Mongolia is, indisputably, a country with a long history of minting, printing and using coins and paper banknotes.
Historian A.Damdinsuren noted in his works that historical records show bronze left-edged knife coins were used during Hunnu state.
Gold backed paper currency was used in the Mongol Empire for the first time in world history Coins minted in gold, silver and other metals carrying the names of Mongolian khans were in wide circulation in the capital Kharkhorum and other parts of the empire
In 1691, with the invasion by the Manchu dynasty, Mongolia lost its independence and sovereign money and was forced to resort to mainly barter trade until the end of the 19th century. During this period sheep, tea, and khadaga (strips of colored silk) were used as the mode of exchange. In some temples and monasteries banknotes named "tiiz" or "ticket" were in circulation.
Starting from 1720s, trade between Mongolia and China grew, leading to the establishment in Ikh Khuree (Urga) of a settlement of Chinese traders named "Maimaachin" by the locals. There was a great influx of Chinese nationals doing trade in Ikh Khuree (Urga), Khovd, Uliastai and Khiagt and by mid-18th century Chinese trade reached even the most remote areas of Mongolia.
The first Russian trade company arrived in Mongolia in the 1860s with others following and opening offices in Khovd and Uliastai.
Russians brought silver ingots and silver coins, leading to a new era of commodity money in Mongolia.
With the signing of the Russian-Mongolian trade treaty in 1912, Russian goods were exempt from customs duties in Mongolia. This was quite conductive to the rapid development of Mongolian-Russian trade, which was unfortunately stalled by World War I.
At that time Mongolia had no sovereign banking, and branches of Tsarist Russian and Chinese bank were opened in the country. "Liaozi", or paper money, was issued three times by Chinese banks for use in Mongolia.
By the endof the 19th century and beginning of the 20th century, Russian and Chinese coins and Banknotes were in wide circulation in the country witch Spanish, Mexican, Englishd and America dollars, German marks and Japanese yen appearing sporadically, brought by Chinese and Russian traders.
In July of 1921, the People's Government made a decision to repay all dept accumulation by aimags, khoshuu and shavi from the state coffers and to prohibit any new borrowing.
The Mongolian Bank of Trade and Commerce was established in June of 1924, and Tugrug, the currency of the People's Republic of Mongolia, was put into circulation heralding a reform of the state monetary policy.
In February of 1926, 10, 15,20 and 50 mungu coins, 1 tugrug silver coins and 1, 2 and 5 tugrug copper coins were issued.
Starting from January 1, 1927, all state ministries and trade organizations in Mongolia were required to conduct transactions in Mongolian tugrugs with the exchange rate of the tugrug to Chinese currency determined as equal. Furthermore, the government decreed that one-to-one exchange of Chinese currency was to be valid until April 1, 1928, after which the rate was to be reduced and the use of Chinese currency in tax payments and bank transactions to be stopped completely.
Thus, in 1925 foreign usurer businesses started losing their position in the country and by 1929 were driven out altogether.
The purpose of this book is to show the evolution of the currency of exchange in Mongolia witch historical documents evidencing the use of foreign banknotes and coins during different periods of the country's history. We sincerely hope this book will be a valuable addition to the knowledge of numismatists, historians, and people interested in the history of Mongolian economics and finance as well as the general public.