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106-594: The precursor of paper money (紙幣) known as " flying cash " were issued by the Tang dynasty ; however, these bills of exchange could in no way be considered to be a form of paper money as they were not meant to be a medium of exchange and were only negotiable between two distant points. The first true paper money in the world was issued under the Song dynasty , these were promissory notes issued by merchants in Sichuan known as

212-411: A creditor on a schedule with a maturity date specified in written contractual terms . Law 122 stipulated that a depositor of gold , silver , or other chattel/movable property for safekeeping must present all articles and a signed contract of bailment to a notary before depositing the articles with a banker , and Law 123 stipulated that a banker was discharged of any liability from

318-563: A 1-inch fold of a wooden luohan sculpture in Melbourne , Australia . However, this specimen later turned out to be fraudulent. Paper money A banknote  – also called a bill ( North American English ), paper money , or simply a note  – is a type of negotiable promissory note , made by a bank or other licensed authority, payable to the bearer on demand. Banknotes were originally issued by commercial banks , which were legally required to redeem

424-465: A central bank in 1791 and 1816 , but it was only in 1862 that the federal government of the United States , began to print banknotes. Originally, the banknote was simply a promise to the bearer that they could redeem it for its value in specie, but in 1833, the second in a series of Bank Charter Acts established that banknotes would be considered as legal tender during peacetime. Until

530-454: A central bank was in 1661 by Stockholms Banco , a predecessor of Sweden's central bank, Sveriges Riksbank . Napoleon issued paper banknotes in the early 1800s. Cash paper money originated as receipts for value held on account "value received", and should not be conflated with promissory "sight bills," which were issued with a promise to convert at a later date. The perception of banknotes as money has evolved over time. Originally, money

636-437: A compelling issue. In the 18th century, banknotes were produced mainly by copper-plate engraving and printing , and they were single-sided. Note-making technologies remained largely unchanged during the 18th century. The first banknotes were produced by intaglio printing : this involved engraving a copper plate by hand and then covering it in ink to print the bank notes. Only with this technique, at that time, could one force

742-439: A contract of bailment if the notary denied the existence of the contract. Law 124 stipulated that a depositor with a notarized contract of bailment was entitled to redeem the entire value of their deposit, and Law 125 stipulated that a banker was liable for replacement of deposits stolen while in their possession . Carthage was purported to have issued bank notes on parchment or leather before 146 BC. Hence Carthage may be

848-578: A country") of the Xin dynasty , Tiancewansui ( 天冊萬歲 ; lit. "Heaven-conferred longevity") of the Wu Zhou , and Tiancilishengguoqing ( 天賜禮盛國慶 ; lit. "Heaven-bestowed ritualistic richness, nationally celebrated") of the Western Xia are examples of Chinese era names that bore more than two characters. Era names were symbols of political orthodoxy and legitimacy. Hence, most Chinese monarchs would proclaim

954-438: A gold- or silver-backed national paper currency standard, which changed the geographic restriction. The range of varying values for these banknotes was perhaps from one string of cash to one hundred at the most. Ever after 1107, the government printed money in no less than six ink colors and printed notes with intricate designs and sometimes even with mixture of a unique fiber in the paper to combat counterfeiting. The founder of

1060-713: A help to the people" (以便民用) and improve internal trade, these were the denominations of 10, 20, 30, 40, and 50 wén and depicted unstrung cash coins. Under the reign of the Yongle Emperor the Great Ming Treasure Note was fixed to be the exclusive valid paper money for the rest of the dynasty and because of this the paper currency of the Ming would see no further alterations or reforms. Overprinting led to severe hyperinflation and distrust of paper currency. The Hongzhi Emperor and Zhengde Emperor abolished

1166-456: A new era name to replace an existing era name was known as gǎiyuán ( 改元 ; lit. "change the origin"). Instituting a new era name would reset the numbering of the year back to year one, known as yuán nián ( 元年 ; lit. "year of origin"). On the first day of the Chinese calendar , the numbering of the year would increase by one. To name a year using an era name only requires counting years from

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1272-415: A new era upon the founding of a new dynasty. Rebel leaders who sought to establish independence and legitimacy also declared their own era names. Often, vassal states and tributary states of Imperial China would officially adopt the era name of the reigning Chinese monarch as a sign of subordination—a practice known as fèng zhēng shuò ( 奉正朔 ; lit. "following the first month of the year and the first day of

1378-535: A new monarch ascended to the throne, he could either declare a new era immediately or inherit the usage of the existing era name from his predecessor. For example, the era name Wutai ( 武泰 ; lit. "exalted martial") of the Emperor Xiaoming of Northern Wei was immediately replaced with Jianyi ( 建義 ; lit. "establishing justice") when the Emperor Xiaozhuang of Northern Wei took the throne. On

1484-476: A person may go throughout the Great Kaan's dominions he shall find these pieces of paper current, and shall be able to transact all sales and purchases of goods by means of them just as well as if they were coins of pure gold In medieval Italy and Flanders , because of the insecurity and impracticality of transporting large sums of cash over long distances, money traders started using promissory notes . In

1590-431: A precise amount and issued on deposit or as a loan. There was a gradual move toward the issuance of fixed denomination notes, and by 1745, standardized printed notes ranging from £20 to £1,000 were being printed. Fully printed notes that did not require the name of the payee and the cashier's signature first appeared in 1855. The Bank of Scotland was established in 1695 to support Scottish businesses, and in 1696 became

1696-464: A rope. Merchants found that the strings were too heavy to carry around easily, especially for large transactions. To solve this problem, coins could be left with a trusted person, with the merchant being given a slip of paper (the receipt) recording how much money they had deposited with that person. Their coins would be restored when they went back and gave that person the paper. True paper money, called " jiaozi ", developed from these promissory notes by

1802-519: A sacred image of Gautama Buddha in the Summer Palace which uncovered a large number of gold and silver ingots alongside various gems and jewelry and a bundle of 1 guàn Great Ming Treasure Note banknotes, as these European soldiers were happy with the gems and precious metals they acquired they handed the bundle of banknotes to US Army Surgeon Major Louis Livingston Seaman , who was a bystander and only unofficially present. Louis Seaman gave

1908-469: A severe case of hyperinflation which made the paper money issued by them worthless. Under the reign of the Yuan dynasty copper cash coins remained in circulation with the inscriptions Zhida Tongbao (至大通寶), Dayuan Tongbao (大元通寶), and Zhizheng Tongbao (至正通寶) forming the majority of the circulating issues and " strings of cash coins " remaining a currency unit. Silver then started to occupy a paramount place in

2014-624: A total of seven era names during his reign. The Hongwu Emperor started the tradition of having only one era name for one monarch—known as the yí shì yì yuán zhì ( 一世一元制 ; lit. "one-era-name-for-a-reign system"). Thus, modern historians would frequently refer to monarchs of the Ming and Qing dynasties by their respective era name. Notable exceptions to this "one-era-name" tradition included Zhu Qizhen who proclaimed two era names for his two separate reigns, Aisin Gioro Hong Taiji who used two era names to reflect his position as khan of

2120-579: A travelogue of a visit to Prague in 960 by Ibrahim ibn Yaqub , small pieces of cloth were used as a means of trade, with these cloths having a set exchange rate versus silver. Around 1150, the Knights Templar would issue notes to pilgrims. Pilgrims would deposit valuables with a local Templar preceptory before embarking for the Holy Land and receive a document indicating the value of their deposit. They would then use that document upon arrival in

2226-433: A very small proportion of the "money" that people think that they have, as demand deposit bank accounts and electronic payments have negated much of the need to carry notes and coins. Banknotes have a natural advantage over coins in that they are lighter to carry; but they are also less durable than coins. Banknotes issued by commercial banks had counterparty risk , meaning that the bank may not be able to make payment when

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2332-478: A virtual currency account (usually a coin no longer physically existing), was used more often. All physical currencies were physically related to this virtual currency; this instrument also served as credit. The shift toward the use of these receipts as a means of payment took place in the mid-17th century, as the price revolution , when relatively rapid gold inflation was causing a re-assessment of how money worked. The goldsmith bankers of London began to give out

2438-454: A weight of 80 to 90 grams per square meter. The cotton is sometimes mixed with linen , abaca , or other textile fibres. Generally, the paper used is different from ordinary paper: it is much more resilient, resists wear and tear (the average life of a paper banknote is two years), and also does not contain the usual agents that make ordinary paper glow slightly under ultraviolet light. Unlike most printing and writing paper, banknote paper

2544-404: A written order to pay the amount to whoever had possession of the note. These notes are credited as the first modern banknotes. The first short-lived attempt at issuing banknotes by a central bank was in 1661 by Stockholms Banco , a predecessor of Sweden's central bank, Sveriges Riksbank . These replaced the copper-plates being used instead as a means of payment. The peculiar circumstances of

2650-415: Is a simple-looking security component found in most banknotes. It is, however, often rather complex in construction, comprising fluorescent, magnetic, metallic, and microprint elements. By combining it with watermarking technology, the thread can be made to surface periodically on one side only. This is known as windowed thread and further increases the counterfeit resistance of the banknote paper. This process

2756-434: Is also a chance for banknotes to have printing errors. For U.S. banknotes, these errors can include board break errors, butterfly fold errors, cutting errors, dual denomination errors, fold over errors, and misalignment errors. Prior to the introduction of banknotes, precious or semiprecious metals minted into coins to certify their substance were widely used as a medium of exchange. The value that people attributed to coins

2862-592: Is applied as a portrait window for the higher denominations of the Europa series (ES2) of the euro banknotes. Windows are also used with the Hybrid substrate from Giesecke+Devrient which is composed of an inner layer of paper substrate with thin outer layers of plastic film for high durability. When paper bank notes were first introduced in England, they resulted in a dramatic rise in counterfeiting. The attempts by

2968-659: Is based on the era name system of Imperial China. Numerous attempts to reinstate monarchical rule in China had resulted in the declaration of additional era names after the founding of the Republic, but these regimes and their associated era names were short-lived. In 1949, the People's Republic of China was founded and the era was changed to the Common Era , for both internal and external affairs in mainland China . This notation

3074-483: Is infused with polyvinyl alcohol or gelatin, instead of water, to give it extra strength. Early Chinese banknotes were printed on paper made of mulberry bark. Mitsumata ( Edgeworthia chrysantha ) and other fibers are used in Japanese banknote paper (a kind of Washi ). Most banknotes are made using the mould-made process, in which a watermark and thread are incorporated during the paper forming process. The thread

3180-480: Is mostly because historians tend to be more interested in a theoretical understanding of how money worked rather than how it was produced. The first great deterrent against counterfeiting was the death penalty for forgers, but this was not enough to stop the rise of counterfeiting. Over the 18th century, far fewer banknotes were circulating in England compared to the boom of bank notes in the 19th century; because of this, improved note-making techniques were not considered

3286-409: Is not always the case, and historically, private banks frequently handled all of a country's paper currency. Thus, many different banks or institutions may have issued banknotes in a given country. Commercial banks in the United States had legally issued banknotes before there was a national currency; however, these became subject to government authorization from 1863 to 1932. In the last of these series,

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3392-433: Is simply a reflection of the supply and demand mechanism of a society exchanging goods in a free market, as opposed to stemming from any intrinsic property of the metal. By the late 17th century, this new conceptual outlook helped to stimulate the issue of banknotes. The economist Nicholas Barbon wrote that money "was an imaginary value made by a law for the convenience of exchange". A temporary experiment of banknote issue

3498-405: Is the basis for the history of central banks backing their currencies in gold or silver. Today, most national currencies have no backing in precious metals or commodities and have value only by fiat . With the exception of non-circulating high-value or precious metal issues, coins are used for lower valued monetary units, while banknotes are used for higher values. Counterfeiting , including

3604-543: Is the first foil application ( Kinegram ) to a paper banknote in the history of banknote printing. The application of optical features is now common throughout the world. Many countries' banknotes now have embedded holograms . Chinese era name Chinese era names , also known as reign mottos , were titles used by various Chinese dynasties and regimes in Imperial China for the purpose of year identification and numbering . The first monarch to adopt era names

3710-538: The Emperor Daizong of Tang replaced the era name Yongtai ( 永泰 ; lit. "perpetual peace") with Dali ( 大曆 ; lit. "great era") in the eleventh month of the Chinese calendar in 766 CE, the first year of Dali thus only consisted of the last two months of that particular year; the second year of Dali began on the first day of the Chinese calendar the following year, just two months after its initiation. When

3816-639: The Jiaozi , under the reign of Emperor Zhenzong (997–1022) the government of the Song dynasty granted a monopoly for the production of Jiaozi notes to sixteen wealthy merchants in Sichuan, as these merchants were slow to redeem their banknotes and inflation started affecting these private banknotes the government nationalised paper money in the year 1023 under the Bureau of Exchange. As these paper notes were backed by

3922-753: The Later Jin and later as emperor of the Qing dynasty, as well as Aisin Gioro Puyi who adopted three era names in his capacity as emperor of the Qing dynasty and subsequently as ruler of Manchukuo . With the establishment of the Republic of China in 1912 CE, the Chinese era name system was superseded by the Republic of China calendar which remains in official use in Taiwan, Penghu, Kinmen, and Matsu Islands . The Republic of China calendar, while not an era name,

4028-463: The Yuan dynasty , Kublai Khan , issued paper money known as Jiaochao . The original notes were restricted by area and duration, as in the Song dynasty, but in the later years, facing massive shortages of specie to fund their rule, the paper money began to be issued without restrictions on duration. The fact that the state was guaranteeing the Chinese paper money impressed Venetian merchants. According to

4134-531: The first European bank to issue banknotes in fixed values. It continues to issue banknotes and is the longest continuous banknote issue in the world. The Scottish economist John Law helped establish banknotes as a formal currency in France, after the wars waged by Louis XIV left the country with a shortage of precious metals for coinage. In the United States , there were early attempts at establishing

4240-407: The forgery of banknotes, is an inherent challenge in issuing currency . It is countered by anticounterfeiting measures in the printing of banknotes. Fighting the counterfeiting of banknotes and cheques has been a principal driver of security printing methods development in recent centuries. Code of Hammurabi Law 100 ( c. 1755–1750 BC) stipulated repayment of a loan by a debtor to

4346-474: The money supply in 1921. At the same time, the Bank of England was restricted to issue new banknotes only if they were 100% backed by gold or up to £14 million in government debt. The Act gave the Bank of England an effective monopoly over the note issue from 1928. Today, a central bank or treasury is generally solely responsible within a state or currency union for the issue of banknotes. However, this

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4452-510: The state's four constituent countries ( Scotland and Northern Ireland ) continue to print their own banknotes for domestic circulation, even though they are not fiat money or declared in law as legal tender anywhere. The UK's central bank, the Bank of England , prints notes which are legal tender in England and Wales ; these notes are also usable as money (but not legal tender) in the rest of

4558-425: The 11th century, during the Song dynasty . By 960, the Song government was short of copper for striking coins, and issued the first generally circulating notes. These notes were a promise by the ruler to redeem them later for some other object of value, usually specie . The issue of credit notes was often for a limited duration, and at some discount to the promised amount later. The jiaozi did not replace coins but

4664-480: The 1760s, these bills of credit were used in the majority of transactions in the Thirteen Colonies. The first bank to initiate the permanent issue of banknotes was the Bank of England . Established in 1694 to raise money for the funding of the war against France , the bank began issuing notes in 1695 with the promise to pay the bearer the value of the note on demand. They were initially handwritten to

4770-542: The 1920s. During the early 20th century two discoveries were made where a large number of 1 guàn Great Ming Treasure Note banknotes were uncovered, the first of these discoveries occurred in the year 1900 when foreign forces occupied the capital city of Beijing in response to the Boxer Rebellion . During the occupation a number of European soldiers of the Eight-Nation Alliance had overthrown

4876-491: The Bank of England and the Royal Mint to stamp out currency crime led to new policing strategies, including the increased use of entrapment. The characteristics of banknotes, their materials and production techniques (as well as their development over history) are topics that are not usually thoroughly examined by historians, even though there are now a number of works detailing how bank notes were actually constructed. This

4982-593: The Bark of Trees, Made into Something Like Paper, to Pass for Money All Over his Country ". All these pieces of paper are, issued with as much solemnity and authority as if they were of pure gold or silver... with these pieces of paper, made as I have described, Kublai Khan causes all payments on his own account to be made; and he makes them to pass current universally over all his kingdoms and provinces and territories, and whithersoever his power and sovereignty extends... and indeed everybody takes them readily, for wheresoever

5088-575: The Era System, their treaties with other countries are in the Dionysian Era ( AD ) system. In modern times, only Republic of China and Japan still continue to use the ancient Chinese era naming system. Even in the domestic arena, the era system can present difficult dilemmas. For example, in Japan, it is difficult to keep track of the age of people who were born in the previous era. Also, while

5194-524: The Holy Land to receive funds from the treasury of equal value. In the 13th century, Chinese paper money of Mongol Yuan became known in Europe through the accounts of travelers, such as Marco Polo and William of Rubruck . Marco Polo's account of paper money during the Yuan dynasty is the subject of a chapter of his book, The Travels of Marco Polo , titled " How the Great Kaan Causeth

5300-598: The Mongol economy and was supplemented by government issued paper money. Under the reign of Kublai Khan the Zhongtong Jiaochao (中統交鈔) was issued whose value was based on the fabric silk . In the year 1271 the Zhiyuan Baochao (至元寶鈔) was issued which was supplemented with the silver-based Zhida Yinchao (至大銀鈔), but these circulated only for a year. The final series of paper money issued by the government of

5406-742: The ROC and Japan both continue to use the ancient Chinese era system, since they have partially adopted the Gregorian calendar for non-governmental use, it is more difficult to track down dates that fall on February 29 leap year in the Western calendar. Furthermore, in Japan, in theory it is difficult to mention future dates since it is sometimes hard to tell whether the current emperor will live long enough for its citizens to use that era name. However, in practice, documents like driver's licenses and 50-year leases use era dates without regard to this problem. On

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5512-506: The Song government was amassing large amounts of paper tribute . It was recorded that each year before 1101, the prefecture of Xin'an (modern Shexian , Anhui ) alone would send 1,500,000 sheets of paper in seven different varieties to the capital at Kaifeng. In 1101, the Emperor Huizong of Song decided to lessen the amount of paper taken in the tribute quota because it was causing detrimental effects and creating heavy burdens on

5618-506: The Swedish coin supply were what led to this banknote issue. Cheap foreign imports of copper had forced the Crown to steadily increase the size of the copper coinage to maintain its value relative to silver . The heavy weight of the new coins encouraged merchants to deposit it in exchange for receipts. These became banknotes when the manager of the bank decoupled the rate of note issue from

5724-685: The Tang dynasty (618–907), as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions. Although government issued centralized paper money did not appear until the 11th century, during the Song dynasty . In Europe, cloth banknotes were in use in Praga in 960 and as part of the banking scheme of the Knights Templars around 1150. The first short-lived attempt at issuing banknotes in Europen by

5830-750: The UK (see Banknotes of the pound sterling ). In the two Special Administrative Regions of the People's Republic of China , arrangements are similar to those in the UK; in Hong Kong , three commercial banks are licensed to issue Hong Kong dollar notes , and in Macau , banknotes of the Macanese pataca are issued by two different commercial banks. In Luxembourg , the Banque Internationale à Luxembourg

5936-562: The Yuan dynasty from 1350 were the Zhizheng Jiaochao (至正交鈔). A major difference between how paper money was used under the Mongols and under the Song dynasty was that, in certain regions of the Yuan dynasty, paper notes were the only acceptable form of currency and could not be exchanged in either copper cash coins or silver sycees . Exchanging paper money into copper or silver was known as duìxiàn (兌現, "convert into specie") which

6042-713: The Yuan dynasty the inflation caused people to lose their trust in paper money and barter became the most common means of exchange. The first banknotes of the Ming dynasty bore the reign title of the Hongwu Emperor and were issued in the year 1375, a year prior he created the Supervisorate of Paper Money (寶鈔提舉司, bǎo chāo tí jǔ sī ) to supervise their production. The initial series of the Great Ming Tongxing Baochao (大明通行寶鈔, dà míng tōng xíng bǎo chāo ) were made of mulberry bark . Notes with

6148-499: The bank currency reserves. Three years later, the bank went bankrupt after rapidly increasing the artificial money supply through the large-scale printing of paper money. A new bank, the Riksens Ständers Bank , was established in 1668, but did not issue banknotes until the 19th century. The idea that social and legal consensus determines what constitutes money is the foundation of modern banknotes. A gold coin's value

6254-457: The banks to refine the technologies employed. In 1801, watermarks, which previously were straight lines, became wavy—an idea of William Brewer, a watermark mould maker. This made counterfeiting bank notes harder still, at least in the short term, and in 1803 the number of forged bank notes fell to just 3000, compared to 5000 the previous year. Banks asked skilled engravers and artists to help them make their notes more difficult to counterfeit during

6360-406: The beginning, these were personally registered, but they soon became a written order to pay the amount to whoever had it in their possession. These notes are seen as a predecessor to regular banknotes by some but are mainly thought of as proto bills of exchange and cheques. The term "bank note" comes from the notes of the bank ("nota di banco") and dates from the 14th century; it originally recognized

6466-469: The bundle of banknotes to the museum of St. John's College in the city of Shanghai . One of these banknotes was reproduced as a lithographic facsimile in the book The Trade and Administration of the Chinese Empire written by Hosea Ballou Morse . Another batch of 1 guàn banknotes was discovered when sometime in the year 1936 one of the walls surrounding the city of Beijing was torn down. When

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6572-494: The denomination of 1 guàn could be exchanged for one thousand bronze cash coins throughout all of the Ming Empire, this was illustrated by an image of a string of bronze cash coins split into ten segments, smaller denominations contained images fewer segments of the string and were issued in 100, 200, 300, 400, and 500 wén . The size of the 1 guàn was 36.4 × 22 cm making them the biggest paper notes ever produced in

6678-418: The era name Jianzhongjingguo ( 建中靖國 ; lit. "establishing a moderate and peaceful country") used by the Emperor Huizong of Song was indicative of Huizong's idealism towards moderating the rivalry among the conservative and progressive factions regarding political and social reforms. The process of declaring an era name was referred to in traditional Chinese historical texts as jiànyuán ( 建元 ). Proclaiming

6784-517: The financing of World War I by the Central Powers (by 1922 1 gold Austro-Hungarian krone of 1914 was worth 14,400 paper Kronen), the devaluation of the Yugoslav dinar in the 1990s, etc. Banknotes may also be overprinted to reflect political or economic changes that occur faster than new currency can be printed. In 1988, Austria produced the 5000 Schilling banknote ( Mozart ), which

6890-551: The first ruler to declare an era name. Prior to the introduction of the first era name in 140 BCE, Chinese monarchs utilized the Qianyuan ( 前元 ), Zhongyuan ( 中元 ) and Houyuan ( 後元 ) systems to identify and number years. Prior to the Ming dynasty , it was common for Chinese sovereigns to change the era name during their reigns, resulting in the use of more than one era name for one ruler. For instance, Emperor Xuan of Han used

6996-401: The first year of the era. For example, 609 CE was the fifth year of Daye ( 大業 ; lit. "great endeavour"), as the era began in 605 CE; traditional Chinese sources would therefore refer to 609 CE as Dàyè wǔ nián ( 大業五年 ). The numbering of the year would still increase on the first day of the Chinese calendar each year, regardless of the month in which the era name was adopted. For example, as

7102-758: The government they were instantly successful and the people regarded them to be equally trustworthy as cash coins , other types of paper notes issued under the Song dynasty include the Huizi and the Guanzi . Before the Mongol Empire conquered China the Jurchen Jin dynasty also issued paper money, the Jiaochao (交鈔). Before the establishment of the Ming dynasty the Mongol Yuan dynasty had suffered from

7208-481: The history of China. All paper notes from this first series of the Great Ming Treasure Note contained the inscription that they were a valid currency issued by the Palace Secretariat (中書省, zhōng shū shěng ), other texts explained that forgers would face punishment and those that expose these counterfeiters shall receive a high reward, finally the date of issuance was written with the era name , followed by

7314-506: The issuing bank would stamp its name and promise to pay, along with the signatures of its president and cashier on a preprinted note. By this time, the notes were standardized in appearance and not too different from Federal Reserve Notes . In a small number of countries, private banknote issuing continues to this day. For example, by virtue of the complex constitutional setup in the United Kingdom, certain commercial banks in two of

7420-471: The labourers got to the huge gate in the wall, they uncovered a large bale of 1 guàn Great Ming Treasure Note banknotes which was buried in the wall itself. After the labourers removed the soiled and damaged notes, they started selling the banknotes to bystanders standing around them. The labourers only sold them for a few copper coins each which would only amount to a couple of cents in American currency at

7526-399: The mid-nineteenth century, commercial banks were able to issue their own banknotes, and notes issued by provincial banking companies were the common form of currency throughout England, outside London. The Bank Charter Act of 1844 , which established the modern central bank, restricted authorisation to issue new banknotes to the Bank of England , which would henceforth have sole control of

7632-417: The month"). For example, Korean regimes such as Silla , Goryeo , and Joseon at various times formally adopted the era names of the Tang , Wu Zhou, Later Liang , Later Tang , Later Jin , Later Han , Later Zhou , Northern Song , Liao , Jin , Yuan , Northern Yuan , Ming , and Qing dynasties of China for both domestic and diplomatic purposes. The Emperor Wu of Han is conventionally regarded as

7738-725: The name of the dynasty or the ruler before the era name for the purpose of disambiguation. For example, when referencing the year 410 CE, Chinese sources could either render it as Běi Yān Tàipíng èr nián ( 北燕太平二年 ; lit. "second year of Taiping of the Northern Yan ") or Běi Yān Wéngchéng Dì Tàipíng èr nián ( 北燕文成帝太平二年 ; lit. "second year of Taiping of the Emperor Wencheng of Northern Yan ). Most Chinese era names consisted of two Chinese characters , even though era names with three, four and six characters also existed. Shijianguo ( 始建國 ; lit. "the beginning of establishing

7844-784: The note was presented. Notes issued by central banks had a theoretical risk when they were backed by gold and silver. Both banknotes and coins are subject to inflation . The durability of coins means that even if metal coins melt in a fire or are submerged under the sea for hundreds of years, they still have some value when they are recovered. Gold coins salvaged from shipwrecks retain almost all of their original appearance, but silver coins slowly corrode. Other costs of using bearer money include: The different advantages and disadvantages of coins and banknotes imply that there may be an ongoing role for both forms of bearer money, each being used where its advantages outweigh its disadvantages. Until recently, most banknotes were made from cotton paper with

7950-694: The notes for legal tender (usually gold or silver coin) when presented to the chief cashier of the originating bank. These commercial banknotes only traded at face value in the market served by the issuing bank. Commercial banknotes have primarily been replaced by national banknotes issued by central banks or monetary authorities . National banknotes are often, but not always, legal tender , meaning that courts of law are required to recognize them as satisfactory payment of money debts . Historically, banks sought to ensure that they could always pay customers in coins when they presented banknotes for payment. This practice of "backing" notes with something of substance

8056-602: The oldest user of lightweight promissory notes. In China during the Han dynasty , promissory notes appeared in 118 BC and were made of leather. Rome may have used a durable lightweight substance as promissory notes in 57 AD, which have been found in London . However, the first known banknotes were first developed in China during the Tang and Song dynasties, starting in the 7th century and were called " flying money ". Its roots were in merchant receipts of deposit during

8162-519: The only pre-Qing Chinese banknotes available on the market. A handful of notes from other denominations survive as they were issued only during the reign of the first emperor. These notes as well as printing plates for denominations that have no known surviving notes are held in Chinese museums. In 2016 art experts at Mossgreen's Auctions, a former auction house with a reputation for deceiving its bidders, were reported to have found an anachronistic 1 guàn Great Ming Treasure Note banknote hidden inside of

8268-541: The other hand, others suggest that the AD system has too much Christian connotation behind it and it is a form of cultural imperialism when an essentially European system of dating is forced upon other civilizations with their own long-used and equally legitimate dating systems. However, with globalization, the AD system is becoming more acceptable in Japan and the ROC. Modern history researchers do not care about era names except for supporting other arguments, such as figuring out

8374-582: The other hand, the era name Tianxian ( 天顯 ; lit. "heavenly intent") was originally proclaimed by the Emperor Taizu of Liao but its usage was continued by the Emperor Taizong of Liao upon assuming the throne. There were numerous era names that saw repeated use throughout Chinese history. For instance, the era name Taiping ( 太平 ; lit. "great peace") was used on at least ten occasions in China. In such cases, Chinese sources would often affix

8480-410: The paper currency of the Ming dynasty to suffer from inflation . In the year 1376 new legislation was introduced to remove worn out notes from circulation and replace them with new banknotes at the cost of a fee known as "Gongmofei" (工墨費, gōng mò fèi ) which was set at 30 wén per paper note. However, in the year 1380 a new law restricted the replacement of paper notes which were unreadable which caused

8586-492: The paper into the lines of the engraving to make suitable banknotes. Another difficulty in counterfeiting banknotes was the paper, as the type of paper used for banknotes was rather different from the paper commercially available at that time. Despite this, some forgers successfully forged notes by dealing with and consulting paper makers, in order to make a similar kind of paper themselves. Furthermore, watermarked paper has also been used since banknotes first appeared; it involved

8692-405: The people of the region. However, the government still needed masses of paper products for the exchange certificates and the state's new issuing of paper money. For the printing of paper money alone, the Song government established several government-run factories in the cities of Huizhou , Chengdu , Hangzhou , and Anqi. The workforce employed in these paper money factories was quite large; it

8798-436: The people to accept these older banknotes at reduced value. During this time the government stopped accepting worn out banknotes and in some cases did not accept banknotes which frustrated the people. During this period the government of the Ming dynasty issued more banknotes to the market in various forms such as military salaries (軍餉, jūn xiǎng ), while they themselves hardly accepted or replaced any existing paper money causing

8904-552: The people to lose trust in the Great Ming Treasure Note. In the year 1380, the Imperial Secretariat was abolished, and the Ministry of Revenue (戶部, hù bù ) was made responsible for the manufacture of the Great Ming Treasure Note paper notes, and the Ministry of Works (工部, gōng bù ) for that of the copper-alloy Hongwu Tongbao cash coins. In 1389 the Ming government released treasury notes with lower denominations "as

9010-411: The production and use of banknotes. By 1535, 1 guàn of paper money was valued at only 0.28th of a coin. A proposal was made in 1643 to reintroduce paper money in order to finance the expenditures caused by the difficult situation that the Ming dynasty faced at the time confronted by the rebel Li Zicheng . The Bank of England planted a small stand of mulberry trees as an homage to these banknotes in

9116-533: The purpose of identifying and numbering years in Imperial China. Era names originated as mottos or slogans chosen by the reigning monarch and usually reflected the political, economic and/or social landscapes at the time. For instance, the first era name proclaimed by the Emperor Wu of Han , Jianyuan ( 建元 ; lit. "establishing the origin"), was reflective of its status as the first era name. Similarly,

9222-445: The receipts as payable to the bearer of the document rather than the original depositor. This meant that the note could be used as currency based on the security of the goldsmith, not the account holder of the goldsmith-banker. The bankers also began issuing a greater value of notes than the total value of their physical reserves in the form of loans, on the assumption that they would not have to redeem all of their issued banknotes at

9328-461: The right of the holder of the note to collect the precious metal (usually gold or silver) deposited with a banker (via a currency account). In the 14th century, it was used in every part of Europe and in Italian city-state merchants colonies outside of Europe . For international payments, the more efficient and sophisticated bill of exchange ("lettera di cambio"), that is, a promissory note based on

9434-422: The same time period, which historians refer to as "the search for the inimitable banknote." During this time, bank notes also began to be double-sided and have more intricate patterns. The ease with which paper money can be created, by both legitimate authorities and counterfeiters, has led to a temptation in times of crisis such as war or revolution, or merely a spendthrift government, to produce paper money which

9540-461: The same time. This was a natural extension of debt-based issuance of split tally sticks used for centuries in places like St. Giles Fair, however, done in this way, it was able to directly expand the expansion of the supply of circulating money. As these receipts were increasingly used in the money circulation system, depositors began to ask for multiple receipts to be made out in smaller, fixed denominations for use as money. The receipts soon became

9646-436: The sewing of a thin wire frame into paper mould. Watermarks for notes were first used in 1697, by Rice Watkins, a Berkshire paper maker. Watermarks and special paper made it harder and more expensive to forge banknotes, since more complex and expensive paper-making machines were needed. In the early 19th century (the so-called Bank Restriction Period , 1797–1821), the dramatically increased demand for bank notes slowly forced

9752-501: The time. One of the bystandards who purchased one of these Great Ming Treasure Note notes was Luther Carrington Goodrich of the Yenching University who purchased two specimens for only a couple of coppers who later gave it to his friend Reverend Ballou who wrote about the account. Due to these circumstances it's relatively easy for modern collectors of banknotes and paper money to acquire the 1 guàn banknotes which are

9858-441: The use of era names today. While the era system is a more traditional system of dating that preserves Chinese and Japanese culture, it presents a problem for the more globalized Asian society and for everyday life. For example, even though within the nation people will know what era they are in, it is relatively meaningless for other nations. In addition, while the Republic of China (ROC) and Japan only recognize documents dated in

9964-485: The year, month, and day. Contrary to the paper money issued by the Song and Yuan dynasties, the Great Ming Treasure Note didn't have any geographical restrictions imposed upon them, nor did they have an expiration date . Paper notes issued by the Ming dynasty noted that they would circulate forever. The Great Ming Treasure Note was not backed by any forms of hard currency or reserves and the government never set any limitations on their production. These circumstances led to

10070-441: Was based on precious metals . Banknotes were seen by some as an I.O.U. or promissory note : a promise to pay someone in precious metal on presentation (see representative money ). But they were readily accepted—for convenience and security—in London , for example, from the late 1600s onwards. With the removal of precious metals from the monetary system, banknotes evolved into pure fiat money . The first banknote-type instrument

10176-526: Was carried out by Sir William Phips as the governor of the Province of Massachusetts Bay starting on December 20, 1690, to help fund the war effort against France . The other Thirteen Colonies followed in Massachusetts' wake and began issuing bills of credit , an early form of paper currency distinct from banknotes, to fund military expenditures and for use as a common medium of exchange . By

10282-646: Was entitled to issue its own Luxembourgish franc notes until the introduction of the Euro in 1999. As well as commercial issuers, other organizations may have note-issuing powers; for example, until 2002, the Singapore dollar was issued by the Board of Commissioners of Currency, Singapore , a government agency that was later taken over by the Monetary Authority of Singapore . As with any printing, there

10388-423: Was extended to Hong Kong in 1997 and Macau in 1999 (de facto extended in 1966) through Annex III of Hong Kong Basic Law and Macau Basic Law , thus eliminating the ROC calendar in these areas. The concept of era name also saw its adoption by neighboring Korea and Vietnam since the middle of the 6th century CE, and by Japan since the middle of the 7th century CE. Notably, Japan still officially retains

10494-495: Was invented by Portals, part of the De La Rue group in the UK. Other related methods include watermarking to reduce the number of corner folds by strengthening this part of the note. Varnishing and coatings reduce the accumulation of dirt on the note for longer durability in circulation. Another security feature is based on windows in the paper, which are covered by holographic foils to make it very hard to copy. Such technology

10600-902: Was not supported by precious metal or other goods; this often led to hyperinflation and a loss of faith in the value of paper money, e.g. the Continental Currency produced by the Continental Congress during the American Revolution , the Assignats produced during the French Revolution , the paper currency produced by the Confederate States of America and the individual states of the Confederate States of America ,

10706-404: Was originally based upon the value of the metal unless they were token issues or had been debased. Banknotes were originally a claim for the coins held by the bank, but due to the ease with which they could be transferred and the confidence that people had in the capacity of the bank to settle the notes in coin if presented, they became a popular means of exchange in their own right. They now make up

10812-425: Was recorded in 1175 that the factory at Hangzhou alone employed more than a thousand workers a day. However, the government issues of paper money were not yet nationwide standards of currency at that point; issues of banknotes were limited to regional areas of the empire, and were valid for use only in a designated and temporary limit of three years. Between 1265 and 1274, the late southern Song government introduced

10918-523: Was the Emperor Wu of Han in 140 BCE, and this system remained the official method of year identification and numbering until the establishment of the Republic of China in 1912 CE, when the era name system was superseded by the Republic of China calendar . Other polities in the Sinosphere — Korea , Vietnam and Japan —also adopted the concept of era name as a result of Chinese politico-cultural influence. Chinese era names were titles adopted for

11024-413: Was the main reason why earlier forms of paper money were deemed reliable. As these regions were completely dependent on paper money inflation hit them more severely as their notes could not be converted into a currency based on any intrinsic value, for this reason the Mongols allowed their subjects to continue using copper-alloy cash coins and issued new ones every now and then. During the last few decades of

11130-496: Was used alongside them. The central government soon observed the economic advantages of printing paper money, issuing a monopoly for the issue of these certificates of deposit to several deposit shops. By the early 12th century, the amount of banknotes issued in a single year amounted to an annual rate of 26 million strings of cash coins. By the 1120s, the central government started to produce its own state-issued paper money (using woodblock printing ). Even before this point,

11236-458: Was used in China in the 7th century, during the Tang dynasty (618–907). Merchants would issue what are today called promissory notes in the form of receipts of deposit to wholesalers to avoid using the heavy bulk of copper coinage in large commercial transactions. Before these notes, circular coins with a rectangular hole in the middle were used. Multiple coins could be strung together on

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