Helping to grease the wheels of trade
during the Song was the .
For centuries, the basic unit of currency in China was with a hole in the center for stringing. Large transactions were calculated in terms of strings of coins, but given their weight these were cumbersome to carry long distances.
As trade increased, demand for money grew enormously, so the government minted more and more coins. By 1085 the output of coins had increased tenfold since Tang times to more than 6 billion coins a year.
was
initiated by merchants. To avoid having to carry thousands of
strings of coins long distances, merchants in late Tang times (c. 900
CE) started trading receipts from deposit shops where they had left
money or goods. The early Song authorities awarded a small set of shops
a monopoly on the issuing of these certificates of deposit, and in
the 1120s the government took over the system,
Marco Polo astonished the Western world when he described
the use of paper currency throughout Khubilai Khan’s Yuan dynasty:
With these pieces of paper, made as I have
described, he [Khubilai Khan] causes all payments on his own account
to be made; and he makes them to pass current universally over all
his kingdoms and provinces and territories, and whithersoever his power
and sovereignty extends. And nobody, however important he may think
himself, dares to refuse them on pain of death. And indeed everybody
takes them readily, for wheresoever a person may go throughout the
Great Kaan’s
dominions he shall find these pieces of paper current, and shall be
able to transact all sales and purchases of goods by means of them
just as well as if they were coins of pure gold. And all the while
they are so light that ten bezants’ worth does not weigh one
golden bezant.
Furthermore all merchants arriving from India or other countries, and
bringing with them gold or silver or gems and pearls, are prohibited
from selling to any one but the Emperor. He has twelve experts chosen
for this business, men of shrewdness and experience in such affairs;
these appraise the articles, and the Emperor then pays a liberal price
for them in those pieces of paper. The merchants accept his price readily,
for in the first place they would not get so good a one from anybody
else, and secondly they are paid without any delay. And with this paper-money
they can buy what they like anywhere over the Empire, whilst it is
also vastly lighter to carry about on their journeys. And it is a truth
that the merchants will several times in the year bring wares to the
amount of 400,000 bezants, and the Grand Sire pays for all in that
paper. So he buys such a quantity of those precious things every year
that his treasure is endless, whilst all the time the money he pays
away costs him nothing at all. Moreover, several times in the year
proclamation is made through the city that anyone who may have gold
or silver or gems or pearls, by taking them to the Mint shall get a
handsome price for them. And the owners are glad to do this, because
they would find no other purchaser give so large a price. Thus the
quantity they bring in is marvellous, though these who do not choose
to do so may let it alone. Still, in this way, nearly all the valuables
in the country come into the Kaan’s possession. (1)
(1) Marco Polo and Rustichello of Pisa, “Book
Second, Part I, Chapter XXIV: How the Great Kaan Causeth the Bark of
Trees, Made into Something Like Paper, to Pass for Money over All His
Country,” in The
Book of Ser Marco Polo: The Venetian Concerning Kingdoms and Marvels
of the East, translated and
edited by Colonel Sir Henry Yule, Volume 1 (London: John Murray, 1903).
This book is in the public domain and can be read online at Project
Gutenberg. Chapter XXIV begins on page 587 of this online text.
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