998 FINANCIAL REFORM AND THE ECONOMY
On the other hand, not all statistical evidence reinforces Won Yuhan's opti-
mistic view about the steady development of a money economy. It is true that
the percentage of cash in government revenues grew and eventually exceeded
Yu Hyongwon's goal of one-third of tax receipts by 1820 when 52.8 percent of
government taxes were collected in cash, compared to 29.2 percent for rice and
14.1 percent for cotton and cotton cloth. Nonetheless, this may have been a peak
figure for the role of cash in tax revenues, for the available figures on year-end
balances in agencies of the central government show a peak of 48.7 percent of
all taxes in cash from 1827 to 1836, and a decline to 36.4 percent from 1868 to
- Although the year-end balance does not measure the total amount of cash
revenue collected or spent during the year, An Pyongt'ae concluded that the
decline in the year-end reserves must have represented not only a decline in the
central government's cash tax income, but a decline in the percentage of com-
modity products relative to total production as well. It may be possible that com-
modity production and sales declined as a product of the general political and
social troubles that culminated in the 1862 rebellion in the south.^45
Finally, the history of the use of cash in the Korean economy took an ironic
twist right after King Kojong ascended the throne in 1864. Presumably under
the direction of the Taewongun, King Kojong ordered the governor of Hamgyong
to cease minting cash in Hamhi1ng and close down the Kapsan copper mine in
that province because mining activities had been causing the local residents hard-
ship. By so doing, the government was now deprived of its domestic copper sup-
plies when the demand for government funds rose sharply to finance national
defense in the face of foreign threat, the resuscitation of the population in the
wake of the 1862 rebellion, and the construction of the Kyongbok Palace to
increase the prestige of the royal house.
The new administration reversed previous cash policy by shutting down min-
ing and minting in the north and instituting the IOo-cash coin, the first multiple-
denomination coin in the dynasty, a decision that was not imposed solely by the
Taewongun but agreed to collectively by the top government leaders. Since one
source estimated that the minting of this coin in 1867 produced sixteen million
yang of cash (equivalent in face value to 1.6 billion of the "penny" coins), it was
not surprising that rapid inflation and the fall in the value of the new coins drove
the old "penny" coins out of the marketplace, and the government was forced to
suspend further minting of the loa-cash in June, 1867. The inflationary situation
had disastrous political consequences for the Taewongun because it appeared to
fulfill the warnings of centuries of monetary conservatives against the conse-
quences of multiple-denomination cash. From a twentieth-century perspective,
however, this experience only proved the necessity of a careful and effective man-
agement of the money supply, not the disutility of multiple-denomination cash.^46
