA was motivated to tackle the issue of
uniform bank accounting classication and
terminology.
Cultural capital and the standardization initiative

When the SBA felt compelled to deal with uniformity in accounting terminology, Chinese busi-
nesses had not addressed the issue of uniformity

in accounting rules and principles at the national
level, nor even within the banking industry. What
the SBA tried to deal with was a uniform accounting terminology in bank accounting onlya rstlevel issue of uniformity with a limited scope.
Nevertheless, the initiative was the important rst
step in the direction of instituting more uniform
accounting practices in China.
The confusion and inconsistency in Chinese
accounting terminology stemmed from the problem inherent in the practice of translation. The theory of translation has long established that exact
equivalency of words in any two languages rarely,
if ever, exists and that translation is always a matter of nding approximate signiers in a target language for the signied in a source language,
negotiated by an exchange in power relations
one language makes sacrice to achieve some level
of commensurability with the other. It follows that
mistranslation and misunderstanding often occurs,
as in the translation of accounting concepts, especially when a translated concept appears in a target
language with a dierent legal and cultural context
(Evans, 2004; Liu, 1999).
In the case of Chinese accounting terminology,
the problem of translation was compounded by
the circumstances under which western-style banking and accounting were introduced into China as
new techniques. When the bank accounting terms
used in modern banks were translated from foreign sources into Chinese, both the sources and
the translations were widely diverse, since foreign
merchants and nanciers were from several dierent countries. Some terms were translated directly
from western languages, and others were secondhand translations through the Japanese language
(one good example was the translation of debit
and credit as shown in Responses in the eld
to the BACT). Some Chinese translations were
rough equivalents of terminologies long used in
native banks, and others were entirely new concepts. Most critically, all modern banks, let alone
native banks and other Chinese businesses, were
not using the same terminology in their banking
transactions and accounting activities, resulting
in no small amount of confusion and inconsistency
(SYGN, 1921, pp. 4344). According to a Chinese
accountant, prior to the 1920s each province had

its way of keeping accounts, each rm had its own
peculiar method and each person was at his liberty
to use any invented accounting term (CWR,
March 14, 1925, p. 37). Apart from other issues,
the inconsistency in bank accounting classication
and terminology was commonly perceived to be a
problem that hampered the growth of the Chinese
banking industry and the establishment of sound
Chinese accounting practices. That is why no one
in the Chinese accounting profession and business
circles, including banking enterprises, openly
opposed, as a matter of principle, uniformity and
consistency in accounting terminology.
Precisely because what was to be standardized
was bank accounting terminology, i.e., words in
a language, the initiative carried larger implications for all actors in the eld of Chinese banking,
in terms of the cultural, linguistic and symbolic
capitals they possessed. For all practical purposes,
the standard to which the Chinese accounting
practices were to conform was western. To have
a uniform Chinese accounting terminology
involved standardizing Chinese vocabularies in
accounting and harmonizing Chinese and western
accounting terminology. In taking up the task,
Chinese modern bankers (and the accountants
they employed) were best prepared because their
training abroad equipped them with professional
knowledge of western accounting practices and
linguistic competence in English, which were cultural capital as well as professional assets in their
own right. They, therefore, emerged as the natural leaders in the endeavor.
In late 1919 three members of the SBA, Xie
Zhiting of the Chongfoo Union Bank, Zhu
Chengzhang of the Shanghai Commercial and
Savings Bank, and Xu Jiqing of the National
Commercial Bank, proposed to deal with the issue
of bank accounting terminology. The association
responded favorably. On January 31, 1920, the
Research Committee on Bank Accounting Terminology was appointed with sixteen members. Xu
Jiqing, the Japan-educated manager of the
National Commercial Bank, served as the chair
(SYGN, 1921, p. 44; Xu, 1926, p. 166). After meeting twenty-three times within the year, the committee collected more than sixty accounting terms
87
(SYGN, 1921, p. 44). By early 1921 a booklet entitled Research on Bank Accounting Classication
and Terminology had been drafted and was distributed among modern banks in the country
(Xu, 1926, p. 166). The second annual meeting of
the Federation of Bankers Associations in 1921
adopted a proposal submitted by the SBA. It
called for all bankers associations in various cities
to form committees charged with studying the
draft bank accounting terminology and to discuss
and vote on the document through correspondence so that it could be ocially adopted at the
annual meeting the following year (Xu, 1926, p.
166). Apparently, this fast-track approach was
not practical and the matter was not acted on by
all bankers associations.
At the third FBA annual meeting in 1922 the
SBA submitted another motion on the issue, upon
which the meeting passed a resolution requiring
all bankers associations to study the draft terminology and submit, within six months, their written opinions to the SBA for consideration. The
SBA would then make a report to the next annual
meeting. Subsequently, the bankers associations in
Jinan, Tianjin, and Hankou submitted detailed
suggestions on revising the draft. Based on the
opinions from the three associations and the original draft, the SBA submitted a review report to
the fourth FBA annual meeting in 1923. The
annual meeting decided that a committee of
accounting experts from Beijing, Shanghai, Tianjin and Hankou be convened by the Beijing Bankers Association to nalize the classication and
terminology based on the SBA draft and the suggestions from the three other associations (Xu,
1926).
In September 1923 seventeen accounting
experts including Xie Lingfu and Cheng Zizheng
from Shanghai, recommended by the four bankers
associations and controllers from various banks,
convened in Beijing. After working on the document for one week, the committee approved the
nal version of the Bank Accounting Classication and Terminology (BACT) (for its text, see
Xu, 1926, pp. 167195; YKKM, 1924). While
modern bankers constituted the leading force in
the uniformity initiative, Chinese accountants
played a technical role in hammering out the
88
uniform accounting terminology.15 The fth FBA

annual meeting held in April 1924 adopted the
document and ocially called on member bankers
associations to see that all banks use the classication and terminology in their accounting practices
(Xu, 1926, pp. 166167; YZ, April 8, 1924, p. 2;
April 29, 1924, p. 7).16
Looking over the making of the BACT, it is
clear that the SBA was the most vigorous driving
force throughout the whole endeavor from 1920
to 1924. But the SBA was able to push its agenda
through to conclusion because other bankers associations too were receptive to the project of a
uniform bank accounting classication and terminology. In other words, a consensus on this issue
was reached in modern banking circles.
Since the SBA tried to establish a uniform Chinese accounting terminology based on the English
language, each and every term in the BACT the
FBA adopted in 1924 was accompanied by an
English translation. This strategy was signicant
in several respects. English terms were used to
dene and standardize the meaning of Chinese
terms that might have diverse usages, and were
also intended to facilitate the business transactions
of those banks that dealt with foreign banks, rms
and customers (which was explicitly noted in the
Guide to the Usage of the document). More
important than the technical considerations, however, were the actual eects of adopting the Chinese translation from English. The Chinese
terminology with an English reference showed for-
15
Probably with some exaggeration, a Chinese accountant
later claimed that some Chinese accountants recommended to
the Bankers Association a uniform accounting terminology for
all banks in China (CWR March 14, 1925, p. 37). In fact, the
accountants were more likely commissioned by the SBA to do
the technical job of compiling the terms. In any case, had the
SBA not wanted a uniform bank accounting terminology, little
would have come out of what the accountants had to oer.
16
The process of drafting, getting feedback, revising, and
nally adopting the uniform classication and terminology was
very much like the process envisioned and carried out by the
Special Committee on Accounting Terminology of the American Institute of Accountants for the same purpose. An
interesting coincidence is that the committee in the US also
started its work in 1920 and continued into the 1930s (Preinreich, 1933; Terminology Department, 1922ae, 1923ae).
eign banks that Chinese modern banks had come

of age and were on an equal footing with them.
It also drastically devalued the linguistic competence of native bankers in the classical Chinese language on which their trade jargons and its social
legitimacy were based.
The full meaning of the latter eect and its symbolic ramications should be made clear: the Chinese terminology translated from English was in
the written vernacular Chinese or colloquial Chinese (baihua wen), as opposed to the classical Chinese (wenyan wen) that native banks were using in
their account books. At that time, writing in the
vernacular Chinese for the sake of raising the educational level of the population, especially underprivileged groups, was a movement championed
by many Chinese intellectuals, typically Westerneducated, as one of the most important ways to
modernize Chinese society (Chow, 1980; Schwarcz, 1986). Given their habitus, modern bankers
joined the movement with ease in undertaking
the project of standardizing bank accounting terminology.17 The consequence, even if not
intended, was a sharper contrast between the
new terms that modern bankers adopted and the
traditional ones that native bankers were using.
By virtue of possessing the linguistic competence
and professional knowledge in western-style banking and accounting, and by adopting accounting
terminology in the vernacular Chinese translated
from English, modern bankers were associated
with Chinese modernity. In contrast, the native
bankers were perceived to be backward and
archaic through their use of the old language. In
other words, native bankers did not lose ground
against modern bankers because they were short
of linguistic capital, since they knew the classical
Chinese. But they did lose ground because modern
bankers showed greater ability and creativity in
the use of the linguistic capital they possessed, utilizing the English language and choosing at the
same time the vernacular Chinese to convey their
ideas. In short, the publication of the uniform
17
In a sense the choice was a continuation of the linguistic
practices of modern bankers and accountants. All pieces
published in the Bankers Weekly, for example, were written
in the vernacular Chinese.
terminology (and eventually its adoption enforced

by the state) would transform the linguistic market
in which native bankers linguistic capital would
devalue drastically. The uniform bank accounting
terminology, which was certied, endorsed and
authorized by English terms and expressed in the
vernacular Chinese words, thus represented the
accruement of modern bankers cultural capital
and contributed to their further empowerment.
Responses in the eld to the BACT

The publication of the BACT met with mixed
responses. To contextualize the responses, we will
provide a brief overview of the document and then
examine the responses as criticisms of the newlystandardized terminology itself and those relating
to adopting the terminology.
The BACT was divided into three parts. Listed
under Liabilities were fty-eight terms, under
Assets were fty-four, and under Prot and
Loss were twenty-one. Each term was followed
by an English translation, a Chinese denition
and an explanation of usage (see Appendix for
the English translations). This list of one hundred
and thirty-three terms was obviously much shorter
than western equivalents, such as the Special Committee on Accounting Terminology of the AIA in
1922.18 A comparison between the two lists shows
many similarities, but also certain dierences.
Certain Chinese terms were dened and
explained correctly in Chinese, but were paired
with English terms that were not normally then
in use in the United States. For example, one nds
the term Furniture and Fixtures under Prot
and Loss (YKKM, 1924, p. 49). What this really
meant was depreciation expenses of xed assets as
stated in its Chinese denition, but was incorrectly
expressed in English. Similarly, Preliminary
Expenses Written O under the same category
really meant amortization expenses of organizational cost and was dened as such in Chinese,
18
The Special Committee compiled over 5000 terms to be
dened in 1922 and the number eventually reached about 7000
(Preinreich, 1933, p. 113; Terminology Department, 1922a, p.
468).
89
but the English translation was unclear (Dong,

2000, p. 50). As it turned out, the linguistic competence in English of the uniform terminology promoters, assumed by themselves and the public,
was rather limited, but enough to trump those
who knew no foreign languages.
In addition, certain classications of accounts
were dierent between the BACT and prevailing
practices in the West. Take the treatment of land
depreciation for example. Under the BACT classication, land and buildings were combined to
form one asset account Land and Buildings.
At the same time, the liability account Land
and Building Sinking Fund was obviously used
for depreciation of both land and buildings. But
in the United States at least, land was subject to
neither depreciation nor appreciation whereas
buildings were depreciated. Some conservative
accounting policies in the West did not even take
into consideration appreciation in land value
(Bliss, 1924, p. 296). Consequently, the separation
of the two items seemed to be essential in western
accounting practices to reect the book value of
assets (Bennett, 1922, p. 376). The Chinese termcoiners did not conceive the issue in the same
fashion.
Many accounting terms used in the West were
missing in the BACT. For example, among the
terms issued by the Special Committee on
Accounting Terminology of the AIA was Intangible Assets. This was dened as patents, copyrights, secret processes and formulae, goodwill,
trade-marks, trade-brands, franchises and other
like property (Terminology Department, 1923b,
p. 466). Yet, the term was nowhere to be found
in the BACT. The absence of the term was probably due to the nature of bank accounting. A bank,
unlike a manufacturing rm or a retail company,
usually did not possess those intangibles listed in
the denition. At the same time, it would seem that
as Chinese accounting terminology moved from
cruder categories toward ner classications with
clearer denitions, the terminology was classied
in broader categories than its Western counterpart
in some areas, and narrower in others. An example
of the latter case was the term Surplus Undivided, which was usually not a separate classication in American accounting. These comparisons
90
illustrate that Chinese bankers and accountants

were learning western style accounting classications and terminologies and establishing Chinese
counterparts accordingly, but that the process
was problematical.
Some problems in the BACT stemmed from the
circumstances under which China found herself in
the 1920s. For one thing, there were many dierent
Chinese currenciesvarious paper notes printed
and coins minted by a number of regional authorities and foreign and Chinese banks. In Shanghai
alone no fewer than six kinds of silver coins were
in circulation and ten banks issued their own paper
notes (Wu, 2002, p. 192; Yu & Dai, 1996, pp. 293
381). Various kinds of low quality copper coins
were especially ubiquitous in Shanghai (NCH,
April 30, 1921, p. 335336; March 17, 1926, p.
13) which westerners in China called the light
weight copper evil (NCH, July 1, 1922, p. 7).
The Shanghai Bankers Association and the successive committees under the FBA working on the
BACT failed to take this fact into account before
the document was issued.
In September 1925, Li Dingmo, a contributor
to the Bankers Weekly, pointed out the confusion
among the denitions of three terms in the document (YZ, September 15, 1925, pp. 2529). Under
category Liabilities, No. 52 was the term
Exchange, and under the category Assets,
Nos. 28 and 29 were Foreign Coins and Miscellaneous Coins (see Appendix). Actually,
foreign coins meant foreign currencies either in
coins or paper notes, and miscellaneous coins
meant various Chinese currencies in circulation
either in coins or paper notes. In other words,
the English translations were again o the mark.
But that was not Lis point.
Li had a larger issue in mind. The denition of
exchange stated that banks paying and receiving with one currency for another are called
exchange. Surplus in this classication, when
receiving, should be listed as assets and, when paying, should be listed as liabilities (Dong, 2000, p.
21). The usage of the term read that when various
currencies are exchanged, whether cashing or
transferring, the payment and the receipt should
be dealt with under this classication (YKKM,
1924, p. 21). At the same time, foreign coins [cur-
rencies] was dened as foreign currencies that

banks buy, but the denition of various coins
[currencies] read that various domestic currencies besides the main currency that banks buy are
called miscellaneous currencies (YKKM, 1924,
p. 34).
As Li pointed out, both the denition of the
term exchange and the explanation of its usage
failed to indicate whether paying or receiving
with one currency for another and various currencies referred to exchange between Chinese
and foreign currencies or between foreign currencies or between various Chinese currencies. Li proposed to use exchange of main national
currency instead of exchange, and domestic
secondary currencies instead of miscellaneous
currencies, as standard terms. The denition of
the former should state that exchange of main
national currency for various foreign or domestic
currencies would be called exchange of main
national currency. The denition of the latter
should state that various domestic currencies other
than main national currency would be called
domestic secondary currencies (YZ, September
15, 1925, p. 29). Li further noted that although a
uniform accounting system beyond a uniform terminology had been suggested, it was not certain
when such a system would come into being; but
the correction of those ill-dened terms could be
easily done (YZ, September 15, 1925, p. 28). It is
not clear from available sources whether the
FBA took notice of and acted on the issue Li
raised.
As the problems identied above suggest, Chinese modern bankers were dealing with a complex
nancial situation because of a combination of
Chinas long history as a commercially developed
pre-industrial society and her contemporary condition as a semi-colonial country with a weak central
government in the early 1920s. The eld of Chinese
banking and its structure was framed by this historical juncture, and the initiatives to standardize
a bank accounting terminology by modern bankers took place in that context.
The publication of the BACT was the rst step
in establishing some uniformity in accounting
practices and it did not immediately end the inconsistency in bank accounting terminology. One
ongoing issue was whether all modern banks

would actually use the terms provided by the
BACT. When the BACT was nalized in April
1924, the FBA called on all modern banksmembers of bankers associations in dierent citiesto
use the adopted BACT, starting July 1, 1924.
Yet, a study conducted in April 1925 found that
not all banks were using the same terms in their
nancial statements. For authorized capital,
four variations were usedcapital stock, capital fund, legal capital fund, and authorized
capital stock. For legal reserve, two terms were
usedreserve and surplus accumulated. For
call loans secured, six other dierent terms were
used (YZ, April 21, 1925, pp. 911). The situation
is hardly surprising, since the BACT introduced
many terms that accounting sta in most banks
were unfamiliar with. Besides, the often-cited Chinese conservatism (e.g., YZ, October 9, 1923, pp.
28) may also explain the slow pace at which the
BACT was adopted by all banks.19
How did foreign banks, as players in the eld
of Chinese banking, react to the initiative launched
by Chinese modern banks? No primary and
secondary sources available to this study indicate
any involvement of foreign banks in the matter.
It may be assumed that foreign banks were
aware of the initiative, but did not treat it as
an issue important enough to respond to. At a
technical level, a Chinese bank accounting classication and terminology harmonized under English
terms would probably facilitate the business
dealings between foreign banks and Chinese banks,
19
A comparison with other countries would suggest that a
degree of discrepancy in accounting classication and terminology would probably always exist. Besides European cases
cited earlier (The eld of Chinese banking), when uniformity
was the talk in the American accounting eld in 1923, it was
found that the balance-sheets of seventeen prominent corporations listed main groups of assets in eight dierent sequences,
and of liabilities in six dierent orders (Peloubet, 1923, p. 336).
As late as the 1930s, a descriptive study of the balance-sheets of
587 industrial corporations that had stocks listed in the New
York Stock Exchange revealed wide discrepancies among those
documents in format, classication, and terminology, to say
nothing of accounting rules and principles (Fjeld, 1936a,
1936b).
91
which would be a positive development from the

perspective of foreign banks. If the development
would also enhance Chinese banks competitiveness, there was little foreign banks could do about
it.
As far as modern bankers were concerned,
however, the biggest issue was to have native
banks, where traditional Chinese bookkeeping
methods continued to prevail, adopt the uniform
accounting classication and terminology and
indeed western-style accounting methods generally. If it was dicult for accounting personnel
in modern banks to get used to the uniform
accounting terminology, the inertia in switching
to western accounting methods and the new
accounting terminology in native banks was substantial. But the issue of whether to make the
switch had much more at stake than inconvenience for native bankers. Given their dierent
habitus and positions in the eld, native bankers
had reason to be wary of the demands for them
to change their practices. First of all, since native
banks were family-invested and managed proprietorships with unlimited liability, their owners
objected to the idea of transparency about their
nancial conditionssuch matters were traditionally and understandably regarded as family
secrets. They were not prepared to change their
traditional business practices and open their
account books to the public just for the sake of
being modern. Moreover, the issue involved
surrendering native bankers cultural capital.
With the adoption of western-style accounting
methods and the uniform bank accounting terminology, native bankers competence in traditional
accounting methods and related terminology
based on the classical Chinese language would
devalue drastically, if not entirely.
Besides those concerns on the part of native
bankers, which were not openly articulated in the
public discourse, there was also a question of
whether it was practically benecial to adopt western-style accounting methods, which did arise in
the public discourse. An article published in 1922
in the Native Bankers Monthly argued that to
improve and reform native bookkeeping did not
necessarily mean switching to western style
accounting. The author asserted that western style
92
accounting methods were over-elaborate, labor/

time consuming, and therefore it was not the time
for native banks to switch to such methods (QY, 2,
10, pp. 37). There were proposals on standardizing native bookkeeping methods, but not on
switching to western-style accounting (e.g., QY,
10, 2, pp. 3341; 10, 3, pp. 3952). By 1926 the
tone in the Native Bankers Monthly had changed
somewhat on the issue, but a complete switching
to western style accounting was still resisted. Qin
Runqing, the chairman of the Shanghai Native
Bankers Guild, stated that all modern banks
adopted western style accounting because it was
more rigorous than native bookkeeping, but that
native banks did not adopt western style accounting because it also had disadvantages, such as narrow classications, minute procedures, and
multiple books and forms, all of which would cost
more labor and money but would not guarantee
error-free results. Instead of switching to western
style accounting, Qin proposed to adopt selective
aspects of it to supplement and improve native
bookkeeping methods (QY, 6, 11, pp. 13).
To fully grasp the issue, let us consider the linguistic and formulaic expressions of native banks
tradition-bound practices. At the time the following aspects of native bookkeeping were still in
use: the format of account books with top-to-bottom writing and right-to-left columns (instead of
left-to-right writing and top-to-bottom columns
in western-style accounts); the cash-based categories of payment and receipt (instead of debit and
credit); the four-column system (instead of double-entry system); numbers written in Chinese
characters instead of Arabic numerals; and axing
on books such seals as error, entry, or balance (YZ, January 16, 1934, pp. 23), in addition
to a host of colorful terms and jargon to name various categories and practices in bookkeeping and
accounting that only the initiated would understand (see below).
Xu Yongzuo, a leading accounting professional
in Shanghai and the editor of the Bankers Weekly,
held the view that the above-mentioned traditional
practices were still useful. He argued that Chinese
bookkeeping was in eect similar to the cash
journal method that was used in modern banks.
The Chinese variation was simple and convenient:
payment and receipt would be recorded as a

decrease and an increase, respectively, in books,
unlike a double-entry system where these transactions would be entered in opposite categories
payment would be entered as a credit and receipt
as a debit in cash account (YZ, February 20,
1934, pp. 16). One of Xus arguments is especially
noteworthy because it involved native bankers linguistic competence in the Chinese language and
therefore their linguistic capital vis-a`-vis those
who might claim linguistic competence and capital
in Japanese and English languages. Chinese words
jie and dai indicating debit and credit,
respectively, said Xu, were taken from Japanese
kanji translations of the two western concepts.20
In the Japanese language, those two words did
mean borrow and lend, but in the traditional
Chinese language both jie and dai could mean
either borrow or lend. Hence, the two words
as debit and credit did not make sense in
the Chinese language except that they were simply
used as labels in bookkeeping and accounting. The
other Chinese words used in Chinese bookkeeping,
shou (receipt) and fu (payment), would work
equally well as labels and would be more consistent with their common usage (YZ, February 20,
1934, pp. 16). Bookkeeping as a social science
is based on the history, customs, and habits of various countries and should be suitable to the time
and place of their societies; concluded Xu,
Westerners cannot dismiss Chinese bookkeeping
as irrational no more than the Chinese can dismiss
Western bookkeeping as irrational (YZ, February 20, 1934, p. 4).21
20
Kanji is Chinese characters used by the Japanese in writing

some concepts in their language. The written form of kanji was
the same as in the Chinese language but has dierent pronunciation in the Japanese language. When Chinese began to
translate Western concepts, they borrowed back kanji that the
Japanese had borrowed from the Chinese language to express
concepts and ideas from the West. Concepts and ideas from the
west (for a scholarly treatment of the topic, see Liu, 1995).
21
Notably, another Chinese accountant also argued in a piece
published in the Native Bankers Monthly that the native
bookkeeping methods need not be completely abandoned and
certain aspects could be improved (QY, 10, 3 (April 1930), pp.
24).
Pan Xulun, also a leading Chinese accountant

in Shanghai with a Ph.D. from Columbia University, disagreed. First of all, Pan was opposed to
distinguishing between Chinese and Western
accounting methods and preferred to distinguish
between single entry and double-entry bookkeeping, or cash-based and assets-based bookkeeping,
or bookkeeping that could measure or compute
prot and loss and one that could not. Secondly,
Pan considered that the use of top-to-bottom writing and right-to-left columns was impractical
because as businesses were becoming larger and
more complex, account books would need more
columns for entries, which the Chinese-style book
format was unable to accommodate. Third, he
argued that bookkeeping based on cash payment
and receipt was convenient with cash transactions,
but would become more complicated and dicult
than double-entry, debitcredit bookkeeping with
non-cash transactions and transfers. Xus proposal
to use receipt and payment instead of debit
and credit did not change the fact that cash
really meant the cash value of assets under various
classications, and the use of receipt and payment would not make things easier or more scientic (YZ, January 30, 1934, pp. 710).
The debate between Xu and Pan illustrates a
typical divide in twentieth-century China between
those who wanted to modernize China by adopting western ways and those who wanted the same
thing but were more ambivalent about dismissing
all things Chinese and embracing all things western. Xus point about the relative accuracy of Chinese words receipt and payment and
borrowed words debit and credit was not
without merit at a technical level,22 and his argument about the relative rationality of Chinese
and western methods were imbued with symbolic
import and political implications. Pan was careful
not to turn the debate into a discussion about
choosing between Chinese and Western, but
93
between eective and ineective.23 By so

doing Pan was able to circumvent the nationalistic
sensitivity of the issue and undercut any symbolic
capital that native bankers might gain from identication with a nationalist cause. At the same time
the cultural capital that modern bankers possessed
in the form of foreign language prociency and
professional knowledge of western style accounting could be transformed into symbolic capital,
as western style accounting methods were identied with science, eciency, eectivenesswith
Chinas modernization. By contrast, native methods were associated with backwardness.
The state and the eld of Chinese banking

The debate would have remained a purely discursive exercise had the political situation in the
country not changed. What needs to be emphasized here is that the whole project of standardizing bank accounting classication and
terminology was devised and pursued by bankers
associations in China without any involvement
whatsoever from the state. The weakness and inaction of the Chinese central government at the time
was a mixed blessing. On the one hand, by default
it ceded much social space to bankers associations
to act and shape the way in which banking and
accounting were to be conducted. On the other
hand, state inaction also meant that there would
be no political-legal authorities to enforce the uniform bank accounting classication and terminology. The FBA and local bankers associations
could only rely on moral persuasion, that is, on
their symbolic power, to persuade all modern
banks to conform to the new terminology. But
that symbolic power was not sucient to sway
all social actors in Chinese bankinglittle could
be done about native banks that continued to
ignore the new classication and terminology,
and indeed western style accounting itself. In the
eld of Chinese banking, social actors could only
22
In fact in the 1920s some modern banks continued to use

receipt and payment in double-entry bookkeeping. A
contributor to the Bankers Weekly argued against such use and
called for uniform use of debit and credit instead (YZ,
April 10, 1923, pp. 1112).
23
A similar divide and related strategies were seen in the
struggle between western-style Chinese doctors and Chinese
practitioners of native medicine in the 1920s and 1930s (Xu,
2001, pp. 190214).
94
do so much with the forms of capital they possessed, and they did not have the political-legal
means to enforce a particular set of accounting
techniques and terms. Native banks would probably have eventually lost the competition between
modern banking and accounting practices and
native varieties, but they did not show signs of giving up their own practices, which embodied their
cultural capital, until the Chinese state reasserted
itself to cause a major shift in the power relations
in the eld.
In 19271928 Chinas political conditions changed dramatically. After a military campaign
known as the Northern Expedition started in
1926, the Guomindang (GMD) or the Nationalist
Party ended warlord satrapies and unied most of
the country. With a vision of a corporate state
(borrowed from Mussolinis Italy) and a nationalist agenda of gaining independence from foreign
powers, the newly-established GMD central government was anxious to assert its political authority and regulatory power over the nancial sector
and the accounting profession, as well as other
industries and professions (Cheng, 2003, pp. 97
101; Coble, 1980; Ji, 2003, pp. 164194; Sheehan,
2003; Xu, 2001, pp. 79156). Under the Regulations on Industrial and Commercial Trade Associations issued by the GMD government, for
example, the Shanghai Bankers Association was
reorganized in October 1931 to become the Shanghai Banking Trade Association, a supposedly less
elitist organization that was open to all banking
sta, not only bank managers and chairmen
(SYZX, 1937, p. 736).
While all industries including modern banks felt
the heavy hand of the GMD state, native banks
faced mounting pressures because of their esoteric
business practices and accounting methods. The
government demanded reliable nancial reports
and data from banking and other industries in
order to enforce banking and commercial regulations and tax laws. To be in compliance, native
banks would have to open their books and disclose
their accounts in a language and a format that a
government ocial could understand. Yet, most
native banks remained reluctant to disclose their
nancial condition to outsiders. In 1930 the
Shanghai Native Bankers Guild considered ve
motions regarding the improvement of native

banks. It adopted four motions but pointedly
decided to take no action on the fthfor all
native banks to publish year-end balance sheets
(YZ, July 8, 1930, p. 1).24
Before long, however, native banks were caught
by circumstances beyond their control. The rst
event that aected native banks fortunes was currency reform carried out by the GMD government
after many years of debate. The reform had silver
tael abolished as the monetary standard and silver
dollars adopted as the national monetary base.
Since a large part of native banks operation was
in the business of exchanging between silver tael
and silver dollars and between silver and copper
coins, the reform would completely undercut that
business. Native banks opposed the reform, while
modern banks strongly supported it, and the argument for the reform prevailed. In March 1933 a
decree from the Ministry of Finance made the
reform ocial. Compelled by a government order,
native banks exchanged their reserves of silver tael
for silver dollars at a rate specied by the decree,
and the Shanghai Native Bankers Guild closed
the daily silver interest market (Du, 1991, p. 232;
Ji, 2003, pp. 183185). At the same time, the
Shanghai Clearing House was promoted by the
Shanghai Bankers Association and established in
1933. The new institution further removed from
native banks the business of settlement of mutual
claims and accounts (Wu, 2002, p. 284).
Before native banks were able to recover from
the said developments, a crisis struck. The Silver
Purchase Act of 1934 in the United States led to
a rapid outow of silver from China, precipitating
a nancial crisis that swept through the Chinese
business world in 19341935 and hit native banking circles especially hard.25 Having exhausted all
other recourses, native banks pleaded to the central government for nancial assistance. By June
24
At least one larger and nancially sound native bank began

at the end of 1932 to publish its annual nancial statement,
which was so rare and therefore newsworthy that the Bankers
Weekly carried the statement (YZ, February 14, 1933, pp. 12).
25
Within four months, from July to October 1934, 207
million worth of silver moved out of China (Cheng, 2003, p.
98).
1935 the government intervened by issuing 25

million nancial bonds, but with conditions.
Native banks had to use collaterals to receive the
bond and then use the bond to borrow cash from
modern banks. Native banks that borrowed
money were also required to submit monthly balance sheets to a Native Banking Supervisory Committee mandated by the government and headed
by a Deputy Minister of Finance and composed
mostly of modern bankers. At the same time
those native banks that defaulted customers or
suspended their business were investigated and
liquidated by the government (Wu, 2002, pp.
290297). In the wake of these events, one contributor to the China Weekly Review observed prophetically: The native banks, as a result of the
occurrences of the past few months, have suered
a great setback in their prestige and credit. . . We
have reasons to believe that as the time goes on,
the important position occupied by the native
banks in the money market will be gradually supplanted by the modern banks (CWR, March 18,
1935, p. 400). Indeed, as many native banks went
out of business, the remainder was consolidated
into larger and fewer entities. In the process native
banks lost much nancial leverage, and a large
share of business in the nancial market was transferred into the hands of modern banks. The latter
also came under increasing government control
and supervision (McElderry, 1976, pp. 177178;
Wu, 2002, pp. 283308; Ye & Pan, 2001, p. 287).
As for accounting methods, since native banks
that survived the crisis were now under the scrutiny of the supervisory committee composed of
government ocials and modern bankers, they
were no longer in a position to keep their nancial
status secret and were forced to share their nancial data via western style nancial statements
based on the double entry system. In the course
of 1936 the Shanghai Native Bankers Guild undertook a project to have all native banks switch from
traditional accounting methods to western style
methods, and by January 1937 native banks in
Shanghai had ocially switched to western style
accounting. Signicantly, when the switch took
place among native banks, the SBAs handiworkthe unied bank accounting classication
and terminologywas duly adopted. The public
95
notice from the Shanghai Native Bankers Guild

to its member native banks about the change contained a list of new accounting termsthirty-one
terms under the heading Liabilities, thirty-six
under Assets, and fteen under Prot and
Lossall taken from the BACT (SQS, 1960,
pp. 473475). That native banks used fewer terms
from the uniform terminology seems to indicate
that the accounting classication in native banks
was broader than in modern banks and the scope
of native banks business was more limited.
What cannot be over-emphasized is that many
Chinese expressions traditionally used in native
banks to refer to books, ledgers, forms and business practices, symbolizing linguistic competence
and social legitimacy, were all abandoned to conform to the standard terminology used in modern
banks. For example, dierent phrases that referred
to the same thingriliu (daily ow), liushui
(owing water), gunchun (rolling surplus),
and huizong (gathering total)were unied as
riji (daily ledger). Similarly, qingbu (clear
book), and tunqing (copy clear) were now
called zongqing (general ledger). Some euphemistic jargon that would confound those outside
native banking circles were changed into the uniform bank accounting terminology. The term
caiyuan (source of fortune), for instance, was
changed to zibenjin (capital). The category
wanshang (ten-thousand merchants) was divided
into three new categories indicating what they
werewanglai kuanxiang (current account),
tongye wanglai kuanxiang (current account with
local counterparts), and waibu tongye wanglai
kuanxiang (current account with out-port counterparts). In the same vein, kechun xinyi (deposit
trust and friendship) was changed to huoqi
chunkuan (current account deposit), liyou yougui
(where interest belongs) to dingqi fangkuan
(xed term loans), and hepu huanzhu (what is
gone returns) to cuishou kuanxiang (overdue
account and bills) (SQS, 1960, p. 476). Those
Chinese expressions were confounding to a layman
because they were traditionally designed as euphemismto refer to business transactions in propitious terms. The linguistic capital that native
bankers possessed had been valuable in the linguistic market where they operated, that is, in Chinese
96
business circles, which were now increasingly

taken over by modern banks.
As traditional and colorful, if imprecise, expressions in native banks accounting books were cast
aside for a straightforward and standard terminology, a turning point in the development of Chinese
bank accounting was reached. At one level, the
changes signaled that native banks now ocially
moved towards transparency and disclosed their
business transactions and nancial conditions to
the public (at least to the government and nancial
institutions in the country), which had been inconceivable in earlier times. At the same time, native
bankers now had to learn new terminology and
do business like newcomers in the banking industry and as followers of modern banks. Native
banks became an inferior, less signicant type of
banking institution.
At a deeper level, the change may be considered
as a sharp devaluation of cultural capital possessed
by native bankers. The linguistic competence in the
classical Chinese language repertoire that native
bankers possessed in categorizing and conducting
their business operations were de-legitimated, and
denied recognition, by modern banks, the state
and eventually by the public, and thus deprived
them of a large portion of their cultural capital.
As the linguistic market for the classical Chinese
shrank in the face of the vernacular Chinese, backed
by foreign languages, the cultural capital of native
bankers was devalued. Further, native bankers
symbolic association with Chinese culture and tradition in the public imagination was all but gone,
and their defense against criticism on grounds of
that symbolic association was no longer plausible.
Conversely and proportionally, modern bankers
achieved domination in Chinese banking symbolically and substantively. They were able to set the
standards and coin the language by which native
bankers were compelled to categorize and conduct
their business and communicate their nancial
data. The native bankers had to acknowledge, recognize and therefore contribute to the dominant
position modern bankers came to occupy.
Yet, if the absence of an eective central government in the early 1920s was a mixed blessing
for modern bankers, so was the presence of a relatively more eective central government after 1927
and especially after 1935. The GMD state chose to

favor modern banks over native banks as the main
pillars of Chinas banking industry and used the
former to supervise the latter in 1935 and thereafter, because the cultural capital that modern banks
possessed marked them as the vanguard of Chinas
modernization. In turn, the state recognition of
modern banks accounting practices, accounting
classication and terminology was the most powerful force in enhancing their symbolic capital.
At the same time, however, the scheme of controlled economy that the GMD state pursued
called for tighter control over the entire Chinese
banking industry including modern banks (Cheng,
2003, pp. 8992; Coble, 1980; Sheehan, 2003). It is
not accidental that the GMD state made eorts to
control the accounting profession through its
party organization and a new set of regulations,
which disqualied any one who committed political oenses against the state (Xu & Xu, 2003, pp.
146148). The states all-knowing and all-controlling agenda necessarily included keeping nancial
resources available and nancial data veriable
through accounting and auditing. The scheme of
supervising and controlling modern banks and
controlling native banks through modern banks
was part of that overall strategy. The events of
19351937, therefore, may be regarded as a milestone both in the establishment of a uniform bank
accounting classication and terminology and in
the state supervision and control of the banking
industry in early twentieth-century China.
Thus the eld of Chinese banking was a very
dierent place in 1937 compared to 1920, due to
the initiative of modern bankers and the action
of the GMD state. Indeed, nancial statistics indicate that modern banks were successful in expanding their business and market share at the expense
of both foreign banks and native banks from the
mid 1920s to the mid 1930s. In 1936 modern banks
possessed total assets of 6.9 billion (81% of the
nancial market), native banks, 757.8 million
(9%), and foreign banks, 909.6 million (11%).
This represented the remarkable growth of the
modern banks (Cheng, 2003, p. 78). Although a
direct connection or conversion between cultural
capital and economic capital possessed by those
institutions is not easy to pinpoint, the expansion
of modern banks from the 1920s to the mid 1930s

might well be attributed in part to the shift in the
possession of cultural capital among the three
groups. It is intriguing to speculate how the eld
would have congured, had the Japanese invasion
of China in July 1937 not taken place, as the war
wreaked havoc on the Chinese economy and disrupted the development of Chinese banking. One
thing we know for certain is that the uniform bank
accounting classication and terminology survived
and remained the norm of the Chinese banking
industry.
Conclusion
The Chinese experience examined here is
instructive both empirically and theoretically.
Using concepts borrowed from Bourdieus theory
of practice, we are able to reveal that the standardization of Chinese bank accounting classication
and terminology resulted from the functioning of
social actors habitus and cultural capital in the
eld of Chinese banking, and that it also resulted
from the interaction between the social actors in
Chinese banking and between those social actors
and the Chinese state.
As a triangular relationship among foreign
banks, modern banks and native banks obtained
in that eld, the signicant shift in the power relations between modern banks and native banks, or
a reconguration of the eld, inevitably impacted
on the power balance between foreign banks and
Chinese banks, both modern and native. Modern
bankers took the initiative to standardize bank
accounting terminology with their technical expertise and linguistic prociency, in the hope of modernizing and therefore strengthening all Chinese
banking institutions in terms of economic capital
and nancial power, even if native banks were
weakened in the process. That was exactly what
happened after modern bankers launched the drive
for a uniform bank accounting terminology.
The rst dimension of the process may be
summarized as follows. Modern bankers habitus
motivated them, and their cultural capital (including linguistic capital as a subset) allowed them,
to launch the standardization initiative. Their
97
cultural capital appreciated when the uniform

accounting terminology and western style
accounting that they had championed were recognized and adopted as the norm in the Chinese
banking industry and, more importantly, recognized and enforced by the state. When their cultural capital was recognized and associated with
science and modernization, it was also transformed into symbolic capital, which lent them
social legitimacy. Both cultural and symbolic capitals were then transformed into material prots
(larger market shares). At the same time and by
the same token, the cultural capital of native
bankers, and their economic capital, were devalued and reduced.
The second dimension worth mentioning was
that the social actors in the eld of Chinese banking
not only interacted with each other, but also with
the state that stood above the eld. When the country was disunited and the state was weak (without a
concentration of all forms of capital) in 19121927,
the social actors were able to act without intervention from the state. When the state became relatively strong and active, however, the social
actors behavior and their interaction with the state
were dierent. What prompted native bankers to
adopt the uniform accounting terminology was
not the action of modern bankers but the nancial
crisis in native banking circles and the intervention
of the state. The action of the state was therefore
the decisive element in the transformation of modern bankers cultural capital into symbolic capital
and of both kinds of their capital into nancial
power and domination in the eld. The process well
illustrates Bourdieus point about the state exercising power over elds, species of capitals, and the
rate of conversion between them.
It is important to realize that the competition
between modern bankers and native bankers and
the domination the former achieved over the latter
did not necessarily come from a well-thought-out
plan or an ill will among modern bankers towards
native bankers. As noted earlier, the two groups
supplemented and cooperated with each other
functionally to varying degrees over time. Rather
the competition resulted from the habitus of modern bankers (an intentionality without intention)
and from the structure of the eld of Chinese
98
banking and their respective positions and relations with each other that were subject to the
changing dynamics in the eld. Bourdieus theory
of practice allows us to understand in a coherent
fashion this phenomenon.
An historical irony is that as the result of the
events in 19351937, modern banks became more
dominant in the eld but also more dominated by
the state. As native bankers saw their cultural
capital devalued and nancial power weakened,
modern bankers too lost the relatively autonomous position they had held in Chinese banking.
Ultimately the victor was the Chinese state which
exercised more systematic supervision and control
over modern banks and through them supervised
and controlled native banks. The condition for
modern banks achieving domination in the eld
of Chinese banking was domination by the
Chinese state over that eldthe culmination of
concentration of capital in all forms. Such, then,
was the paradoxical logic and dynamics of the
state-society interaction and the interaction
among social actors in the eld of Chinese
banking.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
Appendix.
English terms in the Bank Accounting Classication and Terminology issued by the
Federation of Bankers Association, 1924.
Liabilities
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Authorized Capital
Legal Reserve
Special Reserve
Reserve for Dividends
Reserve for Bad and Doubtful Accounts
Land and Building Sinking Fund
Furniture and Fixtures Sinking Fund
Surplus Undivided
Dividends
Dividends Payable
Fixed Deposits
Current Accounts
Special Current Account
Deposits at Call
Sundry Creditors (Temporary Deposits)
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
51.
52.
53.
54.
Banks Orders (Cashiers Orders)

Savings Deposits
Trust Deposits
Local Banks Deposits
Overdrafts on Local Banks
Out-Port Banks Deposits
Overdrafts on Out-Port Banks
Foreign Banks or Correspondents Deposits
Overdrafts
on
Foreign
Banks
or
Correspondents
Certied Checks
Letter of Credit
Drafts Issued and Telegraphic Transfers
Drafts and Telegraphic Transfers Payable
Drafts Payable with Terms
Bills and Accounts Payable with Terms
Forward Sales Contracts on Currencies
Forward Sales Contract on Stocks, and
Bonds, etc.
Items Received for Collections
Loans due to Others
Re-Discount (or Bills Rediscounted)
Funds Received for Participation in Loans
Made through Us
Margin (Security) deposited with the Bank
(and other Guaranty Funds)
Interest Payable
Employees Savings Fund
Employees Bonus
Employees Pension Fund
Employees Insurance Fund (Self-Donation)
Reserve for Employees Insurance Fund
Notes-Issuing (or Bank-Notes Issued)
Other Banks Notes-Issuing (or Other Banks
Notes Issued by Us)
Reserve on Hand for Other Banks NotesIssued (through Us)
Securities Reserved for Other Banks NotesIssued through Us
Bonds, Debentures, etc.
Head Oce and Branches Account (A&L)
Branches and Sub-Branches Account (A&L)
Agencies (A&L)
Exchange (A&L)
Prot and Loss for the Previous Period
(A&L)
Total Prot and Loss for the First Period of
the Year (A&L)
55. Total Prot and Loss for the First Period of

the Previous Year (A&L)
56. Total Prot and Loss for the Second Period
of the Previous Year (A&L)
57. Total Prot and Loss for the Previous Year
(A&L)
58. Branches and Sub-Branches Total Prot and
Loss for the Previous Year (A&L)
Assets
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
Capital Uncalled
Fixed Loans Unsecured
Fixed Loans Secured
Call Loans Secured
Loans at Call
Overdrafts on Current Account Unsecured
(Current Account Overdrawn)
Overdrafts on Current Account Secured
(Current Account Overdrawn)
Bills Discounted
Documentary Bills (Loans Secured by Documentary Bills)
Deposits with Local Banks
Overdrafts by Local Banks
Deposits with Out-Port Banks
Overdrafts by Out-Port Banks
Deposits
with
Foreign
Banks
or
Correspondents
Overdrafts
by
Foreign
Banks
or
Correspondents
Drafts and Telegraphic Transfers Purchased
Foreign Drafts and Telegraphic Transfer
Purchased
Inward Bills (or Drafts Receivable with
Terms)
Loans made on behalf of Customers or
Other Banks
Sundry Debtors (Temporary Loans)
Items Remitted for Collection (Bills Sent for
Collection)
Overdue Account and Bills
Bills and Accounts Receivable
Forward Purchase Contract on Currencies
Forward Purchase Contract on Stocks &
Bonds, etc.
Bonds, Stocks, Debentures, etc. for
Investment
99
27. Bullion Transaction

28. Foreign Coins [currencies]
29. Miscellaneous Coins [various Chinese
currencies]
30. Land and Building
31. Banks furniture & Fixtures
32. Overdue Charges for Safe Custody on Securities arising from Loans
33. Forfeited Securities arising from Loans
34. Bankers Association Endowment Fund
35. Joint Reserve at the Bankers Association
36. Preliminary Expenses
37. Margin and Guaranty Fund Deposited with
Other Banks
38. Interest Receivable
39. Reserve for Bank Notes Issued (or in
Circulation)
40. Reserve for Other Banks Notes Issued
(through Us)
41. Reserve for Bonds, Debentures, etc.
42. Cost of Printing Notes
43. Cash in Transit
44. Cash
[Items No. 45 through No. 54 are the same as the
items No. 49 through No. 58 under Liabilities]
Prot and loss
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Interest
Discount
Charges for Remittances, Transfers, etc.
Commissions
Safe Custody Charges (Charges for Safe
Keeping)
Prot and Loss on Buying and Selling
Stocks, Bonds (Investments)
Prot and Loss on Exchange
Prot and Loss on Bullion Transactions
Prot and Loss on Buying and Selling Foreign Coins [currencies]
Prot and Loss on Buying and Selling Miscellaneous Coins [various Chinese currencies]
Prot and Loss from Warehouses or Godowns
Miscellaneous Prot and Loss
Premises (Appropriation for Land and
Building Sinking Fund)
100
14. Furniture and Fixtures

15. Preliminary Expenses Written O
16. Bankers Association Endowment Fund
Written O
17. Cost of Printing Notes Written O
18. Bad and Doubtful Accounts
19. Management and General Expenses
Social Expenses
Fixings and Repairing
Postages, Stamps and Telegrams
Transportation fee (or Charges)
Traveling Expenses
Advertising Fee
Printings (Printing Charges)
Allowance for the Agencies
Allowance for Notes Redeeming Agencies
Auditing Fee
20. General Expenses
Salaries and Allowances
Food Allowances
Rentals
Vehicles Expenses
Insurance Fee
Taxes and Assessments
Stationary and Supplies
Newspapers, Magazines, and Books
Lighting and Heating
Miscellaneous Expenses
21. Special Expenses
Contributions
Legal Expenses
Employees Educational Expenses
Expenses on Investigation and Research
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Social actors, cultural capital, and the state:

Corresponding author. Tel.: +1 757 683 3554.

and largest Chinese modern banks, the Bank of

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

Another contribution we hope to make is that in

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

capital was accrued or transferred by and between

This study is mainly based on three types of sources with

Habitus, eld, and capital

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

as prociency in a dominant language, ability to

policy of the state and even the overt interventions

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

institutions, and mechanisms to be examined in

for inuence on the state and its policies or trying

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

guage into the vernacular Chinese vocabularies,

The eld of Chinese banking

In contrast, Chinese bankers were one step

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

and making short-term loans (Cheng, 2003, pp.

3738; CWR, June 30, 1923, pp. 3132; Du,

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

enjoyed lay elsewhere. First, established in Chinas

The habitus of Chinese modern bankers

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

unregulated disclosure in the nancial statements

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

general manager in 1919 (MRD, p. 1532). Li Ming

Under the traditional civil service examination that tested

The brief biographical survey shows that the

As early as 1872 the Japanese government employed

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

bankers conditions of existence which formed

Bank of Communications Shanghai Branch, Chen

Social capital and the rise of the SBA

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

ulations, Zhang Jiaao and his fellow bankers

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

responsibility as well as frustration in the face of a

Cultural capital and the standardization initiative

nesses had not addressed the issue of uniformity

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

accountant, prior to the 1920s each province had

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

uniform accounting terminology.15 The fth FBA

eign banks that Chinese modern banks had come

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

terminology (and eventually its adoption enforced

Responses in the eld to the BACT

but the English translation was unclear (Dong,

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

illustrate that Chinese bankers and accountants

rencies] was dened as foreign currencies that

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

ongoing issue was whether all modern banks

which would be a positive development from the

Y. Xu, X. Xu / Accounting, Organizations and Society 33 (2008) 73102

accounting methods were over-elaborate, labor/

payment and receipt would be recorded as a