968 FINANCIAL REFORM AND THE ECONOMY
of the First Emperor of the Ch' in Dynasty would not have been able to stop them
from saving their money, because it was the decision of the rich merchants them-
selves that determined whether they saved their cash or spent it."
Yu blamed the problem on the Korean tendency to honor appearances over
reality. Because scholarship was honored and commercial and industrial activ-
ity despised, even the profiteers in Korea made a show of disdaining commerce
and avoided engaging in any profitable activity in public view while piling up
their cash savings and secretly lending it at high interest or advancing it to oth-
ers for tax payments in advance at a premium (pangnap). In other words, pub-
lic embarrassment over profiteering and commercial activity had restricted the
propensity to spend cash for consumption, and small merchants and peddlers
could not earn enough cash from their sales of handicraft manufacture to accu-
mulate capital to expand their commercial activity. Because the number of petty
merchants was too small, there were not enough of them to bring them together
in cities, and because the rich merchants also had no incentive to exchange their
cash for goods, it was inevitable that currency would stagnate.
The only solution to the problem, therefore, was not to tinker with cash pol-
icy, but to eliminate the sense of shame that people had toward commerce and
industry, and to spend as much money as it would take to lure merchants to under-
take the large-scale joint ventures in establishing commercial shops. If that were
done, the country would have a hundred times more commerce than it presently
did, cash would end up circulating everywhere, even in the most remote rural
villages, and it would no longer be locked up in private treasuries.
A third key to ensuring the permanent adoption of cash was for the govern-
ment to adopt a quota for the annual minting of cash, designate official smelters,
purchase copper and tin, and prohibit the manufacture or circulation of debased
coins. If the government set the annual cash quota so that the volume of cash in
circulation would always be equivalent to the value of commodities for sale on
the market, long-term circulation of cash would be guaranteed.
Unfortunately, the problem with current cash policy was that "we only know
how to mint cash, but we don't know anything about the right way [to mint and
use 1 cash." Because no one knew about the right metals for minting, or the right
weights or dimensions for producing cash of high quality, the types of cash that
circulated throughout the country varied widely in size, weight, and quality. "How
would anyone be surprised that cash stagnated and did not circulate, or that it
varied in weight and was not equal and uniform, or that it would be minted one
day and abolished another, be either too expensive or too cheap, and cause great
problems for commerce and industry as well as agriculture, for private parties
as well as the government?" Cash of varying sizes and weights had to be abol-
ished or withdrawn from circulation and replaced by new cash according to stan-
dard and uniform measures, and private minting or counterfeiting had to be
prohibited. Replacing the money supply with new coins required that the gov-
ernment not stint on expenditures for copper, coal or labor costs - an idea in
tune with Yu Hyongwon's views - and commerce and industry had to be opened