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Copyright©1999byLarryAllen

Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmitted,inanyformorbyanymeans,electronic,mechanical,photocopying,recording,orotherwise,exceptfortheinclusionofbriefquotationsinareview,withoutpriorpermission

inwritingfromthepublishers.LibraryofCongress

Cataloging-in-PublicationDataAllen,Larry.Encyclopediaofmoney/

LarryAllen.p.cm.Includesbibliographical

referencesandindex.ISBN1-57607-037-9(alk.

paper)1.MoneyEncyclopedias.I.

Title.HG216.A431999332.4′03—dc2199-38048CIP

030201001098765432ABC-CLIO,Inc.130CremonaDrive,P.O.Box

1911SantaBarbara,California

93116-1911Thisbookisprintedonacid-

freepaper.ManufacturedintheUnited

StatesofAmerica.

Pagev

ContentsPreface,ixIntroduction,xi

EncyclopediaofMoneyActforRemedyingtheIll

StateoftheCoin1AeginetanSilverStandard,2Alchemy,3AlexandertheGreat,4Almonds,6AmericanPenny,6AmericanRevolution

Hyperinflation,7AncientChinesePaper

Money,9ArabDinar,10

ArgentineHyperinflation,11Assignats,12AthenianOwls,12AtticSilverStandard,12Augustalis,14AugustanMonetarySystem,

15AustrianHyperinflation,16AutomaticTransferService,

16AyrBank,17

BabylonianGrainandSilverStandard,19

BalanceofPayments,20BancodelPiazzadelRialto,

Il,21Bank,21BankCharterActof1833,21BankCharterActof1844,22BankClearinghouses,23BankofAmsterdam,24BankofDeposit,25

BankofEngland,26BankofFrance,28BankofJapan,29BankofScotland,30BankofSpain,31BankofVenice,31BankRate,32BankRestrictionActof1797,

32BankingActsof1826,33BankingSchool,34

BarbadosActof1706,34Barter,35BeerStandardofMarxist

Angola,36BelgianFranc,37BelgianMonetaryReform,37Billon,38BillsofExchange,38Bimetallism,39BisectedPaperMoney,40BlackDeath,40

Bland-AllisonSilverRepurchaseActof1878,41

BloodMoney,42BolivianHyperinflation,43BrazilianHyperinflation,44BrettonWoodsSystem,44BrideMoney,45BritishGoldSovereign,45BronzeStandardofAncient

Rome,46

ByzantineDebasement,47Caissed’Escompte,49Calderilla,50Cappadocia,50CarolingianReform,50CaseofMixtMonies,51Cattle,52Cellini,Benvenuto,53CelticCoinage,53CentralBank,54CertificateofDeposit,55

Check,56ChileanInflation,57ChineseHyperinflation,57ChineseKnifeMoney,58ChineseLeatherMoney,59ChineseSilverStandard,60Clipping,61Cloth,62CocoaBeanCurrency,63

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EncyclopediaofMoney

Pageiii

EncyclopediaofMoney

LarryAllen

SantaBarbara,California

Denver,ColoradoOxford,England

Pagevi

CoconutStandardofNicobars,63

CodeofHammurabi,64CoinageActof1792,64CoinageActof1834,65CoinageActof1853,66CoinageActof1965,67CommodityMonetary

Standard,68CommodityMoney,69ConfederateHyperinflation,

70ConstantineI,71ConsumerPriceIndex,73Copper,73CorinthianSilverStandard,

74CornBanksofEgypt,75CorsoForzoso,76

CounterfeitMoney,76Cowrie,77CreditUnionShareDrafts

(CUSD),78CredoleandTratte,78Crimeof’73,79CroeseanReform,79CrossCoinage,80“CrossofGold”Speech,81CultureofMoney,82Cupro-Nickel,84

CurrencyActof1751,84CurrencyActof1764,85CurrencyActof1773,86CurrencySchool,86DaVinci,Leonardo,89Daric,90DeaOchoReales,91DebitCard,92DecimalSystem,93Denarius,94DepositoryInstitution

DeregulationandMonetaryControlActof1980,94

DeutscheBundesbank,95DeutscheMark,96DissolutionofMonasteries,

97Dollar,98DollarCrisisof1971,99Drachma,99DrumMoney,100

DuodecimalSystem,100EdictofPricesofA.D.301,

101EgyptianCopperStandard,

102Electrum,102EnglishPenny,102EquationofExchange,103EuroCurrency,104Eurodollars,105EuropeanCurrencyUnit,105

EuropeanMonetaryUnion(EMU),106

ExchequerBills,106ExchequerOrderstoPay,106Faust,109FeatherMoneyofSantaCruz,

110FederalDepositInsurance

Corporation(FDIC),111

FederalReserveSystem,111FiatMoney,112

FirstBankoftheUnitedStates,112

Fishhooks,113Fleetwood,William,114FlorentineFlorin,114FoodStamps,115ForcedSavings,116ForeignExchangeMarkets,

117ForestallSystem,118FortKnox,119

FractionalReserveSystemofBanking,120

Franklin,Benjamin,120FreeBanking,120FreeSilverMovement,123FrenchFranc,125FrenchLivre,126FrenchRevolution

Hyperinflation,126FurMoney,126GDPDeflator,131

GermanHyperinflation,131GhostMoney,133Glass-SteagallBankingAct

of1933,133GoatStandardofEastAfrica,

134Gold,135GoldBullionStandard,136GoldDust,136GoldExchangeStandard,137GoldMarkofImperial

Germany,137GoldReserveActof1934,

138GoldRushes,139GoldStandard,141GoldStandardActof1900,

143GoldStandardActof1925,

144GoldStandardAmendment

Actof1931,145GoldsmithBankers,146

Gold-Specie-FlowMechanism,147

GreatBullionFamine,147GreatDebasement,148GreekMonetaryMaelstrom:

1914–1928,149Greenbacks,150Gresham’sLaw,151GuernseyMarketHouse

PaperMoney,152Guns,153

High-PoweredMoney,155HouseofSt.George,155HumanHeads,156HungarianPost–WorldWarI

Hyperinflation,157HungarianPost–WorldWar

IIHyperinflation,157

IcelandicSagaMoney,161InconvertiblePaperStandard,

161IndependentTreasury,162

Indexation,163IndianRupee,164IndianSilverStandard,164InflationandDeflation,165InterestRate,166InternationalMonetary

Conferenceof1878,167

InternationalMonetaryFund,168

IronCurrency,169

IslamicCoinage,170ItalianLira,170Ivory,170Juilliardv.Greenman,173KnightsoftheTemplars,175LaborNotes,177LandBankSystem,177Larin,178LatinMonetaryUnion,179

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Law,John,180LawoftheMaximum,181LeatherMoney,181Leather-WrappedMoneyof

AncientCarthage,181

LegalReserveRatio,182LegalTender,183

LexAternia-Tarpeiaof454B.C.,185

LexFlaminiaof217B.C.,186LiquorMoney,187LiverpoolActof1816,187LombardBanks,187LydianCoinage,188MacmillanCommittee,191MahoganyLogs,191Manilla,191Maravedis,192

MassachusettsBayColonyMint,192

MassachusettsBayColonyPaperIssue,193

MatCurrencyofSamoa,194MediciBank,194Mercantilism,195MexicanPeso,196Milled-EdgeCoinage,196MississippiBubble,197MondexSystem,197

Monetarism,197MonetaryAggregates,198MonetaryLawof1803,199MonetaryMultiplier,200MonetaryTheory,200MonetaryUnionsofAncient

Greece,201MoneyMarketMutualFund

Accounts,201MoneySuperstitions,202Moneyer,203

Montesquieu,204MosaicSilverStandard,205MughalCoinage,206Nails,207NationalBankActof1864,

207NegotiableOrderof

WithdrawalAccounts,208

NewYorkSafetyFundSystem,209

OedipusTyrannus,211

OpenMarketOperations,212OperationBernhard,213OptimalCurrencyArea,214OptionalClause,215OttomanEmpireCurrency,

215PacificCoastGoldStandard,

217PapalCoinage,218PhoenicianWeightStandard,

219

PigStandardofNewHebrides,220

Plato,221Playing-CardCurrencyof

FrenchCanada,222PolishHyperinflation,223Pontiac’sBarkMoney,223PostageStamps,224Potin,225PotosiSilverMines,225PoundSterling,226

POWCigaretteStandard,227PriceRevolutioninLate

RenaissanceEurope,228

PrivatePaperMoneyinColonialPennsylvania,228

PromissoryNotesActof1704,229

PropagandaMoney,230QuattriniAffair,231RadcliffeReport,233

RealBillsDoctrine,234RegulationQ,234Reichmark,234Rentenmark,234ReportfromtheSelect

CommitteeontheHighPriceofBullion,235

Reserves,236ResumptionActof1875,236ReturntoGold:1300–1350,

237

RiceCurrency,238Riksbank,239RomanAes,239RomanandByzantineLaw,

239RomanEmpireInflation,240RosselIslandMonetary

System,241RoyalBankofScotland,242RumCurrency,243RussianPaperMoney,243

RussianRevolutionHyperinflation,243

RussianRuble,244SaltCurrency,245Sandalwood,246SavingsandLoanBailout,

246Sceattas,247ScottishBankingActof

1765,247SealedCoinPurses,248

SecondBankoftheUnitedStates,248

Seigniorage,250SeizureoftheMint,250Shekels,251ShermanSilverActof1890,

251Shillings,252Shinplasters,252SiegeMoney,254Silver,254

SilverCertificates,255SilverPlate,255SilverPurchaseActof1934,

256SlaveCurrency,257SlaveCurrencyofAncient

Ireland,258Snake,258SocialDividendMoneyof

Maryland,259Solidus,260

Solon,260SpanishInconvertiblePaper

Standard,261SpanishInflationofthe

SeventeenthCentury,262

SpartanIronCurrency,262SpecieCircular,264StandardDrawingRights,

264StateNotes,264StopoftheExchequer,264

SuffolkSystem,265SugarStandardoftheWest

Indies,266SuspensionofPaymentsin

Warof1812,267Sweden’sCopperStandard,

267Sweden’sFirstPaper

Standard,269

Pageviii

Sweden’sPaperStandardofWorldWarI,270

SwissBanks,271SwissFranc,272Symmetallism,272TabularStandardin

MassachusettsBayColony,275

Taler,276Tallies,277Tea,278TempleCoinageinAncient

Greece,278TempleMoneychangers,279TempleofJunoMoneta,280TobaccoNotes,281Touchstone,281TradeDollar,281TrapesiteBanking,283

TreasuryNotes,283TrialofthePyx,284TzaristRussia’sPaper

Money,285UnitedStatesEagle,287UsuryLaws,287Vales,289ValueofMoney,290VariableCommodity

Standard,290Vellon,291

VelocityofMoney,292VenetianDucat,293VirginiaColonialPaper

Currency,294VirginiaTobaccoActof

1713,295WageandPriceControls,297Wampumpeag,298WendishMonetaryUnion,

299WhaleToothMoneyinFiji,

300

WildcatBanks,301WizardofOz,301WorldBank,303YapMoney,305Yeltsen’sMonetaryReform

inRussia,306Yen,307Yuan,308Bibliography,309Index,317

Pageix

Preface

Thisbookiswrittenforthegeneralreader,whomayuseitasareferencesourcetotheimportantmonetaryexperiencesthathaveeither

shapedtheevolutionofmoneyandbankingsystemsorthatforotherreasonsareregardedasinterestingmonetaryexperiments.Thereaderwhodoesnotknowwheretostartmaywanttoreadthebookfrombeginningtoend.Inthespiritoftheadagethatallsidesofanissuecannotbeseenfromjustoneangle,thisbookapproachesthesubjectofmoneyasseenfromevery

anglerepresentedbyimportantmonetarysystemsandexperimentsinhistory.

Innovationsinmonetarysystemsinvariablyentailaredistributionofincome,andthereforethesubjectofmoneyisnotoneweexpecttoseehandledwithoutprejudice.Thisbook,however,strivestotreatthesubjectwithouttryingtoproveordisprovecurrenttheoriesinmonetary

economics.Somevaluejudgmentscanhardlybeavoidedindescriptionsofepisodesofhyperinflation,whichremindusofthemonetaryinsanitythatlurksbeneaththesurfaceoffiatmoneysystems.Also,complexscenariosofmonetarydebaclesoftenseemclearerwhenseenthroughthetrainedeyesoftheleadingeconomistsinhistoryandtheoriescanlendorganization

toanotherwisechaoticseriesofevents.Inthisbooktheoriesareadvancedonlytobringtolighttheorderthatexistswherethereappearstobenoorder,andtoenliventhediscussionwiththought-provokingideas.Themainorganizingprincipleinthisbookconsistsinthecommoncharacteristicssharedbyvarioustypesofmoneyandmonetarysystems,ratherthanunifyingtheoreticalthreads

thatcanbetracedfromthefirstpagetothelast.

Thisbookpresentsthesubjectofmoneyintheformofmorethan300topicsrangingfromwhaletoothmoney,furmoney,andtobaccomoneytothemechanismsofthemoderninternationalmonetarysystem.Individualtopicsareintendedtostandontheirownmerits,eachstrivingtopenetrateasarovingspotlight

allthenooksandcranniesofmonetarysystems,lingeringovertheidiosyncrasies,andlookingforarchaicrelicsinmodernsystemsandmoderntraitsinancientsystems.

Theprofessionallytrainedeconomistswillmissinthisbookmuchofthetechnicaljargonandsophisticatedmathematicalandstatisticalanalysisassociatedwiththescienceofmonetaryeconomics.Perhaps

theabsenceoftheoryandjargonwillberepaidintherevelationofthealmostendlessvarietyofmonetarysystemsandexperimentsthatdeserveourattention,andcanteachussomethingaboutthenatureofmoney.

ThecompositionofthisbookwasenrichedsubstantiallybyconversationswithDr.RonFritze,professorofhistoryatLamarUniversity,whosefar-flung

knowledgeofhistoryandancientsocietiesgavememanycluesconcerningthewhereaboutsofuniquemonetaryexperiences.Indiscussingthetreatmentofvarioussubjects,Ialwaysbenefitedfromtheclarificationthatanyissuereceivedathishands.TheheartycooperationofthelibrariansattheMaryandJohnGrayLibraryontheLamarUniversitycampus

impressedmeduringtheprocessof