Chapter 830

“Paper money!”

Pang Yukun was somewhat surprised upon hearing this. Historically, the Great Yu Empire had always used certificates similar to banknotes; the concept of paper money had never existed.

Xiao Ming had anticipated Pang Yukun’s reaction. He immediately activated the technology crystal to explain what paper money was to Pang Yukun.

“Undoubtedly, industry will make goods abundant, and the currency representing the flow of goods will also increase accordingly. Thus, the imperial court will need to issue currency according to the quantity of civilian goods to facilitate transactions between goods.”

“If that’s the case, then how much should be issued?” Pang Yukun asked, somewhat confused.

“The amount issued naturally cannot be arbitrary. Simply put, paper money is equivalent to the old copper coins. Issuing too much will lead to the devaluation of copper coins. What used to buy one bun with one copper coin will now require ten copper coins for one bun. In the long run, this will cause national instability. Therefore, the issuance of paper money must be equal to the current total industrial and agricultural output of the Great Yu Empire. At the same time, to ensure the value of the currency itself, the currency needs to be linked to gold and silver,” Xiao Ming said thoughtfully.

Although the Great Yu Empire showed a trend of surpassing the West in firearms, its current social system still had many imperfections.

Especially in finance, he was too far behind. So, after expelling the barbarians and the Great Yu Empire was basically stable domestically, he decided to make up for this deficiency.

Moreover, he had a grand ambition: to establish an international currency system dominated by the Great Yu Empire, building financial hegemony.

Although this ideal was still some distance away, preparations had to begin now, and issuing paper money was the immediate task.

Pang Yukun gradually understood under Xiao Ming’s explanation. He said, “If that’s the case, I, your old servant, suggest that the Great Yu Empire currently adopt a silver standard currency. After all, gold is too scarce, and silver is the currency that has always circulated in the Great Yu Empire.”

Xiao Ming nodded. He had once wanted to establish a gold standard currency system, but the conditions were not yet met.

“That’s what I meant. However, gold and silver can also be used together, and a system for exchanging gold and silver at a set ratio can be established,” Xiao Ming said. He was laying the groundwork for a gold standard, to use it directly in the future.

Pang Yukun thought for a moment and raised his last concern. He said, “Your Majesty, there are many people in the common people who counterfeit banknotes. If paper money is issued, how can counterfeiting be prevented?”

One cannot handle porcelain work without a diamond drill. Xiao Ming dared to issue paper money naturally because the Great Yu Empire could achieve banknote printing technology. So he said, “You needn’t worry about that. I have my own way to solve it.”

Pang Yukun nodded. “Since that’s the case, I, your old servant, will go back and first deal with the Cao Family Bank.”

With that, Pang Yukun bowed and turned to leave.

Watching Pang Yukun depart, Xiao Ming brought up the information from the technology crystal. Issuing paper money was not a simple matter; he naturally dared not act recklessly.

The reason he put it on the agenda now was partly because the Cao Family Bank had been uprooted, and partly because he was confident that the quality of the paper money he issued was good enough.

Generally, paper money had very high paper requirements, and ordinary paper certainly could not be used. After all, this type of paper was easily damaged by water.

Therefore, the paper truly used for paper money was banknote paper, which was manufactured from cotton linters.

This cotton linter, also known as cottonseed linter, referred to the short fibers remaining on cottonseeds after ginning. These short fibers were stripped off with a delinting machine, resulting in cotton linters.

Because the collection process was complex, short cotton linters were much more valuable than ordinary papermaking raw materials.

Having the materials was only the first step. The next was to master the raw material formula for this type of paper and produce it according to strict proportions.

This way, the paper produced would have a smooth and delicate texture, tough and resistant to folding. When holding such banknote paper in the air and shaking it, or holding both ends of a banknote with two hands and pulling it taut, or flicking the surface of the paper with a finger, it would produce a crisp and clear sound.

Comparatively, the raw materials for ordinary printing paper were mostly straw, wheat stalks, etc. This type of paper had a soft and rough texture, lacking toughness and tensile strength, and was easily torn. If shaken in the air, the sound would be dull.

So, just the manufacturing standard of this banknote paper made it impossible for Great Yu Empire merchants to counterfeit it. After all, the cost of counterfeiting would be very high.

Additionally, he had another anti-counterfeiting method: watermarks.

Watermarks were an ancient anti-counterfeiting method. In contemporary times, his country was the earliest country in ancient times to master watermark pressing technology.

At that time, threads were woven into patterns or designs on the paper screen, protruding from the screen surface. When paper was manufactured, the pulp density varied at these spots, and when viewed against the light, patterns with alternating brightness would appear, thus forming a watermark.

In the Tang Dynasty, there was “Yanbo Jian” watermarked paper, and in the late Qing Dynasty, there was “Wang Liuji” watermarked paper. In Europe, Prussia issued Saxony banknotes with watermarks in 1772, and since then, the use of watermarks became increasingly common.

Besides these two, the third banknote printing technology the Great Yu Empire could achieve was letterpress printing, which used raised designs.

This would create a raised and indented pattern on the surface of the paper money. And the last element would be the printing pigments: mineral pigments.

Compared to plant-based pigments, the colors of various paintings done with mineral pigments remained unchanged for a long time, capable of lasting for thousands of years without fading.

Thinking of this, Xiao Ming said to Qian Dafu, “Now, follow me to the printing workshop.”

“Yes, Your Majesty.” Qian Dafu responded and went out to prepare.

Xiao Ming then picked up his fountain pen and recorded the key technologies. Next, he would transfer technical backbone personnel to establish a paper money workshop.

This workshop would be a top secret of the Great Yu Empire. The method of printing banknotes would be a secret among secrets.

After finishing writing, Xiao Ming rose and went to the printing workshop. This workshop had always been managed by the newspaper office. He directly had Fan Zeng select a portion of people with clean backgrounds from it.

At the same time, he instructed him to establish a complete workshop system, from papermaking to printing, following the newspaper’s printing procedures.

He, meanwhile, gathered the selected individuals at Bowen Academy.

Because this issuance of paper money was very important, Xiao Ming had the provincial office prepare a confidentiality agreement for each of them. Once the agreement was signed, they would strictly guard the secrets of the banknote printing workshop. Any violation would constitute a breach of the Great Yu Empire’s Secrecy Act.

The artisans selected by Fan Zeng were all common people who had lived in Qingzhou City for generations. Information about their families for several generations was very clear, and their entire families also lived in Qingzhou City.

Such artisans were very secure for Xiao Ming, as they had many concerns and the probability of them being bribed was very low.

Over the next few days, Xiao Ming imparted the core technologies of banknote printing to them. Of course, the processes were separated; each artisan only mastered a portion of it.

At the same time, he also ordered the machinery department to manufacture ginning machines. With the current industrial capability, this type of machine was not a problem.

The novel has already been fully translated up to the final chapter. You can access it on my Patreon at https://www.patreon.com/c/caleredhair