Author: Chen Zhonghai
China is the world's earliest use of paper money, but after the birth of paper money is difficult to use in China in large quantities, not to mention the replacement of metal money, several attempts to issue paper money in history have ended in failure, what is the problem?
Hand over money to quote
Paper money, that is, paper money, does not have value in itself, but is a value symbol, which is a credit currency, has a certain face value, but must be guaranteed by some kind of credit. During the Song Dynasty, Jiaozi was the first paper money issued by the government in China and the world, and it was indiscriminately coveted by the Flying Money of the Tang Dynasty.
The main currency of the Tang Dynasty was copper coins, which were non-credit coins, and the value of the currency itself was the value of money, with the development of production and the acceleration of commodity circulation, the speed of minting copper coins could not catch up with the needs, and there was a "money shortage". In order to solve this problem, Tang Xianzong's yuan and the years appeared flying money, and some merchants set up joint numbers in major cities across the country to use flying money instead of common copper coins as a tool of exchange to reduce the demand for copper coins.
Flying money is paper, not only easy to carry but also safe, in addition to the use of merchants, but also officially recognized, the New Book of Tang records: "Xianzong with less money, re-banned bronze." When the merchant Jia went to the Beijing Division, he entrusted the various roads to enter the academy and the various armies and the various armies and the rich families of the envoys, and tended to the four directions with light clothing, and the coupons were taken. "But flying money is also a foreign exchange tool, not a government-issued currency."
At the beginning of the Song Dynasty, the "money shortage" continued, and "Jiaozi shops" appeared in the Chengdu area, and the depositors handed over cash to these shops, and the shopkeepers filled in the amount of the deposit on the paper roll made of paper paper, called "Jiaozi", as a proof of withdrawal. The use of Jiaozi became more and more extensive, and merchants jointly established a joint number, set up branches in various places, and promised that depositors could take as they went, making the use of Jiaozi more extensive, but at this time it was still not legal tender.
In the first year of The First Year of Emperor Renzong of Song (1023), the imperial court set up the Yizhou Jiaozi Service, which officially issued the "Official Jiaozi" on the basis of the popular Jiaozi, printed on paper, with patterns, passwords, pledges, seals and other marks to indicate the denomination and anti-counterfeiting, circulating as a payment voucher, thus becoming the world's first legal paper currency.
The advantages of having children are obvious, not only overcoming the "money shortage", but also convenient and safe to carry, which is beneficial to the country and the people, but for the country, the operation of credit currency must be very cautious, and the principle of credit must be adhered to, otherwise it will be counterproductive.
The Song Dynasty government began to be more cautious, stipulating that the circulation period of a boundary cross child was only 2 to 3 years, and after the expiration of the period, it must be exchanged for the next boundary to continue to use, and the circulation of each boundary child was also strictly limited, and the corresponding reserve system was clarified to ensure that the child could be freely converted. The problem was that these practices failed to persist, and the problems of redundant officials, redundant soldiers, and redundant expenses plagued the finances of the Song Dynasty for a long time, and for the imperial court, which had been short of money, it "couldn't help but" mistake the handover for a "cash machine", and the system of limit issuance and sufficient reserves was repeatedly broken.
The "History of Song Dynasty Food and Goods" pointed out that the issuance of Jiaozi later reached the level of "not accumulating capital and increasing the creation of no art", and the imperial court started a business without capital, "officials have no capital, how can the people believe", so Jiaozi repeatedly depreciated. Although the imperial court was unwilling to give up this "cash cow", and the Southern Song Dynasty changed its appearance with the names of "Guanzi", "Huizi" and "Qianyin", it was impossible to get rid of the end of being abandoned by the people.
YuanMingBao banknote
At the beginning of the Yuan Dynasty, Kublai Khan, the ancestor of the Yuan Dynasty, had not yet made a final decision on which currency system to implement. According to Tao Zongyi's "Record of Quitting Cultivation", the chancellor Liu Bingzhong said: "Money is used for yang, and yin is used for yin." The yangming area of Huaxia, the realm of desert yin. Now His Majesty Long Xing Shuo Desert, King's Landing in the middle of the summer, it is advisable to use the coin, so that future generations can keep it. If you use money, the whole world will not be quiet. ”
This was somewhat superstitious, at that time it was called 谶 latitude, which was paper money, and the popular jiaozi in Chengdu was printed on paper, hence the name. I don't know whether it was because of Liu Bingzhong's advice, or because of other considerations, Kublai Khan ordered the printing of paper into legal tender.
The banknotes printed by the Yuan Dynasty have different versions of the Central Banknote, the Zhiyuan Banknote, the Zhizheng Banknote, etc., the shape is rectangular, generally 25-26 cm long, 16-18 cm wide, surrounded by lace, the upper part is printed with the words "×× Pass Treasure Banknote", the lower part is printed with the printing agency, the name of the official and the time of issuance, the middle is the denomination, there are 1, 2, 10, 20, 50 and 100 texts, these banknotes are collectively called "Bao Banknote".
The Yuan Dynasty promulgated the "Regulations on the Passage of Bao Banknotes", which has 14 articles, stipulating that Bao banknotes are legal tender, the imperial court collects taxes, salaries, and private trade, lending, etc. are subject to Bao banknotes, gold, silver and copper coins are not allowed to participate in circulation, violators are punished, and private physical transactions are also prohibited, and at the same time, the cash reserve system is strictly stipulated, and the credit of Bao banknotes is guaranteed with silver, and the reserve inventory and the implementation of the banknote treasury are regularly checked. In order to ensure the full control of the imperial court over silver, in the nineteenth year of the Yuan Dynasty (1282), the "Rectification of Banknote Laws and Regulations" was promulgated, stipulating that "gold and silver are bought and sold, and the official treasury is paid at the price; for those who buy and sell privately, half of the gold and silver are given to the arresters for rewards, and there is a difference between more than ten and more than one rods." ”
The Yuan Dynasty was the most widely used dynasty of ancient Chinese paper money, and Marco Polo wrote in his travelogue: "Paper money circulated in various places in the field of the Great Khan, and no one dared to risk their lives to refuse to pay for it, in fact, they were willing to accept it, with these paper money can buy and sell anything, and they can also hold paper money in exchange for gold bars." "Not only that, but the Yuan Dynasty treasure banknotes could once be used in other relevant countries without any obstacles.
However, the good times were not long, the economic development of the Yuan Dynasty was slow, and the financial expenditure of the imperial court was increasingly large, in order to solve the problem of insufficient financial resources, the imperial court first used the reserves of bao banknotes, and then directly increased the issuance, resulting in serious currency depreciation, and the credibility of bao banknotes was gradually lost. Although the imperial court stipulated that gold, silver and copper coins could not be used, private transactions paid more attention to these metal currencies, and the use of private money gradually became public, which increased the depreciation rate of paper money.
By the third year of the Yuan Dynasty (1266), 600 yuan per stone meter, the Daedeok decade (1306) rose to 30 guan, an increase of 50 times; to the nineteenth year (1369) 1000 guan could not buy a bucket of rice, an increase of more than 1000 times compared with the yuan three years. The persistence of hyperinflation and its inability to resolve meant the disintegration of the regime, the eventual extension of the powerful Yuan Empire for less than a hundred years, and monetary policy not only witnessed its rise and fall, but also accelerated its demise.
After the establishment of the Ming Dynasty, the "Daming Treasure Banknote" was also printed, but Zhu Yuanzhang learned the lesson of the demise of the Yuan Dynasty, did not dare to abolish the copper coin, and set up the Baoyuan Bureau in the Beijing Division and the provinces to specialize in copper coin minting. According to the "Records of Ming Taizu", Zhu Yuanzhang's surviving Hongwu twenty-two years (1389), Jiangxi, Fujian and other areas of the face value of 2000 yuan of Bao banknotes in the private sector can only be exchanged for copper coins 500 texts; according to Peng Xinwei's "History of Chinese Currency", Xuande seven years (1432) face value of 1000 yuan bao banknotes are only worth 5 copper coins, bao banknotes "accumulate the market, disregard those who pass", zhengde later the imperial court gave up issuing.
Xianfeng "coin reform"
Paper money repeatedly "failed", until the Ming Dynasty still did not become the prevailing legal tender, the middle and late Ming Dynasty established the de facto silver standard, the Qing Dynasty's monetary policy continued this practice, stipulating that silver and money are official currencies, and being cautious about the issuance of paper money.
During the Jiaqing period, the "White Lotus Sect" uprising broke out, the imperial court used military expenses equivalent to five years of fiscal revenue to suppress it, and the finances faced an unprecedented dilemma. In the nineteenth year of Jiaqing (1814), the attendant Cai Zhiding asked for the issuance of paper money, but was severely reprimanded by the Jiaqing Emperor: "The former method of using banknotes on behalf of the people was full of drawbacks, and the small people tended to benefit from it." Compared with money, it is particularly easy to counterfeit, it will lead to the prosperity of litigation, the people who are law-abiding, they are not using the way of convenience, and the state funds are within their means, so as not to be short of form, so why should they change the old chapter lightly, and the profit will not be revived and harm themselves? ”
It was precisely because there were too many lessons that the Jiaqing Emperor did not dare to try paper money easily. However, after the outbreak of the Opium War, new military expenditures were added, and huge foreign indemnities were added, and the financial situation of the Qing Dynasty deteriorated further, and by the time of the Xianfeng Emperor, the call for printing paper money resumed, and the Xianfeng Emperor finally accepted this proposal.
In May of the third year of Xianfeng (1853), "the beginning of the production of silver banknotes", named "official notes", first tried in the Beijing Division, and then promoted to the provinces, the denomination is in silver two units, there are 1 two, 3 two, 5 two, 10 two and 50 two and other different denominations, printed on Goryeo paper, with the Manchu Chinese character "Household Official Notes" on it; in the same year, the "Regulations on Money Bills" were promulgated, and the "Money Notes" were issued, with the unit of making money, there were 250 texts, 500 texts, 1000 texts, 1500 texts and 2000 texts, printed on better white paper, with Chinese characters on them "Great Qing Bao Banknote". These two kinds of banknotes run at the same time, collectively known as "banknotes", which is also the origin of the folk money commonly known as banknotes.
Xianfeng Dynasty's "currency reform" began in a hurry, only to solve the imminent financial crisis, lack of meticulous regulations and preparations, the issuance of "banknotes" is clearly non-convertible paper money, the people have many doubts about this, the year of issuance, the Shuntianfu where the Beijing division is located, encountered resistance, of which the "official ticket" has the greatest resistance, because it has a large denomination, and can not be exchanged for real silver, so the merchants generally refuse to accept.
Under the strong promotion of the imperial court, the "banknote" barely lasted for a few years, but the degree of depreciation was quite alarming, according to Wei Jianyou's "Modern Chinese Monetary History", by June of the eleventh year of Xianfeng (1861), the official ticket "seems to have disappeared", while the banknote "fell to 2.6% to 5.2%", which can be said to be "miserable to the extreme". But this allowed foreign merchants to find an opportunity, they bought a large number of "banknotes" from the society at a very low price, and then took them to the Qing government customs to use the original par value as a tax, because it was the national legal tender, and the customs could not but accept it!
The Xianfeng Dynasty's "currency reform" was even shorter-lived, and in less than 10 years before and after, except for a looting and looting of social wealth and the fact that some foreign merchants were cheap, it could be said that there was no one to do, but the damage to the economy and finance was serious, which aggravated the further deterioration of the economic and financial situation in the late Qing Dynasty.
Chinese is not unintelligent, and the desire for wealth of Chinese kings is not unkind, but paper money, which can bring obvious benefits, has been tried and failed repeatedly in ancient China, because people only see its benefits, but do not see the conditions that should be in place to issue it.
Some ministers who advocated the issuance of paper money even believed that the value of paper money, like metal money, was determined by the imperial court, and the imperial court set as much as it was. In fact, the paper money itself has almost no use value, its monetary value is reflected in the national credit, there is no support of national credit, paper money is not worth a penny, the Ming Dynasty minister Jiang Dejing said well: "Although the people are stupid, who is willing to buy a piece of paper with one gold?" ”
The purpose of issuing paper money should be to facilitate market circulation, activate and improve financial markets, not to solve financial difficulties or temporarily use as a tool for amassing wealth. Therefore, the issuance procedure should be extremely strict, the issuance quota should be scientifically calculated, and the unplanned and unrestrained indiscriminate issuance is actually turning paper money into a forced public debt for the whole society, which will inevitably make it lose credibility, and then cause inflation and chaos in the financial market.
About the author: Chen Zhonghai, columnist and scholar of literature and history of this journal, has been engaged in financial work for a long time, and in recent years, he has focused on the study of economic history and financial history, published 8 biographies of historical figures such as "Cao Cao", 6 collections of historical essays such as "Trapping China: The Great Qing Dynasty Died in Economic Warfare" and "Untying China: Financial Warfare of the Republic of China", and published hundreds of columns of various types.
This article was published in China Development Observation Magazine, No. 9, 2016
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