WHI-Chap15-Obj5

List and explain new business practices which occurred during the Tang and Song eras.

"Letters of credit" were used by merchants due to a shortage of copper coins. They were allowed merchants to leave their goods with the consumer and then receive a payment at another location or time.

Promissory notes were used as well. These notes promised a payment for goods at a later date if the buyer could not pay in full for them.

Eventually checks came into use. They were used to withdraw money from someone's bank account.

Paper money was also used as an alternative to coins. It was first issued by merchants in the 800s A.D. as a slip that could be redeemed for their merchandise. However, merchants could not always give the merchandise to the people who they owed it to due to economic problems. This sometimes led to riots. In order to solve this problem, the Chinese government began to print its own money in 1024 A.D. and forbade anybody to issue their own money. Paper money was soon adopted by neighboring peoples due to its convenience and popularity.

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