Da Ming Baochao

A banknote of 1 guàn (or 1000 wén) issued between 1368 and 1399.

The Da Ming Baochao (simplified Chinese: 大明宝钞; traditional Chinese: 大明寶鈔; pinyin: dà míng bǎo chāo) was a series of banknotes issued during the Ming dynasty in China. They were first issued in 1375 under the Hongwu Emperor. According to the Ch'uan Pu T'ung Chih an estimated sixty different Ming dynasty notes issued, however the actual number may have been higher. Although initially the Da Ming Baochao paper money was successful, the fact that it was a fiat currency and that the government largely stopped accepting these notes caused the people to lose faith in them as a valid currency causing the price of silver relative to paper money to increase to the point that by the mid 1400s 1000 guàn of paper money was needed to pay for only an ounce of silver. The negative experiences with inflation that the Ming dynasty had witnessed signaled the Manchus to not repeat this mistake until the first Chinese banknotes after almost 400 years were issued again in response to the Taiping Rebellion under the Qing dynasty's Xianfeng Emperor during the mid-19th century.

Today extant specimens of Da Ming Baochao banknotes are extremely rare however two discoveries of them during the early 20th century caused a great number of the 1 guàn denomination banknotes issued under the Hongwu Emperor to end up in the hands of museums and private collectors.

Background

A paper note of 90 wén issued by the Mongol Yuan dynasty compared to a note of 1000 wén from the Ming dynasty showcasing the inflation that occurred during this period.

The precursor of paper money (紙幣) known as "Flying cash" were issued by the Tang dynasty, however these bills of exchange could in no way be considered to be a form of paper money as they weren’t meant to be a medium of exchange and were only negotiable between two distant points. Flying cash notes often featured images of sycees to illustrate what value they represented. The first true paper money in the world was issued under the Song dynasty, these were promissory notes issued by merchants in Sichuan known as the Jiaozi,[1] under the reign of Emperor Zhenzong (997–1022) the government of the Song Dynasty granted a monopoly for the production of Jiaozi notes to sixteen wealthy merchants in Sichuan, as these merchants were slow to redeem their banknotes and inflation started affecting these private banknotes the government nationalised paper money in the year 1023 under the Bureau of Exchange. As these paper notes were backed by the government they were instantly successful and the people regarded them to be equally trustworthy as cash coins, other types of paper notes issued under the Song dynasty include the Huizi and the Guanzi.[2] Before the Mongol Empire conquered China the Liao, Western Liao, Western Xia, and Jin dynasties also issued paper money, however the extend of which the Khitan and Tangut or their authenticity has been called into question.[3]

Before the establishment of the Ming dynasty the Mongol Yuan dynasty had suffered from a severe case of hyperinflation which made the paper money issued by them worthless.[4] Under the reign of the Yuan dynasty copper cash coins remained in circulation with the inscriptions Zhida Tongbao (至大通寶), Dayuan Tongbao (大元通寶), and Zhizheng Tongbao (至正通寶) forming the majority of the circulating issues and "strings of cash coins" remaining a currency unit.[5][6] Silver then started to occupy a paramount place in the Mongol economy and was supplemented by government issued paper money.[7] Under the reign of Kublai Khan the Zhongtong Jiaochao (中統交鈔) was issued whose value was based on the fabric silk. Under the reign of Külüg Khan in the year 1271 the Zhiyuan Baochao (至元寶鈔) was issued which was supplemented with the silver-based Zhida Yinchao (至大銀鈔), but these circulated only for a year. The final series of paper money issued by the government of the Yuan dynasty from 1350 were the Zhizheng Jiaochao (至正交鈔). A major difference between how paper money was used under the Mongols and under the Song dynasty was that, in certain regions of the Yuan dynasty, paper notes were the only acceptable form of currency and could not be exchanged in either copper cash coins or silver sycees. Exchanging paper money into copper or silver was known as duìxiàn (兌現, "convert into specie") which was the main reason why earlier forms of paper money were deemed reliable. As these regions were completely dependent on paper money inflation hit them more severely as their notes could not be converted into a currency based on any intrinsic value, for this reason the Mongols allowed their subjects to continue using copper-alloy cash coins and issued new ones every now and then. During the last few decades of the Yuan dynasty the inflation caused people to lose their trust in paper money and barter became the most common means of exchange.[8]

History

A printing plate used for the production of 1 guàn banknotes.

The first banknotes of the Ming dynasty bore the reign title of the Hongwu Emperor and were issued in the year 1375, a year prior he created the Supervisorate of Paper Money (寶鈔提舉司, bǎo chāo tí jǔ sī) to supervise their production.[9] The initial series of the Da Ming Tongxing Baochao (大明通行寶鈔, dà míng tōng xíng bǎo chāo) were made of mulberry bark[10] which was said to be recycled from the paper waste of government ministries and civil service examination test papers and the notes with the denomination of 1 guàn could be exchanged for one thousand bronze cash coins throughout all of the Ming Empire, this was illustrated by an image of a string of bronze cash coins, smaller denominations contained images of single cash coins and were issued in 100, 200, 300, 400, and 500 wén. The size of the 1 guàn was 36.4 × 22 cm making them the biggest paper notes ever produced in the history of China. All paper notes from this first series of the Da Ming Baochao contained the inscription that they were a valid currency issued by the Palace Secretariat (中書省, zhōng shū shěng), other texts explained that forgers would face punishment and those that expose these counterfeiters shall receive a high reward, finally the date of issuance would written with the nianhao (or reign era) first, then followed the Chinese characters for year, month, and day.[9] Paper notes issued by the Ming dynasty contained the text that they would circulate forever, possibly reflecting the idea that the Ming state would be there to accept these banknotes forever as well.[11]

The Da Ming Baochao also wasn't backed by any forms of hard currency or reserves and the government never set any limitations on their production. These circumstances all lead to the paper currency of the Ming dynasty to start suffering from inflation, in the year 1376 new legislation was introduced to remove older more worn out notes from circulation by having them replaced for new banknotes at the cost of a fee known as "Gongmofei" (工墨費, gōng mò fèi) which was set at 30 wén per paper note. However in the year 1380 a new law restricted the replacement of paper noted which were unreadable, this caused the people to accept these older banknotes at reduced value, during this time the government stopped accepting worn out banknotes and in some cases didn't even accept banknotes which frustrated the people. During this period the government of the Ming dynasty only threw more banknotes on the market in various forms such as military salaries (軍餉, jūn xiǎng),[12] while they themselves hardly accepted or replaced any existing paper money causing the people to lose trust in the Da Ming Baochao. In the year 1380 the Imperial Secretariat was abolished, and the Ministry of Revenue (戶部, hù bù) was made responsible for the manufacture of the Da Ming Baochao paper notes, the Ministry of Works (工部, gōng bù) for that of the copper-alloy Hongwu Tongbao cash coins.[13] In the year 1389 the government of the Ming dynasty released treasury notes with lower denominations "as a help to the people" (以便民用) and improve internal trade, these were the denominations of 5, 6, 7, 8, 9, 10, 20, 30, 40, and 50 wén. The banknotes issued by the Hongxi Emperor started having higher denominations as inflation started to increase. A total of twenty different denominations were issued during the brief Hongxi period, by the end of the fourteenth century it required 35 guàn of paper money to buy an ounce of silver, this increased to 80 only two decades later. In the year 1535 1 guàn of paper money rather than being exchanged for 1000 copper-alloy cash coins was valued at only 0.28th of a coin.[14]

Under the reign of the Yongle Emperor the Da Ming Baochao was fixed to be the exclusive valid paper money for the rest of the dynasty and because of this the paper currency of the Ming would see no further alterations or reforms. Contrary to the paper money issued by the Song and Yuan dynasties the Da Ming Baochao didn't have any geographical restrictions imposed upon them, nor did they have an expiration date. Under the Yongle Emperor the economy of the Ming dynasty suffered from inflation which was reflected by the fact that new Da Ming Baochao banknotes of 1 through 20 guàn as well as 25, 30, 35, 40, 45 and 50 guàn. The Yongle era issues were gray in colour and had representations of their value depicted in strings of cash coins with each depicted cash coin representing five actual cash coins, the borders of these banknotes were decorates with clouds and dragons. Around the middle of the fifteenth century the value of the Da Ming Baochao had eroded to the extend that it required 1000 guàn of paper money for a single ounce of silver. After the year 1455 no historical records of the Ming dynasty make any mention to paper money with the exception when a proposal was made in 1643 to reintroduce paper money in order to finance the expenditures caused by the difficult situation that the Ming dynasty faced at the time confronted by the rebel Li Zicheng.[15] The advantages cited by this proposal from 1643 claimed that the production of paper money is cheap to make, banknotes are lightweight and easily carried, they’re easy to conceal, unlike silver paper money can’t be divided into various grades nor did it have to be weighed when used, and the value of paper money could not be "clipped off" by dishonest money changers. The proposal also stated that if paper money was reintroduced that if it were to replace both copper and silver coinages that the government could use the copper saved to manufacture weapons while it could store the silver to finance future expenditures. The proposal to reintroduce paper money during the late Ming period wasn't adopted and it would take another four centuries before another Chinese government would produce paper money again.[16]

The Bank of England planted a small stand of mulberry trees aa an homage to these banknotes in the 1920s.[11]

Counterfeiting

Da Ming Baochao banknotes were extensively counterfeited during their history, this is in fact not unique as the earliest Chinese cash notes warned that the death penalty (usually in the form of decapitation) would be exercised towards anyone found counterfeiting them, as well as those who would aid them by either covering their crimes up or not reporting them. Those who exposed counterfeiters would be given a reward, usually these rewards were given in silver taels.[16]

Penalties for counterfeiting

Despite this generally severe warning towards counterfeiters the actual penalty would vary depending on the type of counterfeiting, the period in Chinese history, and the extend of the committed crime. The banknotes issued by the Later Zhou of the Five Dynasties and Ten Kingdoms period stated that both counterfeiters and conspirators shall be immediately put to death and that their corpses shall be publicly displayed, while during the Song dynasty period the penalty for counterfeiting banknotes was usually only limited to banishment, however in one recorded case a man was publicly beheaded for the possession of 250 fake banknotes. It is stated in the historical records of the Song dynasty that after a large shipment of counterfeit banknotes was seized that an official proposed than rather continuing the rather wasteful policy of decapitating the criminals and then destroying their counterfeit notes the government could save money and lives by simply tattooing the criminals as a punishment and putting official imperial stamps on the fake notes making them "as good as real notes", this proposal was adopted and the government saved both 300,000 bronze cash coins and the lives of 50 men. During the Jurchen Jin and Mongol Yuan dynasties the issue of counterfeit banknotes must've increased in severity as the penalties enforced by these governments was to behead those found guilty of the crime. Under the Ming dynasty after paper money started suffering from depreciation it did not enjoy a favoured status among the government officials and those found counterfeiting Da Ming Baochao banknotes were penalised in more lenient ways. Those found guilty were often only fined. The wording on the banknotes themselves regarding the punishment of those practicing the misdemeanor of counterfeiting also changed to reflect this attitude as one series of the Da Ming Baochao had a warning written on them that only those who truly counterfeited banknotes shall be persecuted while those who were only accomplices and would confess to being miscreants shall be granted amnesty.[16]

Types of counterfeits

The most common form of counterfeiting paper money during the Ming dynasty printing Da Ming Baochao banknotes from counterfeit printing plates or blocks, while another type of counterfeiting was "pasting" where banknotes were pasted together using small pieces other other banknotes by for example illegally raising the value of a 1 guàn banknote to 10 guàn. The latter of these types was also less severely penalised.[16]

Surviving specimens

During the early 20th century two discoveries were made where a large number of 1 guàn Da Ming Baochao banknotes were uncovered, the first of these discoveries occurred in the year 1900 when foreign forces occupied the capital city of Beijing in response to the Boxer Rebellion. During the occupation a number of European soldiers of the Eight-Nation Alliance had overthrown a sacred image of Gautama Buddha in the Summer Palace which uncovered a large number of gold and silver ingots alongside various gems and jewelry and a bundle of 1 guàn Da Ming Baochao banknotes, as these European soldiers were happy with the gems and precious metals they acquired they handed the bundle of banknotes to US Army Surgeon Major Lewis Seaman, who was a bystander and only unofficially present. Lewis Seaman gave the bundle of banknotes to the museum of St. John's College in the city of Shanghai. One of these banknotes was reproduced as a lithographic facsimile in the book The Trade and Administration of the Chinese Empire written by Hosea Ballou Morse. Another batch of 1 guàn Hongwu era banknotes was discovered when sometime in the year 1936 one of the walls surrounding the city of Beijing was torn down. When the labourers got to the huge gate in the wall, they uncovered a large bale of 1 guàn Da Ming Baochao banknotes which was buried in the wall itself. After the labourers removed the soiled and damaged notes, they started selling the banknotes to bystanders standing around them. The labourers only sold them for a few coppers each which would only amount to a couple of cents in American currency at the time. One of the bystandards who purchased one of these Da Ming Baochao notes was Luther Carrington Goodrich of the Yenching University who purchased two specimens for only a couple of coppers who later gave it to his friend Reverend Ballou who wrote about the account.[16]

Due to these circumstances it’s relatively easy for modern collectors of banknotes and paper money to acquire the Hongwu era 1 guàn banknotes as these sold for between 1000 and 1500 US dollars during the 2000s, for this reason modern banknote catalogues like the Standard Catalog of World Paper Money do list two Ming dynasty era banknotes but don’t list other Chinese banknotes and promissory notes produced before the Qing dynasty, John E. Sandrock claims that banknotes from the Song, Liao, Jin, Yuan, and Ming dynasty notes have survived while paper notes from the Tang, Later Zhou, and Western Xia dynasties do not seem to have any extant specimens. Sandrock states that because many of these notes are either one of a kind specimens in the hands of either private collectors or museums while ancient Chinese paper notes that don’t have any (known) surviving specimens are still known due to a great number of Chinese numismatic works and archeological finds, that these notes are therefore "not collectible" and are excluded from notaphilic catalogues for that reason. Sandrock claims that since these early forms of paper money is why paper money exists today that the hobby of notaphily would benefit from having them in catalogues. As only the 1 guàn Da Ming Baochao banknotes are numerous and easily available for collectors costing generally between one and two thousand US dollars that these other banknotes which are either unique or number in the two or three are "priceless". For this reason the notaphilic field for ancient Chinese banknotes other than the Hongwu era 1 guàn notes seems to be a largely ignored field.[16]

In 2016 art experts at Mossgreen's Auctions found a 1 guàn Da Ming Baochao banknote hidden inside of a 1 inch fold of a wooden luohan sculpture in Melbourne, Australia.[17]

See also

References

  1. ↑ Glahn, Richard von (2006). "Re-Examining the Authenticity of Song Paper Money Specimens", Journal of Song-Yuan Studies, 36: 79-106.
  2. ↑ Chen, Chau-Nan, Chang Pin-Tsun, Chen, Shikuan. "The Sung and Ming Paper Monies: Currency Competition and Currency Bubbles", Journal of Macroeconomics, 17/2: 273-288.
  3. ↑ John E. Sandrock (2018). "Ancient Chinese Cash Notes - The World's First Paper Money - Part 1" (PDF). The Currency Collector. Retrieved 5 September 2018.
  4. ↑ Bernholz, Peter (1997). "Paper Money Inflation, Prices, Gresham's Law and Exchange Rates in Ming China", Kredit und Kapital, 30/1: 35-51.
  5. ↑ Glahn, Richard von (2010). "Monies of Account and Monetary Transition in China, Twelfth to Fourteenth Centuries", Journal of the Economic and Social History of the Orient, 53/3: 463-505.
  6. ↑ Yang, Lien-Sheng (1975). "Monetary Terms in Chinese History", T'ung Pao: Journal of the Society for Oriental Numismatics, 1/2: 47-54 [reprinted from Chinese Culture, 1/4 (1958)].
  7. ↑ Li, Kangying (2007). "A Study on the Song, Yuan and Ming Monetary Policies against the Context of Worldwide Hard Currency Flows during the 11th-16th Centuries, and their Impact on Ming Institutions and Changes", in Angela Schottenhammer, ed. The East Asian Maritime World 1400-1800: Its Fabrics of Power and Dynamics of Exchanges (Wiesbaden: Harrassowitz), 99-136.
  8. ↑ Williams, S. Wells (1975). "Paper Money among the Chinese", T'ung Pao: Journal of the Society for Oriental Numismatics, 1/2: 38-40 [reprinted from The Chinese Repository, 20 (1851)].
  9. 1 2 Google Arts & Culture - Chinese Ming Banknote from the collection of the British Museum. Retrieved: 14 September 2018.
  10. ↑ The British Museum - Ming dynasty paper money: scientific analysis -The inclusion of a fourteenth-century Ming note in “A History of the World in 100 Objects” has brought unprecedented attention to these objects by Dr. Helen Wang. Retrieved: 14 September 2018.
  11. 1 2 "Episode 72 - Ming banknote". A history of the world (BBC in cooperation with the British Museum)/. 2014. Retrieved 14 September 2018.
  12. ↑ 游宇明 (19 August 2014). ""大明寶鈔"七十年內貶值一百倍說明了什麼？" (in Chinese). people.cn. Retrieved 14 September 2018.
  13. ↑ Ulrich Theobald (10 May 2016). "Paper Money in Premodern China". Chinaknowledge. Retrieved 10 September 2018.
  14. ↑ Danneem (5 September 2007). "Paper money, a Chinese invention? - 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". National Bank of Belgium Museum. Retrieved 14 September 2018.
  15. ↑ Kallie Szczepanski (8 March 2017). "The Invention of Paper Money - History of Chinese Currency". ThoughtCo. Retrieved 14 September 2018.
  16. 1 2 3 4 5 6 John E. Sandrock (2018). "Ancient Chinese Cash Notes - The World's First Paper Money - Part II" (PDF). The Currency Collector. Retrieved 9 September 2018.
  17. ↑ "Stashed cash: Rare Ming Dynasty banknote found inside Chinese sculpture". Fox News (originally published at Live Science). 2 December 2016. Retrieved 14 September 2018.

Sources

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  • Wu Chouzhong (吳籌中) (1993). "Zhongguo gudai zhibi (中國古代紙幣)", in Zhongguo da baike quanshu (中國大百科全書), Wenwu boguguan (文物·博物館) (Beijing/Shanghai: Zhongguo da baike quanshu chubanshe), 784.
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