Proposal preview

Small change in a global context: “fractional currencies” or “minor coins”?

Aims of the session
This session aims at enriching the approaches to the small change problem by contrasting “fractional currencies” and “minor coins”. While the former are embedded into the legal unit of account or the metal value principles of commodity money, the latter may be the result either of a different conception of money (for example China copper coins), of separated monetary circuits (Ancient Greece, rural Europe) or of a bottom-up make-do attitude (Argentina’s redes de Trueque), putting to use the means of exchange at hand in case of scarcity.
Our call for a renewed study of small change is largely open to non-European as well as European participants, and to all periods of history, so as to build a stronger comparative approach. A key question would be whether discriminating between fractional currencies and minor coins or notes is relevant. The former, as their name implies, are in continuity with the monetary system and must function more or less along the same rules. Minor coins and notes, on the other hand, come in two forms: they can be indeed very small tokens of purchasing power, shielded from the larger model by their sheer smallness, or means of payment of a completely different nature, such as bills, scripts and notes, whatever their denomination, but not easily exchanged for the “legal” or “ordinary” currency. We thus posit that small change is not only “fractional”, i.e. a “big change” reduction in size and weight. The “top-down” perspective indeed fails to take into account the “bottom up” dynamics of small change issuance and use, that may explain the acceptance of non-backed means of payment through trust or local “clubs” social rules.

Organizer(s)

  • Patrice Baubeau Université Paris Nanterre patrice.baubeau@orange.fr France
  • Katerina Bregianni Academy of Athens cbregiann@Academyofathens.gr Greece

Session members

  • Rita Martins de Sousa, ISEG - Lisbon School of Economics & Management Universidade de Lisboa
  • Jürgen Nautz, University of Vienna
  • Michael North, Historical Institute, University of Greifswald
  • Rila Mukherjee, School of Social Sciences University of Hyderabad
  • Ekaterina Svirina, NRU Higher School of Economics
  • Georgina Gomez, International Institute of Social Studies (ISS), Erasmus University, Rotterdam

Discussant(s)

  • Akinobu Kuroda Institute for Advanced Studies on Asia, University of Tokyo ankuroda@ioc.u-tokyo.ac.jp

Papers

Panel abstract

Our session will proceed in three steps. First, the participants will present their papers. Second, based upon the papers, we will aim at building a common vocabulary and framework on small change. Third, we will try to design what a research project based upon a bottom-up perspective could be.

1st half

Small change in the Russian Empire in the 18-19th century

Ekaterina Svirina

During the 18-19th century a lot of different coins, including fractional ones, were minted. They were different in weight, denomination and status. Those that were officially circulating as a means of payment in one period could have been banned as a means of payment in another period. Though it didn’t necessarily mean that they stopped being used by people. Some of the coins were chopped in times when the official lowest denomination was not small enough to help facilitate the trade. In line with aim of the workshop the plan is to add the Russian example into the pool of information on small change for global comparative analysis and to discuss whether the problem of small change, in the way it was set for the panel, is actually existing.

During the 18-19th century a lot of different coins, including fractional ones, were minted. They were different in weight, denomination and status. Those that were officially circulating as a means of payment in one period could have been banned as a means of payment in another period. Though it didn’t necessarily mean that they stopped being used by people. Some of the coins were chopped in times when the official lowest denomination was not small enough to help facilitate the trade. In line with aim of the workshop the plan is to add the Russian example into the pool of information on small change for global comparative analysis and to discuss whether the problem of small change, in the way it was set for the panel, is actually existing.

Fractional money, local coins and parallel currencies: conceptual categorization and historical paradigm

Katerina Bregianni

In a global approach of monetary phenomena, transnational monetary systems have found their opponents; among other factors, they include local and minor coins –as an antiparallel of institutionalised fractional currencies, later (mostly during 20th century) paper money issued by local institutions or local actors, and finally parallel monetary circuits in restricted geographical areas. On the other hand, complementary currency or minor coins were in use amid the framework of standardized monetary systems, as a reaffirmation of their ability to sustain enlarged monetary practise, often by low-levelled monetarized societies. Consequently, the paper will focus on this conceptual differentiation, concerning the usages of local coins, supplementary currency and parallel money.

In a global approach of monetary phenomena, transnational monetary systems have found their opponents; among other factors, they include local and minor coins –as an antiparallel of institutionalised fractional currencies, later (mostly during 20th century) paper money issued by local institutions or local actors, and finally parallel monetary circuits in restricted geographical areas. On the other hand, complementary currency or minor coins were in use amid the framework of standardized monetary systems, as a reaffirmation of their ability to sustain enlarged monetary practise, often by low-levelled monetarized societies. Consequently, the paper will focus on this conceptual differentiation, concerning the usages of local coins, supplementary currency and parallel money.

The pervasiveness of monetary plurality in economic crisis and wars

Georgina M. Gómez

The research shows a pervasive emergence of monetary plurality during episodes of social, economic and political demise. We substantiate the pattern linking crisis and monetary plurality based on numismatic evidence. We start with a birds’ eye view of episodes between the 15th and the 19th centuries, to subsequently research in depth the two postwar periods in Europe, the hyperinflation in the German speaking countries, the Great Depression in the USA and the Spanish Civil war. These were all periods during which local and often handmade currency was better than no money at all for small daily payments. We conclude that emergency currencies were not only temporary solutions but provided windows of opportunity to pursue structural changes in the monetary system according to local possibilities and aspirations.

The research shows a pervasive emergence of monetary plurality during episodes of social, economic and political demise. We substantiate the pattern linking crisis and monetary plurality based on numismatic evidence. We start with a birds’ eye view of episodes between the 15th and the 19th centuries, to subsequently research in depth the two postwar periods in Europe, the hyperinflation in the German speaking countries, the Great Depression in the USA and the Spanish Civil war. These were all periods during which local and often handmade currency was better than no money at all for small daily payments. We conclude that emergency currencies were not only temporary solutions but provided windows of opportunity to pursue structural changes in the monetary system according to local possibilities and aspirations.

Small Change in the Latin Monetary Union

Patrice Baubeau

The growing importance of the discussion about small denomination coins and banknotes during the Latin Monetary Union History (1865-1927) and the progressive renationalization of their circulation lead to that seemingly paradoxical conclusion that the LMU died “from below” (small change) and not “from above” (metallic standard, silver to gold ratio). Two major reasons for that were the substitution dynamics bewteen fractional and minor currencies, on the one hand, and their long-range circulation, something that was not anticipated. The LMU history thus offers a fascinating example of how small change circulated and could eventually unhinge monetary systems.

The growing importance of the discussion about small denomination coins and banknotes during the Latin Monetary Union History (1865-1927) and the progressive renationalization of their circulation lead to that seemingly paradoxical conclusion that the LMU died “from below” (small change) and not “from above” (metallic standard, silver to gold ratio). Two major reasons for that were the substitution dynamics bewteen fractional and minor currencies, on the one hand, and their long-range circulation, something that was not anticipated. The LMU history thus offers a fascinating example of how small change circulated and could eventually unhinge monetary systems.

Small Change Counterfeiting and the Borders of Law, Country and Love

Patrice Baubeau

From 1893 to 1898, Francesco Pastorelli engaged in the manufacture and distribution of counterfeit money. Finally arrested and tried in 1898, the police and judicial inquiries open a window on the life of a small forger and his social milieu, as well as the judicial and monetary problems raised by this low craftsmanship crime. Through his use of counterfeited coins, the social scale of currencies appear, pitting one against the other in both commercial and sentimental exchange, and ranking metals accordingly, as if the false money revealed the falseness of relations and feelings.

From 1893 to 1898, Francesco Pastorelli engaged in the manufacture and distribution of counterfeit money. Finally arrested and tried in 1898, the police and judicial inquiries open a window on the life of a small forger and his social milieu, as well as the judicial and monetary problems raised by this low craftsmanship crime. Through his use of counterfeited coins, the social scale of currencies appear, pitting one against the other in both commercial and sentimental exchange, and ranking metals accordingly, as if the false money revealed the falseness of relations and feelings.

The prevalence of cowries (cypria moneta) as 'small change' in Bengal until the sixteenth century

Rila Mukherjee

Cowries (cypria moneta) prevailed as 'small change' in Bengal until the sixteenth century. The 'kapardakapurana' was used as unit of classification and calculation of land revenue (Wicks), and also as real money until the thirteenth century. Between the thirteenth and sixteenth centuries cowries functioned as real money along with the silver 'tanka' coin issued by the Bengal sultans because of its efficacy in gendering everyday transactions (Deyell, 2010; 2011). Such was its efficacy as monetary unit that cowries continued to circulate until at least the seventeenth century, and there is a likelihood that they were used in rural transactions into the eighteenth century. My enquiry will be as to how, and by what means, this 'small change' was integrated into the 'larger' silver money that circulated in the Bay of Bengal (and in the Indian Ocean) in the early modern period--that is in the period from 1500 to 1800.

Cowries (cypria moneta) prevailed as 'small change' in Bengal until the sixteenth century. The 'kapardakapurana' was used as unit of classification and calculation of land revenue (Wicks), and also as real money until the thirteenth century. Between the thirteenth and sixteenth centuries cowries functioned as real money along with the silver 'tanka' coin issued by the Bengal sultans because of its efficacy in gendering everyday transactions (Deyell, 2010; 2011). Such was its efficacy as monetary unit that cowries continued to circulate until at least the seventeenth century, and there is a likelihood that they were used in rural transactions into the eighteenth century. My enquiry will be as to how, and by what means, this 'small change' was integrated into the 'larger' silver money that circulated in the Bay of Bengal (and in the Indian Ocean) in the early modern period--that is in the period from 1500 to 1800.

On the verge of the hyperinflation – Portuguese informal script notes of the IWW and post war years

Rita Martins de Sousa

The legal Portuguese monetary system almost collapse after the IWW. The devaluation of the currency and the high scarcity of fractional currencies disturb the transactions. As a long run monetized economy the answer of the system was the issue of informal script notes issued by municipalities and some firms with local importance. How these notes were issue, accepted and circulated were the main questions of this paper. This was a case-study where trust and “local” social rules surpassed the problems of a standardized monetary system.

The legal Portuguese monetary system almost collapse after the IWW. The devaluation of the currency and the high scarcity of fractional currencies disturb the transactions. As a long run monetized economy the answer of the system was the issue of informal script notes issued by municipalities and some firms with local importance. How these notes were issue, accepted and circulated were the main questions of this paper. This was a case-study where trust and “local” social rules surpassed the problems of a standardized monetary system.

Small Change in Early Modern Germany

Michael North

In the early modern German monetary policy and economy, small change was regarded as a crucial problem. While one group of princes and monetary advisors saw the production of small change as trigger of inflation, others were concerned of the country’s supply of coins with small face value. That is why, these monetary politicians were anxious to prevent a ban of this kind of coin, which had happened to a couple of the traditional small denominations in Germany. My short contribution will reconstruct the monetary debates and the means that territories employed to achieve the recognition of their small denominations.

In the early modern German monetary policy and economy, small change was regarded as a crucial problem. While one group of princes and monetary advisors saw the production of small change as trigger of inflation, others were concerned of the country’s supply of coins with small face value. That is why, these monetary politicians were anxious to prevent a ban of this kind of coin, which had happened to a couple of the traditional small denominations in Germany. My short contribution will reconstruct the monetary debates and the means that territories employed to achieve the recognition of their small denominations.

2nd half