Re: Help Sought

[Daniel Davies <dsquared@xxxxxxxxxxxxxxxx>]

Albeit horrendously tangential to the orginal question, the free banking experience is quite sinfully interesting.  The Jock banks had "Note wars", runs on currencies, all sorts of skullduggery and fun & games, but the system actually worked, for hundreds of years.  My understanding, though, is that the lynchpin of the Scottish system (which was a system of truly non-state currency; AFAICT the Dutch East India company was more or less acting as a state with its company scrip) was the rigidly enforced prohibition on small denomination banknotes.  In other words, the fiat currency was a rich man's game, which game couldn't be allowed to bring the general means of making transactions (specie or minted coins ie state money) into disrepute.  There are quite possibly all sorts of interesting analogies one could draw here.

-----Original Message-----
From: PEN-L list [mailto:PEN-L@xxxxxxxxxxxxxxxx]On Behalf Of Jurriaan Bendien
Sent: 16 September 2004 17:03
To: PEN-L@xxxxxxxxxxxxxxxx
Subject: Re: Help Sought

I don't know the history of non-state fiat currencies, but I grant that it's quite possible for a non-state to issue currencies that don't suffer from rapid depreciation (inflation).

The Dutch United East India Company founded at the beginning of the 17th century issued its own currency, as well as shares and stock options. My maternal grandfather who worked in the Dutch East Indies until 1937 gave me some old minted coins from this first multinational corporation, so I know this for sure. The internal economy of the UEIC was large; over a hundred thousand people were on the payroll eventually plus slaves, and the corporation itself performed most of the functions of a whole society - it ran schools, courts, hospitals, police, army, personal services, the works. The currency was exchangeable against Dutch florins, and sometimes against other currencies as well.

It is possible this type of thing will occur again in the future (to some extent this already happens with money-of-account).

Jurriaan

 

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