endurable even when peace with the Kitan had to be bought by the payment
of an annual tribute. From 1004 onwards, 100,000 ounces of silver and
200,000 bales of silk were paid annually to the Kitan, amounting in
value to about 270,000 strings of cash, each of 1,000 coins. The state
budget amounted to some 20,000,000 strings of cash. In 1038 the payments
amounted to 500,000 strings, but the budget was by then much larger. One
is liable to get a false impression when reading of these big payments
if one does not take into account what percentage they formed of the
total revenues of the state. The tribute to the Kitan amounted to less
than 2 per cent of the revenue, while the expenditure on the army
accounted for 25 per cent of the budget. It cost much less to pay
tribute than to maintain large armies and go to war. Financial
considerations played a great part during the Sung epoch. The taxation
revenue of the empire rose rapidly after the pacification of the south;
soon after the beginning of the dynasty the state budget was double that
of the T'ang. If the state expenditure in the eleventh century had not
continually grown through the increase in military expenditure--in spite
of everything!--there would have come a period of great prosperity in
the empire.


2 _Administration and army. Inflation_

The Sung emperor, like the rulers of the transition period, had gained
the throne by his personal abilities as military leader; in fact, he had
been made emperor by his soldiers as had happened to so many emperors in
later Imperial Rome. For the next 300 years we observe a change in the
position of the emperor. On the one hand, if he was active and
intelligent enough, he exercised much more personal influence than the
rulers of the Middle Ages. On the other hand, at the same time, the