Empire of China        Southern Song Dynasty Issues, Ca. 1127-1279AD
   

During the Southern Song period its first capital was established at Hangzou which grew to over 1 million people by the beginning of the 1200's. Foreign trade expanded and paper, printed books and paper money continued to find wide use. Prior to the use of paper money copper coins were strung together on a string as the coin of the realm. These proved cumbersome for large transactions.

There was also a significant expansion of large estates and many of the owners evaded payment of their taxes. As a result the government experienced a drop in state revenues, budget deficits and high inflation. The cash reserve backing of paper money decreased over time and resulted in inflation, adding to the problem of minting bronze coins with less and less copper.

Emperor Gao Zong was very concerned called in Wang An-shi 王安石 a renowned economist and statesman for his advise. Wang became deeply involved in the monetary policy of the government.  He initiated  a program of agricultural loans which helped peasant farmers avoid scalping by local moneylenders. Then he started a system of fixed commodity pricing which reduced the power of the agricultural monopolies. He believed that with the government in control of minting metal coins or printing paper money that most economic problems could be solved.

Wang also recommended the expansion in the use of paper money and a unified tax system which contributed significantly to the development of a nationwide market economy. He believed in a social economy and felt a responsibility to the citizenry, which some historians have called a welfare state.

This period ended with its defeat to Kublai Khan in 1279.

We know of no examples of Southern Song banknotes to have survived.

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