Wang Mang's currency reform was divided into four times, and the first reform was the key to solving the problem. By the time of Wang Mang, the five-baht money introduced by Emperor Wudi of Han had been in circulation for more than a hundred years, and the world had basically adapted to a single currency. But to the government's annoyance, after a century of constant depreciation, the cost of minting five baht money has become too high. In particular, the five-baht money has requirements for weight, and even if the government can secretly reduce weight, it cannot do too much.
Wang Mang hoped to devalue the currency through a reform without affecting social stability. His approach was to issue large-denomination coins, the first systematic attempt by the government to issue large-denomination money after China's unification. In this year, Wang Mang issued three new currencies, which were used in parallel with the five-baht coin. The first is big money (Ōizumi Fifty). It weighs twelve baht, which is equivalent to two and a half five-baht coins, but its face value is fifty five-baht coins.
The second is the knife. This is a comprehensive currency, which has a ring similar to a coin, but the ring is hung with a handle similar to the Qi State sword coin during the Spring and Autumn and Warring States periods. Face value five hundred.
The third type is the wrong knife, which is commonly known as the golden wrong knife. This kind of money is similar to the knife, but uses the wrong gold process to form the text "one knife straight five thousand". The face value is five thousand. Because the face value of the latter two currencies is too high, if the private theft will have high benefits, so Wang Mang used a lot of advanced anti-counterfeiting techniques when minting these two coins, and the creation was exquisite. These coins became works of art for later generations.
If this reform succeeds, the government's profits will be very large. For example, large money only uses two and a half five-baht materials, but it is used as fifty five-baht money. And the issuance of the deed knife and the golden wrong knife is even more profitable. However, while the government sees profit margins, the private sector also sees them. A big coin means twenty times more inflation, and it also means stealing a big coin to get twenty times the profit. This is a rare profiteering speculation. As a result, the people immediately melted down the original five-baht money and stole it into these devalued coins. Folk counterfeiting has sprung up, and people have frantically rushed into the industry as much as stock speculation today.
On the other hand, in the trading market, because the coins have depreciated so much, people have switched to gold trading and are afraid to accept these currencies anymore. In response to this problem, Wang Mang banned the circulation of gold and forced people to use the new numismatic system. The result was a nationwide market chaos. Wang Mang thought that his reform could solve the financial problem, but he did not expect that this coinage reform was equivalent to kicking open the gates of hell and could no longer contain it.
Two years later, in 9 AD, Wang Mang had ascended the throne as emperor. He set about correcting the problems created by the first monetary reform. Because the face value of the two knife coins was too large, the civil backlash was too strong, so they were abolished. The excuse he was looking for was that the Han royal family's "Liu" character was composed of the three characters "卯金刀", and since the Liu family was no longer the emperor, then the sword coin should also be discontinued. The problem with the first monetary reform was the disparity between the 50-denomination and the 5-baht money. Wang Mang believes that minting five-baht money is too uneconomical, and the government should directly abolish five-baht money.
So in the second reform, he issued a small money weighing only one baht as the basic currency, and deactivated the five-baht money. The essence is to devalue the most commonly used currency by a factor of five. Through the second reform, there are only two kinds of money left in circulation on the market, namely large money weighing 12 baht worth 50 yuan, and small money weighing 1 baht worth 10 yuan. At this time, people melt twelve wen (also twelve) small coins, and they can mint a large coin to be used as fifty wen hua, and there is still four times the profit of stealing minting. As people melt down small money, there will be only fifty dollars left on the market. Due to the lack of change in the private sector, many small transactions cannot be carried out. The second reform still ends in disturbing the people.
By the following year, Wang Mang realized that his two reforms had not solved the currency problem, but had brought a series of new troubles, and decided to carry out a one-and-done reform to redesign the currency according to ancient ideals. This led to his third reform, which is seen as the pinnacle of monetary reform.
In ancient times, there were many kinds of items that used to function as currency. More typical are tortoise shells, shells, as well as gold, silver, and copper. Wang Mang incorporated all of the above materials into a complex system. Through these five types of materials, he issued six types of money, namely money, gold, silver, turtles, shellfish, and cloth. In addition to the four currencies of gold, silver, turtles and shells, which correspond to four materials, both money and cloth are made of copper. The so-called cloth goods are not the current cloth, but a shovel-shaped copper coin, and the money goods (spring goods) refer to the copper money with a round square hole. This is the so-called "five things and six names". These six types of money are divided into twenty-eight products. Just as the face value of the renminbi is now divided into 100 yuan, 50 yuan, 20 yuan, and 10 yuan, each type of currency has several kinds (products). All currencies form a gradient difference, from one dollar for small money to ten thousand dollars for gold. This is perhaps the most complex monetary system that has emerged within a country in history, and it represents the highest level that a visionary can achieve, and it also shows the absurdity of the Confucian financial system designed according to the ceremonial system.
What Wang Mang did not expect was that even if so many coins were put on the market, it would be difficult for people to remember their conversion relationship, and it would be even more difficult to verify the authenticity of the currency. People are suffering from currency chaos, and the social economy is close to stagnation. Privately, people reject other currencies and still use the original five-baht money. In order to enforce the currency he issued, Wang Mang issued an edict that anyone who dared to carry five baht money should be issued as a pawn at the border gate. After that, the five-baht money did slowly disappear, but the entire business system had completely collapsed. Not only ordinary people, but even those ministers and doctors have gone bankrupt because they are forced to use high-denomination currency. In the end, Wang Mang had to compromise again, using only two currencies, big money and small money, and temporarily stopped using turtle, shell, and cloth coins.
In 14 AD, Wang Mang undertook his last monetary reform. At this time, the most cost-effective five-baht money has disappeared, and only large and small money is circulating on the market. Wang Mang's reform this time abolished large and small money, and issued two currencies, the goods cloth and the cargo spring, of which the cargo spring weighed five baht and was worth one. One cargo cloth is equal to twenty-five cargo springs.
This reform is a return after Wang Mang admitted defeat. Through the disguised way, the weight of the five-baht money was returned, and the currency reform was also drawn. The currency reform greatly disrupted society and markets, and also led to the demise of the dynasty. Until the advent of the Song Dynasty, there was no such crazy coin experiment in Chinese history.