INFLATION AND DEFLATION 935some of the same problems the Chinese had experienced. He expressed his admi-
ration for Kings Sukchong (r. 1674-1720) and Kyongjong (r. 1720-23), not
because Sukchong had initiated a public program to stimulate the spread of cash,
but because both he and Kyongjong had displayed sagacious caution by pro-
hibiting any excessive minting. A shortage of cash was not worth worrying about
anyway because cash could neither be eaten or worn like food or cloth. It would
have been better if cash had never been used in the first place, but now that it
had, he had no choice but to mint more of it. Considering his animus against
cash, it was not surprising that only a couple of months later he reconsidered
his decision and decided to abolish any further minting because of his fear of a
repetition of the inflation of 1696.19
Hong Ch'ijung: Ban on Cash for Tax Payments. Less then two years later in
the third lunar month of 1727, Yongjo presided over a major debate among his
officials over the best means for meeting the problems created by the extraor-
dinarily high value of cash in the market. Although there were some officials
who shared his bias against cash, the majority had recognized that the circula-
tion of cash had spread to more areas of the country, and that no matter what
problems had occurred because of its use, it was now an indispensable medium
of exchange. They had also learned from the previous generation's experience
that the stability of prices had to be maintained by adjusting imbalances between
the supply of cash and the supply of commodities for sale in the market. Nev-
ertheless, in view ofYOngjo's feelings they were forced to be defensive and apolo-
getic in supporting their recommendation for minting more cash.
Second State Councilor Hong Ch'ijung tried to persuade Yongjo that in that
year of crop failure and famine when the impoverished peasants had spent every-
thing they had produced, they were suffering not from surplus cash and infla-
tion but from cash shortage, the excessively high value of cash. and deflation.
By this he intimated that the prices of grain and cloth had been driven so low
that it cost the peasants too much to obtain cash to pay taxes or to repay cash
loans, and that the government should make cash cheaper by minting more of
it, an argument that would have been quite congenial to the cheap silver Pop-
ulists and Bryan Democrats in the late nineteenth-century United States, who
sought to ease the debt burden of poor farmers by a cheap money policy at the
expense of the creditors and bankers (that is, moneylenders) of the cities.
Hong said other high officials had agreed with him in private conversation
that the time had come to mint more cash, but their hopes had been frustrated
by YOngjo's stubborn opposition. If the king conceded that he had to tolerate the
use of cash in the economy, he had to allow additional minting. If. on the con-
trary, he opposed more minting, he would have to abolish the use of cash alto-
gether to protect poor peasants against debt and usurious interest in a money
economy where cash was short and its value was too high.
Since Hong realized that Yongjo could not be persuaded to mint more cash
and Hong himself believed it would be disastrous to abolish the use of cash alto-
gether, he proposed a compromise to salvage the retention of cash at least in the