
Post office stamps as currency (1862) - armenarmen
http://www.nytimes.com/1862/10/02/news/post-office-stamps-as-currency-it-is.html
======
clamprecht
In Federal prison it is common to use books of stamps as currency. When I was
there (95-99) it was around $5 per book of stamps. But it was more common to
just give someone a commissary list (for the prison store) of items totaling
the amount that they owe you.

For larger amounts, you'd have to have someone on the outside send money to
the other person's people on the outside. These days, I suspect Bitcoin makes
this much more efficient (for transfers happening outside the prison).

~~~
lukejduncan
According to Planet Money, an in person block chain is used in at least one
prison.
[http://www.npr.org/sections/money/2017/02/10/514577243/episo...](http://www.npr.org/sections/money/2017/02/10/514577243/episode-753-blockchain-
gang)

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leggomylibro
The novels _Going Postal_ and _Making Money_ by Terry Pratchett actually use
this as a plot device; they're comic Fantasy books that roughly parallel the
invention of fiat currency.

It goes from people starting to use stamps instead of coins because they were
lightweight and "backed by the government" for postage, to people slowly
accepting notes of credit which are backed by gold in a vault, to people
realizing that the notes aren't really backed by the gold, so much as they are
by the city-state's entire economy and potential to do useful work.

"What is the value of a coin compared to that of the hand that holds it?"

~~~
ftlio
I like the sentiment, but the actual thing used to cut people into the value
of that economy has utility that can be priced in terms of that actual thing.

Imagine you lived in an economy where all you had to do was pay robots in the
required electricity to gather the requisite resources (from somehow
politically uncontested, infinite stores), assemble them, and deliver the
product to you (or you to your destination, etc). The cost of storing that
electricity, and transferring it to them would be accountable in electricity
(the purchase of the manufacture of batteries in electricity, the electricity
losses due to transformation and heat loss on the wires, etc).

Humans have thus far been really bad at amortizing the costs of the actual
things they're transacting with. It may be impossible, but Bitcoin is the
first system that seems to have attempted a solution.

~~~
leggomylibro
You might like _The Just City_ , by Jo Walton. I was kind of ambivalent about
it, but it was a reasonably fun speculative fiction about Athena gathering
people from throughout time to recreate the city that Plato laid out in
_Republic_.

To make that possible, she provides robots which can understand basic
instructions and act semi-autonomously to build things, farm, etc, but fall
well short of actual sapience. And after awhile, she introduces a gadfly named
Socrates into the fledgling city.

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rocky1138
"But there is no safety to anybody in taking these stamps any longer as money.
They have not the slightest intrinsic value. They are not a legal tender. They
will not be redeemed by anybody. They will not even pay postage. The public
might just as well make wooden buttons or pebble stones a substitute for
change as these stamps. They would have just as much value, and would answer
precisely the same purpose, so long as the community chose to take them. But
somebody must eventually lose very largely on these postage stamps, -- and the
sooner their circulation is stopped the smaller the loss will be."

One wonders what the author would think of fiat currency, which is what the
world uses to-day.

~~~
strictnein
> "It must either be of intrinsic worth, like metal coins, or represent
> somebody's credit, -- that of the Government, of a corporation, or of
> private individuals."

~~~
rocky1138
Fiat currency doesn't match any of those, though. It is of no value, not even
credit.

~~~
matt4077
Great! IF you have any, I'll gladly take the worthless trash off your hands.

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peeters
I think there might be a subtext here that's not explicitly mentioned (it
would have been understood at the time): the emergence of the electric
telegraph.

> When people took them, they thought that they could convert them into this
> use at least, and that _so long as letters had to go by mail_ they would
> have some value, and might therefore be safely regarded as currency.

The 1860s were right around the time that the electric telegraph was reaching
worldwide popularity. So here in midst of the Civil War they have a fiat
currency based on a commodity that is vulnerable to collapse in value, due to
a disruptive technology.

The immediate threat to the currency is the USPS discontinuing acceptance of
non-pristine stamps. And I think that's all the Times was intentionally
referencing here. But I wonder if there was some understanding that stamps
would make a terrible currency for this reason as well.

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afarrell
> It must either be of intrinsic worth, like metal coins, or represent
> somebody's credit, -- that of the Government, of a corporation, or of
> private individuals. The only intrinsic value of these stamps consisted in
> the fact that they might be used to pay postage.

This seems to be a contradiction. The stamp is a demand upon the credit of the
US Postal Service to perform an act of value. What is the difference between
that and a piece of paper which is a demand upon the credit of a bank to
perform the act of handing you silver?

~~~
hammock
It's not. They explain that a stamp DID have intrinsic value, UNTIL (if you
read on they explain) the credit of the USPS had been taken away by policy
that a smudged/circulated stamp is invalid

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LyndsySimon
Note: article is from 1862 :)

~~~
MentallyRetired
I have to admit, I got all the way to "hitherto" before I figured it out.

~~~
LyndsySimon
I clicked the link thinking "WTF? Didn't Congress do this during the Civil War
in an attempt to prevent people from using postage as currency when the CS
Dollar began to inflate?

A random bit of trivia - the CSA never issued coins. There were two attempts -
a cent and a half dollar - but neither made it past the "proof" stage:
[https://www.pcgs.com/News/Confederate-States-Of-America-
Coin...](https://www.pcgs.com/News/Confederate-States-Of-America-Coinage)

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kevinmannix
The always fantastic NPR-produced podcast Planet Money had a recent episode on
how the founder of a Bitcoin company dreamed up a new currency system based
around the blockchain while he was locked up in prison. Pretty fascinating and
a great way to be introduced to the concept of electronic currency.

Podcast link:
[http://www.npr.org/sections/money/2017/02/10/514577243/episo...](http://www.npr.org/sections/money/2017/02/10/514577243/episode-753-blockchain-
gang)

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derefr
I've always wondered whether you could buy and hold _permanent_ stamps as an
inflation-tracking alternative to treasury bonds. It'd be like using "IOUs for
loaves of bread" directly as a currency: no matter what the monetary policy of
the country issuing it, as long as it's still legal tender, inflation can't
devalue it. Price of bread goes up, core CPI goes up, inflation goes up—but
the IOU still gets you 1 bread.

~~~
RJIb8RBYxzAMX9u
Isn't that what TIPS[0] and I bonds[1] are?

[0]
[https://www.bogleheads.org/wiki/Treasury_Inflation_Protected...](https://www.bogleheads.org/wiki/Treasury_Inflation_Protected_Security)

[1]
[https://www.bogleheads.org/wiki/I_savings_bonds](https://www.bogleheads.org/wiki/I_savings_bonds)

------
k1m
From The Office
[https://www.youtube.com/watch?v=nAcdV019oMQ](https://www.youtube.com/watch?v=nAcdV019oMQ)
:)

