The Historical Record for March 11, 2009: The world’s first paper money

“I don’t know much about money, I’ve seen so little of it.” – Fletch, by Gregory MacDonald

Yeah, graduate students shouldn’t pose as financial experts. We’re generally living grant to mouth. After the gravity of last year’s financial crisis set in though, I realized I may have benefited from spending my late-20s and early-30s being so financially irresponsible. I didn’t have a house, stocks, car loans, trust fund with Bernie Madoff, etc. Never had being so poor seemed so smart. I do owe enough in student loans to buy my own island nation in the Caribbean (with a little to spare for lounge chairs and a round of umbrella drinks) but I think it’s best if we move on to talking about this day in history…

On this date in 1161, the Southern Song court issued the world’s first government-backed paper money. Certificates of deposit and exchange had circulated privately for many years, but the demands of the Medieval Economic Revolution, which saw an enormous expansion in trade and an increasingly sophisticated and complex economy, meant that new forms of exchange were needed. The 会子 (huizi) made its debut on March 11, 1161, backed by copper. Naturally, it took exactly one nanosecond before the first counterfeiters emerged as well, and the Song court offered enormous rewards (including government posts) for anyone who turned in a counterfeit artist.