Banking in ancient China
Banking in ancient China
The financial industry in Chinese history before 1840.
Shang and Zhou Dynasties (about 16th century BC to 771 BC) China was the first country to produce currency. Metal coins were minted in the Shang Dynasty and the Western Zhou Dynasty. Judging from archaeological excavations and documentary records, people mainly used physical currency and metal weighing currency in the exchange process during the Shang and Western Zhou Dynasties. The physical currency at that time included shells, tortoise shells, grain, cloth, etc. The metal weighing currency was mainly copper.
During the Spring and Autumn Period and the Warring States Period (770 BC to 476 BC), the scope of currency circulation became wider, and bronze coins were gradually widely used. Due to the uneven economic development, cultural differences, and political divisions at that time, each vassal state used different currencies. For example, the copper coins of the Qin State were minted with square holes and round holes, and the coin inscription was "half liang". The right to mint coins was controlled by the state. In addition, gold and cloth were legal tender. At the end of the Warring States Period, the "Golden Code" formulated by the Qin State was China's earliest currency-related decree.
Qin and Han Dynasties (221 BC to 220 AD) In ??221 BC, Qin Shihuang unified China and implemented the Qin currency system throughout the country. After the death of Qin, the Han Dynasty inherited the Qin system. In order to make the currency more suitable for exchange, the Western Han government changed the weight of copper coins from "half a tael" (twelve baht) to "five baht". From then on, the five-baht coin system was extended to the Sui Dynasty (581-618).
Southern and Northern Dynasties (420～589) During this period, the credit industry developed. Credit in ancient China originated at the end of primitive society, and the initial loan objects were physical objects. In the future, with the emergence and development of currency, there will be more and more currency lending activities. In the early days of feudal society, lenders were mainly government officials, nobles, and large landowners, while borrowers often had varying degrees of personal dependence, making it very difficult to evade debts. Therefore, borrowing during this period is mainly credit lending, and the interest rate is usually higher. During the Warring States Period, lending money and collecting interest was a very common thing. During the Qin and Han Dynasties, there were also people who specialized in making money by lending money, called "Zi Qian Family". Some wealthy families have so much capital that the government sometimes borrows from them to raise military expenses. During the Southern and Northern Dynasties, institutions that also handled credit business—monasteries—appeared. Buddhism was prevalent at that time and monasteries were spread all over the country. Monks and nuns enjoy many political and economic privileges. The temple not only engages in religious activities, but also manages a large amount of land and also engages in loan business. In addition to traditional credit lending, there is also the pawn industry, that is, mortgage lending.
In the Tang Dynasty (618-907), there were two types of legal tender: copper coins and silk. Silk is measured in "pieces" and is mostly used for large transactions. In the Tang Dynasty, the five-baht coin was abolished. Copper coins were no longer named after their weight, but were renamed "Tongbao" and "Yuanbao". They developed into a higher-level coinage form than the quantity-name coin system.
The monetary economy developed greatly in the Tang Dynasty. But in the field of circulation, the shortage of coins has always been a prominent problem. Because copper coins are prohibited from leaving the country and are heavy, it is extremely inconvenient for merchants to carry them. During the reign of Emperor Xianzong of the Tang Dynasty, "flying money" came into being, that is, after merchants sold goods in the capital, they delivered the payment to the Dao Jinzouyuan, the army, envoys, and wealthy families, and obtained tickets from them. Withdraw money. This kind of flying money is also called "quick exchange" and is the earliest exchange method in China.
With the prosperity of commerce and the development of foreign trade, China's earliest financial market was formed in the West Market of Chang'an, the capital of Tang Dynasty. West Market is the most prosperous market in Chang'an, covering an area of ??about 1 square kilometer. It is dotted with various shops and workshops. Many of them are engaged in credit business, such as counter shops and deposit shops to accept deposits and keep property; gold and silver shops are also engaged in exchange and production. Trading of gold and silver; treasury operation and mortgage lending. The initial formation of the financial market and the emergence of the exchange industry were the main signs of the development of the financial industry in the Tang Dynasty.
The development of the monetary economy in the Song Dynasty (960-1279) was manifested in the monetary form as the strengthening of the monetary nature of silver and the emergence of paper money. Before the Han Dynasty, precious metals gold and silver were used as currency. During the Qin and Han Dynasties, gold was legal tender. After the Han Dynasty, due to the decline of the monetary economy, precious metals lost their status as legal tender. At the end of the Tang Dynasty, there was a trend of precious metals returning to circulation. In the Song Dynasty, the precious metal silver was gradually widely used by people, while physical currencies such as silk gradually lost their currency qualifications. Paper money first appeared in Sichuan at the end of the 10th century. It was called "Jiaozi" at the time. It was initially issued by wealthy private merchants. After 1023, the government monopolized the issuance rights of Jiaozi.
The number of coins minted in the Song Dynasty greatly exceeded that of the Tang Dynasty, but there was chaos and regional separatism in the field of currency circulation. There were many types of coins in the Song Dynasty, with face values ??ranging from small flat, two-fold, three-fold, five-fold, and dozens of coins. The currency materials can be divided into copper coins, iron coins, and tin coins. During the Northern Song Dynasty (960-1127), the minority regimes in the northwest and northeastern regions, Xixia and Liao, also minted their own currencies. During the Song Dynasty in the Central Plains, some places used copper coins, some places circulated iron coins, and some places used both copper and iron coins. During the Southern Song Dynasty (1127-1279), the Kingdom of Jin, which occupied the northern part of the Central Plains, also minted and issued its own currency.
The Yuan Dynasty (1271～1368) ended the scattered and chaotic situation of currency circulation in the Song Dynasty, and the currency became unified again. The currency of the Yuan Dynasty was mainly paper money. The initial paper money was a credit exchange certificate that could be redeemed with silver, and then gradually developed into non-cashable paper money.
The paper currency of the Yuan Dynasty no longer uses the units of copper coins such as "痼" and "文" in the Song Dynasty as the value scale, but uses silver as the value scale. The paper currency system of the Yuan Dynasty was quite complete. In 1287, the Yuan government promulgated the "Regulations on the Passability of Yuanbao Banknotes", which was China's earliest and most complete currency regulations.
The credit industry during the Song and Yuan Dynasties did not develop much compared with before, and traditional usury credit was still widely popular in society. Private credit institutions are mainly pawnshops. In the Song Dynasty, the pawn shop was called "Jieku" or "Zhiku", the one run by the temple was called "Changshengku", and in the Yuan Dynasty it was called "Jieku" or "Jieku". In addition to mortgage lending, pawnshops in the Yuan Dynasty sometimes also engaged in credit lending. In addition to privately opening pawn shops, the government also began to establish institutions to operate the pawn industry. For example, the Jin government once established the Zhidian Treasury, also known as "Liuquan", and the Yuan government established the Gongdian Treasury, which was called "Guanghui Treasury". After the Song Dynasty, the types of currencies increased, and the exchange industry developed. At that time, there were "gold and silver shops" and "silver shops" operating in the currency exchange industry. The "Jiaoyinpu" in the Song Dynasty not only operated various exchanges, but also bought and sold various banknotes. The currency exchange business gradually declined as paper money became more popular.
Ming and Qing Dynasty (1368～1911) The currency of the Ming Dynasty included banknotes, copper coins and silver. In the early Ming Dynasty, paper money was mainly used, and after the middle Ming Dynasty, silver became the main currency. In the Qing Dynasty (1616-1911), both silver and money were involved. Copper coins imitated the money-making system of the Ming Dynasty and were uniformly minted and issued by the state. Silver ingots were freely minted by the private sector. Therefore, there were many differences in weight and fineness of cast silver from various places, and there were many types.
During the Ming and Qing Dynasties, the financial industry developed significantly, especially the pawn industry, which became increasingly developed and pawn shops were spread all over the country. According to statistics, there were more than 20,000 pawnshops in the country in 1644, and there were 600 to 700 pawnshops in Beijing in 1744. The capital of some pawn shops is as high as tens of thousands or hundreds of thousands taels. The pawn business is mainly run by businessmen. In addition, there are also landlords, bureaucrats, and even the government invests in setting up pawn shops, which are called "official pawn shops". In addition to lending money, the pawn shop also accepts deposits and operates currency exchanges.
During the Ming and Qing Dynasties, new financial institutions such as banks, banks, and banknotes also appeared. Banks originated in the middle of Ming Dynasty. They were initially small in scale and mainly engaged in the exchange industry. At the end of the Ming Dynasty, banks gradually developed into institutions that engaged in financial services close to modern times. In addition to exchanging copper coins and gold and silver, they also engaged in lending, deposits and other businesses. Bank accounts first appeared in the early Qing Dynasty, and their business operations were similar to those of banks. Banks and banks also issued money notes and silver notes, which could be exchanged for copper coins and silver. With the widespread establishment of banks and bank accounts across the country, after the Qianlong period of the Qing Dynasty, the circulation of banknotes became very widespread.
During the Qianlong and Jiaqing reigns of the Qing Dynasty, there were bank accounts that engaged in remittance business. Since the operators were mainly from Shanxi, they were also called "Shanxi Banks". At first, they only handled remittances for merchants, and later they also handled government and bank accounts. Officials’ public fund remittance, deposit and loan business.
In addition to various private institutions, the Qing government also established an official financial institution, the "Official Bank of China", to engage in various financial businesses.