From the reign of the Kao-Tsung in 1130 a.d. till the conquest of the whole country by the Mongols, China was divided into two halves - the Sung dynasty holding the Southern part and the Chin Tartars ruling over the Northern half. They were constantly at war with each other and both of them had to issue inconvertible paper money for purposes of revenue. The first attempt of the Sung dynasty was made in 1131, when the Kuan-Tze or Frontier Bills were issued in order to pay the troops stationed on the frontier. As the people had the bitter and unfortunate experience of paper money in the past, these bills had to be forced into circulation and consequently were heavily discounted. Besides the Frontier Bills the Government also issued tea notes, grain notes, and silk notes, exchangeable for tea, grain, or silk, and for such totals as were mentioned in the notes. But the Frontier Bills as well as all the varieties of notes were extremely unpopular; naturally the Government invented the Hui-Tze in 1159; the Hui-Tze replaced all other notes in circulation. The Hui-Tze was in four denominations; the usual 1 kuan or the 1,000-cash note and 500, 300, and 200 cash notes. All these notes were again practically forced on the people and the latter made to pay in metal and coins. It was decreed that the public dues must be payable one-half in specie and the other half in paper - except in places remote from the waterways where the taxes and tributes might all be paid in paper. The object of such a decree was to prevent depreciation of Government paper; later on, this regulation was extended to all business transactions. The Government manufactured the paper for the notes, which were stamped with the Treasurer's seal before they were put into circulation. The Treasurer's seal gave the notes the character of fiat money - it being understood that the Government had the sole monopoly of the issue of paper currency. With every year, a further addition was being made to the total of paper money in circulation; when the Southern Sung dynasty was in its wane the finances of the state was in very bad straits - mainly on account of the excessive issue of the paper notes. When values became extremely low it became necessary that larger and larger quantities of paper money had to be issued and forced into circulation in order to obtain the necessary supplies. In about 1263 a.d. the Hui-Tze was everywhere utterly discredited; so the Government revived the Kuan-Tze which were of two denominations - silver and copper Kuan-Tze. It is an interesting speculation as to the result of the revival of the Kuan-Tze at that period; but before the close of sixteen years after the revival of the KuanTze, the Mongols had already conquered the Chin Territories and the Southern Sung dynasty-came to an end.