Now you have heard the ways and means whereby the Great Kaan may have, and in fact has, more treasure than all the Kings in the World; and you know all about it and the reason why.  And now I will tell you of the great Dignitaries which act in this city on behalf of the Emperor.

NOTE 1.—­It is surprising to find that, nearly two centuries ago, Magaillans, a missionary who had lived many years in China, and was presumably a Chinese scholar, should have utterly denied the truth of Polo’s statements about the paper-currency of China.  Yet the fact even then did not rest on Polo’s statement only.  The same thing had been alleged in the printed works of Rubruquis, Roger Bacon, Hayton, Friar Odoric, the Archbishop of Soltania, and Josaphat Barbaro, to say nothing of other European authorities that remained in manuscript, or of the numerous Oriental records of the same circumstance.

The issue of paper-money in China is at least as old as the beginning of the 9th century.  In 1160 the system had gone to such excess that government paper equivalent in nominal value to 43,600,000 ounces of silver had been issued in six years, and there were local notes besides; so that the Empire was flooded with rapidly depreciating paper.

The Kin or “Golden” Dynasty of Northern Invaders who immediately preceded the Mongols took to paper, in spite of their title, as kindly as the native sovereigns.  Their notes had a course of seven years, after which new notes were issued to the holders, with a deduction of 15 per cent.

The Mongols commenced their issues of paper-money in 1236, long before they had transferred the seat of their government to China.  Kublai made such an issue in the first year of his reign (1260), and continued to issue notes copiously till the end.  In 1287 he put out a complete new currency, one note of which was to exchange against five of the previous series of equal nominal value!  In both issues the paper-money was, in official valuation, only equivalent to half its nominal value in silver; a circumstance not very easy to understand.  The paper-money was called Chao.

The notes of Kublai’s first issue (1260-1287) with which Polo maybe supposed most familiar, were divided into three classes; (1) Notes of Tens, viz. of 10, 20, 30, and 50 tsien or cash; (2) Notes of Hundreds, viz. of 100, 200, and 500 tsien; and (3) Notes of Strings or Thousands of cash, or in other words of Liangs or ounces of silver (otherwise Tael), viz. of 1000 and 2000 tsien.  There were also notes printed on silk for 1, 2, 3, 5, and 10 ounces each, valued at par in silver, but these would not circulate.  In 1275, it should be mentioned, there had been a supplementary issue of small notes for 2, 3, and 5 cash each.