lean administration, bought up all merchandise which
the merchants brought, but allowed them to export only local products,
mainly tea, iron and lead. This regulation gave him a personal income of
several millions every year, and in addition fostered the exploitation
of the natural resources of this hitherto retarded area.

3 _Monopolistic trade in South China. Printing and paper money in the
north_

The prosperity of the small states of South China was largely due to the
growth of trade, especially the tea trade. The habit of drinking tea
seems to have been an ancient Tibetan custom, which spread to
south-eastern China in the third century A.D. Since then there had been
two main centres of production, Szechwan and south-eastern China. Until
the eleventh century Szechwan had remained the leading producer, and tea
had been drunk in the Tibetan fashion, mixed with flour, salt, and
ginger. It then began to be drunk without admixture. In the T'ang epoch
tea drinking spread all over China, and there sprang up a class of
wholesalers who bought the tea from the peasants, accumulated stocks,
and distributed them. From 783 date the first attempts of the state to
monopolize the tea trade and to make it a source of revenue; but it
failed in an attempt to make the cultivation a state monopoly. A tea
commissariat was accordingly set up to buy the tea from the producers
and supply it to traders in possession of a state licence. There
naturally developed then a pernicious collaboration between state
officials and the wholesalers. The latter soon eliminated the small
traders, so that they themselves secured all the profit; official
support was secured by bribery. The state and the wholesalers alike were
keenly interested in the prevention of tea smuggling, which was strictly
prohibited.

The position was much the same with regard to salt. We have here for the
first time the association of officials with wholesalers or even with a
monopoly trade. This was of the utmost importance in all later times.
Monopoly progressed most rapidly in Szechwan, where there had always
been a numerous commercial community. In the period of political
fragmentation Szechwan, as the principal tea-producing region and at the
same time an important producer of salt, was much better off than any
other part of China. Salt in Szechwan was largely produced by,
technically, very interesting salt wells which existed there since _c._
the first century B.C. The i