Tuesday, March 16, 2010

More Currency

There was something else I wanted to say about currency, that I didn’t have time for this morning. It is somewhat in consideration of the trade system for my world.

One of the calculations that makes possible the determination of price in my system designates the amount of foreign goods coming into a given trade region, along with the origin of those goods. Thus I can give a number for the total of foreigners travelling through a given city in the course of a year or the course of a single day. I can also, if I choose, determine the quantity – and origin – of minted coins in a given place.

It is referenced in the GM’s guide that there are multiple types of currencies in the world; we’re very familiar with this, and the complications involved, whenever we travel. What we’re not quite so familiar with is that in the medieval world, many political divisions did not have an exclusive monetary unit ... rather, they depended upon the availability of monetary units minted in other regions. Like the present American dollar, or the British pound of the 19th century, the Italian ducat reigned supreme in many parts of Europe ... as did the guilder, the florin, the taler and the dubloon.

About 18 months ago I experimented in a small fashion with the following scenario: the party raids a hobgoblin fortress, devastates the inhabitants and plunders heartily an extensive treasure of coins, amassed over two decades of successful raiding. Rather than divide the coins into merely gold, silver and copper, I instead also grouped the coins according to the geographic prevalence of four different varieties of coinage. When I say ‘experimented,’ I mean I limited the varieties to only four types. I could have easily included twenty types of coins, with everything from Portuguese, Persian and even a certain smattering of Chinese coinage ... since the party’s location upon plundering this horde was at the edge of the extensive Ottoman empire (it can be assumed the hobgoblins were raiding foreign merchants of all types).

The result? One huge, massive headache. My poor players were not prepared for gold coins that were worth differing amounts of silver, or huge silver coins worth more than a gold coin, or even ‘pieces of eight,’ one of the four types I included. Very quickly they sought out a means of getting rid of the alternative coinage, even at a very poor exchange rate – they’d rather be poorer than have to handle the bookkeeping.

And so I abandoned the experiment ... though I think about it from time to time. At some stage I may feel it’s worth it to ME to do the various calculations (it was a headache for me also, after all), but not quite yet. I am conjecturing a treasure table based on universal availability of valuables, but I’m not at the point where I can instigate said table (still thinking of how the table would be designed!). So the idea is shelved.

But I thought I might mention here that mixed coinage is a worthy prospect for a DM interested in upgrading their economics tables ... not merely in terms of having people make exchanges at the border, but also in terms of certain coins being of greater value because of the more reliable political force backing their value (devaluation of coins is on my horizon), because smugglers and other entities might prefer a foreign coin, and because losing that 10% is just wrong.

I’d like a party that considers keeping a store of differing coins when they travel, paying talers here and ducats there, as they move back and forth across a border. Unlike the DMG, kingdoms in the medieval setting did not outlaw foreign coinage regularly (exceptions always exist), since local minted coins were rarely enough. In regions like the pirate coasts of Africa, or the crossroads of Turkestan, it simply wouldn’t be practical to have a limited acceptance policy where it comes to money.

Something to consider.

7 comments:

R said...

I try to keep my campaign around the years of 1000 to 1250, which I believe is much earlier than yours, but have you experimented with transactions that are based upon the weight of the currency instead of by tale?

Rob Conley said...

Mixed coinage pretty much boils down to how much pure metal in the coin. While I understand the players not liking being handed a mixed bag of coins. If you treat like how gem are treated then the issues can go away. Just value all the coins by a standard measure of value.

For example suppose your standard is a silver penny 1.85 grams. That silver trades with gold 20 to 1.

A Florentine Guilder was a gold coin weighing about 3.5g This makes the Florin worth about 38d.

Alexis said...

While yes, at the time that R's world takes place, weight of pure metal was the principal consideration, this was less true during the later Roman empire, and beginning around the time that my world takes place, the 17th century. In those periods, the actual precious metal content of coins was dwindling, so that a 'silver' taler or 'gold' ducat would contain only a percentage of the metal mixed with lead, zinc, nickel, whatever was available.

The 'value' of a coin, then, became dependent on the willingness of the political division of origin's willingness to recognize the coin as worth whatever it said on the stamp. In Roman times, this led to runaway inflation (during certain times in the Spanish kingdom also, when ships were late returning from the New World at critical times). It was possible for a kingdom to fall into turmoil, and for the coins from that kingdom to turn to dross - as happened with Germany during the 30 years war. This was made worse by certain kingdoms needing quick monies, and slapping together 'gold' coins without any gold in them.

So while I respect the ideal of a perfect, flawless gold coin (and play with it in my world, because it's easier), that isn't the final answer when it comes to the value of coinage.

James V said...

If you treat like how gem are treated then the issues can go away. Just value all the coins by a standard measure of value.

For me that would be good starting point.

From there, I think it would even be possible to include value adjustments by confidence in the coin's State of origin. I don't know if that kind of data was ever gathered for other periods, but I would imagine there is historical currency information that goes back at least to the 20th century. Note when the currency values correlate to economic or political events, and a the adjustments can be derived from that. I'm thinking it would take a fair amount of data mining and number crunching, but at least the concept is sound, to start with a basline standard of value and build adjustments around it.

Andrej said...

Alexis, were the 1/2 orcs of the Cuman a later development in your world from the time of this writing?

Alexis said...

Not at all, Andrej. The half-orc Cumans go back to about 1998/99. I'm curious why you ask (or was this intended for a more recent post?)

Steve L. said...

Actually, the economic value of coins was based on their precious metal content (fiat currency, issued by modern states, is another matter). Money, as an economic good, is subject to supply and demand; consequently, debasement reduces demand for it, decreases its value, and causes prices to rise (i.e., the reduction in its purchasing power means that it takes more money/coins to buy a given good than it did previously). (This also explains modern currency fluctuations in terms of the price of a stable, fixed supply of a commodity such as gold; such fluctuations are largely due to the artificial inflation of the money supply by a government's central bank; the price of gold--or other suitable commodity--in terms of a given currency reveals that currency's genuine economic value.) This is despite the officially-declared face value; I would venture to say that no faith or confidence is involved: Economic actors care only about the value of the metal. See also Gresham's Law, by which consumers spend only the debased commodity money and hoard the good commodity money.

Word verification: jentalon (a sharp claw possessed by certain teenaged girls).