excellent!
On 4/26/07, Michael Perelman <[EMAIL PROTECTED]> wrote:
Tymoigne, Eric and L. Randall Wray. 2006. "Money: An Alternative Story." A
Handbook
of Alternative Monetary Economics, ed. by Philip Arestis and Malcolm Sawyer
(Cheltenham, UK: Edgar Elgar): pp. 1-16.
6-7: "Historical evidence suggests that most 'commerce' from the very earliest
times was conducted on the basis of credits and debits -- rather than on the
basis of
precious metal coins. Innes writes of the early European experience: "For many
centuries, how many we do not know, the principal instrument of commerce was
neither
the coin nor the private token but the tally" (1913, p. 394). This was a
"stick of
squared hazel-wood, notched in a certain manner to indicate the amount of the
purchase or debt," created when the "buyer" became a "debtor" by accepting a
good or
service from the "seller" who automatically became the "creditor" (ibid.).
"The name
of the debtor and the date of the transaction were written on two opposite
sides of
the stick, which was then split down the middle in such a way that the notches
were
cut in half, and the name and date appeared on both pieces of the tally"
(ibid.).
The split was stopped about an inch from the base of the stick so that one
piece, the
'stock', was longer than the other, called the 'stub' (also called the 'foil').
The
creditor would retain the stock (from which our terms capital and corporate
stock
derive) while the debtor would take the stub (a term still used as in 'ticket
stub')
to ensure that the stock was not tampered with. When the debtor retired his
debt,
the two pieces of the tally would be matched to verify the amount of the debt."
7: "Tallies could circulate as 'transferable, negotiable instruments' -- that
is,
as money-things. One could deliver the stock of a tally to purchase goods and
services, or to retire one's own debt. "By their means all purchases of goods,
all
loans of money were made, and all debts cleared' (Innes 1913, p. 396). A
merchant
holding a number of tally stocks of customers could meet with a merchant holding
tally stocks against the first merchant, 'clearing' his tally stub debts by
delivery
of the customers' stocks. In this way, great 'fairs' were developed to act as
'clearing houses', allowing merchants 'to settle their mutual debts and
credits'; the
'greatest of these fairs in England was that of St. Giles in Winchester, while
the
most famous probably in all Europe were those of Champagne and Brie in France,
to
which came merchants and bankers from all countries' (ibid.). Debts were
cleared
'without the use of a single coin'; it became common practice to 'make debts
payable
at one or other of the fairs', and '[a]t some fairs no other business was done
except
he settlement of debts and credits', although retail trade was often conducted
at the
fairs while conventional analysis views the primary purpose of the fairs as
retail
trade, Innes postulated that the retail trade originated as a sideline to the
clearing-house trade. [a footnote suggests that Innes may have been too extreme
in
this respect] BoyerXambeu [Boyer-Xambeu, Marie-Therese, Ghislain Deleplace, and
Lucien Gillard. 1994. Private Money and Public Currencies (NY: M. E. Sharpe).]
concur
that twelfth- and thirteenth-century European medieval fairs were essential in
the
trading and net settling of bills of exchange, the latter being done in several
ways,
from the (rare) use of coins, to bank transfers, the carrying forward of net
positions to the next fair (one of the most frequently used techniques), and
the use
of transferable bills of exchange (ibid., pp. 34, 38-9, 65). These bills of
exchange
were, along with debenture bills for intra-nation trade between cities, the
preferred
debt instruments used by merchants in commerce. Coins were of less
significance."
7: "Credits and debts are at least 2000 years older than the earliest known
coins
-- with the earliest coins appearing only in the seventh century BC. Second, the
denominations of most (but not all -- see Kurke, 1999) early precious metal
coins
were far too high to have been used in everyday commerce. For example, the
earliest
coins were electrum (an alloy of silver and gold) and the most common
denomination
would have had a purchasing power of about ten sheep, so that "it cannot have
been a
useful coin for small transactions" (Cook, Robert M. 1958. "Speculation on the
Origins of Coinage." Historia, 7: 257-62, p. 260). They might have sufficed
for the
wholesale trade of large merchants, but they could not have been used in
day-to-day
retail trade."
--
Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 530-898-5321
E-Mail michael at ecst.csuchico.edu
michaelperelman.wordpress.com
--
Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your
own way and let people talk.) -- Karl, paraphrasing Dante.
