Flying money or flying cash are bills of credit or money certificates. Paper currency was used in place of coins made up of silver, gold, iron or copper. They were not like a real currency that had intrinsic value but were used in exchange for items or could be converted back to coins. They derive value instead of trust. This is called flying money because of its tendency to blow away. These bills were of varying amounts and could be changed back to hard cash at the country’s capital. This was not meant to be a real currency but was developed to solve the problems in shipping real coins overseas.
Origin of flying cash or flying money
Flying cash developed as a result of block-printing in china. This means of doing business developed in the Tang dynasty but was formalized as a government policy in the Song dynasty. Between 805 and 820 the government of the Tang dynasty experienced a shortage of copper cash coins. Copper cash coins were used for daily business transactions and this shortage hindered day to day business. Similar to the use of coins, barter system also proved to be too difficult to use for overseas trade; shipping these to other countries was difficult.
During this time, flying money was first developed to solve this problem. The local merchants were now being paid in money certificates called ‘flying cash’. Then, in the Song dynasty, this was institutionalized as government policy and used as a legal tender. The government began to issue more notes for its business and gradually use of paper money spread westwards.
Flying money gradually gave way to the paper currency in use today. It was adopted by the governments that began to print more of the money certificates. This ultimately leads to the resolution of a lot of problems for investors across the globe.
Advantages of paper money
- Paper money can be produced easily and quickly. Unlike silver, gold or copper that this difficult to get, paper and the printing press are relatively easy to use. This also means that copper, gold, silver and iron can be used in making other products instead.
- Being light-weight, paper money is easy to ship, store and conceal for transporting to other places.
- Paper money is also economical because the material it is made of is less expensive than metal. At the same time, metal can be conserved for use elsewhere.
- Paper money has fiscal benefits. It can be run off in anticipation of receipts before taxes can be laid. It can be used to pay amounts to forced loans without interest.
In conclusion, it might be right to claim that China gave the world a great gift in the form of flying money. From its origin as flying cash by the Tang dynasty and subsequent official use in the Song dynasty, the idea of paper money spread globally and is now paper currency is widely used across the globe.