Currencies, Banking, and Economics

[cavalier973]

Money was a market creation, being derived from bartering; traders determined that certain commodities could be easily traded with anyone. A pig farmer didn't have to find a dentist that liked pork in order to get a root canal; he could trade his pig for a quantity of silver or gold, then take the metal and trade it for other things. Governments alway managed to gain legal control of the money supply, which they eventually devalued to benefit themselves (an inflated money supply--whether one is talking coins that have been diluted with less valuable metals, or an increase in printed paper money--always passes through the government's hands first. It's a way for the government to spend without having to borrow or raise taxes). Money whose purchasing power has not been diluted so much tends to be more valuable than money that has. A nation in war tends to inflate its currency, so if you are running a scenario in which a nation is at war, expect to have that nation's money lose value compared to a nation at peace, even if it is gold coin (the king, of course, will have his coiners put a little copper in those "gold" coins, so he can pay his soldiers for another month). Now, while this was generally true, there were exceptions. English silver coins appeared to maintain their value throughout the Hundred Years' War, if I remember correctly. The English nobility tended to wield more influence over the King, especially over his ability to tax and spend, so that may account for English coin holding its value better.

History of money and banking - MisesWiki


Banks, in the modern sense of the word, didn't of course exist in Medieval times. "Usury", or the charging of interest on loans, was forbidden by both the Christian and Muslim faiths. Jewish folk could charge interest on any money loaned to a non-Jew; when one couples this with the fact that many governments passed laws that forbade Jews from working in any sort of "regular" trade, one understands why the term "Jewish Banker" came about.

The practice of fractional-reserve banking (which describes our modern banking system), as I understand it, developed in England within the goldsmithing industry (although apparently Chinese merchants also figured it out; see the above link). Wealthy individuals would deposit their excess gold with a goldsmith, who presumably had the means to protect it from theft. The goldsmiths would give receipts on the gold deposited, and the receipts would circulate as money, because one could always go back to the goldsmith and turn in the receipt for actual gold. Since it was rare that all depositors attempted to withdraw all their gold at the same time, the goldsmiths began issuing receipts for gold they didn't actually have. Imagine borrowing your neighbor's car while he's on vacation, and renting it out to people for the couple of weeks or so that he is gone. It's 100% profit for you; since you didn't have to put any money into actually acquiring ownership of the car in question.

I feel the need to add that the "banking" in medieval times was in large part conducted by the Knights Templar. A king or noble going on a crusade would "lend" his land to the Templars, who in turn would finance his expedition. The KT would reap all profits while the noble was away, or for a certain number of years. The monastaries of the KT were strongly protected, and so a good place to deposit valuables.

I had not thought of this before, (and it's kind of off-topic) but the fortress of a D&D order of paladins would be a natural place for anyone to store valuables, since they are lawful good (and are thus unlikely to steal the valuables themselves), can detect evil (and so can divine is someone is possibly a thief) and are powerful fighters (to the pain!) that can defend said valuables.

Two adventure hooks: 1. A valuable hoozit was stolen from the Order of the Most Radiant Heart; as a member of said order, your team's paladin has a natural desire to recover it and keep the Order's good name in tact.
2. Your team is hired to steal a valuable hoozit from the Order of the Most Radiant Heart. Your paladin's not going to be happy with this mission...

 

[Samloyal23]

Okay, so can we establish a simple set of rules to start using multiple currencies and promissory notes in the game? Are there 3e skills that cover numeracy, haggling, bureaucracy, and moneylending? I'm thinking numeracy should be a Knowledge skill, haggling and bureaucracy should be seperate skills, and moneylending should be Profession. Thoughts?

 

[cavalier973]

Okay, so can we establish a simple set of rules to start using multiple currencies and promissory notes in the game? Are there 3e skills that cover numeracy, haggling, bureaucracy, and moneylending? I'm thinking numeracy should be a Knowledge skill, haggling and bureaucracy should be seperate skills, and moneylending should be Profession. Thoughts?

"Craft money", perhaps?

The only 3e that I've really played is "Neverwinter Nights"; it seems there was an "Appraise" skill, or something like that. With enough ranks in this skill, one could determine the relative value of one currency with another.

 

[Samloyal23]

"Craft money", perhaps?

The only 3e that I've really played is "Neverwinter Nights"; it seems there was an "Appraise" skill, or something like that. With enough ranks in this skill, one could determine the relative value of one currency with another.

Craft money? That sounds like Forgery to me...

 

[Samloyal23]

Now, this is the type of character option available if you have banking in your campaign, just as an example...

Burghausen Guild Banker
Your clan has a long tradition as bankers and moneylenders and you were educated in the family business.
Prerequisites: 1st-level only, must be from Burghausen.
Benefits: Diplomacy, forgery, knowledge (bureaucracy, economics, nobility and royalty, and numeracy), and profession (bookkeeper and moneylender) are always class skills for you. Pick 2 of these skills and add 1/2 your level to your rank in each. Anytime you have to trade one currency for another you come out ahead of the normal exchange rate by 10+level%. You begin with double the normal amount of gold for your class. You can switch your preferred class to Trader or Rogue. Once you select a preferred class you cannot change it again.

Edit: An interesting blog on the topic of moneylenders...

 

[Grogg of the North]

Typically in my worlds the churches act like banks. Especially travel deities like Fharlanghn since I tend to equate travel with commerce.

It only really comes up if the PCs want a place to stash their wealth somewhere while they're adventuring or if they want to lighten their load while traveling.

 

[Samloyal23]

The Valoran drachma comes in copper, silver, and gold. Each coin has an image of the goddess Athena on one side and the Temple of the Young Gods on the other. The current king of Valora authorised guilds to issue promissory notes of up to 50,000dr value when he ascended the throne. Most promissory notes are 1,000-10,000dr in value. Valoran notes are accepted in Burghausen and Skytop Village but most other communities in the land will not accept promissory notes.

Irium uses a drachma of the same size as the Valoran but has an image of the dead god Zeus on one side and the Mount Olympus on the other. Officially, Valoran money is not accepted in Irium because of the religious schism between the two cities, but most Iriumans will take any coin at face value. The temple of Zeus in Irium issues promissory notes of up to 20,000dr value, most being 1,000-5,000dr in value. Because of the poor economy of Irium most merchants in other cities will not accept these notes at all or accept them at 50% their listed value.

The city of Burghausen currency consists of bronze marks, silver thalers, and gold kroners. Bronze marks are rarely accepted in other cities. The guilds of Burghausen are authorised to issue promissory notes of up to 100,000kr value. The five ducal houses of Burghausen have been authorized by the king to issue notes of up to 500,000kr. As the wealthiest of the city-states in the land Burghausen has a strong reputation and its notes are usually accepted in Valora, Ys, and Aldea. Burghausen is also the main center for banking and finance in the region, so its advisors are often hired by other cities.

 

[cavalier973]

A member of a "banker class" should have "Insight" (or whatever) as a class skill, since a successful banker must be able to read people and tell if they are good risks for loans.

 

[Samloyal23]

A member of a "banker class" should have "Insight" (or whatever) as a class skill, since a successful banker must be able to read people and tell if they are good risks for loans.

Important skills would be appraise, diplomacy, knowledge (numeracy, law, economics, bureaucracy), profession (bookkeeper, moneylender), and sense motive.

 

[Belzbet]

A member of a "banker class" should have "Insight" (or whatever) as a class skill, since a successful banker must be able to read people and tell if they are good risks for loans.

HD: d6's OR d8's (what do you guys think?).
BAB: 3/4, like cleric (a banker is surprising tough, they need to be because they deal with powerful creatures almost everyday)
SAVES: High Reflex and Will (a banker is quick and and strong willed)
SKILLS: either 8+Int OR 6+Int (what do you guys think is more appropriate?). A banker is very skillful.
CLASS SKILLS: Profession (any), Craft (any), Sense Motive, Bluff (a banker frequently makes use of this skill), Diplomacy, Intimidate (a banker may need to be intimidating), Appraise, Knowledge (relevant knowledge skill, not all), Forgery, Gather Information, Sleight of Hand, Use Magic Device (Yeah a banker gets this as a class skill because it reflects his affinity for items of all kinds), Spot ( a bankers eyes need to be quick), Tumble (a banker finds himself tumbling across the floor quite abit, it is often useful for a banker to perfect his skills in tumbling)
PROFICIENT: Light Armor, and shield (except tower shields).
All Simple Weapons, also the banker gets to choose one martial weapon as a favored weapon. It gains proficiency with its favored weapon. This reflects a bankers training and preparation for combat in case of a volatile situation (they keep their favored weapon behind their desk, etc.).


Possible Class Features:

A banker gains +1 on UMD checks at level 1. At level 5 and every 5 levels thereafter the banker receives a +1 increase on its UMD checks, so +2 at level 5, +5 at level 20, etc. (this increase stacks with all others).


BRIBE: Any intelligent creature (Int 3 or above) can be bribed (it functions like charm or dominate spells, or Qeas Quests at higher levels, the duration should be in days). We would need to limit the uses somehow (and the players money shouldnt be that limit). The ability should be Cha. based (maybe it could be mechanically like a hexblades hexes, but it should be able to be used more than the hexes).

SKILLED BANKING: Because of your skill and training you make more money (you are at a higher pay grade) than other common bankers (than a commoner or expert, or any other class, that happens to be a banker, namely, that happens to be using profession(banking) to gain extra money). Add 50% to the total gold (silver, copper) that you made via the profession(banking) roll at the end of every week of work; so if you made 10 gp in a week add 50% of that to the total for a new total of 15gp. At level 10 double the amount that you would normally make each each if you were not a banker (so if you made 50gp in a week then your new total would be 100p, etc.). Gaining money from a profession still takes much of your tme during the week as laid out in the PHB.

A banker may get some item creation feats as bonus feats; if we choose this as a class feature we can allow it to create items via UMD like the artificer (however it doesnt get the bonuses that the artificer does and it doesnt get nearly as many bonus item creation feats).
Or maybe they would get to use extra item slots (at level 10 they can use 3 rings, or 2 belts, or something).

SAFE STORAGE: Being a banker you have access to highly secure vaults.The benefit of this is that you can store an unlimited number of items in the vault and they can never be stolen the vault must has location in a city that has a bank in it, your DM still must agree that you have access to the vault in the particular city you want to store things; if they are stolen you have insurance and the bank buys them back so effectively the items never get stolen, unique items or artifacts can be stolen and cannot be replaced, but since this is a class feature it should have an advantage over the regular storage space you can buy or secure, it become sbetter if the items CAN NEVER be stolen...)

BANKERS WAGE: A bankers main defense are the items it carries. Bankers get extra gold per level that they can use to buy better or more items (maybe something like 1/10 of wealth per level extra or something). This is not actual gold but assets and bonuses gained from banking. This may complicate things more than not so this ability may not be any good. But if we keep the extra gold as a small fraction of wealth per level then it shouldnt be unbalancing (this is supposed to make the banker a viable threat and it reflects the bankers ability to gain and deal with money).