Monday, September 07, 2015
Intramural exchange
Still looking for old econ stats. Still didn't find what I was looking for, but
bumped into this 1772 book on bookkeeping methods.
Bringing text out of the image and modernizing a bit:
In the plantations they reckon their monies and keep their accompts the same way as they do in Britain. But their money is of far less value; for bills upon London, from any of the Caribee islands, are usually charged with 25 per cent in favour of London. That is, if St Christophers of Montserat should draw £100 upon London, the merchants of London charge the drawer with £125 for the said £100. And for Jamaica, Virginia, Maryland, Pensilvania, New England &c the difference is commonly greater. ... London exchanges with the other towns of Great-Britain for a small percent in favor of London.
Seems peculiar to have an exchange rate within one currency, but in fact we do the same thing to Alaska and Hawaii without recognizing it explicitly. Prices and wages in Hawaii are 30% higher than mainland.
Lesson: Greece doesn't need to have its own separate currency to achieve some degree of decoupling from Germany. It could use a Euro with a different value. Banks routinely handled such intramural adjustments in 1772, long before adding machines or computers made numbers easy. There's no TECHNICAL barrier to this technique.
Interesting that this 1772 author didn't separate out the colonies that were preparing to rebel against London's economic treatment. He sees Jamaica, Virginia, Maryland, Pensilvania, New England &c as belonging to the same category. Must have been a serious surprise when some of those discounted Plantations took up arms against London. Jamaica never revolted violently, and even after its fairly recent independence would rather return to colonial status. Sensible people. They understand that revolution makes things worse! 
Bringing text out of the image and modernizing a bit:
In the plantations they reckon their monies and keep their accompts the same way as they do in Britain. But their money is of far less value; for bills upon London, from any of the Caribee islands, are usually charged with 25 per cent in favour of London. That is, if St Christophers of Montserat should draw £100 upon London, the merchants of London charge the drawer with £125 for the said £100. And for Jamaica, Virginia, Maryland, Pensilvania, New England &c the difference is commonly greater. ... London exchanges with the other towns of Great-Britain for a small percent in favor of London.
Seems peculiar to have an exchange rate within one currency, but in fact we do the same thing to Alaska and Hawaii without recognizing it explicitly. Prices and wages in Hawaii are 30% higher than mainland.
Lesson: Greece doesn't need to have its own separate currency to achieve some degree of decoupling from Germany. It could use a Euro with a different value. Banks routinely handled such intramural adjustments in 1772, long before adding machines or computers made numbers easy. There's no TECHNICAL barrier to this technique.
Interesting that this 1772 author didn't separate out the colonies that were preparing to rebel against London's economic treatment. He sees Jamaica, Virginia, Maryland, Pensilvania, New England &c as belonging to the same category. Must have been a serious surprise when some of those discounted Plantations took up arms against London. Jamaica never revolted violently, and even after its fairly recent independence would rather return to colonial status. Sensible people. They understand that revolution makes things worse! Labels: Metrology
¶ 2:23 AM
