The history of banknotes in ancient China

My favourite banknotes happen to come from a country which has the most people living in it and probably the highest contributor of pollution in the world and also the host to the 2008 Olympics that was recently held. I am sure you all know it, its China, also known as the middle kingdom. It has one of the worlds oldest people and continuous civilizations, consisting of states and cultures dating back more than six millennia. It is the home to some of the greatest inventions in the world which are paper, compass, gunpowder and printing. It has the world's longest continuously used written language system.

It is also the first country in the world to use banknotes and invented it for use of the people of China in those days. Since this blog is about money, I would not be posting a lot about the history of the various dynasties that has issued banknotes as it would be too long but on the other hand we can learn a lot through the various issuances of banknotes in the various dynasties that existed in China.

This is a brief idea of how China came to invent and use the first banknotes in the world.In the old days,in China, coins were circular with a rectangular hole in the middle were used in everyday transactions and there were no banknotes, can you imagine using only cents to pay for an item that costs a Dollar or even to pay an amount as high as 100 Dollars??.If paying for large amounts with coins was hard enough, carrying it around would be even harder.Though these coins were strung together with a string or rope to ease transport a solution had to be found.

If that was not enough,let me tell you about the denominations of coins.In China those days there were copper coins and each one was known as 1 cash and bigger amounts were known as Tael.To get one Tael,it would take 1000 cash unlike today where 100 cents would be equal to 1 Dollar.

Yes the all smart Chinese people found a solution and thus led to the creation of the banknote”Jiaozi”,the worlds earliest banknote during the Song dynasty and following dynasties followed one after the other.The next dynasties continued to issue banknotes until the PRC. The history of these notes and a little history of China can be found here.

From the Song dynasty to the Peoples Republic of China the type of banknotes are just too many and numerous banks have issued them.I dont think there is anyone who has half of the type of banknotes from China.The beauty and history of these notes are just amazing and interesting.I believe that China itself has the most type of different paper money in the world.Every type of note has a story behind it.The information here is just a scratch on the surface and more can be found in the internet.Due to my financial status I do not have most of the notes although I wish I had so the images here are obtained from various sources in the internet.I hope you will enjoy it as much as I do.:-)

The dynasties of China

Allow me to show you the dynasties of China,so as to allow when did the banknotes exist and to also know the sequence of dynasties.In my opinion each dynasties history is so huge that it each may be equivalent to a small nations entire history.

Chinese Dynasties1.Xia dynasty-(2100-1600BC)

2.Shang dynasty-(1600-1046BC)

3.Zhou dynasty-(1122-256BC)
-Western Zhou
-Eastern Zhou

4.Sping and autumn period(770-476BC)

5.Warring States period(475-221BC)

6.Qin dyansty(221-206BC)

7.Han dynasty-(206BC-220AD)
-Western Han
-Eastern Han

8.Three Kingdoms-(220-280AD)
-Wei(220-265AD)
-Shu(221-263AD)
-Wu(222-280AD)

9.Jin dynasty(265-420AD)
-Western Jin
-Eastern Jin

10.Southern and Northern dynasties(420-589AD)
11.Sui dynasty(581-618AD)
12.Tang dynasty(618-907AD)

13.5 dynasties and 10 kingdoms
-Later Liang(907-923AD)
-Later Tang(923-936AD)
-Later Jin(936-946AD)
-Later Han(947-950AD)
-Later Zhou(951-960AD)
-10 Kingdoms(907-979AD)

14.Song dynasty-(960-1279AD)-Northern Song(960-1127AD)
-Southern Song(1127-1279AD)

15.Liao dynasty-(916-1125AD)

16.Western Xia dynasty-(1038-1227AD)

17.Jin/Jurchen dynasty-(1115-1234AD)

18.Yuan dynasty-(1279-1368AD)

19.Ming dynasty-(1368-1644AD)

20.Qing dynasty-(1644-1911AD0

21.Republic of China-(1911-1949AD)

22.Peoples Republic of China-(1949-present)

Some of these dynasties have overlapping time periods as they existed together with other dynasties.The Jin in number 15 are the ancestors of the Manchu who will later establish the Qing dynasty not to be confused with the Jin dynasty in number 9.Dates vary from different sources.

Tang dynasty Flying Cash

For these part of the dynasties I would touch much on the history because if I put it brief it would not be nice and the history of each dynasty as I have said is too wide.So most would only be about the banknotes.Paper money started with the Tang dynasty but these notes were not actually for general circulation for the citizens,used only by merchants for mercantile transactions between distant places(not as a medium of exchange) and not considered as money and so real paper money started with the Song dynasty

Tang dynasty horse figurine

These Tang dynasty money appeared in about 800AD and was given the name Flying cash not because there was anything magical but because they tend to fly away easily(well of course it flies away,it is made out of light paper,which banknote does not fly away).

Women playing cuju(football)

In China till the Tang dynasty,only coins circulated and there were no paper money so from large to the smallest of payments or transactions,coins were used.So if a seller or merchant wanted to buy things he would use coins only ,and if the purchase was large,he would need a huge amount of coins and goods purchased would be in a distant place so it would be troublesome to carry such a huge amount of coins.(If you were observant you would know that most people nowadays even think it would be troublesome to carry even a small amount of coins in their pocket,don’t believe me?,ok when you owe someone a dollar,try paying in coins, you will see them asking you to pay a dollar note,strange people if you ask me).

A man herding horses(Han Gan)

How are these notes used?.Merchants make a deposit of an amount of coins at a origin place usually the capital and they would receive a banknote which would show the amount of money it was exchanged for and then bring it to a certain place they would want to go and exchange it back for the same amount of coins,this is definitely easier then carrying huge amount of coins.(ex-you have 2 pieces of 50 cent coin but you think it is troublesome to carry it so you go to a bank in KL and change it for a dollar note so you travel to Penang but remember that these notes cant be used publicly so you go to a branch of the same bank and exchange the note for 2,50 cent coins.

Spring Outing of the Tang Court (Zhang Xuan)

The Tang government found it troublesome to transport huge amounts of coins to distant places for the purchase of good,transporting these huge amount of coins could be dangerous as they could be a victim to robbers and bandits.The government took the idea from the merchants and paid the merchant whom they made business with these notes.Since they could be exchanged for hard currency at the capital, they were traded amongst merchants like currency.Merchants who were paid would deposit coins at the capital and go wherever destination they are heading and cash the note and receive the coins in return again.So overall these notes were created for convenience.These notes which acted like a modern day bank draft had the looks of currrency(Todays bank draft don’t even look attractive,it looks more like a piece of paper compared to these notes).Since these notes existed some 1200 years ago,pieces of this notes are very rare.I was lucky to find this image although it took me quite a while.

This is a Tang Flying cash,a one kwan note issued during the reign of Emperor Wu Zong(841-846AD),15th emperor of the Tang.The size of this note is(9x6 inches)0r(22.9x15.2cm),ancient cash are usually huge.This note was donated to a Boston museum.If you have one of these notes, a small fortune awaits.

Handscroll attributed to Han Gan
(Looks like it had many owners,observe the amount of chopmarks it has,it really spoils the artwork)

The Song dynasty Jiaozi and Huizi

The Song dynasty was regarded as the first government in history to issue paper money.These paper money first appeared in the province of Sichuan.Emperor Zhenzong(998-1022AD),the 3rd emperor of the Song dynasty allowed 16 rich merchants in Chengdu in the province of Sichuan to issue paper money.Sichuan province was also the place where the art of printing was invented.Acted as credit notes,these paper money was known as Jiaozi.Credits notes often are for a limited duration, and at some discount to the promised amount later.

Emperor Zhenzong

With the high circulation of the notes,the Chengdu local government established the earliest administrative and savings bank known as the Office of Jiaozi. 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

Rabbit and Jay birds(Cui Bai,1061)

However there were some merchants who were slow to redeem their notes and the paper money became inflated.Because of this the issuing of paper money privately was banned and the notes were withdrawn.In 1023 the government established the Bureau of exchange and only official notes printed by the government was allowed.

Bird on branch(Li Anzhong,12th cent)

The Bureau issued notes were known as Huizi and issued in 1160AD were in denominations of 200,300,500 cash and 1,2,3 strings of cash.These notes were the highest issued amount among other type of notes during the Song dynasty. This new adopted governmental policy of issuing notes was successful at first for two reaons: First, for each issue of paper notes to be put into circulation, the government provided a cash backing. Second, paper notes and standard coins were interchangeable and a citizen could buy salt or liquor with his paper notes from the government-owned stores which were as good as coins.

Loquats and mountain birds

Now more about the Jiaozi. Pictures of houses, trees, and people were printed on it. 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.

Duckling

And now the Huizi,these notes were supposed to be redeemed by later issues but the government did not exercise enough control and these notes became inflated also,the government knew this this and quickly used it to pay for military expenditures.The government kept increasing the amount of Huizi until the country was full of it and at the end of the dynasty, these notes became almost worthless.Here are the Song notes for your viewing pleasure.The 2nd was hard to find.

Jiaozi note
50 kwan note(Great Song Public convinience note)
Text-Board of Rites printed this note for the people and to be used side by side copper cash,reward for informing on a counterfeiter is 1000 taels of silver
Huizi note
These notes are said to be extremely rare and were sometimes found during archeological digs,or reproductions were made with the plates found during excavation.

The Liao and Western Hsia dynasty money

The Liao dynasty was also known as the Khitan empire and are grouped into what was known as the Tartar dynasties.The dynasty ruled over parts of Mongolia,Manchuria and Northern China.It was founded by Yelu clan of the Khitan people.Its first ruler is Yelu Abaoji and was alos known as Emperor Taizu.

Plate(19-12th century)

Liao notes of Emperor Tianzuo/Yelu Chun(1075-1128),last emperor of Liao were issued by the Board of War for payment for military supplies.Denominations are from 1 to 10 kwan.I have not found much on these part of the dynasty on their money so this post is quite short.Finding this picture was already hard enough.And this image was a sketch only.Does anyone know where to find a better image?

Liao 10 kwan note issued Emperor Hsien Ching(1136-1141AD) of Wesetern Liao.This note is titled Great Liao Treasure note.If you are wondering what are those wierd looking that look like ribbons,those are silver sycee ingots.Text:The counterfeiter will be beheaded and the informer will be rewarded 800 tael of silver.(I do have this note)

Jin dynasty chiao-ch'ao

This Jin dynasty must not be confused with Jin dynasty (265-420).This dynasty is also known as the Jurchen dynasty.These Chiao-ch'ao notes were inssued in 1153 when the capital was moved to Peking.It established a Bureau of Paper Currency in Kaifeng as the central agency in charge of all issues.Jin dynasty money followed the format of the Song currency.There were enominations of 100,200,300,500,700 cash and 1,2,3,5 and 10 kwan notes which were made of thicker paper and were gray in colour.Seals were applied to the notes which meant "Seal of the Tien-Hui reign(1123-1137)" and below were "Treasure note of the Great Jin dynasty".

Jade Ornament from Jin

These notes were used to pay sallaries of military officers and soldiers.For the first time no time period was set for the circulation of these notes.And again like notes of previous dynasties,after a few decades,these notes depreciated.Steps were taken to stabalize such as tieing their value to silver.

Chengling Pagoda built between 1161 and 1198AD

This method did not work and until 1223,at the end of the dynasty their value had dropped to 1/150 of their value.Even though counterfeiter of paper money was punishable by death, there were few attempts. In 1183, a printer, who had produced 2600 fake notes in 6 months was arrested and sentenced to death.Somehow i found an image of the JIn dynasty paper money but it showed a fraction of the note.Info on certain dynasties money is quite hard to find.Does anyone know where to find an image of a full size note?

Jin paper money with lotus flowers and leaves in the border

Yuan dynasty paper money

Genghis Khan had united the Mongol tribes and he has led the Mongols to numerous victories and had conquered such a vast are of land that it is known as the largest empire in history.Well as they say,like father like son,his descendents continued to expand the Mongol empire,Asia was mostly conquered during Genghis Khan and his descendents went on to stretch the Mongol Empire across most of Eurasia, conquering all of modern-day China, as well as substantial portions of modern Russia,southern Asia,Eastern Europe and the Middle East..A man such as Genghis Khan would of course have many wives and offspring.And one of his children was named Tolui and through his christian wife he fathered children and one of them was named Kublai Khan who was his second son.

Kublai Khan

Kublai Khan then went on to become the founder of the Yuan dynasty with further conquest of the remaining Song dinasty which were the Southern Song in 1274 and finally destroying them in 1279 and united China.During his rule he tried to conquer Vietnam, Japan,Java and Myanmar but failed.His empire was visited by some Europeans,most famous one was Marco Polo.Kublai was impressed with him and made him an official.He travelled much in China on missions and,he made notes and wrote about customs and the geography of China.He stayed there for 17 years and when he returned he wrote and published a book about his travels.During his stay he was impressed with the paper money that he wrote an entire chapter on it.(You can read it in his book)

Porcelein plate,14th century

The Yuan dynasty was the shortest dynasty,however its issuance of paper money was so rampant to sustain commerce..These notes were to circulate without a time period unlike notes of previous dynasties,There were more Yuan dyansty paper money surviving and one has also been found ini a cave and some during archeological excavations.The brass plate was also found in this way.

Invasion of Japan

First type of money issued was known as Silk Money because they were backed by silk but of course was made of paper in 1227.Yuan notes appeared in 1287 and circulated not only in China but also in Annam,Siam and Burma.There denominations of 10,20,30,40,50 cash ,100,200,300,400,500 cash, and 1,2 kwan.There were also another type of money used to buy military supplies

Invasion of Japan

There were 3 issues during the Yuan dynasty.The inflation which started in 1287 became worse after every issue. Although there were efforts to reduce the inflation in 1350 by minting coins however the number produced was insufficient to help and people practiced barter and not using the worthless notes.Soon there were rebellions all over China,this caused militray spending to increase and the use of paper money increased to finance the army.In the end the Yuan dynasty was finally overthrown and led to the establishment of the Ming dynasty.

A few examples of Yuan paper money
2 kwan note

200 cash note

Ming dynasty paper money

Famine ,discontent among the people , discrimination of Han Chinese by the Mongols caused rebellions and hatred towards the ruling government which led to its downfall.Zhu who was penniless peasant and Buddhist monk joined the Red Turbans in 1352 and gained reputation by marrying a daughter of a rebel commander and captured Nanjing(Later to be the capital of the Ming) in 1356. led an army towards the capital of the Yuan dynasty in 1358,the emperor of the Yuan dynasty fled and Zhu declared the founding of a new dynasty and named it Ming or ‘Brilliant’ and took the name Hongwu.He then became the first emperor of the Ming.He ruled from 1368AD-1398AD.

Hongwu Emperor

I am sure And like other the previous Yuan dynasty,the Ming also issued paper money and like other previous dynasties which issued paper money suffered from inflation.It first appeared in 1374 by the Board of Revenue.These notes were known as Da Ming Tong Xing Bao Chao or in English is Great Ming Precious notes.These notes could not be exchanged into coins.Denominations of 100,200,300,400,500,1000 cash were issued during the reign of first emperor of the Ming Emperor Hongwu.In 1389 denominations of 5,6,7,8,9,10,20,30,40,50 and 50 cash appeared for trade.

Yongle Emperor

An interesting fact is that these notes were made from mulberry tree paper which was recycled from waste paper from government ministries and examination papers for Civil Service.During the Ming notes were issued under 3 emperors-
Hongwu-(1368-1398)1st
Yongle -(1402-1424)3rd
Hongxi -(1424-1425)4th

Forbidden City(Built during reign of Yongle)

The denominatios of the notes during Yongle are 1 to 20 kwan,25,30,35,40,45 and 50 kwan.Hongxi notes have denomination of 10,20,30,40,50,60,70,80,90,100,200,300,400 ,500,600,700,800,900,1000 cash.(Can you imagine if our money has these many type of denominations?Its madness).The notes of Hongxi were known as Great Ming Military Administration Treasury Notes.

Hongxi Emperor

Inflation took hold again and at the end of the century 35 strings of cash were needed to obtain an ounce of silver, 20 years later it took 20 strings and by the 1400s it took 1000 strings in paper currency to buy 1 ounce of silver.The value of these notes decrease so rapidly that people wiould not even accept these notes and silver became the preferred medium of exchange and the notes began to disappear from circulation and after 1455 it never appeared in works on Chinese history.

Spring Morning

In the year 1643AD,the last year of the Ming dynasty there were plans to revive the paper money and a proposal was sent to emperor Chongzen,the last emperor of the Ming.However it failed as the government was too weak from rebellions and would not benefit from this.And for the next 400 years from the year 1400s commerce existed. without paper money until the need for paper money arose again during the Qing dynasty.

Ming 1 kwan note(Hongwu reign)

Sketch of the 1 kwan for clearer picture.The size of these notes are 20.32cm x 29.21cm
200 cash note (Hongwu reign)

50 cash note(Hongwu reign)

50 kwan note(Yongle reign)

1000 cash note(Hongxi reign).The size of this note is 8.89cm x 21.59cm.
Images of these notes are very hard to find because of the scarcity of these notes and most which survived till today are in the hands of private collectors.Ming dynasty notes are said to be the largest at one point of time but there are more larger notes.