936 FINANCIAL REFORM AND THE ECONOMY
private market. To gain Yongjo's favor for his plan, he was even willing to pro-
pose a policy that would have set the Korean tax and currency system back to
the sixteenth century, an idea that would have offended Kim Yuk, Yu Hyongwon,
and other great proponents of a cash economy. Hong suggested that YOngjo abol-
ish the requirement that part of the taedong land tax, the military cloth tax (kun-
p '0), and the cloth tribute owed by official slaves be paid in cash. The peasants
would pay these taxes in cloth alone, the government would cease paying any
of its bills in cash, and cash would be allowed only for petty purchases on the
market in the capital (and probably other commercial and market towns as well).
Hong believed that by removing government demands for cash commutation of
taxes, available cash would then be funneled into the market, reducing the value
of cash and commodity prices, and providing some relief to provincial peasants
who had to buy cash with grain at a prohibitive rate of exchange to pay all or
part of their taxes.
Yongo was intrigued but not overwhelmed by the proposal because he still
thought that there was more to be feared from the evils associated with minting
more cash than there was from an excessively high value of cash in the market.
He declared that his own preference really was not simply to prohibit more mint-
ing, but to do away with cash altogether, to cleanse the human mind of the devi-
ous tricks of monetary manipulation. Even though cash was now in short supply,
the population of the capital had no reason to fear any loss in the food supply
unless grain transport ships were lost at sea in their voyages from the south.
Since King YOngjo realized that only rich creditors benefited in a cash econ-
omy when the money supply was short, he reasoned that peasant debtors would
have everything to gain from outright abolition of cash. He knew from experi-
ence what the problems of a cash surplus (and inflation) were, but since he could
not predict what would happen ifhe abolished the use of cash altogether, he was
willing to accept Hong's compromise by abolishing the use of cash for every-
thing but small transactions in the "private" market and monitor its effects for a
year or two. He then asked the assembled officials to voice their own views as if
he were willing to be dissuaded by skilled and effective argument to the contrary.
Two officials supported Yongjo's basic inclination to abolish cash altogether
instead of Hong's compromise. Minister of Personnel Sim T'aekhyon agreed
but not because he thought cash had the capacity to create evil inclinations in
the human mind. On the contrary, he agreed with Hong's view that the increase
in the value of cash had imposed such heavy costs on taxpayers that the gov-
ernment had no choice but to mint more of it, but because Yongjo was so firmly
opposed to it, he had not dared express his views until this conference. Now he
believed that the best policy was simply to abolish the use of cash altogether,
because if the government were permitted to spend its cash reserves in private
markets under Hong's plan, it would create other kinds of problems that he did
not specify.
Chang Pung'ik, a fifth rank military officer, agreed with Yongjo's belief that
cash was responsible for stimulating man's capacity for sharp practices and decep-