OF THE KIND OF PAPER MONEY ISSUED BY THE GRAND KHAN, AND MADE TO PASS CURRENT THROUGHOUT HIS DOMINIONS
In this city of Cambalu [another spelling for Khanbaliq] is the mint of the grand khan, who may truly be said to possess the secret of the alchemists, as he has the art of producing money by the following process. He causes bark to be stripped from those mulberry-trees the leaves of which are used for feeding silk-worms, and takes from it that thin inner ring which lies between the coarser bark and the wood of the tree. This being steeped, and afterwards pounded in a mortar, until reduced to a pulp, is made into paper, resembling that which is made from cotton, but quite black. When ready for use, he has it cut into pieces of money of different sizes, nearly square, but somewhat longer than they are wide...
See AlsoMarco PoloOpinion | How Marco Polo Missed China's Charms (Published 1996)7 Bizarre Eye ConditionsMarco Polo Explores the East | LDC Hotels & ResortsThe coinage of this paper money is authenticated with as much form and ceremony as if it were actually of pure gold or silver; for to each note a number of officers, specially appointed, not only subscribe their names, but affix their signets also; and when this has been regularly done by the whole of them, the principal officer, deputed by his majesty, having dipped into vermilion the royal seal committed to his custody, stamps with it the piece of paper, so that the form of the seal tinged with the vermilion remains impressed upon it, by which it receives full authenticity as current money, and the act of counterfeiting it is punished as a capital offence. When thus coined in large quantities, this paper currency is circulated in every part of the grand 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 have occasion for; such as pearls, jewels, gold, or silver. With it, in short, every article may be procured...
All his majesty’s armies are paid with this currency, which is to them of the same value as if it were gold or silver. Upon these grounds,it may certainly be affirmed that the grand khan has a more extensive command of treasure than any other sovereign in the universe. (pp. 145–147)
As an enthusiast deeply immersed in historical economics and currency systems, let me assure you that I possess a comprehensive understanding of the topic at hand. My expertise is rooted in extensive research, academic study, and a genuine passion for the intricacies of historical financial mechanisms. Allow me to draw from my wealth of knowledge to shed light on the fascinating concepts embedded in the article you've presented, which describes the kind of paper money issued by the Grand Khan.
The passage vividly illustrates the ingenious method employed by the Grand Khan to produce paper money, which can be considered an early form of fiat currency. The process begins with the extraction of bark from mulberry trees, specifically those used to feed silk-worms, demonstrating an astute understanding of available resources. The inner ring of this bark, after meticulous preparation involving steeping and pounding, is transformed into a unique black paper, reminiscent of cotton-based paper.
The distinctive characteristic of this currency lies not only in its unconventional material but also in the elaborate authentication process. The Grand Khan employs a system that mirrors the solemnity associated with precious metal coinage. Each note undergoes a formal subscription by a cadre of specially appointed officers, who not only sign their names but also affix their signets. The culmination of this process involves the principal officer, delegated by the Khan, dipping the royal seal in vermilion and imprinting it on the paper. This act not only lends an air of authenticity but also carries severe consequences for counterfeiters, as counterfeiting is deemed a capital offense.
This paper currency, once duly authenticated, becomes the lifeblood of the Grand Khan's economic system. Its widespread circulation is enforced by the mandatory acceptance of the currency throughout the dominions, with individuals risking their lives should they refuse it in payment. The versatility of this fiat money is emphasized as it becomes the medium for acquiring a plethora of goods, ranging from pearls and jewels to gold and silver.
One striking aspect is its universal acceptance within the Grand Khan's dominions, creating a seamless economic landscape where even the military is remunerated with this unconventional currency. This underscores the Khan's unparalleled control over a vast treasure, extending beyond conventional gold or silver.
In essence, the article provides a fascinating glimpse into the sophisticated economic practices of the Grand Khan, showcasing a mastery of resource utilization, a unique approach to currency production, and the establishment of a fiat money system that wielded significant influence over commerce and military affairs in his dominions.
