"The so-called issuance of banknotes is actually to use a piece of paper, print a delicate pattern on it, and then leave a mark to prevent counterfeiting, mark the denomination, and replace the circulation of copper coins!" Yang Wu explained to Luo Zhixiang.

Then, he explained to him in detail some details of later banknotes.

"What's the difference between this and the iron money issued by Ma Yin?" Luo Zhixiang was a little dumbfounded after hearing this.

Whether it is Ma Yin's iron coin, or Wuyi's Tongbao of Wu, or the Kaiyuan Tongbao issued during the heyday of the Tang Dynasty, etc., they are all insufficient, and the difference can be called "seigniorage".

The size of seigniorage varies between different currencies.

For example, the actual cost of a Kaiyuan Tongbao must be less than a penny, but this difference is not large, and the difference between the iron coins minted by Ma Yin is very large; As for the Kaiyuan Tongbao of the Wu Kingdom, the size of its seigniorage should be somewhere in between.

However, now the method proposed by Yang Wu is good, and he actually prints some patterns directly on the paper, indicating the denomination, and adds some anti-counterfeiting marks to use it as currency circulation, which is more ruthless than Ma Yin's cast iron money!

Therefore, Luo Zhixiang was so shocked after listening to the method proposed by Yang Wu.

"Of course it's different! Ma Yin's iron coin is currency, and it itself cannot be exchanged for a full amount of copper coins; But the paper money that is only to be issued has enough money as a reserve! Yang Wu explained.

The paper money he is talking about is not the paper money that can be issued without moderation in the Song Dynasty, Yuan Dynasty, Ming Dynasty and other periods in later generations, but the paper money in the gold standard period of Western countries in later generations.

The kind of banknotes backed by gold reserves have great restrictions on both credit and the amount of money issued, which makes the authorities unable to issue banknotes at will, but as much currency as there are gold reserves, which greatly guarantees the stability of the value of the currency and promotes economic prosperity.

Although the replacement of gold and silver by paper money in later generations is an inevitable result of the development of the world economy, if there is no excess of the gold standard period, if you want to transform it into a credit currency period in later generations, the result is often the situation in the Yuan Dynasty.

So in this day and age, the best thing to do is to use precious metals as the standard currency.

Of course, the currency of Wu is equivalent to the copper standard today, but the value of copper is limited after all, and with the development of the economy, the copper standard will increasingly fail to keep up with demand.

Therefore, during the Song Dynasty in history, copper coins were still commonly used, and silver and gold could not be circulated as currency; And by the time of the Ming Dynasty, silver could be circulated directly.

Of course, the monetary system of the Ming Dynasty was equivalent to a silver-copper double standard.

In terms of the situation of world economic development in later generations, the gold standard is the most stable monetary system.

It's a pity that Wu Guo is now not talking about gold, but even the reserves of silver are insufficient, and it is obviously not enough to use it as the standard currency.

Therefore, Yang Wu's plan is not to issue paper money for the time being, and continue to use copper coins for circulation; At the same time, people were sent overseas to look for gold and silver mines.

I heard that the gold and silver production in ancient Japan was relatively high, but unfortunately Yang Wu did not remember where the gold and silver mines in Japan were.

After finding enough gold and silver, try to directly transition to the gold standard or silver standard, using gold or silver as a reserve, and usually circling gold or paper money, as well as small denominations of copper coins.

The iron money issued by Ma Yin is actually somewhat similar to the credit currency of later countries, which is completely the currency that Ma Yin forced to issue by virtue of his dominant position, and other forces will not recognize it.

For example, now that Wu has seized a large number of Chu territories, the iron coins issued by Ma Yin have also been abolished.

In order to ensure that the people would not suffer too much loss as a result, the Wu court had no choice but to use Wuyi Tongbao to exchange for Ma Yin's iron money - of course, this exchange is obviously not a full exchange, and the iron money of the general three pennies is also exchanged for the Wuyi Tongbao of one penny.

But even so, those people were still very willing to exchange, and Wu Guo greatly gained the hearts of the local people with just this hand.

"The paper money issued by the orphan has enough cash as a reserve, that is, the people can exchange the paper money in their hands for full cash anytime and anywhere, and they can also use the paper money to pay taxes to the imperial court; However, the iron money issued by Ma Yin could not be exchanged for full cash from Ma Yin, nor could it be used to pay taxes. This is the difference between the paper money issued by Gu Yao and Ma Yin's iron money! Yang Wu finally explained.

After all, Luo Zhixiang was good at financial management, and soon realized the difference between the paper money Yang Wu said and Ma Yin's iron money, and also realized the benefits of issuing paper money.

First of all, of course, it is more convenient for paper money to circulate, for example, the cash money has always been a thousand dollars, if a person brings a few pieces of money with him, then he must ask a special person to carry it with a large backpack; But if you use paper money, it is undoubtedly too convenient.

The second benefit of issuing banknotes is that it reduces the loss in circulation. A copper coin has been in circulation for a long time, and it will naturally rust, corrode, and loss, and if you use paper money, it doesn't matter if it is old and rotten, anyway, the cost of printing paper money is not high.

In addition, there are many other benefits of circulating banknotes that are difficult to mention.

However, Luo Zhixiang still asked a little strangely: "King, according to what you just said, since the issued banknotes can be exchanged for sufficient cash at any time, then this means that as much copper as the imperial court reserves, how many banknotes can be issued; If the copper reserves are reduced, then the amount of paper money issued must be reduced; In this way, isn't it still the amount of copper in the national reserve that determines the amount of paper money in circulation? How can this alleviate the problem of insufficient cash circulation? ”

"Haha......" Yang Wu laughed when he heard this: "Who told you that you must issue as many banknotes as there is copper?" ”

"Isn't that what the king just said? Paper money can be exchanged for full cash at any time, if the cash in reserve is not enough, then the people can't exchange it when they exchange it? Luo Zhixiang wondered.

"Lone asks you, do you think that all the people in the world will exchange their paper money for cash at the same time?" Yang Wu asked with a smile.

"Well, of course not!" Luo Zhixiang pondered for a moment, and then replied with great certainty: "Even if the people exchange, the time will definitely be staggered, and it is impossible for all the people to choose to exchange paper money for cash." That is to say, the state only needs to reserve 1,000 wen in cash, but it can issue 1,200 wen in paper money, or even more, and there will be no problem! ”

Luo Zhixiang understood it thoroughly, and soon deduced a conclusion that surprised him.

Yes, the gold standard system of the Western countries in later generations, in fact, the total value of the denomination of the banknotes issued by them was much higher than the gold reserves in their hands, and this proportion could be as high as double or even more.

That is, if the state has one gold coin in its hands, he can issue a note worth two gold coins!

In this way, the demand for money circulating in the market can naturally be satisfied to a certain extent.

Of course, if Wu issued paper money far in excess of its reserves as soon as it came up, and also allowed paper money to be freely exchanged for copper coins, I was afraid that problems would soon arise.

After all, the people are not stupid, and even if they accept paper money, it will take a process.

In the beginning, if the state allowed the full amount of paper money to be exchanged for cash, I am afraid that everyone would choose to exchange it.

However, if people find that paper money can be exchanged for cash at any time after a long time, they will be relieved and slowly accept paper money.

After all, compared to cash, paper money is indeed much more convenient to use.

Since paper money can be exchanged for cash at any time, why don't you use paper money?

So with the passage of time, after everyone agrees on the banknotes, then the state can slowly relax the reserve ratio, such as 1,000 yuan of cash, you can issue 1,200 yuan of banknotes, without worrying about problems.

Of course, the reality is not that simple.

In the actual process of operation, first, how to prevent counterfeiting of banknotes, this is a big problem; Second, what to do if there is a run, these are all things that need to be paid attention to.

However, those problems, even in later generations, are a headache for all countries, and naturally cannot be completely solved in this era, so we can only try to restrain these problems.

After Yang Wu told Luo Zhixiang his thoughts, he said with a smile: "Luo Qing, you are a well-known financial manager in my country, what are the things that need to be paid attention to in this method that Gu just said, you have to think about it after you go back, and then give Gu a chapter to talk about it in detail." The time is not yet ripe for the issuance of banknotes, but in the future, the issuance of banknotes is inevitable. So as the head of the household, you have to start preparing now! ”

"Yes, the minister will definitely think about this matter carefully when he goes back!" Luo Zhixiang replied with some excitement.

As someone who has a great interest in financial management, it is natural to be thrilled to hear such a brilliant idea that has never been done before.

He had a hunch that if he could handle this matter well, he would be famous in history in the future.

For Yang Wu, although the issuance of paper money is an inevitable trend of the development of the times, the issuance of paper money needs to be guaranteed by legislation, and the interference of some powerful people, especially later kings, must be excluded.

Otherwise, if later generations are like the emperor of the Yuan Dynasty, they will use printing banknotes as a "money-grabbing artifact", and there will inevitably be a big mess.

And in this era when there are no restrictions on the power of the monarch, how to ensure the independence of currency issuance. Neutrality, this is the problem that Yang Wu needs to have a headache.

"Even if you can guarantee that you will not start with the issuance of banknotes, how can future generations ensure that they will not do anything wrong?" Thinking about this problem carefully, Yang Wu couldn't help but have a headache.