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What Is Money and How Is It Created?

What Is Money and How Is It Created? (Illustration) Ancient Places and/or Civilizations World History Social Studies STEM Visual Arts Ethics

The people of Yap understand what “money” is all about. These Micronesian natives, whose Pacific Island has become a popular diving location, have a money tradition worth investigating.

Their currency is made of stone.

More precisely ... their currency is made of limestone.

Heavy limestone.

From distant islands.

Somewhere, along the path of their history, the people of Yap determined that:

...labor is the true medium of exchange and the true standard of value. (See The Island of Stone Money, Uap of the Carolines, by William Henry Furness, published, in 1910, by J.B. Lippinoott Company, at page 93.)

And the labor, to which Yapese attach a very high standard of value, is displayed in the remnants of limestone deposits which Yap explorers found—on the islands of Guam and, especially, Palau—and then carved into heavy discs which they ferried back to Yap on their small boats (which often became unstable during bad weather).

Those limestone discs—called rai—are the equivalent of American dollars, Japanese yen, EU euros and the British pound.

Seriously.

The Yapese live in a beautiful place—pictured at the top of this page—where gold and silver does not exist. Their version, of gold and silver, became those massive limestone discs which their explorers had carved from distant-limestone deposits.

How did they get the limestone from the quarries at Palau? Scott Fitzpatrick, an anthropologist who knows a lot about the Yapese and their history, tells us how the excavations took place:

The Yapese were ingenious carvers and engineers. Using tools at first made of shell and stone, and later of iron, they skillfully chipped away towering walls of limestone. They built stone pathways to move the tremendously heavy disks from their quarries over the steep, rugged terrain down to the docks, where they were secured onto canoes and rafts for the trip home.

How did the Yapese men carry the heavy stone money to their canoes? They carved holes in the middle of the discs, then shared the weight by placing a pole through the middle of the limestone objects:

...[they] began carving pieces into the shape of a full moon, which were perforated through the center so a pole could be slid through the hole, each end resting on a laborer's shoulders.

Only rai under six feet in diameter could be transported in a canoe. The Yapese boats likely had a crew of six to eight people when unloaded, but only two when returning with rai to Yap. Probably within one hundred years of first quarrying rai, the Yapese began to use rafts, allowing them to transport disks of much larger size.

But ... they wouldn’t use those massive stones for just any purchase. They used them, mostly, for the purchase of rights—like a daughter’s dowry, for example:

Rai could be exchanged for food, or given as a gift to a bride or newborn child; it could be used to pay a loan, secure allies in times of conflict, or ransom a battle corpse from another village...

How would that work—when it was (and is) really, really difficult to even lift those massive stones? It’s not like someone could just pick-up a disc and carry it to a store. Some of them weigh as much as a car.

Scott Fitzpatrick tells us how Yapese bought goods and services without lifting a stone:

They often talk about the stones themselves not changing hands at all. In fact, most of the time they wouldn't.

Instead, Yapese would receive, or buy, an interest in one of the stones which were sometimes lined-up along a walking path which served as a kind of bank:

A “money bank” of rai lines a walking path on Yap. Although rai may be given or sold, it’s rarely moved. A stone may get a new owner but not a new home.

The Yapese even had a way to establish value for each stone. Its worth could depend more on its history than its size:

Like diamonds, the value of rai was dependent on the rarity and beauty of the stone, the quality of carving, its shape and size, and its carver’s skill. With rai, however, the history behind each piece was equally important.

If a famous navigator brought rai back to Yap, or if people were injured or killed during the expedition, it might be considered even more valuable. The same also held true if there was an exceptional story behind a stone. For instance, there is one piece in Yap called “the stone without tears” because no one died during the journey to Palau and back- a rare occurrence. It, too, is highly prized.

A stone which was lost in the journey back to Yap could also have value. There is, in fact, a very valuable stone which ended-up in the Pacific Ocean which the Yapese have never seen but still value.

Workers had retrieved it from a Palau quarry, then beautifully carved it, but it went overboard when a storm overwhelmed the men not long before they reached home. When the travelers reported what had happened, the Yapese decided the stone money was still usable even though it wasn’t physically present. According to Fitpatrick:

So somebody today owns this piece of stone money, even though nobody's seen it for over 100 years or more.

Today, tourists visiting Yap can still see stone money surrounding the homes of wealthy Yapese people. And even though they now use more modern currency, like American dollars, the locals still measure their personal wealth by the number of valuable limestone discs they possess.

As a final thought ... if you think this story is fanciful, in any way, ask yourself a question from today’s world:  What is a bitcoin (and what makes it usable as a 21st-century currency)?

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Author: Carole D. Bos, J.D. 5183stories and lessons created

Original Release: Oct 07, 2013

Updated Last Revision: Jul 17, 2019


Media Credits

Image of a sunset at Yap, online courtesy Western Central Pacific Fisheries Commission.

 

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"What Is Money and How Is It Created?" AwesomeStories.com. Oct 07, 2013. Jul 17, 2019.
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