1. What indication do you find that the playing-card notes issued by the governo
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Question
1. What indication do you find that the playing-card notes issued by the governor served as a means of payment? Why were they accepted as such?
2. What indicates that the notes served as a store of value? What made them acceptable as such?
3. Did the invention of playing card money change the unit of account in the local economy?
Case for Discussion MAKESHIFT MONEY IN THE FRENCH COLONIAL PERIOD The following letter was written by Govenor de Meulle of the French province of Quebec in September 1685 My Lord- I have found myself this year in great straits with regard to the subsistence of the soldiers. You did not provide for funds, My Lord, until January last. I have, notwithstanding, kept them in provisions until September, which makes eight full months. I have drawn from my own funds and from those of my friends, all I have been able to get, but at last finding them without means to render me further assistance, and not knowing to what saint to pay my vows, money being extremely scarce, having distributed considerable sums on every side for the pay of the soldiers, it occurred to me to issue, instead of money, notes on [playing] cards, which I have had cut in quarters. I send you My Lord, the three kinds, one is for four francs, another for forty sols, and the third for fifteen sols, because with these three kinds, I was able to make their exact pay for one month. I have issued an ordinance by which I have obliged all the inhabitants to receive this money in payments, and to give it circulation, at the same time piedging myself, in my own name, to redeem the said notes. No person has refused them, and so good has been the effect that by this means the troops have lived as usual. There were some merchants who, privately, had offered me money at the local rate on condition that I would repay them in money at the local rate in France, to which I could not consent as the King would have lost a third; that is, for 10,000 he would have paid 40,000 livres; thus personally, by my credit and by my management I have saved His Majesty 13,000 livres Signed] de Meulle Quebec, 24th September, 1685 SOURCE: From Canadian Currency, Exchange and Finance During the French Period, vol. 1, ed. Adam Shortt (New York: Burt Franklin, Research Source Works Series no. 235, 1968) QUESTIONS 1. What indication do you find that the playing-card notes issued by the govemor served as a means of payment? Why were they accepted as such? 2. What indicates that the notes served as a store of value? What made them acceptable as such? 3. Did the invention of playing-card money change the unit of account in the local economy?Explanation / Answer
1 & 2. The playing card notes is no different from our currencies. In essence, the current economies run on "paper" money ONLY. Though theoritically the intrinisic value like bullions and other commmodities determines the valuation of "paper" money, many economies have started manipulating its real value to overcome the fiscal deficit. Thus a "paper" or "plastic" money has become the mode of transaction / payment in modern economies. Historically, the metal used to mint coin is used as base for valuation of the denomination but now it is vice versa!
The main component or pre-requisite of "paper" money is validity and credibility of Issuer i.e. the entity which promises to pay equivalent amount of alternate commodity like Barter system. For example The US Govt ensures that $100 is honoured when the owner wants to exchange it either for metal or other curriencies. Whereas if the same gurantee is provided by an lesser known individual, it may not accepted by all like Bitcoin.
3. It did not change the unit of account but it helped to leverage the playing card notes for favourable exchange of currencies. As indicated by Governor, the people used the playing card ONLY as an alternative for "paper" currency i.e. virtual currency.
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