INFLATION AND DEFLATION 945household cash tax had at least been used successfully during the early Tang,
he must have assumed that this precedent would carry weight with yongjo. Of
course, since no version of the household tax, whether in cloth or cash, was
adopted until the Taewongun's regime in 1870, primarily because it was opposed
not only by yangban, but by all those who had gained exemption from the mil-
itary support tax over the years, Yi's argument by itself was not likely to gain
much support for the retention of cash.^24
Second Minister of Rites YO P'iryong agreed that most people thought cash
should be abolished, but he and Yun Pin, third inspector of the Office of Inspec-
tor-General, felt that if cash were abolished now in the midst of a succession of
crop failures, there would be no resources left for providing relief. YOngjo revealed
at this juncture that despite the prolonged debate over the utility of cash and the
history of its use since the seventeenth century, he still did not understand its
function in the economy. He told Yun that he just could not understand how any-
thing besides food could be used to provide relief to starving peasanh since nei-
ther gold nor pearls, let alone cash, could be eaten or worn. Yun then had to
instruct him that wealthy people with grain reserves would be willing to ship
their grain to the areas of shortage and sell it for cash if the state provided cash
to the peasants for that purpose.
Not everyone at the conference, however, was unwilling to discuss other alter-
native media of exchange, particularly paper money. Cho Chinhiii, the junior
sixth counselor in the Office of Special Counselors, did not recommend paper
money as a suitable alternative for cash, but at least he blamed its failure in China
on timing rather than any intrinsic weakness in paper money itself. Since the
Han dynasty various dynastic governments in China had in fact made changes
in the type of currency used from time to time, but unfortunately no matter what
the type, it exacerbated the disparity of wealth between the rich and poor. The
Chinese government (probably in Sung times) had attempted to remedy this by
abolishing copper cash and replacing it with paper money, but unfortunately it
did so too late, after the (Sung) dynasty had already entered into irreversible
decline. Since Yongjo 's recent attempt to stop using cash for taxes and govern-
ment expenditures had failed, he concluded that there was no other alternative
to cash, but he had refrained from making a strong argument for increasing the
money supply earlier out of respect for Yongjo 's feelings.
Pak Taehang, by contrast, agreed that a suitable substitute had to be found
for cash, and he, Third Royal Secretary Cho Chibin, and Chief State Councilor
Yi K wangjwa, supported the adoption of paper money. Pakjustified paper money
by arguing that the primary problem was not the type of currency but the rela-
tive exchange value between currency and commodities. Cash worked best if it
were "light." or less in value than the price of commodities on the market, but
because at the present time cash was "heavy" or more expensive than com-
modities, wealthy lenders were loaning cash to the peasants and demanding repay-
ment ill grain, collecting twenty or thirty times their capital in the transaction.
The famous Han Yii of the Tang dynasty had in fact been able to discern that