Chapter 56 Paper Money

  Wen Ti Rendao said, "Compared with copper coins, silver is even more troublesome."

  At this time, the people who were serving Shang Xiang had already carried the dishes to the outside of Wenhua Hall.

  Chongzhen Emperor nodded slightly, and Wen Tianren also noticed it, so he stopped talking and let the people arranged by Shangshan put dishes on the table.

  After everything was ready, Emperor Chongzhen said: "The two of you, dear officials, have a meal first."

  But soon, Emperor Chongzhen couldn't help but ask: "How troublesome is the trouble with silver?"

  Wen Ti Ren put down his chopsticks and replied solemnly, "Your Majesty, silver taels, apart from the troubles of having several kinds of copper coins, are much more valuable than copper coins. A slight loss is a significant loss, so weighing them accurately is also a contentious issue."

  Zhong Jinwei listened while eating. Compared to the ancients, modern people lack that kind of etiquette knowledge carved into their bones and recognition of the majesty of monarchs.

  "Besides the above reasons, another troublesome matter is the exchange relationship between silver and copper coins. Because the fineness of silver and the fineness of copper coins both affect their exchange."

  The Chongzhen Emperor nodded slightly, these things seemed small, but their impact on the people was great.

  "Is there any solution?"

  "Your Majesty, the Da Ming Bao Chao can be exchanged for silver and copper coins, but its devaluation is very severe. Therefore, the people still mainly use silver and copper coins, and there is no solution yet."

  Wen Tianren's words reminded the Chongzhen Emperor, who recalled that the Great Ming Banknotes could indeed solve these problems. They had been issued since the time of Taizu, but due to their rapid devaluation, no one was willing to use them, and they had gradually stopped being issued from the Zhengde period onwards. The emperor himself had also overlooked the existence of the Great Ming Banknotes for this reason.

  The Chongzhen Emperor thought of this and couldn't help but sigh: "If the Great Ming's precious notes could be as solid as silver and copper coins, it would be perfect."

  Originally, the devaluation of Da Ming Bao Chao could have been controlled by following the example of Song Emperor Taizong's method of recalling the currency. However, now neither the common people nor officials believe that this paper money has any value, so no one is willing to use it. Even if the imperial court says they want to recall it, nobody believes them, and current fiscal revenue is also insufficient to take out extra silver to recall it.

  Wen Tianren thought of this and secretly regretted that if he had used this strategy from the beginning, there would be no such troubles now.

  Zhong Jinwei had eaten enough and seeing the situation, spoke out: "Your Majesty, what I want to say to you is about this Da Ming Baochao matter."

  It seems that Zhong Jinhua has a solution, and Zhong Jinhua is once again the focus of attention.

  "Your Majesty, do you remember when I first came to this world, I had a wallet with me, but the money in it was not silver or copper coins, but paper bills and bank cards."

  Wēn Tǐ Rén interrupts: "What is a bank card?"

  "A bank card is when you put money into a bank, yeah, like a money house, and then the money house will write down the amount of your money on this card, it's very convenient to carry around." Zhong Jinwei thought he'd explain what a bank card is, but he didn't know if they would understand, after all, this was the result of technological advancements.

  "That's silver ticket!" Wen Tiren judged directly.

  Zhong Jinwei was speechless, and upon careful consideration, it really wasn't much different from ancient silver notes.

  "Let's not talk about bank cards for now, let's talk about paper money." Zhong Jinwei quickly changed the subject to cover up his embarrassment at underestimating the wisdom of the ancients.

  Chongzhen Emperor and Wen Tiren did not notice that they had just been despised by Zhong Jingwei, and continued to listen to his explanation.

  "Paper money has obvious advantages over physical currency. Mr. Wen had a comparison earlier, so I won't mention it now. Let's mainly talk about how to issue paper money." Zhong Jiawei's face was thick-skinned, he himself only half-understood the economics of currency, yet here he was acting as an expert.

  "The reason why Da Ming Bao Chao did not become a mainstream currency in the market after its issuance is due to the incorrect method of issuance."

  Zhong Jinwei recalled the content seen by later generations online and said, "After the treasure notes of the Great Ming were printed, they were directly given to the ministers, to the army, and also allowed merchants to exchange them for silver, was it like that?"

  Not very sure, it's better to ask first anyway.

  "Yes." Wen Ti-ren replied in coordination.

  "If that's the case, then this Da Ming Bao Chao should be worth that many silver taels. But in fact, the cost of producing Da Ming Bao Chao is not much. After ordinary people exchange it back, if they can't use it for transactions, it's no different from ordinary paper. Silver and copper coins are different, even if they can't be used for transactions, their value is still there, and they can be used to make silverware and copper utensils."

  In plain language, it's easy to understand, and no one can deny that Emperor Chongzhen and Wen Tiren both understood it clearly.

  "When the Da Ming Bao Chao was first introduced, why could it be used? It was because the imperial court forced its use, saying that one tael of Bao Chao was equivalent to one tael of silver. However, as time went on, more and more Bao Chao were issued, and I still have many unused ones in my hands. As a result, I received even more. So, I took the Bao Chao to buy things everywhere, thinking that since there were so many, they would never run out. Everyone did the same, and the final result was that one tael of Bao Chao could buy fewer and fewer things. And because the things that could be bought with Bao Chao became fewer and fewer, the common people became increasingly distrustful of it, eager to get rid of it as soon as possible, and started using it to buy things again. As a result, round after round, the Bao Chao became nothing more than a piece of paper."

  These devaluation reasons, Wen Tianren basically understood, but Emperor Chongzhen was not very clear. To be honest, in ancient times, there were no specialized people studying the economic system and laws of currency, and even the emperors of the Ming Dynasty did not understand it well, they just printed paper money when they needed to use money.

  "So how can we make baochuan turn from paper into currency again? I think now is a good time."

  "What does Zhong Xiang Bo mean by this?"

  "The Da Ming Bao Chao has not been printed for many years, so the historical burden of reissuing it will be much lighter. We can take it step by step."

  "The first step is to recall the old Da Ming Bao Chao and then completely destroy them, solving the historical burden."

  The Chongzhen Emperor shook his head: "The court currently does not have the ability to recover the Great Ming's precious notes."

  "It's not a one-to-one recovery, it can be recovered at market price, for example, one or two silver coins can recover several thousand guan of Da Ming Bao Chao."

  Chongzhen Emperor shook his head, "My silver containers have all been melted down to be used as military salaries, where is the extra money to recall the previously issued Da Ming Baochao?"

  "Never mind, let's just be shameless and issue another set of banknotes. That way, we won't have any historical burden." Zhong Jinwei thought that feudal society still had its advantages, and if they could get away with it like this, it seemed like nothing would happen.

  "Master Zhong continued to speak."

  "The first step is to gather the best craftsmen from all over the country, use the most advanced printing technology, and the best special paper for banknotes to print banknotes, in order to minimize the possibility of counterfeit banknotes as much as possible."

  One major drawback of paper money is the fear of counterfeiting, and the people of the Ming Dynasty were well aware of this. On the previous Da Ming Bao Chao, it was written that counterfeiters would be beheaded, and those who reported them would be rewarded with 250 taels of silver, and the property of the offender would still be given to him. The punishment for counterfeiting cannot be said to be light.

  So there was no problem with this first step, and both Emperor Chongzhen and Wen Tiren understood.

  "The second step is to establish a reserve fund system."

  "What is prepared gold?" Chongzhen Emperor asked.

  "It's just that the amount of paper money issued is equal to the amount of physical reserves. To put it simply, if the imperial court wants to print 1,000 taels of silver paper money, they must have a reserve of 1,000 taels of silver."

  "Why?"

  "In order to establish a credit system for paper money, the imperial court issued 1,000 taels of silver-backed paper money. The people were worried that the paper money would depreciate and not be worth as much. No problem, the people could exchange the paper money for real silver. The purpose of doing so was to let the people not worry about their paper money depreciating."

  "Master Zhong, what's the benefit for the imperial court if we do it this way? The paper currency issued has corresponding silver reserves, why not just issue silver directly?"

  "Your Majesty, if paper currency is allowed to circulate in the market, it can solve many of the problems I encountered when going to restaurants and taverns. It will reduce a lot of trouble for the people, who will naturally be happy to trade, and as money flows, commerce will flourish even more. The court will naturally gain more benefits from it."

  There are many things involved here, and Zhong Jingwei is not very clear about it either. He just explained it briefly, but even with such a simple explanation, Emperor Chongzhen and Wen Tiren were not very clear about the relationship inside. They just saw Zhong Jingwei's expression as if it was natural and obvious, and thought that it should be correct.

  "Of course, the main benefit that the imperial court can obtain is not this."

  "What is that?" Emperor Chongzhen asked hastily, having heard that the imperial court had a greater advantage, and he threw down his chopsticks.