The history of paper money is interesting not only from the idea and technolgy of printing, but also from the perspective of trading with a commodity that in itself has no intrinsic value. Clearly the issues of paper currency must inspire confidence for trading something of worth for items of no specific worth, and with the potential to be abused by the issuer as a way to increase the supply and control of items of value, thus creating inflation. For much of its history, China used gold, silver and silk for large sums, and bronze for everyday transactions. The notion of using paper as money is almost as old as paper. The first paper banknotes appeared in China about AD. An early use of paper was for letters of credit transferred over large distances, a practice which the government quickly took over from private concerns. The Chinese, with their great gift for pragmatism, labelled this practice «flying money».
Bibliography
Paper Money Paper currency was a by-product of Chinese block-printing. It started in Tang but not until Song dynasty that it became institutionized as a governmental policy. It had two main advantages over money made out of silver, gold, copper or iron: It was easier to carry around and the copper and iron could be saved for use in everyday objects. Names and seals were printed and written on paper money by the government officials who issued it. Unfortunatey no written documents exist today which enable us to know how this system of paper currency actually functioned prior to the Yuan period. When Maro Polo traveld to China in the 13th century, he was so impressed by paper money that he described how it was made, used and valued. Paper money was not used in Europe until the 17th century. Paper money began with the «flying cash» of the Tang dynasty around The Tang government considering the inconvenience of shipping cash to distant areas where government purchases were made, paid local merchants with money certifiactes called «flying cash», because of its tendency to blow away. These certificates bearing different amounts of money could be converted into hard cash on demand at the capital. Since they were transferable, they were exchanged among merchans almost like currency. Real paper currency was not introduced until early in the Song dynasty, when it was utilitzed by a group of rich merchants and financiers in Szechuan, the same province where the art of printing had been invented. Each banknote they issued had printed on it pictures of houses, trees, and people. Red and black inks were intermittently applied; the seals of the issuing banks were affixed; and confidential marks were made on each bill. All these devices made counterfeiting extremely difficult. These banknotes could be converted into hard cash at any time in any of the issuing banks. Widely circulated, they were readily accepted for the payment in debt and other financial obligations. In these banknotes were withdrawn and only official notes printed by the government were allowed.
History of Chinese Currency
Paper money is an invention of the Song Dynasty in China in the 11th century CE, nearly 20 centuries after the earliest known use of metal coins. While paper money was certainly easier to carry in large amounts, using paper money had its risks: counterfeiting and inflation. The earliest known form of money is also from China, a cast copper coin from the 11th century BCE, which was found in a Shang Dynasty tomb in China. Metal coins, whether made from copper, silver, gold, or other metals, have been used across the globe as units of trade and value. They have advantages—they are durable, difficult to counterfeit, and they hold intrinsic value. The big disadvantage? If you have very many of them, they get heavy.
Bibliography
Paper, printing, and paper money originated in China way back during the Tang Dynasty. Here is how its use spread through other dynasties and around the world. China invented paper money during the Tang Dynasty that ruled between and , and they used this currency for a long time before it found its way to other countries. In fact, when the famous traveler Marco Polo visited China, somewhere between and , he found paper money so intriguing that he dedicated a whole chapter to it in his book. Being shrewd business people, the Chinese found the weight of the coin money to be cumbersome and figured that printed money would be more efficient. It makes sense too, considering that China also invented paper and printing. Paper money was conceived when merchants began leaving the heavy coins behind with a trusted agent who would record on paper how much money had been left as a deposit. This period was likely the beginning of banking as well. The government would later take up this idea and instead of traders depositing their money in exchange for a promissory note or draft with their corporations, the government would convince them to deposit their coin currency with them in exchange for notes. The government would continue to issue new notes, but because it never withdrew the old ones from circulation, this led to depreciation, as we will see later. During the Song Dynasty that came after Tang, there would be great changes that would make paper money even more popular. For example, the central and provincial governments licensed many shops in towns where people could go to exchange their coin money for paper notes. Many years later, Song would take control of this situation and make the issuing of paper money a government affair and would print paper money Jiaozi and release it into the system directly without going through agencies. This led to the establishment of factories in Anqi, Huizhou, Hangzhou, and Chengdu where the paper money would be printed using special methods such as mixing different fibers to prevent the printing of counterfeit money. Printing woodblocks sort of like stamping would be dipped in various colors for printing. These colors could be as many as six. It was determined that the notes would expire in three years. Nearly years before paper money arrived in Europe , it was already being used for trade in China. This means that paper money came to be around BC. While it made trade easy, paper money in China did not come without its ill effects. For example, around , paper money was altogether eliminated from the economy because too much of it had been printed, causing dire inflation. The government did try to collect the cash and centralize it, but their efforts were unsuccessful.
Money — Chinese history (Hello China #80)
History of Chinese Currency
First paper, then paper money. This is pure logic. It is hardly surprising that the first notes or better, the first paper money, appeared in China. With the invention of paper and printing on its account, this country was almost destined to produce the first paper money. For centuries the mulberry tree has been cultivated in the Valley of the Yellow River Hoa period, 18th to 12th century BC. The first traces of paper date back to the 2nd half of the 1st anckent BC but then it was not used as writing material. For their traditional calligraphy with brushes they used linen, hemp, bamboo cane and bark of the mulberry tree. How did ancient china make paper money progress has been made between the 2nd and 4th century AD: Thanks to the use of soaked bast of the mulberry the quality of the pulp significantly improved and paper became less heavy. The improvement was such that paper gradually replaced the former bamboomats. Clerical texts and reports for the Court were henceforth written on paper but still in a vertical direction.
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