Many varieties of money reveal Korea’s tough past
Three centuries later and halfway across the globe, his words are still relevant, at least according to the enormous crowd that gathered in front of the Bank of Korea in Seoul this January.
The crowd began forming on Jan. 18 and people slept on the street to secure their place on line. They all wanted to exchange their existing money for new bills which were due to come out on Jan. 22. Because new bills are not issued very often the first examples that appear are believed to be worth more, especially those with serial numbers like 7777777.
From the beginning, the new bills were controversial. The authenticity and “Korean element” of the cultural assets and historical figures on the front and back were questioned. For example, the celestial globe on the back of the new 10,000 won bill is said to originate from China. Also Lee Hwang (known as Toegae) on the 1,000 won bill would not have worn the hat that’s seen on his head although the Bank of Korea claims it followed the basic outline of a portrait drawn by Lee Yu-tae (1916 to 1999).
For any civilization, building a monetary system is never easy. For Korea, the effort to create a formal currency started during the reign of King Seongjong in 996 although the Goryeo Dynasty (918 to 1392) made Korea’s first coin, the geonwon jungbo.
Before the geonwon jungbo appeared, records show that iron was the preferred medium of exchange from the early Iron Age through to the Korean Three Kingdoms period (57 B.C. to A.D. 668), replacing, although not wholly, a barter system based mainly on cattle, grain and cloth.
The coin however, was not embraced by the public and its circulation was suspended in 1002. Another century passed before the court issued new coins ― the haedong (one name for Korea at that time) tongbo, haedong jungbo, samhan (three kingdoms) tongbo and samhan jungbo.
Even with the public skeptical about official forms of money, the court was persistent. The era’s kings, especially Sukjong and Yejong, believed state control of the currency did much to enhance national wealth. King Seongjong banned the use of coarse hemp, which was the most popular barter item at the time, in the attempt to push coins issued by the state.
Along with coins, the court also produced bottles for use as currency, made with silver and copper. In 1101 they began importing baochao, or Chinese paper money. Both these efforts failed, as both were easy to counterfeit due to chaotic social and political circumstances.
“In short, the people of Goryeo were not yet ready for a monetary policy and the government lacked consistency in pushing a single sure-fire form of money,” said Jeon Tae-yong, a researcher at the Bank of Korea. “Unlike China and Japan, the Goryeo Dynasty wasn’t active in long-distance trade and it lacked the raw materials to mint a sufficient amount of coins.”
The effort to stop bartering continued throughout the early Joseon Dynasty. The ruling elite issued paper notes and coins in the hope of unifying the country and improving its financial environment. In 1401, the Joseon Dynasty issued currency notes made from mulberry paper. The next year, a mint, Saseomseo, was set up to improve the monetary system and taxes began to be collected in paper money.
Despite all these efforts, the value of Joseon’s paper money declined and by 1423 it was almost worthless.
Amidst the Japanese invasions, the government was desperate to promote the use of coins to rebuild the economy. By the late Joseon Dynasty, the public’s acceptance of currency began to grow. In 1678, the courts began to mint sanpyeong tongbo. “The sangpyeong tongbo is seen as the first Joseon Dynasty coin to be circulated with some degree of success,” said Jeon. “It lasted for around two centuries.”
Modern Korean currency truly began with the founding of the Bank of Korea in November 1909, the first central bank in Korea ― it still has the sole right to issue currency. However, during the colonial period the social and economic climate did not provide the bank with adequate support for it to maintain its independence and it ended up reissuing Japanese Daiichi Bank notes.
The first currency issued by the Bank of Korea was the one hwan note (in December 1910). In March 1911, the new Japanese colonial government proclaimed the “Joseon Bank Act” stating that the Bank of Korea had to be called “The Joseon Bank.”
The won’s first appearance took place through the Joseon Bank. It issued a 100 won note in 1914, followed by 1 won, 5 won and 10 won notes during the next year.
The Joseon Bank persevered after Korea was liberated from Japanese colonial rule (August 15, 1945). It was not closed until the Bank of Korea officially reopened in June, 1950.
The bank seemed to be a harbinger of doom because the Korean War erupted the same year, before it could even issue any money.
A few months into the war, North Korean forces began issuing large quantities of 100 won Joseon Bank notes.
The Bank of Korea tried to suppress them for fear they would disrupt the South Korean economy and cause inflation. Presidential emergency decree No. 10 was issued to get rid of North Korean counterfeit currency. It banned the use of Joseon bank notes.
During this time, there were three major currency reforms, starting in 1950. They were intended to stabilize the currency and avoid inflation. The third reform, in 1962, introduced the current won system.
In the 1970s, with the fast-paced development of the Korean economy, there was a need to issue bills of larger denominations ― the 5,000 won bill first appeared in 1972 and the 10,000 won came out in the following year. The 1980s saw an improvement in Korean money with a more precise and sophisticated layout and anti-forgery elements.
There are many odd instances in the making of modern Korean money.
The issue of the figure on a bill or coin has always been a topic of intense debate. The first human figures appeared on a Korean coin during the Joseon Dynasty. It featured four couples making love. It was meant as a symbol of fecundity. This however, was a celebratory coin and not circulated freely.
The 1,000 won bill was issued in 1950, and it featured Korea’s first president Syngman Rhee . Initially his portrait appeared on the left side of the bill. In 1956, the portrait was moved to the center.
However, because the president’s face tended to get damaged when the bill was folded in half, his face was moved to the right. Rhee’s face was then replaced by Lee Hwang because there were some who complained about putting a contemporary political figure on a bill.
When it began creating the 10,000 won bill in 1972 the Bank of Korea initially wanted to put Bulguksa Temple or Seokgulam Grotto on the back but after protests from Christian groups, it changed course.
The controversy doesn’t seem likely to end. The Bank of Korea is planning to issue 50,000 won and 100,000 won bills in early 2009 after the National Assembly passed a resolution demanding large denomination bills last year.
“We are currently considering ten figures from Korea’s history as the likely face for these new bills.
After gathering a general consensus from the public and strict analysis by the committee for new bills, we hope to start printing prototypes next year ready for a release in early 2009,” said Park Un-sup, manager at the Bank of Korea’s new bill department.
By Cho Jae-eun Staff Writer [firstname.lastname@example.org]