THE  CURRENCY

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PAPER  MONEY
Paper  money  comes  to  be  considered  next,  since,  speaking
generally  and  exceptis  excipiendis,  it  is  in  China  based  on
copper  and  not  on  silver.  There  is  no  record  to  show
when  bank  issues  first  began,  and  to-day  the  notes  of
money-changers  circulate  readily  within  a  radius  limited
only  by  the  credit  and  reputation  of  the  issuing  firm.  It  is
not  my  purpose,  however,  to  consider  private  issues,  but
only  the  fiduciary  issues  of  fiat  money  made  by  the  government. ­

Tang  and  Sung  Notes
The  first  government  notes  of  which  the  issue  is  recorded ­
  were  of  the  Tang  Dynasty.  The  Emperor  Hientsung
  (a.d.  806-821)  on  account  of  the  scarcity  of  cash,
issued  an  edict  prohibiting  the  manufacture  of  copper
utensils,  such  as  basins  and  kettles  ;  and,  to  provide  for
the  monetary  stringency,  opened  offices  at  the  capital
at  which  merchants  could  deposit  their  coin,  receiving  in
exchange  government  notes,  called  “  bonds  "  or  “  flying
money  ”  ;  the  offices  represented  the  different  provinces,
and  the  notes  were  redeemable  at  the  proper  provincial
capital.  Translated  into  modern  terms,  this  means  that
the  government  began  to  issue  paper  money.  These  issues
continued  to  the  end  of  the  Tang  period.  The  first  Emperor
of  the  Sung  period  (a.d.  960)  followed  the  custom  of  the
Tang  Dynasty  and  issued  government  notes  at  large  commercial ­
  centres,  redeemable  at  other  large  centres.  As
described,  these  notes  served  rather  the  purpose  of  bills  of
exchange,  but  it  is  hard  to  believe  that  the  government  did
not  avail  itself  of  the  opportunity  to  get  something  for
nothing,  and  to  pay  some  portion  of  its  obligations  in  this
form.  In  a.d.  997  the  amount  of  these  notes  outstanding
was  1,700,000  strings  (tiao)  of  cash,  and  in  a.d.  1017  was
2 .93°,000  strings.
It  was  in  the  state  of  Shuh,  the  present  province  of
Szechwan,  that  the  true  paper  money  was  first  introduced  ;
these  were  notes  issued  without  being  guaranteed  by  some