Flying cash (), or ''Feipiao'', was a type of paper

negotiable instrument A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time, whose payer is usually named on the document. More specifically, it is a document contemplated by or consisting of a ...

used during China's

Tang dynasty The Tang dynasty (, ; zh, t= ), or Tang Empire, was an Dynasties in Chinese history, imperial dynasty of China that ruled from 618 to 907 AD, with an Zhou dynasty (690–705), interregnum between 690 and 705. It was preceded by the Sui dyn ...

invented by merchants but adopted by the state. Its name came from their ability to transfer cash across vast distances without physically transporting it. It is a precursor to true

banknotes A banknote—also called a bill (North American English), paper money, or simply a note—is a type of negotiable instrument, negotiable promissory note, made by a bank or other licensed authority, payable to the bearer on demand. Banknotes w ...

which appeared during the

Song dynasty The Song dynasty (; ; 960–1279) was an imperial dynasty of China that began in 960 and lasted until 1279. The dynasty was founded by Emperor Taizu of Song following his usurpation of the throne of the Later Zhou. The Song conquered the rest ...

. According to the ''

New Book of Tang The ''New Book of Tang'', generally translated as the "New History of the Tang" or "New Tang History", is a work of official history covering the Tang dynasty in ten volumes and 225 chapters. The work was compiled by a team of scholars of the So ...

'', in the year 804, merchants were using flying cash. Between 805 and 820 there was a shortage of copper cash coins which proved to be a hindrance for daily business transactions in the Tang dynasty. The creation of the flying cash happened after a tax reform that allowed for the partial acceptance of taxes in money, which had increased the demand for currency which scared the government that merchants would remove cash coins from the capital to circulate so they ordered the local governments to set up monetary systems based on silk, other fabrics, and daily items akin to

barter In trade, barter (derived from ''baretor'') is a system of exchange in which participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Economists distingu ...

which hampered long-distance trade in the Tang dynasty and harmed the national economy. The people that had the largest benefit from the introduction of flying cash were tea merchants and these merchants helped improve the trade between the capital and the regions. Originally the government of the Tang dynasty was less than receptive to the idea of bills of exchange and had attempted banning them on multiple occasions, but in 812 flying cash were officially accepted as a valid means of exchange. After the government had accepted these bills the supervision of flying cash was handled by the Ministry of Revenue (戶部), the Tax Bureau (度支司), and the Salt Monopoly Bureau (鹽錢司). The state began printing their own notes. Flying cash would remain in use until the early period of the

Origin

Between the years 618 and 758 the Chinese salt monopoly was controlled by local governments as opposed to the imperial government, this system was known as the ''Kaizhong policy'', the local governments didn't produce the salt themselves but taxed it. In the year 758 the government official Liu Yan had convinced the imperial government to actively enforce its salt monopoly again. This was known as the ''Zhece policy''. Under the ''Zhece policy'' Chinese merchants were paid in salt certificates in exchange for supplying the frontier armies directly as opposed to transporting government provisions to them. During the reign of the

Emperor Xianzong Emperor Xianzong of Tang (4 March to 1 April 778''Old Book of Tang'', vol. 14. – 14 February 820; r. 805 – 820), personal name Li Chun, né Li Chun (), was an emperor of the Chinese Tang Dynasty. He was the eldest son of Emperor Shunzon ...

the supply of

cash coins In economics, cash is money in the physical form of currency, such as banknotes and coins. In bookkeeping and financial accounting, cash is current assets comprising currency or currency equivalents that can be accessed immediately or near-immed ...

in circulation was scarce and when Chinese merchants would travel to the capital city, the merchants would entrust their money to the representative offices of their local governments, to the various armies of the Tang dynasty, government commissioners, and local rich families. The merchants did this to lighten their traveling burdens as they would hurry away in all directions. When the tallies were matched at a local office, they could withdraw their money.

Use

Flying cash was never originally meant to be used as

legal tender Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in pa ...

and, therefore, their circulation was limited. However, since they could be exchanged for hard currency at the capital with an exchange fee of 100 '' wén'' per 1000 ''wén'', they were traded amongst merchants as if they were currency. Flying cash continued to be used in the

Five Dynasties The Five Dynasties and Ten Kingdoms period (), from 907 to 979, was an era of political upheaval and division in 10th-century Imperial China. Five dynastic states quickly succeeded one another in the Central Plain, and more than a dozen conc ...

era into the beginning of the Song Dynasty in 960. It was not until the

and subsequent Jin occupation that paper money was officially established as a legal tender. Eventually, the Song Dynasty began to issue more notes to pay its bills- a practice that ultimately contributed to runaway inflation.

References

Sources

* Kang Guohong (康國宏) (1997). "Feiqian (飛錢)", in Men Kui (門巋), Zhang Yanqin (張燕瑾), ed. Zhonghua guocui da cidian (中華國粹大辭典) (Xianggang: Guoji wenhua chuban gongsi), 104. (in Chinese) * Yao Enquan (姚恩權) (1993). "Feiqian (飛錢)", in Shi Quanchang 石泉長, ed. Zhonghua baike yaolan (中華百科要覽) (Shenyang: Liaoning renmin chubanshe), 85. (in Chinese) * Zhou Fazeng (周發增), Chen Longtao (陳隆濤), Qi Jixiang (齊吉祥), ed. (1998). Zhongguo gudai zhengzhi zhidu shi cidian (中國古代政治制度史辭典) (Beijing: Shoudu shifan daxue chubanshe), 362. (in Chinese) {{Chinese currency and coinage Currencies of China Tang dynasty Banknotes Medieval currencies Economy of the Tang dynasty

Origin

Use

See also

References

Sources