try to grow
and removed the fear of competition from the military, some of whom did
not belong by birth to the gentry. The generals by whose aid the empire
had been created were put on pension, or transferred to civil
employment, as quickly as possible. The army was demobilized, and this
measure was bound up with the settlement of peasants in the regions
which war had depopulated, or on new land. Soon after this the revenue
noticeably increased. Above all, the army was placed directly under the
central administration, and the system of military governors was thus
brought to an end. The soldiers became mercenaries of the state, whereas
in the past there had been conscription. In 975 the army had numbered
only 378,000, and its cost had not been insupportable. Although the
numbers increased greatly, reaching 912,000 in 1017 and 1,259,000 in
1045, this implied no increase in military strength; for men who had
once been soldiers remained with the army even when they were too old
for service. Moreover, the soldiers grew more and more exacting; when
detachments were transferred to another region, for instance, the
soldiers would not carry their baggage; an army of porters had to be
assembled. The soldiers also refused to go to regions remote from their
homes until they were given extra pay. Such allowances gradually became
customary, and so the military expenditure grew by leaps and bounds
without any corresponding increase in the striking power of the army.

The government was unable to meet the whole cost of the army out of
taxation revenue. The attempt was made to cover the expenditure by
coining fresh money. In connection with the increase in commercial
capital described above, and the consequent beginning of an industry,
China's metal production had greatly increased. In 1050 thirteen times
as much silver, eight times as much copper, and fourteen times as much
iron was produced as in 800. Thus the circulation of the copper currency
was increased. The cost of minting, however, amounted in China to about
75 per cent and often over 100 per cent of the value of the money
coined. In addition to this, the metal was produced in the south, while
the capital was in the north. The coin had therefore to be carried a
long distance to reach the capital and to be sent on to the soldiers in
the north.

To meet the increasing expenditure, an unexampled quantity of new money
was put into circulation. The state budget increased from 22,20