When the plates used for the first issue were worn out, new ones had to be made. The design also was a dragon though smaller in dimension. The lines of the new design were finer than those in the previous one. The Chinese characters and other particulars remained unchanged.
Each of the three denominations of the stamp had its own outer frame, but there was only one master die of the central design. In printing 1-candarin stamps, the dragon design die was fitted to the 1-candarin frame. Forty such combinations were used at the same time to produce 40 stamps. In printing stamps of other denominations, the same dragon die was inserted in 3-candarin or 5-candarin frames. The plates were made in similar manner as in the first issue. All printing was done by the Customs Statistical Department in Shanghai.
All the stamps were printed on white paper bought from England, watermarked with the diagram of 〝Tai Chi〞(supreme ultimate). as shown in (P-1) below. The paper was surfaced with a kind of ingredient on which the color faded easily when the stamp was exposed to moisture or sunshine.
In the beginning, the perforations (12 1/2in gauge) produced by the old machine were rough so the stamps are called〝 Small Dragon with Coarse Perforation Stamps.〞In subsequent printings in 1888 a new machine of 11 1/2 gauge was used; the teeth were so smooth that a new name, 〝Small Dragon with Smooth Perforation Stamps,〞was given to the stamps so perforated. The paper used for the earlier issue was thick, while that used for the later issue was thin.