"Finance" was not a native concept in ancient China, and the Kangxi Dictionary and all previous dictionaries do not record the word finance. "" in the modern sense often refers to activities related to more mature and perfect financial products and financial systems such as money, deposits and loans, exchange, stocks and bonds. But in essence, finance can be understood as the allocation of resources across time and space.
The development of the financial market in ancient China can be roughly divided into three stages: First, from the pre-Qin to the Two Han Dynasties, the financial market at this time appeared in large numbers of loans, especially hostage lending, that is, once it was not repaid, it was repaid with the personal labor of the borrower. Second, during the Wei, Jin, Sui, and Tang dynasties, the financial finance of religious monasteries that transcended blood and geographical restrictions became the main body of the financial market, and the five basic businesses of the financial industry - deposit, loan, guarantee, exchange, and exchange - began to take shape in the development of monastic finance. The third stage was after the Tang and Song dynasties, with the revival of the small peasant economy, monastic finance was gradually replaced by the secular financial market. The main activities of the financial market are no longer limited to lending, but there are many new institutions engaged in savings, exchange and other businesses, such as professional money banks for currency exchange, professional long-distance capital circulation of ticket numbers and so on.
The emergence of financial markets
During the Spring and Autumn Period and the Warring States Period, the individual family production mode gradually replaced the collective production mode, and the small peasant economy arose, laying a social foundation for the emergence of the financial market. Crop growth is cyclical, farmers often have periodic shortages of materials, and due to the low level of agricultural production technology, small farmers with weak strength often go bankrupt due to natural disasters and heavy taxes.
In this case, the peasants had to rely on borrowing from the bureaucratic aristocracy and the private rich to sustain reproduction. The main body of the debtor is the individual small peasants living in hardship, the main body of the creditor is the government, the nobles and the private rich, the resources have been allocated in space and time, and the financial market has been generated and developed.
In order to maintain the stability of the small-scale peasant economy, the government sometimes adopts some free relief methods, and also helps small farmers through the way of official loans, and the most important of the official government loans is the famine relief loan. The so-called charity loan is to lend food, seeds, clothing and other necessities of life to the recipients to help them tide over the difficulties. In the case of a large number of ordinary people losing land in the late Western Han Dynasty, official government loans were often accompanied by land loans. But more than that, it relied on the funds provided by the nobility, private landlords and wealthy merchants to meet the market's demand for borrowing. The aristocratic rich borrowed money from their own capital and relied on blood relations, official laws, etc. to recover loans.
After the Yellow Turban Rebellion, the centuries-long war and strife greatly damaged private commerce and also caused the government's credit to decline, and the previous financial market lending entities - the government and rich businessmen - could not continue, and the monastic finance based on religious credit suddenly emerged and became the main body of the financial market in the chaotic world.
The rise of temple finance
During the Qin and Han dynasties, private lending was mainly between individuals, and by the two Jin Dynasties, an unprecedented credit institution was born, which was a Buddhist monastery.
Buddhism spread rapidly in the Central Plains and was favored by the royal family and bureaucratic class, so the temple enjoyed many privileges, such as tax exemption and exemption from military service, and the economic burden was lighter. Income was also plentiful, from the emperor down to the landlords and merchants, in order to show piety, they all gave away goods and even land to the temple. According to records, in the early Tang Dynasty, Gaozu Li Yuan rewarded the Shaolin Temple with 10,000 acres of good land "for the permanent residence of monks and the provision of monks". During the Zhenguan period, Tang Taizong Li Shimin rewarded the Shaolin Temple with another 40,000 mu of land, and according to the "Juntian Order", he gave each monk 30 mu of "mouth dividing fields". So much so that someone in the Tang Dynasty once said, "It is very rich in the world, and the Buddha has seven or eight." ”
A large number of donations have enabled the monastic finance to play the role of a reservoir, gather social funds, and provide a foundation for extensive social circulation.
With the good land and money donated by the government and the people, the monks gave free money to the masses in the chaotic world, and in the period of social stability, they moved from the previous free relief to the combination of free relief and paid loans, that is, when the natural disasters and man-made disasters were serious, they carried out free relief, and when the disasters were not serious, they made large-scale loans to the society.
The temple is an organized group, and the loan business is naturally more convenient and reliable than that of private individuals, and gradually it has a reputation, and some landlords, bureaucrats, and nobles also entrust the temple to lend. In line with the development of the times, the temple launched the business of depositing and managing money on behalf of customers, from which a certain management fee was collected. In this way, the temple has the function of saving, which is born.
The core of monastic finance
Although the five major businesses of deposit, loan, guarantee, exchange and exchange in the monastic finance of the Wei and Jin dynasties had taken shape, its main business was lending. According to historical records, about one-third of the economic income of Dunhuang monasteries comes from borrowing. There are two main forms of monastic lending: "quality lifting" and "borrowing".
Pledge is a form of lending in which the creditor requires the debtor to provide a certain amount of property as security in order to reduce the risk of lending. The operation of pledge lending requires a venue and a large number of management personnel, which has led to the earliest credit institutions - the pledge bank, or longevity bank, pawn, etc., which have been called differently by successive generations. Judging from the existing historical data, the earliest special agency to set up a special agency to operate the quality industry was the Buddhist temple in Southern Qi.
There are two types of business: mortgage loans and pledge loans. Mortgage is mainly for real estate, for example, if someone wants to borrow money from the temple, he uses his house as a guarantee for the claim, and once the money is not paid, the house belongs to the creditor (temple). In the process of borrowing and repayment, the property rights of the borrower's house do not need to change.
Pledges are made against movable property. For example, the borrower gives one of his own pieces of clothing to the creditor (temple) as security for the claim. If the lender does not redeem it when it is due, or if he cannot repay the money, the garment will be disposed of by the temple and will generally be auctioned to liquidate. Equivalent to the later pawnshop, the quality bank is the earliest pawnshop.
Many things can be pledged, such as gold, clothes, jewelry, livestock, or even a bunch of hemp. Regarding the assessment of the value of "qualitative" things, in general, "double and accept its quality", which is the norm of the pawn industry in later generations - "what is worth ten is only four or five", or "worth ten when it is five".
Lending is a form of lending that is made through a contract without collateral. It is based on personal credit, and the maintenance of debt-creditor relationships is premised on the existence of bond deeds.
Lending as a form of credit lending has long been around, but because of the high risk, it is often limited to a limited range controlled by the nobles and rich. Since the Southern and Northern Dynasties, monasteries and their monks have widely lent money to the treasure houses and personal income, and spread the lending network to all levels of society, but the main lending object is still the nearby peasants, and the most common loan is grain.
From the existing information, it can be seen that a large number of loans borrowed by the monastery are loans, and the borrowers and lenders often sign additional default clauses to ensure the smooth progress of cooperation. Although the loan is not directly collateralized in kind, in fact it is guaranteed by the borrower's entire family property, and even his relatives are guaranteed.
Such private deeds are legally sanctioned, and if the debtor is in debt due to bankruptcy, flight or inability to repay, one of the temple's countermeasures is to let the county collect the debt on its behalf. But the more common approach is to function as a religion, telling the stories of retribution for the many debtors who suffered in hell. The unique advantage of monastic finance is the social constraint function based on religious belief, sometimes without establishing a deed, it can still recover the original interest on schedule, which is the flexibility of monastic lending, and it is also impossible for ordinary private lending to do.
Of course, when it comes to repaying the loan, the temple is to charge interest. During the Southern and Northern Dynasties, there were few records of lending interest rates, and the Tang Law stipulated that the interest rate of pledged loans was generally five points per month, and the interest could not exceed the principal, nor could it be returned to the capital (interest rolling interest calculated).
Private financial revival
During the Southern and Northern Dynasties, professional pledge lending institutions were limited to monasteries. As far as the Sui and Tang dynasties, social stability and economic prosperity, the Buddhist fever showed a cooling trend, and brought about the decline of monastic finance and the revival of private finance. With the development of the economy, various forms of socialized fundraising began to appear, such as small clans and larger business gangs.
On the basis of studying monastic finance, private finance extensively carried out pawn, custody and deposit payment, flying money, exchange and other businesses, and replaced monastic finance as the main body of finance in the new era in the middle and late Tang Dynasty.
Although the glory was no longer glorious after the middle of the Tang Dynasty, as the earliest large-scale financial institution in The history of Chinese finance engaged in various types of business, the temple created a precedent for pawn, storage, exchange, auction and other industries in later generations, and was the originator of financial institutions such as pawnshops, money banks, and ticket numbers in the Ming and Qing dynasties.
The biggest significance of monastic finance is to break through the limitations of using its own funds to lend and realize socialized fundraising. Lending to all sectors of society, especially the vulnerable groups of society, has greatly increased the degree of socialization of the financial industry.
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