Chapter 477: Chapter 345: The Pros and Cons of Paper Money
"This absolutely won’t work!" Gaius immediately voiced his dissent loudly: "The tribe’s gold and silver coins in storage are already dwindling, and once they’re all distributed, what shall we use to purchase iron ore from the Alde Tribe?"
"Gaius, as far as I know, the Aldeans are currently very fond of the pottery, furniture, and wooden sculptures made by our tribe. A kiln of pottery can be exchanged for several carriages of iron ore. Three months ago, we had already stopped needing to use gold and silver coins to purchase iron ore from the Alde Tribe. This is what Pigeris mentioned during the previous Political Affairs Hall meeting."
Pigeris interjected as a reminder: "We may not need gold and silver coins to purchase iron ore from the Aldeans, as we can barter goods. But for the iron ore we need from the Noric people, we’ll still have to pay with gold and silver coins. Now, if we distribute all the coins as you say, there won’t be any left to buy iron ore from the Noric people."
"How can we not have money?" Capito sneered, "Can’t the Commerce Department manage the market and recoup the coins through selling goods?"
Pigeris replied mockingly, "Capito, our tribe doesn’t produce gold or silver; we don’t have mines. The gold and silver coins we originally obtained from pillaging the Romans have been repeatedly spent on purchasing iron ore, while our tribe continues to expand, the population continues to grow, more officials are appointed, and the production of goods from the workshops continues to increase. Do you seriously think the amount of gold and silver coins in our tribe is sufficient?"
Capito froze, then coldly said: "Pigeris, you’re the one who previously proposed substituting wheat for gold and silver coins in trade, which caused no small amount of trouble for your Commerce Department. That’s why I suggested this. Since it’s not feasible, figure it out yourself."
"Enough, quiet down. Let me think this through properly." Once Maximus spoke, the hall immediately quieted, and everyone’s gaze focused on him.
Back then, when the Nix Tribe was first established, markets were to be built, but the tribesmen had no money. How could trade be carried out? After discussion by the Political Affairs Hall, a decision was made to use wheat as a substitute for gold and silver coins for trading goods in the tribe’s markets and as compensation for salaries. This was because the tribesmen had acquired large tracts of land and would have abundant wheat after each harvest, enabling them to buy the goods they desired. Additionally, food was precious to every tribe member, easily accepted, and quickly spread.
Coming from his past life, Maximus understood this was actually a primitive version of bartering, designed as a temporary solution to address the tribe’s initial establishment, lack of gold and silver, and the desire to promote trade.
But he hadn’t expected just over a year to pass before the wheat-as-currency method revealed numerous issues. The tribe had developed too quickly, and it was no longer the struggling group of forty thousand people with homes bereft of possessions from two years ago.
Nowadays, the tribe had expanded from the banks of the Kupa River to the Sava River Plain. The population had multiplied by three or four times. The Old Clan Members had surplus grain at home, various workshops blossomed, production increased daily, and the goods they manufactured not only appealed to the tribespeople but also drew admiration from outsiders (such as the Aldeans). Marketplaces were increasingly established across the territory, and commerce flourished. After September, trade was expected to become even more prosperous because the harvest would empower both old and new tribespeople to actively participate in trade activities. Thus, currency had become a pressing issue.
What was the solution?
Maximus originally had a rough idea but hadn’t anticipated implementing it so soon, which left him feeling hesitant. He stood up and paced thoughtfully beside his seat.
A moment later, he stopped, his expression composed, and said, "We’ve been here for almost two years now. Everyone should be aware that, apart from our Nix Tribe, the Aldeans, Pannonians, and even the Boyi people—all of these tribes conduct their trade internally through bartering."
"I’ve heard that many tribespeople mock their ignorance and backwardness. But you must understand that several thousand years ago, the entire Mediterranean world—and indeed all of humanity—conducted commerce through barter. As time progressed, populations grew, and trade activities increased, making barter increasingly inconvenient. It was then that humanity invented currency to replace bartering, becoming a medium for exchange during trade, providing a more accurate measure of value, and facilitating transactions more efficiently. This innovation made Mediterranean commerce more prosperous."
"In the past, shells, iron, copper, lead, and tin... all have been utilized as currencies by some city states or kingdoms. Eventually, gold and silver became the dominant currency used by people across most parts of the Mediterranean."
The people in the hall listened intently. From the moment they were born, the environment had shaped their belief that using gold and silver to buy items was as natural as drinking water. Hearing Maximus explain the history of currency expanded their perspectives, enabling them to realize that gold and silver weren’t initially used as money, and prompting deeper reflection.
Seeing this reaction, Maximus increased his rhetorical emphasis, asking, "Gold and silver can’t be eaten, can’t be worn, and can’t be forged into tools for farming or waging war. They seem to be useless. So why have they become the primary form of money recognized by people across the Mediterranean today? Can anyone explain?"
Everyone fell into contemplation.
"Is it because gold and silver are beautiful and rare?" Karina, rarely speaking, hesitantly offered her opinion.
"Gold and silver aren’t considered rare in the Mediterranean. Many places have gold and silver mines with quite significant production." Pigeris countered. "I think their widespread use stems from their relative abundance, which enables circulation across much of the Mediterranean. Additionally, gold and silver are soft, easily forged, and easily cut without corroding. Thus, people prefer them as a medium for trade."
"I think... perhaps precisely because gold and silver have no other uses, those who possess them won’t consume them for other purposes. Hence, they can be widely recognized as currency by many city states," someone mused.
Gaius shared his perspective with emotion: "Our tribe uses wheat as money. But during last year’s war with the Pannonians, to ensure ample grain supplies for the army, the Finance Department halted salary payments to officials and artisans for over a month, and two town marketplaces stopped trading. If we had been using gold and silver as currency, this issue wouldn’t have occurred."
Maximus spoke again, seriously stating: "You all answered well. You’ve essentially outlined why the majority of city states in the Mediterranean chose to use gold and silver as currency."
"Nevertheless, using gold and silver as money also poses problems. For instance, purchasing large quantities of goods requires vast amounts of gold and silver, necessitating the use of carriages or many people for transportation. During transactions, gold and silver must not only be weighed accurately but also scrutinized for purity, preventing counterfeiting..."
"Still, despite these drawbacks, gold and silver are significant improvements over previous items used as currencies, which is why they’ve gained widespread use in Mediterranean trade. But could there be something even more suitable than gold and silver for currency, more beneficial to commercial activities?"
Maximus looked at the gathering crowd, who had resumed their reflections. Without waiting for their responses, he continued, speaking firmly and deeply: "Of course there is, and it’s unique to our tribe! This material is—paper!"
"Paper has already been widely used in our tribe. I’ve heard its manufacturing process isn’t complicated, and the raw materials are easy to obtain. But how could it serve as currency?"
Chief Officer Kefisofon was the first to question. As the head of the Cultivation Department and also a teacher at the school, he interacted with paper more than anyone else. At the beginning of last year, paper was a rare commodity, but now the Finance Department distributed it in large quantities to schools across the tribe, making him feel it was inexpensive.
Maximus smiled: "Precisely because paper is easy to manufacture, it won’t run out, and can be extensively used in transactions. You may believe paper is cheap because the Paper Making Workshop belongs to the tribe, and the paper it produces is freely given to all departments. But you must understand that the entire Mediterranean world relies only on our tribe to manufacture paper. It’s far superior to papyrus for writing and record-keeping. If we were to sell paper externally, wouldn’t it be considered valuable?"
"But we can’t sell paper externally right now." Pigeris remarked regretfully.
"No, we can’t. But this only proves paper itself has value. Moreover, since the Paper Making Workshop is under the tribe’s direct control, there’s no risk of others using paper to forge counterfeit money, disrupting our tribe’s markets. You see, our tribe possesses unparalleled advantages for using paper as money."
Maximus smiled confidently: "Now, how should we use paper as currency to purchase goods? Should paper be valued and exchanged based on its weight, like gold and silver? Of course not!
"We should leverage paper’s writable attributes and denote specific denominations on each sheet. For instance, if a sheet is marked as one Seth, then that paper could only be exchanged for a single copper coin; if another sheet is marked as one Tina, then it could be exchanged for one silver coin—"
"Leader, if one sheet of paper is marked as 1,000 Ores, does that mean it could truly serve as 1,000 gold coins?" Pigeris raised a question.
Maximus nodded: "In theory, yes."
The hall erupted in commotion. Everyone was both puzzled and astounded.
"Fellow members, if gold and silver are useless objects, why does one gold coin buy a cow, and one silver coin buy a ceramic pot?" Maximus patiently explained. "This is because the value of gold and silver coins is a consensus formed over the long course of commercial activity across the Mediterranean."
"Yet our tribe, newly established, hasn’t had time for tribesmen to gradually reach such a consensus. Thus, it falls upon our tribe—upon the Political Affairs Hall—to assign values to paper currency. But this is not an authority that can be exploited wantonly! We must take full responsibility for the tribespeople and ensure that every piece of paper currency we produce corresponds to the value of goods of its denomination, giving paper currency its true worth."
"This requires the tribe to guarantee the credibility of paper currency—like our oaths to the Danu Goddess—which we absolutely must uphold! Should we recklessly print large denominations on pieces of paper and flood the markets, it would constitute theft of the tribespeople’s wealth and destroy the credibility of paper currency. When that happens, no one will be willing to use it!"