History of the Five Dynasties and Ten Kingdoms

Chapter 520: Financial War on Liao

The seventh year of Tianfu (942):
Starting in the spring of that year, the country suffered from a severe drought and a serious locust plague. The plague lasted for more than a year. "Locusts harmed the fields in all states of the country, eating all the grass and leaves," and the crops were completely destroyed.

Drought and locusts followed one after another, causing a large number of people to flee and starve to death everywhere. In the area west of Tongguan, the death rate of starving people was as high as an astonishing 80%! (The starvation was particularly severe in Guanxi, with to people dying)

In June of this year, Shi Jingtang passed away. It was also because of this round of disasters that "the Jin Dynasty began to decline."

4. Economic Reform

After entering Luoyang, Shi Jingtang quickly and concisely liquidated the "Li Congke Group", killing only the "three major evil men", among whom was Li Congke's money bag - Zhang Yanlang.

But soon, Shi Jingtang regretted killing Zhang Yanlang, because there were very few people who were proficient in accounting systems, and in such a huge court, he could not find a suitable candidate to be the "Judge of the Three Courts".

Finally, after a month of searching, the Imperial Envoy Zhou Gui was finally given the important task.

Sang Weihan set a tone for Shi Jingtang, which was to coax the Khitan and promote production. The Central Plains dynasty has an amazing self-healing ability. As long as the external environment is relatively stable and production and operation are carried out in an orderly manner, it will definitely overcome difficulties and achieve revival.

Therefore, Shi Jingtang's series of good policies were all carried out around this core idea. After a period of recovery, the level of social and economic development has caught up with the "Mingzong's prosperous era".

Under such circumstances, Shi Jingtang lifted the "agricultural ban", allowing private citizens to make agricultural tools privately.

In the feudal period, there was a saying that "every inch of iron can be used as a weapon", and all kinds of ironware had to be reported to the government for record to prevent people from using farm tools to make weapons and armor. In certain historical periods, the supervision of private ironware reached an outrageous level, such as five households sharing one kitchen knife.

The government's courage to open up agricultural tools and allow the people to freely make iron tools demonstrated its full confidence and the vigorous economic development.

In a rapidly developing economy, strict control over means of production will seriously hinder economic development.

During the Tianfu period, as Shi Jingtang continued to implement policies such as tax reduction, tax exemption, release of labor, and encouragement of wasteland reclamation, there was a serious shortage of means of production. Therefore, Shi Jingtang kept pace with the times, lifted the ban on agricultural tools, and promoted economic recovery and rapid development.

Lifting the agricultural ban was not the craziest thing. Shi Jingtang's craziest and most criticized move was lifting the "money ban", that is, allowing private currency to be minted by the people.

The government allows private individuals to print counterfeit money... This is the surface, and it is also the most misunderstood aspect.

The "money ban" was lifted after more than half a year, and private coinage was banned again. This was also used as strong evidence by later scholars to criticize Shi Jingtang for not understanding finance and messing around.

It's not that simple. We are most likely wronging him.

In the previous article, when Gao Pian was trying to destroy the economy of Xichuan, he mentioned "short money", which then led to some financial common sense, such as "money shortage". With the vigorous development of the economy and the rapid operation of the financial market, "money shortage" is an inevitable result, and "short money" is equivalent to the court using government credit as collateral to issue "shadow currency", creating virtual currency out of thin air.

With the economic recovery during the Tianfu years, the problem of "money shortage" became more and more serious in the third year of Tianfu (938). At the same time, the economic exploitation of the Later Jin by the Khitan also exacerbated this financial dilemma. The Khitan set up the "Huituwu" in the Central Plains to manage the trade between the Khitan and the Central Plains, which is equivalent to the overseas offices of the Ministry of Foreign Trade today. At that time, foreign trade was mainly led by the government, mainly in border areas, setting up special exchanges such as "Quechang" to be responsible for trade with foreign ethnic groups.

Foreign delegations usually drove cattle, sheep, and camels, carrying foreign trade goods, to trade with Central Plains merchants in such exchanges, especially bulk commodities at the national level. In this way, the central government could stabilize prices, protect domestic economic order, and control the loss of strategic materials, killing two birds with one stone.

This situation changed when the Khitan supported Shi Jingtang to establish the Later Jin Dynasty. The dominant power was lost from the Central Plains dynasty and was instead dominated by the Khitans.

The Khitan set up the Huitu Office in the Central Plains, which was an economic aggression against the Central Plains Dynasty, seriously affecting the Central Plains Dynasty's foreign exchange control, thus affecting the financial order of the Central Plains, making the Central Plains an economic semi-colony of the Khitan.

The official in charge was called "Huitushi". At the beginning of the establishment of the Later Jin Dynasty, the Khitan appointed Qiao Rong as the Huitushi. Qiao Rong was originally a general of Heyang. He surrendered to the Khitan with Zhao Dejun and Zhao Yanshou. The goods of the Min Kingdom mentioned above were seized by the Later Jin Dynasty. The Khitan interfered unreasonably and ordered Shi Jingtang to release the envoys of the Min Kingdom. Qiao Rong was responsible for transporting the seized goods to the Khitan.

In fact, the "Huitushi" was probably equivalent to the "comprador" in the late Qing Dynasty. On the surface, they were trade officials, but in reality they were the vanguards of economic aggression. Because they were not maintaining a fair trade order, but the interests of the Khitans, and when necessary, they would not even hesitate to damage the sovereignty of the Central Plains dynasty.

The establishment of Huituwu allowed the Khitan to seize the wealth of the Central Plains without any hindrance, while at the same time dumping a large amount of inferior goods into the Central Plains, buying low and selling high, and forcing purchases and sales.

Currency, exchange rate, etc. are the financial high frontiers of a country and must not be controlled by external forces.

Under the Khitan's greedy bloodsucking, the Central Plains dynasty suffered from a severe shortage of currency and copper for circulation.

In response to this, Shi Jingtang came up with two solutions.

The first is to "ban copper ware".

It was forbidden for the people to melt copper coins and cast copperware. This could slightly alleviate the problem of "money shortage". But this was only a temporary solution, not a fundamental solution, because the fundamental cause of the "money shortage" was the rapid economic development and the economic aggression of the Khitan, not the people casting copper coins into copperware.

It's just scratching the surface and the results are not very good.

So, the second move was to lift the “money ban”.

In November of the third year of the Tianfu reign (938), an imperial decree was issued to allow the people to privately mint copper coins with the inscription "Tianfu Yuanbao". As long as the people had copper, they could mint their own copper coins, and as long as they had the inscription "Tianfu Yuanbao", they could circulate them at the same value as the coins issued by the imperial court.

In December, another decree was issued, ordering all the people in the world, whether private or government, to encourage all copper objects, such as copper statues in temples, to be cast into copper coins.

Half a year later (July 939), an imperial decree was issued to stop private coinage. The reason was that there were always people who wanted to harm the emperor, and that the people always made "counterfeit coins", mixed lead, tin and other sundries into the copper coins, and the copper coins they cast were very thin, so it was banned.

(End of this chapter)