Rome must fall.

Chapter 357: The Pros and Cons of Paper Currency
"That's absolutely impossible!" Cornelius immediately objected loudly: "The tribe doesn't have much gold and silver coins stored. After distributing them, how can we buy iron ore from the Ardei tribe?"

"Cornelius, as far as I know, the Ardii people are very fond of the pottery, furniture, and wooden statues made by our tribe. One kiln of pottery can be exchanged for several cartloads of iron ore. Three months ago, we no longer needed to use gold and silver coins to buy iron ore from the Ardii tribe. This is what Pigris said at the previous meeting in the Council Hall."

Pigris interrupted and reminded, "We don't need to use gold and silver coins to buy iron ore from the Ardi people now. We can barter. But when we buy iron ore from the Noriki people next time, we still have to pay gold and silver coins. But if we distribute all the coins as you said, we won't have money to buy iron ore from the Noriki people."

"How can there be no money? Can't the market managed by the Ministry of Commerce recover the money by selling goods?" Capito sneered.

Pigris retorted, "Capito, our tribe has no gold or silver mines, and we don't produce gold or silver. The gold and silver coins we got from looting the Romans have been decreasing in the process of buying iron ore again and again, while our tribe is constantly expanding, the population is increasing, the number of officials is increasing, and the goods produced by various workshops are also increasing. Do you think the gold and silver coins in the tribe can be used?"

Capitol was stunned for a moment, then said in a cold voice: "Pigris, it was you who said that the way of using wheat instead of gold and silver coins for trade has caused a lot of trouble to your Ministry of Commerce, so I made this suggestion. Since you think it won't work, then you can find a way yourself."

"Stop talking, be quiet, and let me think about it." As soon as Maximus spoke, the hall immediately returned to silence, and everyone focused their attention on him again.

When the Nix tribe was first established, they wanted to build a market, but the tribesmen had no money, so how could they trade? After discussion, the Council of Government finally decided to use wheat instead of gold and silver coins to trade goods in the tribal market and as wages. This was because the tribesmen had acquired a large amount of land, and after the harvest every year, they would have a large amount of wheat, so they would be able to buy the goods they wanted. In addition, food was precious to everyone in the tribe, so it could be accepted by everyone and circulated quickly.

Maximus from his previous life knew very well that this was actually a primitive variation of barter, a stopgap measure designed to solve the problem of the initial establishment of the tribe and the lack of gold and silver, but the desire to promote the development of trade.

However, he did not expect that after just over a year, the method of using wheat as currency would reveal many problems. This was because the tribe had developed too rapidly. It was no longer the embarrassing scene of two years ago with only more than 40,000 people and most of the tribesmen were penniless.

Today, the tribe has expanded from the Kupa River to the Sava River Plain, and the population has tripled or quadrupled. The old tribesmen have surplus food at home, and various workshops have been improved. The output is increasing day by day. Some of the products made are not only popular among the tribesmen, but also loved by outsiders (Ardi people). Markets are established one after another in the territory, and commercial activities are booming. It will be more prosperous after September, because the new and old tribesmen will be more capable of participating in trade activities after the harvest, so currency has become an urgent problem to be solved.

How to do?
Maximus originally had a rough idea, but he didn't expect to implement it so soon, so he was a little hesitant. He stood up and paced back and forth beside his seat thinking.

After a moment, he stopped and said calmly: "We have been here for almost two years. Everyone should know that except for us, the Ardi people, the Pannoni people, and even the Boyi people here all trade within the tribe on the basis of barter.

I heard that many of their fellow tribesmen laughed at them for being ignorant and backward, but you have to know that thousands of years ago, the entire Mediterranean and even the entire human race were engaged in trade activities based on barter. It was only with the development of time, the population grew, the trade activities increased, and barter became less and less convenient. So we humans invented the use of currency to replace barter and make it a medium of exchange in trade activities, so that we can more accurately measure the value of goods and make buying and selling more convenient, thus making the trade in the Mediterranean more prosperous.

In the past, shells, iron, copper, lead, tin... were all used as currency in a city-state or a kingdom, but eventually gold and silver became the currency used by the vast majority of people in the Mediterranean..."

Everyone in the hall listened attentively. They had been influenced by the surrounding environment since birth and felt that using gold and silver to buy things was as natural as drinking water. At this moment, listening to Maximus's brief account of the history of currency broadened their horizons and made them realize that gold and silver as currency did not exist from the beginning, which gave them more thoughts.

Seeing this, Maximus asked in a more serious tone: "Gold and silver can neither be eaten nor worn, nor can they be made into tools for farming or fighting. They seem to be useless. Why can they become the main currency recognized by people all over the Mediterranean today? Who can tell me the reason?"

Everyone fell into deep thought.

"Is it because gold and silver are beautiful and rare?" Karina rarely spoke, but seemed very unconfident.

"Gold and silver are not rare in the Mediterranean. There are gold and silver mines in many places, and the output is very large." Pigris retorted: "I think it is precisely because it is not rare that it can be circulated in many areas of the Mediterranean. In addition, gold and silver are soft, easy to cast, easy to cut, and not easy to decay, so people are more willing to use it to buy things."

"I wonder... maybe it's because gold and silver have no other uses and people who own them won't use them for other things, so they are recognized by many city-states and used as currency." Cornelius said with deep emotion: "Our tribe uses wheat as currency, but in the war with Pannoni last year, in order to fully guarantee the army's food, our finance department stopped paying officials and craftsmen for more than a month, and the markets in the two towns also stopped trading... If gold and silver were used as currency, there would be no such problem."

Maximus spoke again, saying seriously: "You answered very well, and basically explained why most city-states in the Mediterranean use gold and silver as currency.

However, there are still some problems with using gold and silver as currency. For example, when buying a large number of goods, a large amount of gold and silver is needed, which must be transported by carts or multiple people. When trading, the weight of gold and silver must not only be accurately weighed, but also the internal purity must be distinguished to prevent adulteration...

However, although gold and silver have these shortcomings, they are much better than other things that have been used as coins. That is why they are widely used in trade among Mediterranean city-states. But is there anything more suitable for coins and more conducive to commercial activities than gold and silver? "

Maximus looked at the people who were thinking again, and without waiting for their response, he said in a deep and firm tone: "Of course there is, and it is something unique to our tribe! That is - paper!"

"Paper is widely used in our tribe. I heard that its manufacturing process is not complicated and the raw materials are easy to obtain. How can it be used as currency?"

Kefisofon was the first to raise the question. As the head of the Ministry of Etiquette and Education and also a teacher in the school, he dealt with paper the most. At the beginning of last year, paper was still a rare commodity, but now the Ministry of Finance distributed large quantities of paper to various schools in the tribe, which made him feel that paper was very cheap.

Maximus smiled and said, "It is precisely because paper is easy to make that there is no shortage of it and it can be used in large quantities in trade. You think paper is cheap because the papermaking workshop belongs to the tribe and the paper produced is free for use by various departments. But you should know that only our tribe can make paper in the entire Mediterranean. It is more conducive to writing and recording than papyrus. Do you think that if we sell paper outside, will it be very valuable?"

"But we can't sell the paper now," said Pigris regretfully.

"It can't be sold, but this shows that paper itself is valuable, and the papermaking workshop is directly controlled by the tribe, so it is impossible for others to use paper to forge coins and disrupt the tribe's market. You see, the tribe has unique conditions for using paper to make coins."

Maximus smiled confidently and said, "So how do you use paper as currency to buy goods? Is it like gold and silver, where you can exchange different goods by the weight of paper? Of course not!
We need to use the writing property of paper to write a certain face value on each piece of paper. For example, if a piece of paper is marked with one Seth, then this piece of paper can only be used as a copper coin; if another piece of paper is marked with one Denar, then it can be used as a silver coin -"

"Chief, if a piece of paper is marked with one thousand auris, can this piece of paper really be used as 1000 gold coins?" Pigris asked.

Maximus nodded: "Theoretically, it is possible-"

There was a commotion in the hall, and everyone was confused and surprised.

"Gentlemen, since gold and silver are useless, why can one gold coin buy a cow and one silver coin buy a pottery jar?" Maximus patiently explained, "Because this is a consensus gradually reached by the people of the Mediterranean in their long-term commercial activities, and they have given gold and silver coins such value.

Since our tribe has just been established, there is no time for the tribe members to slowly reach such a consensus. Therefore, it is up to our tribe and the government to set the value of the banknotes. However, this is not a right that can be abused! We must be responsible for the tribe members and ensure that every banknote we make can buy goods corresponding to the value written on the paper, that is, to make the banknotes valuable!

This requires the tribe to guarantee the credit of the paper money, just like we swore to the goddess Danu, we must never break it! If we print large numbers on paper and issue them indiscriminately as you said, we will be robbing the tribe members of their wealth and destroying the credit of the paper money. Then no one will be willing to use the paper money!"

(End of this chapter)