Tedium - When Money Doesn’t Look Like Money 💰

Today in Tedium: Cryptocurrency isn’t exactly at the peak of its powers at the moment, admittedly, for lots of good reasons. There has been at least one unmitigated financial disaster involving a crypto exchange in recent months, and anyone who held onto their NFTs after, say, June, did not find that to be a wise decision. Tedium isn’t really a crypto publication, but it does like writing about unusual things, and on the currency front, there’s a lot that’s unusual about currency that doesn’t come in the form of coins, dollar bills, or even cryptocurrency. Today’s Tedium talks about types of currency that aren’t really designed for your wallet. — Ernie @ Tedium

Today’s GIF is of a form of stone currency called a “Rai,” associated with the Micronesian island of Yap. More on that in a second.

An example of “card money,” a form of currency on playing cards, used in French territories starting in the 17th century. (Wikimedia Commons)

That time the French colonies decided it would be a good idea to make currency out of playing cards

Jacques de Meulles was a desperate civil servant who needed a quick solution to a complicated problem.

See, de Meulles was the intendant for New France—a large area spanning from Louisiana to Newfoundland, much of which was famously sold in the Louisiana Purchase of 1803. He was essentially a technocrat managing an area that was largely still coming into its own as a center of economic activity. The territory’s challenging, import-heavy economic model basically left the massive region utterly dependent on ships coming in from France.

And that meant that when the massive French territory ran out of money, largely in coin form, it was stuck attempting to find reasonable alternatives. As the 1984 book Money and Exchange in Canada to 1900, by numismatic researcher A.B. McCullough, put it:

The preoccupation of the colonists with attracting coins may be difficult for the modern reader to appreciate. Today, coins are used almost exclusively for small transactions and for making change. This was an important function in earlier periods and shortages of small coins led to inconvenience in small day-to-day transactions, but the importance of coins in the seventeenth, eighteenth and nineteenth centuries went far beyond small change. Coins were the only legal tender, the only form of payment which could not legally be refused. They were the basic and most reliable form of money. Paper money was a recent innovation, subject to forgery by individuals, to overissue with resulting depreciation, and to repudiation by the issuing agency. The precious metals from which coins were produced had an intrinsic and remarkably stable value which made the coin a secure store for surplus wealth. Coins were also given importance by the leading economic theory of the seventeenth and early eighteenth centuries, mercantilism. Mercantilism identified precious metals, or coined money, with wealth. Because there was a finite amount of precious metals, wealth was acquired, not created. Nations became wealthy by acquiring coin from other nations. The colonists, in seeking to attract coins to their jurisdiction, were simply copying the policies of the home governments.

As implied by that passage, it was not exactly an easy thing to circulate currency in the 17th century, no matter where you were, but there wasn’t really a good alternative, especially for a territory under the management of a far-away royal empire.

That royal empire attempted to solve the problem by minting coins specifically for New France, but even that didn’t go far enough. As McCullough recalled, transporting coins was expensive, but replacing coins with dollars had proven a counterfeiting risk, with the French West Indies Company unsuccessfully pushing for a ban on them. But because coins were so challenging to transport the French government had decided at some point to send bills of exchange to the government, rather than actual coinage. Good for France, but bad for New France, which had to figure out a way to, you know, continue to pay for things.

That was when de Meulles had a bright idea: If France wasn’t going to send him any money, he was just going to make his own. The medium of choice? Recommissioned playing cards:

By June 1685 these sources of funds were exhausted and de Meulles was forced to issue what were in effect promissory notes. These were issued in three denominations: 15 sols, 40 sols and 4 livres. Their circulation as money was guaranteed by a penalty of 50 livres for anyone who refused them in any payment or who sold goods for higher prices if they were paid for in the notes. The proclamation introducing the notes specified that they would be redeemed as soon as funds arrived from France. Because the notes were written on playing cards cut in different sizes according to denomination, they were referred to as "card money.”

The cards were a success. They circulated freely and evidently at face value and were redeemed in September 1685. However, by February 1686 the colonial treasury was again without funds and was forced to issue a new series of cards in 40-sol and 4-livre denominations. These were issued on the same terms as those of 1685 and were redeemed in September 1686.

Essentially, these cards, borne of necessity, existed as a stopgap because France was failing to send money to Canada quickly enough. And, as you might guess, King Louis XIV did not love this. For one thing, the cards were an easy format to counterfeit and threatened to create inflation. But for another—and this is the part that wasn’t quite so obvious at first—it turns out the slow doling out of money on the part of France was intentional, as the French government feared that New France was spending extravagantly, rather than the truth of the matter, which was that France’s attempt at control was making it impossible to to business in New France.

“In later years it became clear that a more serious objection was that the issue of cards weakened the king’s fiscal control over Canada,” McCullough wrote. (If that was the concern, maybe be better at distributing money to the colonies?)

This was an unusual state of affairs, proven more unusual by the fact that playing cards actually proved popular as a form of money, as the blogger Mlle Canadienne recalled: “The colony's resources are limited. The playing cards are made of sturdy cardboard, made to withstand frequent handling. They have emerged as the most durable and affordable medium in the colony context.”

While full of problems—the ever-present effects of inflation being one, as was the not-always-fulfilled promise that the cards would eventually be replaced with actual money from the notably extravagant government of King Louis XIV, whose coffers were often cleared by the many costly wars of 17th century France—playing cards were incredibly useful from the perspective of convenience. Basing money on something people already commonly used and was relatively light in nature seemed like a significantly better idea than carrying around a bunch of coins.

The result was that this temporary stopgap continued in New France in one form or another for decades. Per the book Quebec on the Seventeenth Century, the makeshift currency had roughly 2 million Francs in circulation by 1714.

The inflation that card money created was untenable, so it was at one point removed from circulation, but there was no real alternative, so it was brought back into circulation after a few years. It took until the 1760s for French Canada to finally quit it, though its introduction had ripple effects throughout the French empire for decades afterward as it appeared throughout New France and in territories like modern-day Suriname. At one point during the French Revolution, card money briefly went into circulation in France itself.

All because France was slow at paying its overseas bills.