Chapter 31 Section 7 Yuan Dynasty Banknotes and Inflation

In the later years of Genghis Khan, the Mongolian Khanate, Bozhou Huizi was issued, with silk as the unit.In the eighth year of Emperor Taizong (1236 A.D.), banknotes were issued, and the total amount of issued banknotes should not exceed 10,000 ingots.At the beginning of Xianzong, due to the depreciation of banknotes, the silver banknote balance law was established to maintain the price of banknotes with silver.Soon, a banknote delivery department was set up to deal with banknote issuance. In the first year of Zhongtong (AD 1260), the ancestor of Shizu issued "Zhongtong Yuanbao Banknotes", also known as "Silk Banknotes".Taking taels as the unit, two taels of silk banknotes are worth one tael of silver, and 15 taels of gold are worth one tael of gold. Text, 50 texts, 100 texts, 200 texts, 300 texts, 500 texts, Yitong, Erguan.It is always equal to one or two silk bills.The old banknotes issued before will be recovered at par with the central unified banknotes.Statutory banknotes are the only legal currency, and gold, silver, and copper coins are prohibited from being used.They also weave the "Zhongtong Silver Goods" with Wen Ling, and every ten taels is worth one tael of silver, which has not been done yet.In the twelfth year of Zhiyuan (1275 A.D.), small banknotes were added, called "li banknotes", which were divided into two, three and five.In the following year, when Ahema was in charge of the country, banknotes were issued indiscriminately, and prices rose sharply.In the seventeenth year of Zhiyuan (AD 1280), banknotes were issued in the south of the Yangtze River, and the central banknotes were used to redeem the Southern Song Huizi, and Song coins were banned.In the next few years, prices continued to rise. In the 24th year of the Zhiyuan period, the price rose several times compared to the 13th year of the Zhiyuan period. Therefore, the "Zhiyuanbao banknote" was changed to 11 grades. Five guan, still based on gold and silver, silver one tael banknote two guan, gold one tael banknote 20 guan.In August of the 31st year of the Yuan Dynasty, the cash in the banknote depots from all walks of life was returned to the capital again.

In the second year of Wuzong Zhida (AD 1309), the "Zhida Silver Banknote" was reissued, ranging from 2% to 22, divided into 13 grades, and each pair of "Zhiyuan Banknote" had five guan, Zhongtong banknote 15 guan, silver one liang , a coin of gold.Later, the "Central Unified Banknote" will be withdrawn within 100 days, and the money will be restored.Renzong overthrew this system and still used "Zhiyuan banknotes" and "Zhongtong banknotes".In the tenth year of Emperor Shun Zhizheng (AD 1350), "Zhizhengjiao" was issued, which was always combined with "Zhiyuan banknote" or 1,000 copper coins.It was first issued with "Zhongtong Banknote" stamped to the word "Authentic Banknote", without a banknote, and it was the first legally non-cashable banknote.

Take a comprehensive look at the four changes in Yuan Dynasty banknotes.At the beginning, it was "Zhongtong Banknote", which was always in use in the Yuan Dynasty, and was gradually replaced by "Zhizheng Banknote" in the later period.The second is "Zhiyuan Banknote", which is five times that of "Zhongtong Banknote".Furthermore, the "big banknote" is five times larger than the "Zhiyuan banknote". The "big banknote" is abolished, and the "right banknote" is used to deal with the endgame. The excessive issuance of banknotes in the Yuan Dynasty caused hyperinflation, and its severity was no less than that of the Jin Dynasty and the Southern Song Dynasty.There are two main reasons for this: First, political chaos, self-destructive law, and loss of trust in the people.The Yuan Dynasty won the world with horses, and fought continuously for years. The political economy and society were not stable. The people were in chaos for a long time and complained.The conquered area is vast and the situation is complicated.The four khanates did not play the role of guard, but increased trouble.The local ruling class of the empire repeatedly committed the disadvantages of the Song and Jin Dynasties. After the victory, they were arrogant and extravagant, indulged in extravagance, and searched wantonly. The battle for the throne and power strife have never stopped, and they have no time to care about the way of governing the country.However, the imperial court's policies were changeable, changing orders from day to day, doing whatever they wanted, and breaking their promises.The history of such cases is endless.As mentioned above, the silver used as banknotes in banknote banks in various places was transferred to Kyoto, which made the people distrust banknotes.Another example is pouring banknotes, collecting and exchanging banknotes indiscriminately.If you don't believe what you say, you don't know what to do.Second, the long-term fiscal deficit is extremely serious, and it is only made up by issuing banknotes, which leads to skyrocketing prices, chaos in banknote laws, and boiling public grievances.For example, from the first year to the first year, the fiscal revenue barely accounted for half of the fiscal expenditure.Later expenditure was more than 400 times the income, that is, more than 99% of the fiscal expenditure was supplied by the issuance of banknotes.Therefore, the finances of the Yuan Dynasty were always stretched and extremely difficult.For example, in November of the fourth year of Zhida (AD 1311), the four expenditures of banknotes, civil engineering, military supplies, and rewards in that year exceeded more than 30 million ingots, and there were only 110,000 ingots in the treasury, which was almost 1/300 of the expenditure. With such a huge deficit, we had to issue money.At this time, 1.45 million ingots of large silver banknotes were issued, and more than 36 million ingots of Zhongtong banknotes were issued, with an average of 77,765 coins per person, an increase of 1253 times compared with that of Zhongtong.This kind of wanton indiscriminate issuance doubled the circulation of banknotes and caused prices to rise.At the beginning, it increased exponentially, in the middle period, it increased by ten times, and in the later period, it increased by hundreds or thousands of times. All the public and private banknotes became waste paper.In this chaotic situation, private banknotes and substitute currencies appeared.Shops and restaurants make their own bamboo and wood plaques and paper stickers, which are used as currency in the market.The government also allowed some officials to issue banknotes privately.There are a large number of bad banknotes, such as Guanyin banknotes, painted banknotes, folded waist banknotes, wave banknotes and so on.In such a situation, the people are in dire straits. There is a folk song that says: "Opening the river to change the root of the disaster...The official system is excessive, the criminal law is heavy, and the people complain; people cannibalize people, and money buys money. Have you ever seen it? Xian, what a pity and pitiful!" (see "Ming Shilu" Volume 234) During the reign of Emperor Shun to Zhengzheng (AD 1341-1368), inflation deteriorated to the extreme, the banknote law completely collapsed, and the government was still issuing banknotes indiscriminately. The price of goods is like a runaway horse, and the price of rice has risen by 60,000 to 70,000 times compared to the Central Government.Private transactions use money completely, and even return to the state of barter exchange.