Recently I have listened to a few podcasts about how currency worked in the 1800's, but I couldn't find them in the few minutes I looked before sending my earlier email.
I got interested in 19th century currency as context for the Kirtland Safety Society Anti-Bank, but that context is far richer than Mormon history. Here is one example episode that contrasts bank issued currency (their term) with counterfeits, and concludes that the only difference between them is who goes to jail when the note cannot be redeemed. http://backstoryradio.org/shows/bridge-for-sale-deception-in-america/ The segment is Mo' Money, Mo' Problems. (BackStory is a great podcast, BTW.) I can't find the other episode. I think it was one from NPR's Planet Money. But it describes how each shop owner had to have a book of currencies with exchange rates that was updated regularly. The further you got from your town, the less your bank note was worth. It provided a lot of friction in transactions and sounded like a huge pain. I find crypto currencies to be fascinating, and I see the value in a digital form of cash (i.e. no corporate fees and increased privacy). However, I think a lot of the "market of currencies" sales pitch that accompanies these innovations ignores the previous experience in America and other countries with multiple simultaneously accepted currencies. Richard On Saturday, January 18, 2014 16:30:48 Michael Torrie wrote: > On 01/18/2014 01:33 PM, Richard Esplin wrote: > > This was how money worked in the United states until the end of the 19th > > century. No clear market winner emerged. It was a mess. > > I assume you were referring to the situation where banks issued bank > notes and many banks crashed in the early 1840s, including the Kirtland > Saftey Society. We might want to distinguish between currency (the US > dollar) and the bank notes. The bank notes weren't currency. My > understanding is that they were promisary notes that the bank would pay > real USD to someone who wanted to cash them in. Banks issued far more > bank notes than they had assets to cover, and when people demanded their > money, the banks collapsed. It's true the bank notes were used as > money, but my understanding is they weren't currencies. They were all > USD for one. Also their value didn't fluctuate as a commodity compared > to the USD, though I'm sure in communities where bank notes were used > that prices of goods went up and down depending on the perception of a > particular bank's position and whether or not they'd make good on their > promises. > On Saturday, January 18, 2014 00:13:18 Andy Bradford wrote: > <snip> > > > As long as there is no grant of monopoly by a State, will not the market > > produce a money that is economically superior (e.g. higher quality at > > non-monopoly prices)? Or do you believe that a monopoly in the > > production of money does not follow the same economic logic that says > > that relative to markets in which open competition exists, monopoly in > > markets produces a poorer quality good at higher prices? > > > > I can imagine a large number of money making entrepreneurs entering the > > market, and many of them failing. It's also entirely possible, and > > likely, that market participants will eventually settle on just one > > or even two monies that are the so-called ``universally accepted'' > > currencies. How can we know if monies are not allowed to compete? I > > don't consider the EUR and the USD to be an example of competition in > > this case, at least not for the majority of market participants (perhaps > > for well connected bankers, but they are part of the banking cartel). > > > > Andy /* PLUG: http://plug.org, #utah on irc.freenode.net Unsubscribe: http://plug.org/mailman/options/plug Don't fear the penguin. */
