Yu's ANALYSIS OF CURRENCY 891
of coinage, but to the reduction of agricultural production and resulting famine
and deprivation because the lure of profit from private minting would induce
peasants to abandon their fields in favor of a more lucrative profession. Private
minting would also exacerbate existing disparities of wealth, especially because
the wealthy were the only ones who had sufficient capital to undertake private
minting.
Liu Chih: Copper Restriction and Copper Price. Liu also felt that the supply
of copper cash was too small and the price of raw copper too high, but he did
not attribute the cause to a deficiency in copper mining, but the excessive use
of copper for the manufacture of utensils, weapons, and other products. He also
complained that even though more cash was being minted than ever before, the
value of individual coins was too high because they weighed too much, and the
raw copper cost more than the heavy copper coins were worth. Counterfeiters
had been melting the heavy coins down to mint lighter ones even though this
was prohibited, and enforcement was too lax to obstruct it.
Since iron was better than copper for making weapons, and lacquerware bet-
ter for making utensi Is, he advised the emperor to prohibit the use of copper for
those purposes to liberate more copper for use as cash, and drive the price of
copper down. Once the price of copper was reduced, it would become unprof-
itable for counterfeiters to melt down heavy coins to make lighter ones, and the
coinage could be stabilized once again. Liu Chih recognized fully the relation-
ship between the supply of copper, whether in are or copper utensils, and the
value of copper cash, but it did not occur to him to economize on the cost of
money either by minting multiple denomination coins or printing paper money.
In any case, his ideas were opposed by all the chief officials of the T'ang court,
and the emperor decided only to order the district magistrates to eliminate all
debased cash.^24
Tu Yu's Summary afWisdom on Currency. Yu also cited Tu Yu's essay on cash
in the Tung-tien that surveyed developments through 756 A.D. Tu broke no the-
oretical ground on monetary policy, but he reinforced many of the ideas that Yu
had covered in his survey of Chinese monetary history. He reinforced Liu Chih's
lessons about the valuable function of money to regulate the value and distrib-
ution of goods, and the duty of the enlightened ruler to intervene in the mar-
ketplace to stabilize prices, He confirmed the beliefs of earlier statesmen and
commentators that the establishment of currency or money was "profound and
far-reaching" in its effects because it allowed the calculation of the value of the
products of the world in terms of "number." Since gold and silver were used for
utensils or jewelry and grain and cloth were too difficult to transport or subdi-
vide, cash was the only suitable medium of exchange "because it flows and does
not reside I in one place I just like a stream of water." It can be moved from one
place to another, divided in parts and used for subdivisions of weight and length.
Coinage was invented by a sage, the Grand Duke (T'ai-kung) of the Chou
dynasty. It was later withdrawn from circulation but reinstated in the feudal state
of Ch'i. Kuan-chung praised currency because it neither added nor detracted