Yu's ANALYSIS OF CURRENCY 879CURRENCY IN CHINAThe Sages Sanction CurrencyYu must have been overjoyed to discover that the Great Plan (hung~fan) in the
Book of History proposed to King Wu by the venerable Kija (Ch'i-tzu in Chi-
nese), a Korean culture hero as well as a Chinese sage, had proclaimed that the
terms shih and hua (sik and hwa in Korean), usually translated into English as
food and money, were fundamental to the economy of a sage ruler. Hua was
defined as means of exchange, "things like gold, knives, cash, and cowry shells
that were used to distribute profit and circulate goods, both of which were the
basis for providing livelihood to the people." According to the "Treatise on Food
and Money" of the History of the Han Dynasty (Han-shu), cowry shells were
purportedly the main form of currency until the Grand Duke (T'ai-kung) Lli
Shang. an acquaintance of King Wen, the father of the founder of the Chou empire
(B.C. I 122), minted the first form of metallic currency called the IlUan-fa to replace
cowry shells, and established an agency (Chou-fu) to handle the administration
of cash." Only one type of currency was presumably used until King Ching (r.
B.C. 544-520) presumably minted a coin called large cash (fa-ch 'uan). proba-
bly a larger coin to circulate along with the earlier, smaller cash.^1
The Rites of Chou also claimed that the Chou state had set up several agen-
cies for regulating markets and currency. The Wai-fu or Outer Agency acted as
the treasury for currency outside the capital, handled the receipt of taxes and
expenditure of funds in currency, and paid for the expenses of the officials, rites,
entertainment of foreign guests or envoys, funerals, field training for the army,
and imperial progresses. The Ch'uan-fu (Currency Agency) took charge of col-
lecting market taxes in cash and buying unsold goods that had been accumu-
lating on the market, functioning presumably to stabilize prizes by intervening
in purchase and supply operations. Yu provided additional reinforcement from
post-classical times by citing his favorite Ming scholar, Ch'iu Chlin, who
praised cash because it was easier to move around than large and heavy items
and stimulated the circulation of goods, and also because small coins allowed
the determination of minute differences in prices.
The Ssu-shih (Market Agency) of the Chou era also regulated the boundaries
and shop sites for the permanent market, decided which shops would market which
goods, set fair prices for goods, prohibited the circulation of luxury items, and
ensured the circulation of both goods and money. It also intervened in the mar-
ket to mitigate the effects of economic disasters. During a poor harvest or famine
it would aid the merchants and the consumers by suspending market taxes on
shops and counteracting the high prices offood and goods by minting more cash.^4
The thrust ofYu's message here was that metallic cash had been invented at
the beginning of the first millennium B.C. in China and was successfully sup-
ported by the state's use of cash to collect taxes and pay salaries and other
expenses. The rulers also took responsibility for regulating the organization of