Paper Money Under the Khan: Two Accounts Disagree

From Iron Coins to Paper Notes

1Under the Tang dynasty (618–907), Chinese printers learned to carve a whole page of text into a wooden block, ink it and press paper onto it. Many officials were chosen by exams on the writings of Confucius. Merchants who moved goods along the Grand Canal did not want to haul heavy strings of copper coins, so some left their coins with government offices or trusted shops and carried paper receipts instead. People nicknamed these receipts “flying money.”

2The Song dynasty (960–1279) went further. In Sichuan, in western China, people used iron coins, which were heavy and low in value, so paying for a large purchase meant hauling a load of metal. Merchants there began trading printed paper notes instead, and in the 1020s the Song government took over and issued its own notes, the first government paper money in the world. Song China also made gunpowder weapons, compasses for ships and fine porcelain that was sold across Asia.

3In 1206 Genghis Khan united the Mongol peoples, and Mongol armies went on to build an empire that stretched from Korea to eastern Europe. In 1260 his grandson Kublai Khan issued paper notes called Zhongtong notes. Kublai founded the Yuan dynasty in 1271, ruled from a new capital, Dadu (today Beijing), and finished conquering the Song in 1279. Yuan notes were printed from blocks, stamped with official seals and marked with a warning against counterfeiting.

4Japan learned much from China, including Chinese writing and Buddhism. From 1192, real power in Japan lay with the shogun, a military ruler whose government sat at Kamakura, while the emperor kept his title and his court in Kyoto. Samurai served the shogun and other lords in return for land. Japan had stopped making its own coins in the 900s, and by the 1200s its markets used copper coins that traders carried by ship from Song China. When Kublai sent fleets against Japan in 1274 and 1281, samurai fought the invaders, and storms wrecked many of the ships.