Banknotes, which are defined as currency symbols. I have the impression that this thing was invented by Westerners. The reason why we have such an impression is that, on the one hand, most of the theories of today's economic system are put forward by Westerners, and on the other hand, we are influenced by film and television dramas and some physical cultural relics, thinking that the circulation of money in feudal society is only in the form of precious metals. At most, a few bills were exchanged in a bank, similar to today's cheques, and were not used as ordinary currency symbols.
In fact, this very advanced currency symbol was the first to appear and commonly used in our country, to be precise, in the Northern Song Dynasty on the mainland. Moreover, the earliest paper money in circulation is the money bank's redemption - Jiaozi. Let's take a brief look at the background and reasons for the emergence and circulation of Jiaozi.
Above_ Zhang Zeduan's "Riverside Scene at Qingming Festival" records the prosperity of Tokyo, the capital of the Northern Song Dynasty
- The strange economic system of the Northern Song Dynasty
The Northern Song Dynasty was a dynasty with a prosperous business and a relatively high degree of wealth. It was precisely because of the active commercial activities that the demand for currency in the Northern Song Dynasty increased unprecedentedly. Before the advent of so-called paper money, the currency used by feudal dynasties was generally copper, that is, minted copper coins. Stimulated by commercial demand, the Northern Song Dynasty greatly surpassed the previous great unified dynasty, the Tang Dynasty, in its ability and quantity of coinage. But despite this, the copper coins of the Northern Song Dynasty were still insufficient. In desperation, in order to alleviate the currency gap, the Northern Song Dynasty had no choice but to divide the currency circulation into regions, among which Sichuan did not circulate copper coins, but used iron coins.
In other words, in the Northern Song Dynasty, it was not a unified national currency, and commerce was not simply free circulation throughout the country. This strange system is obviously not conducive to business development.
Above_ Jiaozi of the Northern Song Dynasty
- The emergence and nationalization of "Jiaozi".
Because the value of iron is much lower than that of copper, but the weight is not much lighter, it is extremely inconvenient to trade as a general equivalent. Especially for large transactions, you must consider the cost of coin transportation in your logistics costs. In order to solve this problem, the people in Sichuan spontaneously formed a money village organization, with 18 relatively wealthy people to open a money bank, and the basic criterion is to issue bills for each bank, so that it has circulation, so as to facilitate the use of market transactions, and this bill is called "Jiaozi". In this way, the problem of difficulty in carrying currency during transactions is solved at once. Over time, not only the use of Jiaozi in large transactions, but also in general private transactions, the reason is convenience.
This kind of non-governmental spontaneous business behavior is conducive to promoting the development and growth of private capital, but there will inevitably be problems and crises in the process of development, and Jiaozi is no exception.
Above_ Northern Song Dynasty Jiaozi copper plate
Due to the poor strength or improper operation of individual banks, there is a shortage of funds, and there is a problem that Jiaozi cannot be cashed. This caused Jiaozi to have a certain crisis, and the people also sued Qian Zhuang in court. It stands to reason that at this time, the Northern Song Dynasty only needed to adjust from it, and the private capital in Sichuan would complete the adjustment independently, respecting the general development law of survival of the fittest. However, the Northern Song court's approach was to nationalize Jiaozi and issue Jiaozi to Sichuan in a unified manner on the basis of state finance.
On the surface, the imperial court has a lot of money, and the unified issuance of Jiaozi seems to be able to avoid the problem of not being able to cash out, but in fact, Jiaozi is just a currency symbol, and this thing itself is worthless. As for all kinds of black-box operations, friends who understand finance will know better than me, so I won't do anything here. However, history tells us that the Northern Song Dynasty gradually diversified Jiaozi (such as salt stamps) and expanded the scope of circulation (Qin, Jin, etc.). As a result, a large amount of wealth was seized from the people. The same was true during the Southern Song Dynasty.
Above_ Mongolia, Jin, Western Xia, Southern Song Dynasty
- Jin and Yuan followed the example of the Northern Song Dynasty, and paper money became popular
After the fall of the Northern Song Dynasty, Song Gaozong established the Southern Song regime in the south, while the north was occupied by the Jurchens and their puppet regimes. With the gradual consolidation of the foundation of Jurchen rule and the abandonment of puppets, the Jin Dynasty also developed its own paper money, Jiao Yuan, and its system was basically copied from the Northern Song Dynasty Jiaozi. However, the northern region generally lacked copper resources, so the payment of money could only be based on the wealth plundered from the Northern Song Dynasty, and the foundation was very weak.
During the reign of King Wanyan Liang, King Hailing launched a large-scale war against the Song Dynasty. The process of this war was so difficult and the consumption was so great that it obviously exceeded Wan Yanliang's expectations. In order to solve the financial difficulties, the Jin court began to collect money from the people by paying money. In addition, the subsequent inability to increase the reserves of real currency in a timely manner led to the rapid expansion of banknotes, and the financial system of the Jin Dynasty was on the verge of collapse.
Above_ Wanyan Liang (1122-1161), the character Yuangong, his real name is Wanyan Di Gunai
Although the successors of the Jin Dynasty also worked hard to rectify the rule of officials and develop the economy, due to the relative shortage of resources in the north, the financial "big hole" left by the Jin and Song Wars could not be filled. When the Mongolians swung south, the Jin Dynasty, which had not fully recovered its strength, had greatly declined in its ability to resist Mongolia aggression. Soon, the Jin Dynasty was destroyed by Mongolia.
The Mongol and Yuan dynasties were unable to establish an effective and sustainable tax system, resulting in an unhealthy fiscal system. One of the reasons for this is that the rulers of the Mengyuan Dynasty wavered on the issue of accepting and abandoning Sinicization, and the change of policy was basically either/or, and the "drifting" turn was not buffered at all.
Above_ Great Dynasty Tongbao, before the founding of the Yuan Dynasty, the Great Dynasty was the Chinese title of the Mongolia Empire
Despite the chaos of the Mongol and Yuan dynasties' policy system, the dynasty was relatively open to the outside world, which also promoted the Yuan dynasty's commercial economy, which laid the foundation for the Mongol and Yuan dynasties to issue paper money. The Mengyuan court used the theoretical basis of borrowing paper money from the Song and Jin dynasties, especially the formulation and implementation of the reserve fund mechanism, coupled with strong and effective administrative orders, at the beginning of the unification, the Mengyuan banknotes were accepted and popularized by the people.
As mentioned above, the poor tax system of the Mengyuan Dynasty, coupled with the consumption of various foreign wars and internal strife, the Mengyuan court has always been in an embarrassing situation of empty treasury. In order to solve the financial crisis, the Mengyuan court continued to follow the old path of the previous dynasty - inflation, killing chickens and eggs. After digging three feet into the people, the economy of the Mongol Yuan Dynasty finally collapsed, and the rulers of this dynasty were also driven back to their hometown in Mongolia amid the wave of popular resistance.
Above_ Zhu Yuanzhang (1328-1398)
- The conservative Ming Dynasty, the end of the paper money era
Anti-Yuan heroes, the last laugh is Zhu Yuanzhang, who is proficient in military affairs and even more proficient in power schemes. As soon as he came to power, the founding monarch of the country, who was born in the most humble background, set the tone for the country's economic development - emphasizing agriculture and suppressing business. The whole country must be subordinated to a self-sufficient "big rural" economic model, which is obviously not conducive to the circulation of capital. The slowdown in capital circulation meant a decrease in the demand for money, which was one of the reasons why the Ming Dynasty was able to replace copper coins with the silver standard, and as for currency symbols, there was little urgent need.
However, the old Zhu Emperor still struggled with the paper money system of the Ming Dynasty. After the Ming Dynasty unified the country, Taizu Zhu Yuanzhang tried in vain to use the emperor's power to forcibly implement paper money throughout the country. The reason why he said that he "forcibly" implemented it was because the Ming Dynasty did not reserve funds for the issuance of paper money at all. Zhu Yuanzhang's method or order is that gold and silver, that is, currency, can be exchanged for paper money, but paper money cannot be exchanged for gold and silver, and there is a one-way circulation between paper money and gold and silver. Such a banknote, even people who have no common sense, know that it is a piece of waste paper. Such paper money even existed until the fall of the dynasty, but the direct effect of its existence was to pay officials. However, the court's deception of officials has turned into an ingenious robbery of ordinary people by officials, filling their own big holes with the blood and sweat of the people.
Above_ Silver ingots from the Ming Dynasty
Since the Ming Dynasty's banknote issuance system was so incompetent, and the economic model was relatively static and inefficient, there was indeed no room for banknotes. It is precisely because there is no paper money that there has been no inflation in the entire Ming Dynasty, and the Ming Dynasty court has lost the means of using paper money to quickly "draw blood" from the people.
However, because the economic model of the Ming Dynasty was too simple, when there was a financial crisis, all that could be done was to continuously raise taxes and push the dynasty into a vicious circle from which it could never recover. The reason for this is that the rulers of the Ming Dynasty generally lacked the courage to reform the system, let alone the ability to open up sources and reduce expenditure, so they could only drink to quench their thirst and dig their own graves.
Resources:
"The Financial Code of the Central Empire" by Guo Jianlong/Strait Publishing and Distribution Group
Source: "People's Oriental History"
Author: Wang Jinbai
Editor: Wu Xicheng
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