Your Majesty, it has co to our attention that our rchants are extensively using banknotes issued by Joseon.
As the Cabinet Secretary reported, Emperor Xuande stroked his beard.
Banknotes from Joseon? Wasnt there a diplomat here not long ago discussing issues of exchange and forgery? But what issue have our rchants caused now?
To Emperor Xuandes question, the Cabinet Secretary began his explanation.
A significant number of rchants are exchanging silver for Joseons one-nyang banknotes, seeking to acquire them.
Why is that?
Because the Joseon governnt guarantees the value, and its believed to be more reliable and convenient than carrying physical silver, our rchants prefer to exchange for Joseons banknotes.
And how much silver has been lost to this?
We have yet to determine the exact amount, but reports suggest its significant.
The report turned Emperor Xuandes expression grave.
The economy of the Ming Dynasty was heavily reliant on silver. The proportion of taxes collected in silver was gradually increasing, and market transactions were also predominantly conducted in silver.
The outflow of such a crucial resource could pose a serious problem.
With a grave look, Emperor Xuande instructed the Cabinet Secretary.
Verify the facts imdiately and report back.
Yes, Your Majesty.
A month later, the Cabinet Secretary reported back to Emperor Xuande.
The exchange of silver is taking place at the Joseon trade office in Shandong, with last months transactions alone amounting to 1 million nyang.
1 million nyang Is that a serious amount?
At Emperor Xuandes question, the Cabinet Secretary pondered for a mont.
Considering the current scale of our Ming Dynasty, 1 million nyang isnt an unbearable burden. However, thinking ahead Should I declare it a serious matter? No, considering the substantial benefits the Emperor has gained through Joseon, especially from the Crown Prince of Joseon, speaking carelessly could endanger my own position.
Contemplating the best response, the Cabinet Secretary cautiously began to speak.
At present, the burden isnt significant. However, if the volu of transactions continues to increase at the current pace, it will eventually beco a major problem.
Is that so? Then what should be done
Emperor Xuande frowned at the Cabinet Secretarys words.
While the Cabinet Secretary often preemptively worried, he was far from incompetent.
On the contrary, under the Cabinet Secretarys leadership, the Ming empires finances were becoming more robust.
But to pressure Joseon
Applying pressure on Joseon to reclaim silver through tribute or other ans seed the easiest route, but it was not favorable for him.
Joseon had been enriching his personal coffersnot the state treasury of Ming but the emperors own finances. Recklessly pressuring Joseon could lead to a foolish act akin to killing the cow to straighten its horn, where excessive asures lead to adverse outcos.
As Emperor Xuande and his ministers mulled over their options, urgent news arrived from Shandong.
A diplomat from Joseon has co?
After reading the ssage, Emperor Xuande turned to the Cabinet Secretary.
Is now the ti for a diplomat to visit?
It is not.
Whats the matter then? Im curious about what issue has arisen this ti.
As Emperor Xuandes curiosity peaked, the envoys sent by King Sejong arrived at the Forbidden City.
* * *
So What brings the envoys from Joseon here?
After the exchange of pleasantries adorned with all sorts of polite expressions and their corresponding replies, Emperor Xuande quickly got to the point.
At Emperor Xuandes inquiry, the head of the envoy, the official from the Minister of Taxation, imdiately knelt and raised his voice.
Your Majesty! Please spare our small border country, Joseon!
Eh?
Taken aback by the unexpected plea, both Emperor Xuande and the Cabinet Secretary blinked in surprise.
After regaining his composure, Emperor Xuande, with a face full of questions, asked, To my knowledge, neither I nor my empire have caused harm to Joseon. What is this absurd claim?
Who wouldnt know of Your Majestys special consideration for Joseon? However, currently, an excessive amount of Mings silver is flowing into our Joseon! Our nation is small and struggles to bear this burden. We beseech Your Majesty to bestow your grace and control the flow of silver!
Hearing the Ministry of Taxation officials plea, Emperor Xuande turned to the Cabinet Secretary.
It seems that this influx of silver is also a problem for Joseon.
It appears so.
With the Cabinet Secretarys nod, Emperor Xuande turned back to the Ministry of Taxation official and spoke, I too am aware that a significant amount of our Mings silver is entering Joseon and have been seeking asures to address it. However, this involves legitimate trade by rchants, and its not sothing we can easily interfere with. Does Joseon have any proposals to manage this situation?
At Emperor Xuandes final question, the Cabinet Secretary looked at him with slightly surprised eyes, realizing that if Joseon didnt have a suitable answer, it could be used as a pretext to pressure them.
Yet, Emperor Xuande wasnt thinking of pressure; he genuinely hoped for a solution, believing that the Crown Prince of Joseon, whom he knew well, would not stand idly by. Its clear, he thought.
Faced with Emperor Xuandes inquiry, the Ministry of Taxation official slightly changed the topic, How could a small nation interfere in the affairs of a great one?
However, this issue pertains not only to my empire but to Joseon as well. Thus, Joseon must have contemplated so solutions. Speak now. It is an imperial command.
Upon Emperor Xuandes command, the Ministry of Taxation official hesitated for a mont before speaking, Our Joseon believes that the best solution would be for the great nation to also mint and circulate its currency.
Create currency? Hmm
Upon hearing the Ministry of Taxation officials suggestion, Emperor Xuande looked towards the Cabinet Secretary.
The Cabinet Secretary shared a similarly troubled expression with Emperor Xuande.
They were well aware of the Yuan Dynastys issuance and circulation of Jiaochao (paper money) and had attempted to circulate paper money (Jizhuan) in the Ming as well. However, the circulation of paper money was heading towards failure.
supload.wikidia/wikipedia/commons/d/de/Yuan_dynasty_banknote_with_its_printing_plate_1287.jpg
The primary reasons were the inflation caused by Emperor Yongles frequent military expeditions and the depreciation of paper moneys credibility due to counterfeiting.
Eventually, the Cabinet Secretary intervened on behalf of Emperor Xuande.
Let the envoy from Joseon listen. Our Ming empire also attempted to circulate paper money, but it did not go well. And now, you suggest we issue it again?
The Ministry of Taxation official replied to the Cabinet Secretarys question, How could we in Joseon not know? However, seeing Ming rchants seeking our Joseon banknotes, we believe there must be a solution.
At the Ministry of Taxation officials response, both Emperor Xuande and the Cabinet Secretary nodded in agreent. The fact that rchants sought after Joseons banknotes indicated that the concept of paper currency itself wasnt the issue.
Hmm
After quietly observing the envoy, Emperor Xuande posed a question to the Ministry of Taxation official.
Is the envoy sent by the Crown Prince?
Eh? No, Your Majesty! I am here by the command of our king.
The Ministry of Taxation officials response elicited a slight smile from Emperor Xuande.
Ive heard that the King of Joseon is a remarkable person. However, Ive also heard that he is more of a scholar. The answer you just gave sounds more like that of a rchant. In the current Joseon palace, the only one capable of thinking like a rchant would be the Crown Prince. Am I wrong?
As the Ministry of Taxation official continued to deny, Emperor Xuande concluded with a smile, Very well. Let it be known as such. So, Joseon is suggesting that we reintroduce paper money. But to suggest reissuing a form of currency that has already failed implies theres a solution to its problems. What might that be?
Promptly, the Ministry of Taxation official answered, Trust.
Trust?
The belief that if a paper note is marked with the value of one nyang of silver, it genuinely holds the value of one nyang of silver. And the belief that it cannot be counterfeited.
Emperor Xuande murmured in a slightly disappointed tone upon hearing the Ministry of Taxation officials response, Thats a well-known principle
Everyone knows this principle. The Crown Prince would surely be aware of it.
Emperor Xuande was disappointed because this was common knowledge. However, the Ministry of Taxation official calmly replied, To establish currency, there is no other strategy but to adhere to these two principles to the best of our ability.
Why are you so confident?
Because I, too, was involved in the issuance of our banknotes.
At the Ministry of Taxation officials response, Emperor Xuande, who had been observing the envoy, turned to the Cabinet Secretary, Now that I think about it if rchants seek it out, it must be because they trust it. But I have never seen Joseons paper money. Do you have it, Cabinet Secretary?
Upon Emperor Xuandes inquiry, the Cabinet Secretary imdiately knelt down.
Although curious about the rumors of Joseons paper money, the Cabinet Secretary had deliberately refrained from seeking it out, a matter of pride.
How could the currency of a minor nation be of any consequence!
I do not possess it either. Please forgive my disloyalty, Your Majesty.
As the Cabinet Secretary sought forgiveness, Emperor Xuande waved his hand dismissively.
Such a trivial matter is hardly disloyalty Rise.
Your grace is boundless!
anwhile, the Ministry of Taxation official, witnessing the exchange, clenched his teeth.
Being sowhat proficient in Chinese, he understood the conversation and felt slighted.
To dismiss it as such! Do they not realize the effort it took to create and properly circulate our currency? If they havent seen it, they could have simply asked ! How belittling towards Joseon!
The Ministry of Taxation official suppressed his anger, recalling the advice given before departure.
Given our current circumstances, Joseon is not in a position to confront Ming. For now, and for the foreseeable future, leave your pride and ego behind in Joseon! There will co a ti when we can repay any debts.
Rembering this counsel, the Ministry of Taxation official cald himself and interjected into the conversation.
I have one with .
Is that so? Let see it.
At Emperor Xuandes request, the Ministry of Taxation official took out a wallet from his sleeve.
With careful movents, he extracted a one-nyang banknote and handed it to the eunuch.
This is a banknote from Joseon.
Is it?
Though his tone was nonchalant, Emperor Xuande carefully received the banknote. He was aware that Joseons banknotes were stamped with a seal.
This is truly beautiful! This is not just a banknote; its closer to a work of art!
Upon seeing Joseons banknote for the first ti, Emperor Xuande involuntarily exclaid in admiration.
Blue and red lines frad the banknote, and within these borders lay a beautiful landscape painting. In one corner of the banknote, marked with one nyang, was King Sejongs seal, clearly imprinted.
The seal looks slightly different from the one on official docunts?
At Emperor Xuandes inquiry, the Ministry of Taxation official promptly responded, This is a new seal created specifically for use on currency.
Is that so
After examining the Joseon banknote thoroughly, Emperor Xuande handed it to the Cabinet Secretary.
Take a look, Cabinet Secretary. It seems we wont have to worry about counterfeiting, at least.
As the Cabinet Secretary examined the banknote, he looked at the Ministry of Taxation official in astonishnt.
Is this truly printed?
It is indeed printed.
Hearing the Ministry of Taxation officials confirmation, the Cabinet Secretary stared at the banknote in a daze, murmuring to himself unwittingly.
Ive heard that the printing technology from the East has always been superior
Regaining his composure, the Cabinet Secretary presented the banknote back to Emperor Xuande, saying, Your Majestys insight is correct. It seems we need not worry about the issue of counterfeiting.
Right? Let the envoy take it back.
After returning the banknote through the eunuch, Emperor Xuande murmured as he gazed into the distance, The one that got away is always the biggest Truly a pity.
Emperor Xuande was evidently regretting the missed opportunity regarding the technology.
Weve understood the solution to counterfeiting. But what about maintaining its value?
The first step is to issue currency only up to the value of the predetermined budget. This builds trust among the people, who will gradually accept an increased circulation, provided there is an equivalent amount of physical assets backing it. Furthermore, any additional issuance should only be in exchange for an equivalent amount of silver brought by those wishing to exchange, ticulously assessing the quality of the silver to accurately determine its value.
Thats the standard approach.
Pleased with the Ministry of Taxation officials succinct explanation, Emperor Xuande nodded and then looked towards the Cabinet Secretary.
Now I see why we failed.
Indeed, Your Majesty.
The Cabinet Secretary nodded in agreent with Emperor Xuandes observation.
To secure the budget for Emperor Yongles military campaigns and voyages of exploration, the Ming cabinet at the ti had recklessly printed paper money.
This led to the devaluation of the paper currency.
The envoy may withdraw.
Following Emperor Xuandes command, the envoy bowed respectfully and withdrew.
After the envoy left with a three-fold cheer for the emperor, Emperor Xuande turned to the Cabinet Secretary.
If we prepare properly, we could manage it, couldnt we?
It is entirely feasible.
Right? The humiliation of our state-issued paper money being treated as inferior to a rchant guilds promissory notes must end. And
Pausing briefly, Emperor Xuande revealed his true thoughts.
It would be absurd if we couldnt succeed in sothing even that small nation has accomplished.
Indeed, Your Majesty.
Thus, the Ming empire embarked on another attempt to issue paper currency, marking the beginning of a challenging period for Ming craftsn.
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