Viewpoints 12.2: Circulating Paper Money

In China the Mongols maintained the established practice of circulating paper money (see “China Under Mongol Rule” in Chapter 13), which amazed visitors from other parts of Eurasia. The three texts below give different perspectives on the use of paper money. The first is a legal ruling issued in 1291 by the Mongols in China, the second is Marco Polo’s description of the practice as he witnessed it in the 1290s, and the third is Rashid al-Din’s account of the failed attempt to introduce the practice in Mongol-ruled Persia in 1294.

The Yuan Code of 1291

At any Treasury for Note Circulation, when a person comes to exchange worn-out notes for new notes, the responsible official shall oversee the counting of the notes in the presence of the owner. If none of the notes are patched or counterfeited, the official shall apply the stamp “Exchanged” to them and place them in the treasury and hand over new notes to the owner. The supervising authorities shall send inspectors to make frequent inspections. Any violator of these provisions shall be investigated and punished.

Marco Polo

The coinage of this paper money is authenticated with as much form and ceremony as if it were actually pure gold or silver; for to each note a number of officers, specially appointed, not only subscribe their names, but affix their seals also. . . . When thus coined in large quantities, this paper currency is circulated in every part of the Great Khan’s dominions; nor dares any person, at the peril of his life, refuse to accept it in payment. All his subjects receive it without hesitation, because, wherever their business may call them, they can dispose of it again in the purchase of merchandise they may require; such as pearls, jewels, gold, or silver. With it, in short, every article may be procured. . . .

When any person happens to be possessed of paper money which from long use has become damaged, they carry it to the mint, where, upon the payment of only three per cent, they receive fresh notes in exchange. Should any be desirous of procuring gold or silver for the purpose of manufacture, such as of drinking-cups, girdles, or other articles wrought of these metals, they in like manner apply to the mint, and for their paper obtain the bullion they require.

Rashid al-Din

On Friday [July 27, 1294], Akbuka, Togachar, Sadr al-Din, and Tamachi-Inak went to Tabriz to launch the paper money [chao]. They arrived there on [August 13], promulgated the decree, and prepared a great quantity of paper money. On Saturday [September 12, 1294], in the city of Tabriz, they put the paper money into circulation. The decree laid down that any person who refused to accept it would be summarily executed. For one week, in fear of the sword, they accepted it, but they gave very little in return. Most of the people of Tabriz perforce chose to leave, taking the textiles and foodstuffs from the bazaars with them, so that nothing was available, and people who wanted to eat fruit went secretly to the orchards. The city, which had been so populous, was completely emptied of people. Vagabonds and ruffians looted whatever they found in the streets. Caravans ceased to go there. . . .

Sadr al-Din, affected by the words [of a dervish], and with the assent of the retainers after this ruination, obtained a decree authorizing the sale of foodstuffs for gold. Because of this people became bold and transacted business openly in gold, and the absent returned to the city, and within a short time it was flourishing again. In the end, the attempt to introduce paper money did not succeed.

Sources: Dayuan tongzhi tiaoge (Taipei: Huasheng shuju, 1980), 14.1b–2a, trans. Patricia Ebrey; Manuel Komroff, ed., The Travels of Marco Polo (New York: Boni and Liveright, 1926), pp. 159–161; Bernard Lewis, ed. and trans., Islam from the Prophet Muhammad to the Capture of Constantinople. Vol. 2: Religion and Society (New York: Oxford University Press, 1987), 292w from p. 192, slightly modified. © 1974 by Bernard Lewis. Used by permission of Oxford University Press, USA.

QUESTIONS FOR ANALYSIS

  1. What do you learn about the processes of cultural borrowing from these sources?
  2. What features of paper money most impressed Marco Polo?
  3. What made it difficult to introduce paper money in Tabriz?