Travels Of Marco Polo: Thirty Six Introduction of Paper Money

With regard to the money of Kambalu, the great Khan may be called a perfect alchemist for he makes it himself.  He ordered the people to collect the bark of certain tree, whose leaves are eaten by the worms that spin silk.  The thin rind between the bark and the interior wood is taken, and from it cards are formed like those of paper, all black.  He then causes them to cut into pieces, and each is declared worth respectively half a livere, a whole one a silver gross of Venice, and so on, to the value of ten bezants.  All these cards are stamped with his seal, and so many are fabricated, that they would buy all the treasuries in the world.  He makes all his payments in them, and circulates them through his kingdoms and provinces, over which he holds dominion; and none dares to refuse them under the pain of death.  All the nations under his sway receive and pay this money, for their merchandise, gold, silver, precious stones, and whatever they transport, buy or sell. The merchants often brings to him goods worth 400 thousands bezants, and he pays in livere and they accept them because they can make purchases with them through out the whole empire.  He frequently commands those who have gold, silver, clothes of silk and gold, or other precious commodities, to bring them to him.  Then he calls twelve men skilful in these matters, and commands them to look at the articles, and fix their price.  Whatever they fix is paid in these cards, which the merchants accepts.  In this manner, the great sire possesses all the gold, silver, pearls and precious stones in his dominion.  When any of the cards are torn or spoiled, the owner carried them to the palace, where from they were issued, and receives fresh one with a deduction of three per cent. If a man wishes gold or silver to make plate, girdles or other ornaments, he goes to the office, carrying a sufficient number of cards, and gives them in payment against the quantity of gold or silver he requires.  This is the reason why the Khan has more treasure than any other lord in the world; nay all the princes in the world together have not an equal quantity.

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Note:- The first bank-note type instrument was introduced in China, in 7th century. Merchants used to issue receipts acknowledged by wholesale merchants as money to avoid the carrying of heavy bulk of copper coins. Circular coins with a rectangular hole were strung together on thread were thus replaced by these receipts. This practice began during Tang dynasty.

Jiaochao as narrated by Marco Polo must have been a modification of the existing notes.