In Penghu Subprefecture during Qing rule, community schools and the Veined Stone Academy not only transmitted orthodox learning, but the Veined Stone Academy further required that local educated elites mediate and adjudicate local conflict and report threats to state control. Local histories describe how local educated elites joined with elders and harbor watch heads to serve as the major positions involved in local control in rural villages. Although the elders and harbor watch heads were arguably more central in mediation and adjudication, local educated elites played the additional role of preparing legal instruments for families, lineages, and temple organizations. Legal instruments include chits, account books, and community compacts. The legal instruments describe not only an interlinking between each other, but also heavy reliance upon statuses used in the state’s bureaucracy and sub-bureaucracy for local physical control. On the one hand, this article suggests that the preparation and use of legal instruments assumed considerable practical knowledge about money as a productive force in a commodity economy. On the other hand, this article additionally suggests that local educated elites had a special centrality in processes of social reproduction in the Penghu Islands because of the combination of the state’s intense strategic interest in local control with the commercialization of village economy.