| Paper money under the later Ming Dynasty
was not so effective. The Ming issued in 1375 a new note called the 'Precious
Note of Great Ming'. It was issued in one denomination only throughout the
two hundred years in which it was the legal tender. This was naturally very
inconvenient for all commercial purposes, although copper coins were permitted
to circulate, and these must have provided the small change necessary in
everyday life. Through inflation, the Precious Note gradually lost its value
and was replaced by silver. In the middle of the seventeenth century, the
Ming tried to reinstate paper money after a lapse of about two centuries,
but it was badly implemented, resulting in great inflation, and failed. Paper
money on a national scale and a regular basis died out until European influence
brought it back in modern times.
When the older methods of paper money issuance became known in the West, they had a profound influence on Western banking. The old Hamburg Bank and the Swedish banking system were set up on Chinese lines. Thus, some of the fundamental banking procedures of the Western world came from China directly. The first Western paper money was issued in Sweden in 1661. America followed in 1690, France in 1720, England in 1797, and Germany not until 1806. |
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| A copper plate for printing paper money, from the Southern Sung Dynasty capital of Hangchou, and dating from between II 27 and 1279 AD. Below it is a print made from the plate as a modern example. Paper money had been invented in China by the late eighth or early ninth century: the first Western paper money was issued in 1661 in Sweden. |
