Where Do They Get Their Money? Part Two
  • Where Do They Get Their Money? Part Two


    Today weíre going to talk more about money. Last column I discussed some of the quirks of coinage as a unit of weight backed by the commodity metal itís minted from. This time, Iíll talk about other kinds of money.




    Representative money is a unit with no intrinsic value - such as a zinc disc, or a slip of durable paper - that can be exchanged for a precious commodity, such as gold or silver. Why switch to representative money, however, if the previous coins minted from commodities worked perfectly fine before?

    Remember my previous column, where I mentioned how precious metal coinage could be defaced by shaving and milling. Having the coinage itself be base metal, exchangeable for commodity, would help ensure and protect its worth. Moreover, if the coin itself is just a token exchangeable for gold or silver, why not use lighter media such as paper or cloth as units of exchange for units that would be unwieldy to carry around?

    Five thousand gold pieces weighs about a hundred pounds, if you go by D&D 5Eís estimations - kind of unwieldy for most purposes. A letter of credit from a certified bank, backed by its reserves of gold, however, makes for a more convenient token of exchange than the coinage itself. This lends itself well to settings with established, entrenched mercantile banking systems, especially if the PCs are going to be dealing in units of cargo.

    Representative paper money is vulnerable to forgery, however, which means, of course, that counter-forgery measures will enter use. For example, modern paper currency utilizes watermarks, specially made paper or polymer, and holographic strips of metal embedded in the noteís surface. A setting with widespread magic might have slightly more exotic ways of demonstrating its authenticity. A rather more white-collar thievesí guild might be locked in an arms race of exploits and countermeasures, with squads of roguish alchemists performing experiments to reverse-engineer an alchemical ink used only on authentic banknotes, while a bankís own experts examine forgeries in order to refine their techniques.

    Magic could also be an interesting way of protecting paper money from forgery. A letter of credit signed to a specific bearer could be reinforced with a silent image displaying the features of its owner. Such a note would require disguises to successfully use if filched, and imagine trying to pick pockets if a banknote screams that itís been stolen once itís been taken? The noteís rightful owner would of course have received a token from the bank that silenced the magic as long as both were in their possession.

    This can lead to an entertaining world building wrinkle. Imagine if you will, a guild of commercial wizards who specialize more in banking, logistics and long-range communications setting up their own bank. Their arcane measures would make their banknotes the most reliable ones in a region, and their access to non-couriered forms of messaging means that they could establish branches in faraway ports without too much difficulty. Now consider dragons. They are sapient, long-lived, and love piles of treasure. An enterprising dragon could form its own banking system run by kobolds day-to-day, a monstrous counterpart to the wizard-backed bank.

    Both the examples above - the wizardís guild or the dragon - would make for an excellent patron for a group of PCs, especially if they own their own trading vessel, or journey for rare commodities such as spices and gems. Those would also make for entertaining dungeon plans, given the necessity for vaults and guards, and provide an exciting backdrop for a heist adventure.

    This article was contributed by M.W. Simmes as part of ENWorld's User-Generated Content (UGC) program. We are always on the lookout for freelance columnists! If you have a pitch, please contact us!
    Comments 6 Comments
    1. MNblockhead's Avatar
      MNblockhead -
      It is too bad that we don't know more about how the Knights Templar made their letters of credit system work and how they protected themselves against fraud (cite: https://www.bbc.com/news/business-38499883).

      Florence's bills of exchange would be another historically appropriate model to use.

      The article I cited above discusses how this created a private currency outside of the control of any sovereign. Discussing checks and balances in financial institutions may seem like a boring topic for your fantasy role play, but there are plenty of interesting hooks if you at how some sovereigns in history sought to gain control over the bankers. Most famously, King Philip IV of France's destruction of the Knights Templar.
    1. Kobold Boots -
      Quote Originally Posted by MNblockhead View Post
      It is too bad that we don't know more about how the Knights Templar made their letters of credit system work and how they protected themselves against fraud (cite: https://www.bbc.com/news/business-38499883).

      Florence's bills of exchange would be another historically appropriate model to use.

      The article I cited above discusses how this created a private currency outside of the control of any sovereign. Discussing checks and balances in financial institutions may seem like a boring topic for your fantasy role play, but there are plenty of interesting hooks if you at how some sovereigns in history sought to gain control over the bankers. Most famously, King Philip IV of France's destruction of the Knights Templar.
      Some help on the templar thing.

      Citizen goes to the coffer house. At their height the templars may have had close to 10000 of them throughout the lands. Cited number is near 9000 so I'm being aggressive. Citizen drops off stuff and gets a letter of credit detailing what they dropped off and it's estimated value.

      Letter of credit is good at any other coffer house and has two things going for it. First is the date of the document tied to a proof code that consists of three or more numbers. The example in the collection I refer to has a three digit number. The combination of the proof code and the date advises the coffer house of the cipher to use to prove authenticity.

      Last thing is that there have been indications of a cipher alphabet on the stamped seals at the bottom of the letters. My estimation were I to have an opinion was that the above mentioned proof code in combination with the date and the cipher stamp will tell folks whether or not the letter can be trusted.

      Citizen goes to coffer house in another area, and they get equivalent value.

      Now in a magical world, this gets much simpler, or much more complicated depending on how detailed you want to go.

      Be well
      KB

      Edit: Note that letters of credit attributed to the Templar are from what I know exceedingly rare and always of questionable authenticity. Take this for what it's worth and not from a position of fact.
    1. Koloth's Avatar
      Koloth -
      Paper documents may have worked well in the real world for the Templars and their customers, but in a D&D type world where fireballs, burning hands and dragon breath are common perils, trusting your net worth to a piece of paper would be a risky business.

      Some type of magically/alchemically/special Dwarf minted coin with a noted worth might be a better approach. The value could be stamped on the coin at the D&D equivalent of the Templar coffer house and the authenticity verified by lay folk via a 0 level spell that almost anyone can cast. Of course, the process to create the coin would be a closely held secret. Part of the creation process for the coin could include various protections against harm, for a small fee of course.
    1. Kobold Boots -
      Quote Originally Posted by Koloth View Post
      Paper documents may have worked well in the real world for the Templars and their customers, but in a D&D type world where fireballs, burning hands and dragon breath are common perils, trusting your net worth to a piece of paper would be a risky business.
      I know that asking for logic on these boards has been a mixed bag, but fire was and is pretty common in the world last I checked.

      Some type of magically/alchemically/special Dwarf minted coin with a noted worth might be a better approach. The value could be stamped on the coin at the D&D equivalent of the Templar coffer house and the authenticity verified by lay folk via a 0 level spell that almost anyone can cast. Of course, the process to create the coin would be a closely held secret. Part of the creation process for the coin could include various protections against harm, for a small fee of course.
      .

      All of this is entirely reasonable provided your game world supports the premise sufficiently for your level of details. I can see it working for most.

      In my case, the dwarves would want to be paid for minting the coins, the lay folk that knew the cantrip would unionize and hide the secret of the spell behind a training program then negotiate themselves into a middle class that cost the bank money and the creation process would need to be guarded more heavily than the actual loot underpinning the financial system. All of these things raise costs and work against the reason why banks formed in the first place, to make money.

      As you've shown though there can be a bunch of different ways to approach this. I only replied because concern about magical fire as the primary reason to be concerned about paper is missing the point that mundane fire exists, was a threat to the templar system, and that functioned well enough.
    1. stargazera5's Avatar
      stargazera5 -
      Hmm...

      GM: Ok, having defeated the ancient Lich of The Thrice Fallen Citadel you soon discover the seal chest in which he held the ancient treasure for which he devised his infernally cunning labyrinth of death traps. As you open it, your wondrous eyes appears banknotes worth tens of millions of gold coins!

      Players: Score!

      GM *makes several rolls*: Okay, Dafydd the Bard makes his history check and realizes that the bank which backed these notes went out of business when the Citadel fell for the 3rd and final time. An appraise check reveals they may be worth a few hundred copper to a collector, if you can find one.

      Players *gathers tar and feathers*


      Yeah, banknotes just don't have the same flair.
    1. R_Chance's Avatar
      R_Chance -
      Just put your letter of credit in a fireproof / waterproof box. Its not like a checking account. Its just a way of moving money from point A to Point B without dragging a bandit lure around with you. Not to speak of the weight and bulk. The letters are usually only good at the local branch of the issuing institution (or an allied one). Merchant companies will issue them in my game. They have a magical seal. And if all else fails and you counterfeit one, well, that's what Assassins Guilds are for.
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