CONFUCIAN STATECRAFT 57Sejong's Attempt to Restore Paper Money and Cash
Sejong may have been depressed by his experience with copper cash, but he did
not lose his determination to succeed with some form of currency, so in 1445
he tried to restore the use of paper money for the third time since 1402, and he
continued to ban use of cloth for currency. He valued each new bill at fifty mun
of cash or one mal of grain (in which one mun of cash was worth 1/5 toe), and
he also legalized the bills previously printed in 1426 at a value of forty mun.
Although he banned the use of cotton cloth, he decided to allow people a choice
between paper money and copper cash for paying taxes or buying goods from
state warehouses. He also ordered government agencies to use paper money to
pay official salaries and bureau expenses for fuel, vegetables, lighting oil, and
clerical costs. To protect the money supply, he specified that any merchants guilty
of exporting cash or precious jewels abroad to buy foreign goods would have
their property confiscated, but later in 1447 he eased these Draconian regula-
tions by lifting the prohibition against melting copper down to make utensils.
He hoped to win popular support for paper bills and copper cash.
Although some officials felt that cash was more likely to succeed than paper
money, it was cash that quickly dropped out of use. Paper money also suffered
because officials, contrary to royal orders, did little to absorb paper money from
the public by selling government goods, and demanded cash or even illegal cloth
for taxes. By 1450 it was obvious that cloth was being used more than paper
money for private transactions, and King Munjong commented that it might be
a good idea to authorize capital bureaus to pay part of their expenses in cloth
so that paper money might rise in value.^84
The Decline of Paper and Copper Cash
When King Sejo came to the throne in 1455, he reversed Sejong's policy of allow-
ing the public to choose the medium of payment by insisting on paper money
and prohibiting cloth or other goods for official payments or private trade. Coer-
cion, however, only succeeded in making people more wary of paper money,
and in 1456 Sejo, recognizing that the policy was a failure, rescinded his order
and returned to Sejong's policy of allowing transactions in any medium - ramie,
cotton cloth, or paper bills. The exclusive use of paper money was then limited
by law only to taxes on artisans, merchants, shops, and peddlers.8^5
Later King Songjong in 1474 ordered the use of cloth for official slave trib-
ute as well. Because the quantity and value of paper money had both declined
severely after 1445, the taxation section of the Law Code (Kyongguk taejon)
published in 1460 declared that the official value of one bill of paper money
was to be one toe of rice, I/J[) the value (one mal) previously set by King Sejong.
The code also declared that paper money was now the lowest grade of currency
in circulation, lower than 5-sae (ramie?) cloth and 3-sae cotton cloth.