Bring out the Money

Cabbage, dough, mulla, green, buck. The number of terms of endearment for currency is staggering. I can recognize money immediately, as can most of you.  In currency there needs to be extreme consistency, inconsistencies are what allow us to identify forgeries. The first money was coinage. It could be cast or imprinted with exactness. The level of consistency needed for paper money to function was made possible by the advent of printing. And for that we can thank the Chinese.

A bank note from the Ming Dynasty

US dollar bills coming off the press

 Spy movies and action movies often have shots of paper money coming off the printing press, usually right before it gets stolen. The Chinese were the first to make paper and they were the first ones to have the idea of printing money. Instead of giant printing presses with etched turbines or printing plates like we use today, they used giant presses with carefully chiseled stone printing blocks. (this is a really interesting page describing our current currency printing process)

There was a very successful port where merchants would come to trade. Carrying large amounts of copper coinage was bulky and heavy, so merchants started exchanging paper receipts like an IOU of a cheque that the recipient could take to a business and exchange for coins. The system developed to the point in the Tang dynasty that merchants could travel to distant ports and still exchange the receipts. In the 1120s the Song dynasty took over the practice and started issuing the first paper money. (Ebrey, 131) Trading brought practice of printing money spread to Japan in 1401 (Bowman 32, 209). Both authors credit the use of paper money as a major factor that allowed the Song dynasty to expand economically. The use of paper money continued through subsequent dynasties and even the Mongol invasion. (use declined during the Ming dynasty but did not completely stop) The mongols took the concept of paper money with them to Iran in 1291. It is possible that it spread from there to Europe, or European countries may have developed the practice on their own. 

Paper currency from the Song dynasty

In our discussion on Gutenberg in class, we mentioned that the Chinese had printing technology long before the Europeans but that the European language system was more amenable to movable type. Metal movable type made printing in Europe efficient and fostered the growth and dispersal of knowledge.  Chinese is a character based system, so movable type was not as practical (you would need a huge number of type pieces). The Ong reading we did for class mentions this. Also the pieces were often made of wood or stone and cracked on compression, like what happens in a printing press. These factors contributed to the different use of the printing press by the Chinese. But, paper money is a different matter. The printing plates or blocks are carved, etched or chiseled as a single unit in every country that uses them. This made movable type a null factor.

The development of paper money allowed China's economy to flourish. A flourishing trade economy fosters innovation and development in other areas of knowledge. 

Further reading:

A good brief summary of the development of paper money around the world

This gives an excellent description and pictures of the currency available during each dynasty. 

A brief history of money in general