type of literature, the literature of entertainment, could come into
existence. Not all these consequences showed themselves at once; some
made their first appearance later, in the Sung period.

A fourth important innovation, this time in North China, was the
introduction of prototypes of paper money. The Chinese copper "cash" was
difficult or expensive to transport, simply because of its weight. It
thus presented great obstacles to trade. Occasionally a region with an
adverse balance of trade would lose all its copper money, with the
result of a local deflation. From time to time, iron money was
introduced in such deficit areas; it had for the first time been used in
Szechwan in the first century B.C., and was there extensively used in
the tenth century when after the conquest of the local state all copper
was taken to the east by the conquerors. So long as there was an orderly
administration, the government could send it money, though at
considerable cost; but if the administration was not functioning well,
the deflation continued. For this reason some provinces prohibited the
export of copper money from their territory at the end of the eighth
century. As the provinces were in the hands of military governors, the
central government could do next to nothing to prevent this. On the
other hand, the prohibition automatically made an end of all external
trade. The merchants accordingly began to prepare deposit certificates,
and in this way to set up a sort of transfer system. Soon these deposit
certificates entered into circulation as a sort of medium of payment at
first again in Szechwan, and gradually this led to a banking system and
the linking of wholesale trade with it. This made possible a much
greater volume of trade. Towards the end of the T'ang period the
government began to issue deposit certificates of its own: the merchant
deposited his copper money with a government agency, receiving in
exchange a certificate which he could put into circulation like money.