On this day 999 years ago
Goldminers
Posts: 3,992 ✭✭✭✭✭
I have been reading a very interesting book on the History of Fiat Paper Money by Ralph T. Foster.
After many various private endeavors that failed for various reasons, on January 12, 1024, the Imperial Chinese Sung Court directed the National Treasury to issue the first Chinese National Paper Money for general public use. Their right of physical coinage had already a monopoly of the state for the previous 1,000 years.
Much of the existing common coinage was in the form of iron coins. Ninety pounds of iron coin "cash" in a string of coins with square holes, was equal to one ounce of silver. When people and merchants brought in the official coins, they could now receive a sealed, government paper note.
Merchants were no longer allowed to create their own currency notes which had numerous failures due to over issuing notes and business collapses. I am thinking of about the modern crypto "currency" creation analogies, associated fraud and likely future government control. Not to mention, the Federal Reserve and 31 trillion in unsustainable government debt.
History sure repeats itself. I have a stronger desire to trade a few more of my Federal Reserve Notes for physical silver and gold.
Comments
90 lbs = 1 Oz silver, would been great to be a chiropractor in that time, just saying
Even then, silver had value.... No mention of gold equivalents @Goldminers ? Cheers, RickO
It is interesting. So far from what I have been reading, it seems China was primarily interested in silver as the store of real value. The coins in order of value were iron or lead, copper, and silver prior to the introduction of gov't paper currency. The European and Arabic nations were forced to trade in all their silver into paper notes in order to buy silk, tea, porcelain, spices, and other goods. No one in China at that time would sell them anything for their silver, as the government got to keep it all. This was true when the Mongols took over the Northern portions of China as well.
During the late 1500-1700's vast amounts of the Spanish silver from Bolivia, Peru and Mexico went to Manila in the Philippine's where it was then traded for goods from China and SE Asia. There were ocean currents that made a circular route possible from key ports like Acapulco on the Western side of Mexico to the Chinese market. Much of the New World silver that went to Europe, was also sent to China for trade.
New World silver coin minting was authorized by Spain in 1497 for commerce and initially was at the Potosi mint in Bolivia, near the world's largest silver mine. When Spain introduced the first silver coins to America in 1536, they were still hammered. The Spanish Dolar (the term "dollar" used since 1581), was accepted almost everywhere at the time as it was standardized at 38mm diameter and .822 troy ounces. It was worth 8 Spanish Reales, ie. piece of eight.
These were irregular shaped until 1728-1732 when they were finally mechanically milled and minted round. There were half dollar (4 bits) and quarter dollars (2 bits) minted as well. The first bit coins were actually physical silver. LOL
My US Mint Commemorative Medal Set
@Goldminers.... Very interesting, thanks for the added information. Cheers, RickO