Silly Money

07 16 chinese paper moneyToday, I am told, is the date that the first European banknotes were issued by the Swedish bank, Stockholm Banco, in the year 1661. Banknotes are quite a weird thing, if you think about it, so I thought we might take a look at how we came to accept what is essentially just a piece of paper in place of something that has any intrinsic value. Paper money had been used in China for around eight hundred years. The Ancient Chinese also produced some of the earliest known coins. They were generally round, though there are older coins that are shaped like spades or knives. The coins had a rectangular hole through the middle so they could be strung and worn around the neck. The problem was, if you had a lot of them, they were a bit heavy. So people started leaving their coins with a trustworthy person which was exchanged for a slip of paper stating how many coins had been deposited. These slips of paper could then be used later to retrieve the money. Eventually the notes began to be passed from person to person instead of the coins.

07 16 kublai kahnTravellers from Europe such as Marco Polo brought back tales of the strange paper money. In fact in his ‘Travels of Marco Polo’ he devotes a whole chapter to it. He describes how the Emperor, Kublai Khan, had notes made from the bark of mulberry trees, which he had plenty of. He paid for everything with the notes and they were used by all his subjects in place of coins. No one was allowed to refuse the notes, on pain of death. Furthermore, merchants coming to China from abroad, bringing gold, silver, jewels or pearls were allowed to sell to no one but the Emperor. They were paid with his notes, which could be exchanged for anything in his Empire. If there was anyone else left who happened to have any gold, silver, gems or pearls, they could take them to the Royal Mint and get a good price for them, but they were paid in notes made from mulberry bark. So that was how the Emperor ended up with all his empire’s wealth, yet it cost him almost nothing to acquire it. “He hath”, said Polo, “ the Secret of Alchemy in perfection”. The idea of issuing promissory notes travelled to medieval Italy and Flanders and they began to be used as an alternative to transporting cash over long distances, which was both impractical and dangerous.

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As in China, the notes that were issued in Sweden were also due to the difficulty of carrying heavy money around. Their problems however, were much bigger. Basically there were two currencies that were both called the daler, but one was made of copper and the other of silver. This was a problem because they were both meant to be worth the same amount. Copper was much cheaper than silver, so the copper coins needed to be bigger. Then suddenly copper got really, really cheap. The coins became enormous, huge slabs of copper weighing several kilograms. The largest denomination, the ten daler weighed almost 20 kilograms, that’s 44 lb. Unsurprisingly, people didn’t much want to carry them around, they wanted to deposit them at the bank. The promissory notes they received in exchange were much easier to use. A note could be put in an envelope and posted whereas even a single coin might require a horse and cart.

Sadly, Stockholm Banco decided it would be okay to print more notes than the value of the copper that they held. That didn’t really work out. They went bankrupt after three years. Swedish banks did not issue paper money again until early in the nineteenth century. The Bank of England began to issue paper notes in exchange for real money in 1695, when it was trying to raise money to rebuild the country’s navy after a particularly disastrous war with France. Eventually, paper money became pretty normal everywhere. Coins made from gold, from silver, from copper, could be often too dangerous, and sometimes massively inconvenient to carry around, so everyone was persuaded to accept little pieces of paper, that are essentially useless until you exchange them for something else. Now, of course, we don’t often have the pieces of paper either, just a small plastic card. Money feels even more imaginary but, unfortunately, our world would grind to a halt if we stopped believing in it.

Adrift

03 25 canalettoThis day in 421 marks the founding of the beautiful city of Venice. I was surprised that we can be so specific about an event that happened so long ago. Especially when I found out that it happened at exactly 12 noon. A whole city, born in a single moment. The event this date commemorates is the founding of the first church, San Giacomo on the islet of Rialto. March 25th is also the Feast of the Annunciation, when the Angel Gabriel visited the Virgin Mary with important news, so probably it was a propitious day to found a new city.

The first citizens of Venice were largely refugees fleeing their homes following invasions of Attila the Hun and other tribes from the north as the Western Roman Empire began to crumble. Venice sits on a lagoon which is protected from the sea by a chain of low islands in the north east of Italy, It was a good site for a settlement because it was difficult to reach from land and only the people who lived there knew how to navigate its waterways. But building there was a huge problem. The islands are small and the ground is soft. So the city sits partly on land and partly on water. In order to build foundations, people had to 03 25 santa maria della salutedrive wooden piles into the silt and build on top of them. Wood doesn’t sound like a great material to hold up massive stone buildings. You’d think it would have rotted away, but because the wood is underwater, the micro-organisms that cause decay can’t grow the way they would in the open air. Also there are a lot of them. This church, Santa Maria Della Salute was built on over a million of them, each measuring 4 metres in length. The city is made up of 117 islands, so where a city would usually have streets, Venice has 177 canals. The streets it does have are really just the left over spaces between buildings. The narrowest is just 53 cm wide.

Although a collection of muddy islands wasn’t the most sensible place to build a city, it was excellently placed for trade between western Europe, the still thriving Eastern Empire of Byzantium and the Far East via the Silk Road. Venice became a rich and thriving centre for trade and by the thirteenth century was the most prosperous city in Europe. It was from this Venice that Marco Polo set out, in 1271, on a massive journey overland via the Silk Road to China. His journey lasted twenty-four years. In 1299, a book was published about his travels. It’s a rather fanciful account, that was written by a man named Rusticello. Marco Polo narrated the stories of his adventures whilst the two were both imprisoned following a war between Venice and Genoa.

03 25 marco poloRusticello was a writer of romances, so it’s rather hard to pick out which parts of Marco’s story might be true. He mentions a place where there used to be an island populated by a race of dog headed people, encountered serpents with teeth that could swallow a man and a unicorn. From his description, these are clearly crocodiles and a rhinoceros. He also mentions that the Chinese used paper money and burned coal, both of which were unknown in Europe. The book also claims that he became an important person at the court of Kublai Khan at Xanadu. Marco Polo’s recounted tales were widely read and inspired many to set off on their own adventures. Columbus carried his own, heavily annotated, copy when he set off on his journey that led to the discovery of the Americas. It is also the original source of Coleridge’s famous poem. During his lifetime, people found his stories rather unbelievable and even now there are those who doubt that he ever went to China at all. There is no historical evidence to support the claims made in the book. Marco himself claimed: “I did not tell half of what I saw.”

Kublai Khan died before Marco arrived back in Venice which caused the fragmentation of the Mongol Empire and the closing of the Silk Road. This would eventually lead to new sea routes being found to the Far East and the declining importance of Venice as a centre of trade. It was ravaged several times by plague. In 1630, a third of the population died. But the city still had it’s beauty and it became an important stop on the Grand Tour. This was a city that encouraged pleasure. It was famous for its masked Carnival, for its gambling houses and for its courtesans. This was the Venice that gave birth to Giacomo Casanova in 1725.

03 25 casanovaCasanova also spent much of his life travelling and his adventures also made it into print. But Casanova’s life was very different, he lived on his wits. Sometimes he was lucky, sometimes he wasn’t. He made his living variously as soldier, a musician, a gambler, a medic, an astrologer, a spy and a librarian. He was also quite a prolific writer. Among other things, he translated the Iliad and wrote a sort of science fiction novel called ‘Icosaméron’, which is about a brother and sister who fall into hidden world beneath the surface of the Earth. It is populated by a race of dwarves who feed mainly by breastfeeding each other. But he is now best remembered for his ‘Histoire de Ma Vie’, the story of his life.

His first big break was when he happened to save the life of a Venetian nobleman after he suffered a stroke. The nobleman adopted him and Casanova lived a grand life until he was arrested by the Inquisition. Among the charges were: cheating at cards, blasphemy and occult practices. He was imprisoned in the Doge’s Palace, but escaped through the roof along with a disgraced monk. After that, he was exiled from Venice but famous for his daring escape. He spent the next eighteen years criss-crossing Europe. He travelled around 40,000 miles. Made a fortune running a lottery in France and lost it gambling. He was involved in duel in Poland and frequented the literary salons of Geneva. He met with Voltaire, Catherine the Great and Benjamin Franklin. He got around. Unlike the travels of Marco Polo his adventures are supported by historical evidence.

Casanova’s name is now synonymous with ‘philanderer’ and he is best known for his many sexual conquests. His autobiography was not published until 1822 and it was very heavily edited. Histoire de Ma Vie was not published in full until 1960 and not translated into English until 1966. Giacomo Casanova was remarkably honest about his relationships, his successes and his failures. He opens his memoirs by saying: “I was all my life the victim of my senses; I have delighted in going astray and I have constantly lived in error, with no other consolation than that of knowing I have erred. … My follies are the follies of youth. You will see that I laugh at them, and if you are kind you will laugh at them with me.”