China was not a big country producing silver in ancient times, which doomed that silver could hardly become the mainstream currency in ancient times in most historical periods. In fact, most of the time, silver exists as a precious metal. From precious metal to mainstream currency, silver experienced the process of small-scale use in Tang and Song Dynasties, value measurement in Yuan Dynasty and large-scale use in the middle and late Ming Dynasty.
Space is limited, this paper only takes the collapse of precious paper money in Ming Dynasty as an introduction to explain how silver in Ming Dynasty became the mainstream currency.
Start with paper money
Paper money has been popular since the Northern Song Dynasty, and it has been the main currency in the Southern Song Dynasty and the Yuan Dynasty. In the early Ming Dynasty, following the example of the Yuan Dynasty, paper money was used as the main currency and copper money as the secondary currency, and folk gold and silver trading was prohibited.
Ming Dynasty paper money, named "Daming Baoqian", was officially issued from 1375 (the eighth year of Hongwu), with a large amount of easy-to-use treasure money and a small amount of copper coins below 100. There were six denominations at first (100, 200, 300, 400, 500 and consistent), and more denominations were added later.
Defects of Daming paper money
Compared with scrap metal and metal coins, paper money is undoubtedly an advanced form of money. However, the issue system of Daming paper money left many defects at the beginning.
First, Daming paper money has no clear reserve system.
Without the reserve system, there would be no restrictions on the circulation of Daming paper money. To put it bluntly, the imperial court can print as many as it wants. With the continuous input of paper money into society, the devaluation of paper money is inevitable.
At the same time, banknotes can only be exchanged in one direction. In other words, the official exchange rate of paper money, copper coins and gold and silver is only the exchange rate at which the imperial court bought folk copper coins and gold and silver with paper money. Folk gold and silver can be exchanged for paper money, but folk paper money cannot be exchanged for official gold and silver, which greatly reduces the credit of paper money and can only be forcibly apportioned by the emperor and the court authority.
Second, you can't pay taxes entirely with Daming paper money.
Daming paper money is a clear legal tender, but it is stipulated in the Ming Dynasty that all paper money cannot be used when paying taxes. When paying business tax, only 70% are allowed to use paper money, and the remaining 30% must use copper coins or gold and silver. This is forcing people to hold precious paper money, but also gold, silver and copper coins. This is a contradiction in the policy of the Ming Dynasty, and it is another damage to the authority of paper money in the Ming Dynasty.
Third, the "reverse banknote law" of Daming banknotes harms the interests of the banknote holders.
What do you mean by "reverse money method"? Is the discount of paper money. We all accept the concept that the value of paper money will not change whether it is old or new. However, this was not the case in the Ming Dynasty. In the early Ming Dynasty, the old banknotes could not be exchanged for new banknotes, so that the banknotes were worn to a certain extent and really became waste paper. People naturally treat old and new banknotes differently.
Later, in the Ming Dynasty, there was a rule of exchanging old banknotes for new ones, but it became a means for officials and unscrupulous officials to exploit the people-forcing the people to pay taxes with new banknotes, but it was still very expensive to exchange old banknotes for new ones.
Obviously, at the moment when ordinary people get the banknotes, there is a risk of continuous depreciation. Who wants to hold precious Ming dynasty banknotes when there are substitutes? In fact, the devaluation of paper money in the Ming dynasty began to be serious in the middle of Hongwu. How do people deal with it? Try to use copper coins, silver and physical objects (silks and satins, cloth and silk, rice) as substitutes.
Daming paper currency depreciation
In the case that the paper money system was flawed and the people were unwilling to hold it, the sharp depreciation of the Ming dynasty's treasure money soon occurred.
At the initial stage of banknote issuance, the exchange ratio is: one banknote to one or two silver; By the middle of Hongwu, three or five banknotes were worth one or two silver; When I arrived in Xuande, one hundred banknotes were worth one or two pieces of silver; By Chenghua, the 2,000-yuan paper money was hardly worth a penny or two.
In the hundred years of Ming dynasty, the devaluation of paper money reached 1000 times. Under this trend, the decree of the Ming government prohibiting gold and silver trading has become invalid. It has become popular among the people to avoid the losses caused by the devaluation of paper money by holding physical objects and silver.
With the great development of commodity economy in the middle of Ming Dynasty, silver trading became more and more extensive. According to Ming Wan's preliminary investigation on the monetization of silver in the Ming Dynasty, this paper makes statistics on the trading contracts in the Ming Dynasty: as early as 1438 (the third year of orthodoxy), silver and physical transactions have become the mainstream in the trading contracts in the Ming Dynasty (silver transactions accounted for 64%, physical transactions17%); By Jingtai, silver transactions had accounted for 90% of the trading contracts; By the time of Chenghua, silver trading had been fully used.
The epistatic process of silver
In order to forcibly maintain the circulation of precious paper money, 1394 (twenty-seventh year of Hongwu), Zhu Yuanzhang issued a new policy to stop casting copper coins and prohibit their use. Originally, the circulation of copper coins in the Ming Dynasty was small, which made copper coins more supporting roles, but made silver more frequently used.
Why silver? Silver is widely used as currency in Central Asia and has been used in foreign trade since the Song and Yuan Dynasties. Although paper money was used in the Yuan Dynasty, it was deeply rooted in the people's hearts in the Ming Dynasty by taking silver as the value scale (valuing with silver and paying with paper money). Moreover, in the foreign trade of the Ming Dynasty, most foreign merchants were mainly silver. According to Ming Taizu, in the last years of Hongwu, "Hangshang, regardless of commodity prices, negotiated with gold and silver".
The Ming Dynasty officially lifted the ban on silver trading, which happened in the orthodox years, and Ming Yingzong implemented the "golden flower and silver system". The "Golden Flower and Silver System" officially allows silver, precious paper money and copper coins to be used in parallel in private transactions. The actual situation is that paper money is unpopular, copper coins are seriously insufficient, and silver has actually become the main currency of the people.
The Ming court approved the circulation of silver among the people, but it did not mean that silver became legal tender.
During the orthodox years, the official revenue and expenditure of the imperial court was still dominated by precious paper money. In other words, people still need to change some silver into precious paper money when paying taxes, and there are still many inconveniences. The salaries of officials in the Ming Dynasty consisted of some rice and some precious paper money. The devaluation of paper money has also seriously damaged the economic interests of officials. Under the appeal of officials, the court had to follow the trend.
In the eighth year of Jiajing, the Ming Dynasty began to use silver to collect taxes and pay official salaries. The Mongolian northern defense replied that "the increase in troops was not enough, and all of them were given in silver." The official use of silver is increasing, and silver is getting closer and closer to legal tender.
The last hammer to establish the status of silver as legal tender-Zhang's "one whip method" in Wanli New Deal.
The "one whip law" is intended to increase fiscal revenue by solving land merger. The measure of "combining tax and service, paying taxes in silver per mu" is equivalent to pushing silver to the status of national legal tender. From then on, silver can be properly circulated between the government and the people.
This is one of the positive effects of the "one whip method", which clarified the status of silver as the mainstream currency, made private finance no longer interfered by the court, and inadvertently promoted the great development of commodity economy in the late Ming Dynasty. Since then, silver has penetrated into every corner of Ming society, and the use of silver by the people has become the norm. Influenced by the Ming Dynasty, the monetary system of the Qing Dynasty has always been dominated by the "silver standard".
Where does silver come from?
As mentioned earlier, silver failed to become the mainstream currency earlier in the history of China because China is not a big producer of silver. So how to meet the huge demand for silver in the Ming Dynasty?
This should talk about the great navigation era from15th century to16th century. Europeans discovered America and found a lot of silver mines in Mexico and Bolivia. Through international trade, cheap silver from the United States swept the world.
In the first year of Qin Long (1567), the sea ban was lifted, and the southeast coast entered a period of foreign trade explosion. In the middle and late Ming Dynasty, the foreign trade surplus lasted for nearly a hundred years, and silver rolled into China.
According to Angus Madison's Millennium History of World Economy, at that time, 1/3 of the world's silver output flooded into China (the total amount was between 350 million and 500 million). According to The Overseas Trade of Macao after the Mid-Ming Dynasty by all Han students, Manila imported silver from Macao 163 1 year, which was equivalent to 3.8 times of the national treasury income of Wanli Empire.
Stimulated by the massive inflow of overseas silver in the Ming Dynasty, the industry and commerce and private economy were unprecedentedly active, and silver trading prevailed among the people. In the context of the gradual collapse of paper money, silver has replaced paper money as the mainstream currency. The rise of silver, in turn, has played a positive role in the private economy.