The National Deposit Department

As a part of the ministry of finance, the National Deposit Department played an important role in the financial cycle of the Northern Song Dynasty. In this article, I shall present studies concerning the National Deposit Department, which was the centre of the money supply in the financial system, thus revealing its contribution to the financial cycle, as well as its influence on economies of the empire.This article will begin with the reference to Miyazawa Tomoyuki's explanations of the drastic reductions of income from business taxes during Qingli and Huangyou times: i.e. the Miyazawa Hypothesis. Analysis and comparisons will be done on data of total income, business taxes and monopolies, revealing the positive correlations between the elements mentioned above and the fluctuations of commodity prices. On this basis, a deeper correlation between economic changes and money supply could be discovered. This article will also present studies on the status of the National Deposit Department, as the administration department of the coin money, during the early years of the Northern Song Dynasty, in order to explain the long-term inflation caused by surplus money supply. Responding to the peak of inflation, the government brought about a series of alterations of financial policies. The alterations included the combination of the reclamations of currency accomplished by the National Deposit Department and other economic approaches concerning the commodity prices and income taxes, which eventually caused the reductions in business taxes. All the historical facts mentioned above correspond to the Miyazawa Hypothesis.Moreover, this article illustrates how the government succeeded in satisfying the huge economic demand of the armies in spite of the fact that no national market had been formed during that time. This achievement is realized through the supply and reclamations of money performed by the National Deposit Department, which eventually played the role of the collections and allocations centre of the treasury all over the empire. This historical fact corresponds to the concept of "Military finance" proposed by Japanese scholars.Such finance cycles existed even after the Xifeng Reforms. However, the role of the National Deposit Department was reduced due to the rising of new financial institutions such as the fengzhuangku. Analysis of the status of the financial cycles and the changes inside the National Deposit Department shall be presented to support the conclusion. That it is the misinterpretations of the effect of the finance cycles that had caused the economy collapse during the late years of the Northern Song Dynasty, when the empire was rules by Emperor Huizong.Last but not least, studies on the formation of the department-centered financial system of the Tang and Song Dynasties shall also be presented, as well as statements concerning theories such as "the accumulative poverty".