HOW THE PEOPLE ON THE ISLAND AND ELSEWHERE LEARNED WISDOM.
But while any commodity possessed of acknowledged purchasing power or
value may be used as money, the experience of the islanders and every
other people must have soon taught them that some commodities are much
better adapted to this purpose than others; or, rather, that the use
of certain commodities as money, while they may answer the purpose,
nevertheless entail very serious disadvantages. And the details of
the manner in which this information has been acquired by experience
constitute one of the most interesting chapters in the world's
history. The experience of the islanders was somewhat as follows:
At the outset they agreed to use cowries--a pretty shell picked
up on the beach, and which the women all desired to have and use
as an ornament. These shells were not, however, plentiful; and,
in fact, it was found that it required about as much time and labor
for a man to collect a hundred of them as it did to grow a bushel
of wheat. Consequently, wheat regularly exchanged for cowries (as
money) at the rate of one hundred cowries for one bushel, while the
farmer with two thousand cowries could readily buy a plow, which
was considered equivalent in value to twenty bushels. By-and-by,
some idle fellows that were in the habit of sailing made a long
excursion, and, for the first time, visited a little island on the
remote horizon. When they landed, they found, to their surprise,
that instead of cowries being very scarce on the beach, they were
very abundant. They winked at one another, and said little; but each
man proceeded to gather all the cowries he could, and, returning to
the main island, kept their discovery a profound secret.
The first thing of note that next happened among the Robinson Crusoe
people was a great and unexpected revival in business. Money began
to grow abundant. Societary circulation was never so active. Every
thing that was offered for sale speedily found a purchaser, and,
demand increasing, prices rapidly increased also. It was also noticed
that a few persons who never did any regular work, but speculated
and gambled all the morning, and took pleasant sailing excursions
every afternoon, had, especially, plenty of money, which, as patriotic
citizens, desirous of making trade lively, they were always most ready
to part with for other commodities. The shop-keepers, the farmers, and
the mechanics, all also finding that they had more money than usual,
all also felt impelled to buy something, and prices took a fresh start
upward, so that a bushel of wheat that could previously have been sold
for one hundred cowries easily brought one hundred and fifty, and even
two hundred. But, on the other hand, the farmer, instead of being able
to buy, as before, a plow for two thousand cowries, now found that he
had to pay double, or four thousand; or, in other words, the cowries
had only about one-half the purchasing power they possessed before.
But for a time every body was jubilant. Was it not evident that
the value of every man's possessions, measured in cowry money, had
greatly increased--and what could be more natural than that the shrewd
adventurers who had been the authors of these golden days should be
highly honored, invited to speak before cowry clubs in all parts of
the island, and be even talked of for the chief offices, which still
continued to be filled by Robinson Crusoe and his man Friday? The
continually augmenting prices--measured in cowry money--of all
commodities, or, what is the same thing, the continually diminishing
purchasing power of the cowries, at last began to attract attention,
and this in turn induced distrust; so that the price of a bushel
of wheat, which had been at first one hundred cowries, and then two
hundred, rose to three, four, and even five hundred cowries. Another
remarkable circumstance noticed was, that, as prices increased,
the wants of trade for cowry money also increased proportionably,
which want the adventurers who had been the means of giving the
island its increased volume of money took care to supply by bringing
additional quantities of cowries as they were needed. It was also
observed that, as distrust increased, there was also a remarkable
increase in societary activity; for every body desired to change off
his cowry money for something else. [3] Persons who were in debt made
haste to pay their debts, and every body was ready to lend cowry money
to start all sorts of new enterprises. A company was organized, for
example, with a capital of ten million cowries, to explore the wreck
of the original ship which brought Robinson Crusoe to the island; and
although nobody knew exactly where the wreck was, or what was supposed
to remain in it, it was advocated as affording great opportunity
for labor. Another project, for which a company with fifty million
cowries capital was started, was to build a system of canals across
the island, although the island had a width of only about ten miles,
with a remarkably safe ocean navigation all around it.
Finally, the secret of the whole matter gradually leaked out. Other
people besides the original three shrewd fellows found out where the
supply of cowries came from, and made haste to visit the remote island,
provide themselves with money, and put it in circulation. But the
more money that was issued, the more was needed to supply the wants
of trade, until at last it took a four-horse wagon-load of cowries
to buy a bushel of wheat. Then the bubble burst. Stock-companies
all failed. Trade became utterly stagnant. The man whom Robinson
Crusoe had made secretary of the island treasury thought he could
help matters by issuing a few more cowries, but it was no use. Some
very wise persons were certain that every thing would be all right
again if people would only have confidence; but as long as the people
who worked and saved were uncertain what they were to receive for
the products of their labor--something or nothing--confidence didn't
return. Every body felt poor and swindled. Every body who thought he
had money in savings-banks woke up all at once to the realization
that his money was nothing but a lot of old shells. Every body
had his bags, his tills, and his money-boxes filled with shells,
which he had taken in exchange for commodities which had cost him
valuable time and labor. Strictly speaking, however, calamity did not
overtake every body. There were some exceptions, namely the shrewd and
idle fellows who had first found the cheap supply of cowries, and,
taking advantage of the ignorance of the community, had added them
to the before-existing circulation to serve as money. All these had
taken very good care to keep the substantial valuable things--houses,
lots, plows, grain, etc.--which they had received in exchange. They
had, in fact, grown rich by robbing the rest of the community. [4]
The community, however, were too courteous to call them thieves, and
in conversation they were usually referred to as shrewd financiers,
and as men ahead of their time. The concluding act of this curious
island experience was, that the formerly so highly prized money
became depreciated to such an extent as to possess value only as
a material for making lime. The people accordingly, by burning,
made lime out of it, and then, in order to make things outwardly
cheerful, used the lime as white-wash. But upon one point they were
all unanimous, and that was, that the next commodity they might select
to use as money should be something whose permanency of value did not
depend on elements capable of being suddenly affected by accidental
circumstances, or arbitrarily and easily changed by the devices of
those who desired to get their living without working for it.
But this experience of the islanders in reference to the originating
and using of money, although curious, has not been exceptional; for the
records of history show that men almost everywhere, in going through
the process of civilization, have had a greater or less measure of
the same experience. One particularly noteworthy illustration of this
is recorded in the "History of New York," by Diedrich Knickerbocker,
and in the manuscript records of the New York Historical Society. It
was in the days of Dutch rule--1659--in New Amsterdam (afterward New
York), when the common money in use was the so-called Indian money,
or "wampum;" which consisted "of strings of beads wrought of clams,
periwinkles, and other shell-fish. These had formed a simple currency
among the savages, who were content to take them of the Dutch in
exchange for peltries."
William Kieft was at that time governor, and being desirous of
increasing the wealth of New Amsterdam, and withal, as the historian
relates, somewhat emulous of Solomon (who made gold and silver as
plenty as stones in the streets of Jerusalem), he (the governor)
determined to accomplish his desire, and at the same time rival
Solomon by making this money of easy production the current coin of the
province. "It is true, it had an intrinsic value among the Indians,
who used it to ornament their robes and moccasins; but among the
honest burghers it had no more intrinsic value" than bits of bone,
rag, paper, or any other worthless material. "This consideration,
however, had no weight with Governor Kieft. He began by paying all
the servants of the company, and all the debts of the Government,
in strings of wampum. He sent emissaries to sweep the shores of Long
Island, which was the Ophir of this modern Solomon, and abounded in
shell-fish. These were transported in loads to New Amsterdam, coined
into Indian money, and launched into circulation."
"And now for a time affairs went on swimmingly. Money became as
plentiful as in the modern days of paper currency, and, to use a
popular phrase, 'a wonderful impulse was given to public prosperity.'"
Unfortunately for the success of Governor Kieft's scheme, the
Yankees on Connecticut River soon found that they could make wampum
in any quantity, with little labor and cost, out of oyster-shells, and
accordingly made haste to supply all the wampum that the wants of trade
in New Amsterdam required; buying with it every thing that was offered,
and paying the worthy Dutchmen their own price. Governor Kieft's money,
it is to be further noticed, had also in perfection that most essential
attribute of all good money, "non-exportability." Accordingly,
when the Dutchmen wanted any tin pans or wooden bowls of Yankee
manufacture, they had to pay for them in substantial guilders, or
other sound metallic currency; wampum being no more acceptable to
the Yankees in exchange than addled eggs, rancid butter, rusty pork,
rotten potatoes, or any other non-exportable Dutch commodity. [5]
The result of all this was, that in a little time the Dutchmen and
the Indians got all the wampum, and the Yankees all the beaver-skins,
Dutch herrings, Dutch cheeses, and all the silver and gold of the
province. Then, as might naturally have been expected, confidence
became impaired. Trade also came to a stand-still, and, to quote from
the old manuscript records, "the company is defrauded of her revenues,
and the merchants disappointed in making returns with which they
might wish to meet their engagements." It is safe to conclude that,
after this, the commodity made use of by the Dutchmen as money was
something less liable to have its value impaired than wampum.
The early settlers in East Tennessee also came to a similar conclusion,
after a somewhat similar experience. Raccoon-skins were in demand for
various purposes, and consequently were valuable. They accordingly
selected them for use as money. Opossum-skins, on the other hand, were
not in demand, and therefore had little value. Those of the settlers
who desired to discharge their obligations without giving a full
equivalent paid their taxes in opossum-skins to which coons' tails
were attached. The counterfeits having once got into the treasury,
could not be exported out of the treasury to meet the payments of
the State, and the use of coon-skins as currency came to an end.
But to return to the island. Although the first experience of the
islanders in selecting a commodity to be used as money had been
particularly unfortunate, the necessity of having some agency to serve
the purpose of money remained as great as before, and consequently
a new commodity had to be selected. Various people proposed various
things. Some proposed to use bananas, which were always desirable,
and, when good and ripe, were always exchangeable at a very constant
value; but their unfitness to be used as money was acknowledged as
soon as it was pointed out that bananas decayed very quickly after
they became most useful, and that therefore a man who had plenty of
money to-day might have none tomorrow, and that through no fault of
his own. [6] Wheat, cattle, and pieces of stamped iron were also
proposed, but all of these were found to be unsuitable in some
essential particular. Thus, for example, it was objected to wheat,
that, though it was almost always in demand, and represented a very
constant amount of labor for its production, it was too bulky to
carry about, and rarely had the same exact value one year as another;
to cattle, that it was impossible to divide up an ox, cutting off
the tail at one time and the ears at another, for the purpose of
making change, without destroying the value of the animal as a whole;
and that if cows in general were to be used as legal tender to pay
debts, the very poorest cow would very probably be selected from
the money-pen for such a purpose; [7] while, if iron were adopted as
money, and circulated at its current value, it might be necessary to
move about a ton to pay a debt of twenty or thirty dollars.
A peculiar kind of beads, made of blue glass, had come into use with
the women on the island as ornaments, and being greatly in demand,
small in bulk, and of most durable material, they were thought to
be peculiarly well fitted to serve the purpose of money. They were
accordingly adopted, and for a time fairly answered the purpose. But
all at once the women declared their continued use to be unfashionable;
and all use and demand for the beads at once ceasing, the merchants
and others who had accumulated a large stock of them, in exchange
for other commodities, at the same moment found that what they had
regarded as money had no longer any purchasing power or value, and
in consequence experienced great losses. Thereupon the community
concluded not to use blue glass beads any longer as money. [8]
How fast the people on the island, by reason of their varied
experience, educated themselves up to a knowledge of what constitutes
good money may be inferred from the following incident:
A portion of the inhabitants on the island were heathen, and, to defray
the expense of efforts to civilize and Christianize them, it was the
habit of certain good men to take advantage of the assembling of the
people from time to time to solicit and receive contributions for
such objects. It was observed, however, on such occasions that some
persons, either through ignorance of what constitutes money, or by
reason of great poverty, were in the habit of depositing commodities
in the hat which were not money; and the practice having been brought
to the attention of Robinson Crusoe (who generally presided at such
meetings), he is reported to have administered rebuke and instruction
in the following impressive manner:
"Before proceeding to take up our regular contribution for the
heathen," he said, "I would suggest to the congregation--and more
especially to those who sit in the gallery--that the practice of
putting into the hat commodities which are not money, more especially
buttons, shows a degree of ignorance respecting the uses of money on
the part of some in this community which I had not supposed possible,
after all our recent and varied experience on this subject. But if,
through ignorance or impecuniosity, any should feel obliged to continue
to contribute buttons in the place of money, I would request that
they do not stamp down or break off the eyes; inasmuch, as while by
so doing they utterly destroy the utility of these commodities as
buttons, and do not increase their desirability as money, they also
utterly fail to deceive the heathen; who, although ignorant of the
Gospel, and not using buttons for any purpose, are nevertheless,
as a general thing, good judges of currency."