Chapter Ninety-Seven: The Reign of Ill-Gotten Wealth

In the fourth year of Emperor Gaozu’s reign during the Wude era, the five-zhū coin was abolished and replaced by the Kaiyuan Tongbao coin, measuring eight fen in diameter and weighing two zhū and four liǎng. Ten coins equaled one tael in weight, and one thousand coins weighed six jin and four liǎng. Mints were maintained in Luò, Bìng, Yōu, and Yì prefectures. Qin Wang and Qi Wang were each granted three furnaces for coin casting, while Right Deputy Minister Pei Ji was allotted one. Anyone caught counterfeiting faced death, and their family’s property was confiscated. On the fifth day of the fifth month, a mint was established in Guì Prefecture. It was observed that the new coins struck a balance in weight and size, facilitating convenience in trade near and far. This measure temporarily restored order to the chaotic currency circulation, but soon counterfeit coinage began to rise again, and the widespread use of debased money became rampant.

During the reign of Emperor Gaozong, attempts to curb private minting by issuing new coins failed to resolve the problem; instead, it worsened. In the first year of the Qiánfēng era, the dynasty introduced new coins inscribed “Qiánfēng Quánbǎo.” These were to be stored by officials and no further minting was required. Nonetheless, mints were set up nationwide alongside the continued casting of the Kaiyuan Tongbao coins. Soon after, private counterfeiting surged, and the coinage quality deteriorated once more.

Under Wu Zetian, the problem of illicit coin minting intensified. Decrees were issued to hang coin samples in markets, instructing the populace to use coins matching these standards. Yet, difficulties in trade persisted, causing delays and stagnation. Subsequently, edicts allowed coins not made of iron, tin, copper alloys, or pierced through the center to circulate. Only coins made of refined copper, free of impurities, and of proper thickness and size were permitted; all others were prohibited. Nevertheless, counterfeit coins proliferated like swarms of bees, especially in the south of the Yangtze and Huai regions, where counterfeiters hid in isolated lakes, vast seas, and deep mountains—places perilous and rarely visited where local authorities found it impossible to enforce bans. By the Shenlong and Xiantian periods, even the two capitals were overwhelmed with debased coins.

In the fifth year of Emperor Xuanzong’s Kaiyuan era, strict measures were enacted to suppress counterfeit currency. Song Jing, a chancellor, petitioned to ban all inferior coins. In the first month of the following year, the circulation of the two zhū four liǎng coins was enforced, and unfit coins were confiscated, melted down, and recast. Consequently, at the beginning of the Tianbao era, coin use improved somewhat in the capitals, and rice and millet became more affordable. However, after several years, the debased coinage problem reemerged. Local governments forbade paying premiums for good coins, allowing both good and bad coins to circulate interchangeably. Wealthy merchants and unscrupulous individuals began to collect good coins and secretly smuggle them to the south of the Yangtze and Huai regions, where each coin was exchanged at five wen for counterfeit ones, disguised as official currency and brought into the capital for private use.

Reviewing the entire Tang dynasty, the problem of private minting persisted for a prolonged period, deeply affecting currency circulation. Several reasons contributed to the prevalence of private coin minting:

First, the severity of private minting in the early Tang period was closely tied to the private ownership of copper. According to the Tang legal code, private extraction of copper and iron was permitted, with officials collecting taxes on the yield. If the copper was refined, officials were responsible for purchasing it in the market. This meant that while the government taxed privately mined copper, it did not compel miners to sell it exclusively to the state, allowing free trade. Consequently, the majority of copper mined annually was controlled by private hands, fostering rampant private minting and the proliferation of inferior coins. Despite repeated prohibitions on private minting and debased coins, enforcement was lax, and in the 22nd year of the Kaiyuan era, Zhang Jiuling even proposed not banning coin minting altogether.

Second, the gradually increasing significance of coinage made private minting profitable. During the wars at the end of the Sui dynasty, cloth and silk served as the primary mediums of exchange. With the establishment of the Tang dynasty, the monetary system was reestablished, though many transactions still involved substantial use of cloth and silk. As productivity recovered and the commodity economy flourished, the demand for metal coinage steadily increased. By Emperor Gaozong and Empress Wu Zetian’s reigns, commercial activity was vibrant nationwide. The further development of industry and commerce sharply increased the demand for copper coins, to the extent that market transactions required actual coinage. Meanwhile, the use of barter goods declined as metal currency became lighter and more convenient. The enhanced status of coinage made private minting lucrative, leading to its widespread occurrence.

Third, the growing tension between currency demand and supply was a critical factor in the rise of private minting. As the commodity economy expanded and monetary taxation increased, the demand for coinage surged. However, coin production was limited, exacerbating the supply-demand imbalance.

The high costs of coin production in the Tang dynasty also contributed significantly to the proliferation of private minting. Production costs comprised raw materials and labor expenses. Although there were ninety-six copper smelting sites, during Emperor Gaozong’s Linde era, forty-eight were shut down in Shǎn Prefecture, and during Emperor Xuanzong's reign, another twenty-seven were closed. The reduction in smelting facilities led to a sharp decline in copper output, forcing the government to increase copper purchases, thereby raising minting costs.

Furthermore, official records state that craftsmen were required to work twenty days annually, with two additional days in leap years. Those required to serve longer than fifteen days were exempt from other duties, and those serving over thirty days were excused from taxes and labor duties, increasing production expenses for state-run workshops. For example, during the Tianbao era, each furnace employed about thirty craftsmen, working all months except June and July, with each craftsman serving roughly ten months annually—far exceeding the twenty-day service requirement. The government had to pay wages for the extra days, with records indicating that craftsmen often worked outside the capital. These factors drove labor costs up steadily.

In summary, the rising costs of raw materials and labor pushed overall minting expenses higher. When these costs exceeded the revenue from coin production, minting output naturally declined, limiting supply. The resulting scarcity of official coinage coupled with growing currency demand sharply intensified the conflict, allowing private minting to flourish and infiltrate the market.

The issue of private minting was a persistent headache for the Tang court and had profoundly negative effects on the development of the commodity economy. It manifested in two principal ways: first, the influx of counterfeit coins undermined currency value, driving good coins out of circulation through the so-called “bad money drives out good” phenomenon. In the first month of the Shangyuan year under Emperor Suzong, an edict acknowledged the widespread private minting outside official mints, which absorbed small coins and created systemic corruption. Despite many convictions, the ban was not fully enforced.

Second, private minting flooded the market with excessive currency, devaluing money and driving up prices. Records from the Old Book of Tang note that in the fourth year of the Yifeng era, officials ordered the Eastern Capital to release coarse rice and millet for sale in the market, accepting debased coins at one hundred wen per dou. These coins were to be melted down and recast by the Ministry of Revenue. Heavier coins matching official weights were allowed to circulate freely. As rice and millet prices rose, some argued the increase was due to the growing number of iron coins, which caused money to depreciate and goods to become expensive. Consequently, the minting of coins by the Ministry of Revenue was temporarily suspended before being resumed.

The circulation of counterfeit and debased coins disrupted the monetary system and severely damaged political and economic order. The Tang dynasty implemented various policies to address private minting, but results were mixed.

These measures included:

1. Redeeming bad coins—an economically sound approach combining collection and prohibition to reduce inferior coins in circulation. The government offered silk, rice, and official coins in exchange for bad coins.

2. Recasting coins and adjusting denominations to units of ten and fifty to elevate the value of official currency and suppress counterfeit money.

3. Increasing official coin production. After Emperor Gaozong’s Qianyuan era, official minting expanded gradually. In the fourth year of Yifeng, some believed the rising prices of rice and millet were caused by excessive coin minting. The minting was temporarily halted before returning to normal.

4. Allowing the circulation of some bad coins. Despite strict laws, the government could not satisfy the currency demand in the market, resulting in only nominal enforcement and a degree of tolerance toward private minting.

5. Enforcing harsh penalties to suppress counterfeit coins. Under Emperor Suzong, offenders faced death, and their families were punished. Zheng Shuqing, the mayor of Jingzhao, reportedly executed over 800 counterfeiters in a few months.

6. Displaying official coin samples in markets to guide the public.

7. Instituting copper restrictions, banning the private sale of copper and the casting of copper objects to secure minting materials and prevent private minting. Despite multiple decrees, these restrictions had limited effect.

Regarding the private minting activities of the Zhenqian money shop, although they engaged in illicit coin casting, their gold and silver coins were solid, full-weight currencies. They were neither underweight nor adulterated, and were crafted with exquisite workmanship and effective anti-counterfeiting features. The phenomenon of bad coins driving out good did not apply here because good coins had inherent value, and the public favored Zhenqian’s gold and silver coins.

Researcher Peng Le studied Zhenqian’s gold and silver coins and found their metal purity around ninety percent. Accounting for processing and labor costs, a single silver coin’s value exceeded 1,050 wen, offering excellent value.

Many people preferred to exchange their gold and silver at Zhenqian’s shop, as their coins preserved value, were easy to carry, and convenient for transactions. For a time, demand for the shop’s gold and silver coins exceeded supply. Had it not been for concerns that excessive issuance would attract government scrutiny, Zhenqian would have introduced more coins into the market.

... A brief aside ...

Many historical novels portray protagonists throwing around large sums of money casually, as if tossing a few strings of coins were trivial. Setting aside whether this is plausible, one wen in ancient times roughly equates to three to four times the value of later currency, without even considering inflation, which would raise the relative value further.

To clarify, ancient coins were primarily metal items, the most common being the five-zhū coin. The zhū was a unit of weight equal to one twenty-fourth of 50 grams. Tang dynasty’s Kaiyuan Tongbao coins followed the Western Han’s five-zhū standard. Ten coins weighed one tael; one coin weighed one qián, and one thousand coins weighed six jin and four liǎng.

A modern one-yuan coin issued in 2000 weighs slightly over six grams. It feels light in the pocket, but imagine carrying one hundred such coins — anyone curious could try this experiment and readily understand the sensation. As a coin collector, the author often has several hundred coins in a plastic bucket, worth around one to two hundred yuan, heavy to hold, giving a tangible sense of weight.

A single string of coins (one guàn) equals five or six hundred coins, so carrying that many coins is quite an ordeal. Bringing several strings of copper coins when going out would be not only cumbersome but impractical.

Thus, those time-traveling protagonists who casually throw strings of coins around seem to be born strongmen, as if money were stolen and could be spent recklessly, which is truly baffling.