980 FINANCIAL REFORM AND THE ECONOMY
reintroduced. In 1750 just after the equal service reform had been adopted, a
number of officials recommended the adoption of multiple-denomination cash
to meet the demand for more currency for tax payments. Even though Yongjo
agreed that the equal service tax reform did require more cash for tax payments,
he decided only to mint more of the ordinary "penny" cash. III
More small cash was minted periodically to keep up with the demand for cash
generated by the spread of commercial activity throughout the country, and in
1750 a request was made by the Border Defense Command to concentrate all
minting in one agency to economize on the use of copper because its price had
been increasing, but this idea was not implemented until 1785 when King
Chongjo agreed to give that task exclusively to the Ministry of Taxation. 17
King YOngjo fought fiercely to rid the Korean economy of cash, but circum-
stances forced him to acknowledge its indispensability to the Korean economy
at the time. When he did so, he was constrained not only by his own conserva-
tive inclinations but the declining exports of copper from Japan. While agree-
ing to mint more cash to reduce the disadvantages of extreme deflation, he still
maintained a conservative policy designed to keep the money supply at a min-
imum. The net effect of that policy was to restrain the potential for economic
growth and development by elevating commodity prices and raising interest rates.
THE EXPANSION OF PRIVATE MERCHANT ACTIVITYThe Challenge to Licensed Monopoly, [741-1813King YOngjo was forced into his reluctant capitulation to the growing demand
for more currency by the expanding scope of the commercial economy and the
increased importance of private, unlicensed merchants. Just as Yu Suwon had
written in the 17305, in 1741 the magistrate of Seoul complained that the
supremacy of the licensed merchants had already been threatened by hordes of
small merchants and traders who set up shop in the capital. At times the gov-
ernment enforced the rules against competition. They closed down unlicensed
lumber dealers who set up their own warehouses along the banks of the Han
River in 1753 and petty officials of the National Academy who took over the
bankrupt capital salt shops and established salt warehouses in 1769. They took
punitive action against private rice merchants who hoarded rice in their ware-
houses and drove up the price in 1782.
At other times, however, the government was gradually forced to abandon its
resistance to the activities of unlicensed merchants and private wholesaling activ-
ities. In 1742 and 1747 government agencies finally ceased opposing the activ-
ities of previously unlicensed merchants in tobacco and soybean paste. but they
chose to grant monopoly rights to them rather than tolerate unlicensed compe-
tition as a matter of principle. When the second magistrate of Seoul, Yi Pohyok,
asked in 1742 that all new shops founded in the capital in the previous sixteen