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Marco Polo Describes Chinese Fiat Currency in the 13th century in his book "The Travels" (China was the first country to use fiat)

Marco Polo Describes Chinese Fiat Currency in the 13th century in his book "The Travels" (China was the first country to use fiat)

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It is in this city of Khan-balik that the Great Khan has his mint; and it is so organized that you might well say that he has mastered the art of alchemy. I will demonstrate this to you here and now. You must know that he has money made for him by the following process, out of the bark of trees-to be precise, from mulberry trees (the same whose leaves furnish food for silkworms). The fine bast between the bark and the wood of the tree is stripped off. Then it is crumbled and pounded and flattened out with the aid of glue into sheets like sheets of cotton paper, which are all black. When made, they are cut up into rectangles of various sizes, longer than they are broad .... And all these papers are sealed with the seal of the Great Khan.

The procedure of issue is as formal and as authoritative as if they were made of pure gold or silver. On each piece of money several specially appointed officials write other names, each setting his own stamp. When it is completed in due form, the chief of the officials deputed by the Khan dips in cinnabar the seal or bull assigned to him and stamps it on the top of the piece of money so that the shape of the seal in vermilion remains impressed upon it. And then the money is authentic. And if anyone were to forge it, he would suffer the extreme penalty. Of this money the Khan has such a quantity made that with it he could buy all the treasure in the world.

With this currency he orders all payments to be made throughout every province and kingdom and region of his empire. And no one dares refuse it on pain of losing his life. And I assure you that all the peoples and populations who are subject to his rule are perfectly willing to accept these pa-pers in payment, since wherever they go they pay in the same currency, whether for goods or for pearls or precious stones or gold or silver. With these pieces of paper they can buy anything and pay for anything.

Several times a year parties of traders arrive with pearls and precious stones and gold and silver and other valuables, such as cloth of gold and silk, and surrender them all to the Great Khan. The Khan then summons twelve experts, who are chosen for the task and have special knowledge of it, and bids them examine the wares that the traders have brought and pay for them what they judge to be their true value.

The twelve experts duly examine the wares and pay the value in the paper currency of which I have spoken. The traders accept it willingly, because they can spend it afterwards on the various goods they buy throughout the Great Khan's dominions .... Let me tell you further that several times a year a fiat goes forth through the towns that all those who have gems and pearls and gold and silver must bring them to the Great Khan's mint. This they do, and in such abundance that it is past all reckoning; and they are all paid in paper money.

By this means the Great Khan acquires all the gold and silver and pearls and precious stones of all his territories. And all the Khan's armies are paid with this sort of money. I have now told you how it comes about that the Great Khan must have, as indeed he has, more treasure than anyone else in the world. I may go further and affirm that all the world's great potentates put together have not such riches as belong to the Great Khan alone.

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