Money, money circulation and credit - стр. 18

Paper money is relatively new for the world of money. The paper monetary units are token money, only symbols. Usually they appeared in the periods of acute state needs during the wars and revolutions when the other sources of financing (taxes, lendings, etc.) ran out. One more reason of the paper money issue was a chronic deficit of an external state account, in order to avoid the gold drain abroad the government was forced to implement the inconvertible to gold money provided with a forced rate of exchange.

For the first time it was issued in the VII^>th century in China in the form of large denominations in order to replace the inconvenient fullbodied copper coins. And while the notes could be freely exchanged onto the full-bodied they were popular in circulation. Later in the XIII^>th century paper money was issued in Persia and in the XIV^>th century in Japan.

However in other countries the substitutes of «real money», i.e. coins were widely spread. Their nominal was verified with the sovereign’s stamp or a sign and a personal stamp of a merchant or a banker. Initially in the form of complementary means of exchange the deposit receipts of stocked items, taxes payments, loans granting were used. Their circulation increased the trade opportunities but at the same time frequently complicated the exchange of these paper duplicates onto the metal coins.

Among the west countries the first who began to issue paper money were the North American States. In 1690 such monetary units were issued in Massachusetts State.

In Europe the first who decided to adopt the American practices was France: in 1716-1720 the famous economist and banker John Law (1671-1629) began to print the notes of the Royal Bank. Hereafter when the world economy followed the way paved by John Law and began to create the central banks he was granted with an exclusive right of the banknotes issue.

On the territory of Kazakhstan the paper monetary units appeared in the end of the XVIII^>th century and mainly these were the Russian monetary units.

In Russia the emission of paper money – assignats for the first time began in 1769 r. It was supposed that like in other countries who risked implementing paper money they could be freely exchanged onto silver or gold on request. But all turned otherwise. To the end of the century already the excesses of assignats forced to freeze the exchange, in the nature of things the rate of assignated ruble began to fall and the prices of goods increase.