Key ideas: Published in 1910. “The Yap Islanders regarded stones quarried and shaped on a distant island and brought to their own as the concrete manifestation of wealth. For a century and more, the “civilized” world regarded as a concrete manifestation of its wealth metal dug from deep in the ground, refined at great labor, and transported great distances to be buried again in elaborate vaults deep in the ground. Is the one practice really more rational than the other?” (Milton Friedman)
In a land where food and drink and readymade clothes grow on trees and may be had for the gathering, it is not easy to see how a man can run very deeply in debt for his living expenses,—for which, indeed, there need be no barter, and if no barter, there is no need for any medium of exchange.
In fine, as far as mere existence is concerned in Uap, there is no use for money. But nature’s readymade clothes, though useful, are not ornamental, and the soul of man, especially of woman, from the Equator to the Poles, demands personal adornment. And like all adornments, polished shells, tortoise-shell, variegated beads, etc., demand labour in the making.
Here then the simple-hearted natives of Uap, who never heard of Adam Smith nor of Ricardo, or even if they should hear of them would care no more for them than for an English song from the phonograph, have solved the ultimate problem of Political Economy, and found that labour is the true medium of exchange and the true standard of value.
But this medium must be tangible and enduring, and as their island yields no metal, they have had recourse to stone; stone, on which labour in fetching and fashioning has been expended, and as truly a representation of labour as the mined and minted coins of civilisation.
This medium of exchange they call fei, and it consists of large, solid, thick, stone wheels, ranging in diameter from a foot to twelve feet, having in the centre a hole varying in size with the diameter of the stone, wherein a pole may be inserted sufficiently large and strong to bear the weight and facilitate transportation.
These stone “coins,” if I may so call them, are not made on the Island of Uap, but were originally quarried and shaped in Babelthuap, one of The Pelao Islands, four hundred miles to the southward, and brought to Uap by some venturesome native navigators, in canoes and on rafts, over the ocean by no means as pacific as its name implies; and, with the stones safely landed, these navigators turned speculators, and, with arguments as persuasive as those of the most glib book-agent, induced their countrymen to believe that these “novelties” were the most desirable things to have about the house.
Of course, the larger the stone the greater its worth, but it is not size alone that is prized; the limestone, of which the fei is composed, to be of the highest value, must be fine and white and of close grain. It is by no means any large stone, however skilfully fashioned, from The Pelaos that will be accepted as a fei; it is essential that a fei be made of this particular variety and quality of limestone.
After having been stored in houses, out of sun, wind and rain, the fei present a white, opaque appearance, somewhat like quartz, but not so translucent nor of so fine a grain; when by luck it happens that a man’s wealth outgrows the capacity of his house, his money is then stored outside, and, thus exposed to tropical weather, its colour changes to a dirty gray, somewhat like sandstone, and the surface becomes rough and covered with moss and lichen.
As far as purchasing power goes, this does not, however, detract from its value; this “unearned increment” can be readily scraped off and the quality of the stone and its diameter, on which depends its value, be no whit diminished. I saw several æsthetic possessors of stone money polishing their wealth and cheerfully chipping away at their riches, thereby plainly evincing that they did not deem the acquisition of moss desirable for rolling stones.
Fei are cut as nearly circular as primitive resources permit, and through their centre a hole is cut whereof the diameter is, roughly speaking, about one sixth of the total diameter; this hole is, as I have said, for the insertion of a pole sufficiently strong to bear the weight of the wealth upon the shoulders of men when passed as currency.
The smaller, more portable “coins,” used for the purchase of fish from the failu, or of pigs from the wealthy chiefs, slope from the centre in one or two step-like gradations; wherefore, if at the centre they are six or eight inches thick, they are but an inch and a half, or two inches thick at the periphery. Their diameter, and, therefore, their value, is measured in spans, which in Uap means the stretch of the index finger and thumb.
In front of a failu there are always many fei, which are thus displayed as evidence of the industry and wealth of the inmates; they are acquired by the hard work of members either on fishing expeditions or by their labour in building houses for the villagers.
Another noteworthy feature of this stone currency, which is also an equally noteworthy tribute to Uap honesty, is that it is not necessary for its owner to reduce it to possession.
After concluding a bargain which involves the price of a fei too large to be conveniently moved, its new owner is quite content to accept the bare acknowledgment of ownership and without so much as a mark to indicate the exchange, the coin remains undisturbed on the former owner’s premises.
My faithful old friend, Fatumak, assured me that there was in a village nearby a family whose wealth was unquestioned,—acknowledged by every one, and yet no one, not even the family itself, had ever laid eye or hand on this wealth; it consisted of an enormous fei, whereof the size is known only by tradition; for the past two or three generations it had been, and at that very time it was lying at the bottom of the sea!
Many years ago an ancestor of this family, on an expedition after fei, secured this remarkably large and exceedingly valuable stone, which was placed on a raft to be towed homeward.
A violent storm arose and the party, to save their lives, were obliged to cut the raft adrift, and the stone sank out of sight. When they reached home, they all testified that the fei was of magnificent proportions and of extraordinary quality, and that it was lost through no fault of the owner.
Thereupon it was universally conceded in their simple faith that the mere accident of its loss overboard was too trifling to mention, and that a few hundred feet of water off shore ought not to affect its marketable value, since it was all chipped out in proper form.
The purchasing power of that stone remains, therefore, as valid as if it were leaning visibly against the side of the owner’s house, and represents wealth as potentially as the hoarded inactive gold of a miser of the middle ages, or as our silver dollars stacked in the treasury at Washington, which we never see nor touch, but trade with on the strength of a printed certificate that they are there.
There is one undeniable advantage in this form of weighty wealth among people whose houses are as fragile as those in Uap:—when it takes four strong men to steal the price of a pig, burglary cannot but prove a somewhat disheartening occupation. As may be supposed, thefts of fei are almost unknown.
There are no wheeled vehicles in Uap and, consequently, no cart roads; but there have always been clearly defined paths communicating with the different settlements. When the German Government assumed the ownership of The Caroline Islands, after the purchase of them from Spain in 1898, many of these paths or highways were in bad condition, and the chiefs of the several districts were told that they must have them repaired and put in good order.
The roughly dressed blocks of coral were, however, quite good enough for the bare feet of the natives; and many were the repetitions of the command, which still remained unheeded. At last it was decided to impose a fine for disobedience on the chiefs of the districts. In what shape was the fine to be levied?
It was of no avail to demand silver or gold from the chiefs,—they had none,—and to force them to pay in their own currency would have required, in the first place, half the population of the island to transport the fines; in the second place, their largest government building could not hold them; and finally, fei, six feet in diameter, not having been “made in Germany,” were hardly available as a circulating medium in the Fatherland.
At last, by a happy thought, the fine was exacted by sending a man to every failu and pabai throughout the disobedient districts, where he simply marked a certain number of the most valuable fei with a cross in black paint to show that the stones were claimed by the government.
This instantly worked like a charm; the people, thus dolefully impoverished, turned to and repaired the highways to such good effect from one end of the island to the other, that they are now like park drives.
Then the government dispatched its agents and erased the crosses. Presto! the fine was paid, the happy failus resumed possession of their capital stock, and rolled in wealth.
Fei are not prized merely because they are old, nor have they any sanctity as the legendary work of gods or ancient heroes. This was proved by an enterprising Irish-American copra trader, who, while living in Uap, carried on for many years a brisk, profitable trade by sending a schooner to The Pelaos with several natives, experts in all the essentials of fei. There the stones were quarried, properly shaped, and the schooner returned with a full cargo of genuine wealth, which was given in exchange for tons of dried coconut and bèche-de-mer.
The exchangeable value of fei seems to depend largely upon the eagerness of buyer and seller at the time of trading. Fatumak gave me, however, the following valuations, which possibly are a little high,—he was intelligent and a dear old fellow, but close-fisted to a degree, and his avaricious soul would no doubt have insisted, when trading, upon the very highest value.
three span fei of good whiteness and shape ought to purchase fifty “baskets” of food—a basket is about eighteen inches long and ten inches deep, and the food is taro roots, husked coconuts, yams, and bananas;—or, it is worth an eighty or a hundred pound pig, or a housand coconuts, or a pearl shell measuring the length of the hand plus the width of three fingers up the wrist.
I exchanged a small, short handled axe for a good white fei, fifty centimetres in diameter. For another fei, a little larger, I gave a fifty pound bag of rice—a somewhat extortionate price, but then the good, close-fisted Fatumak was not on hand to bargain for me. I was told that a well-finished fei, about four feet in diameter, is the price usually paid either to the parents or to the headman of the village as a compensation for the theft of a mispil….
# Between traders and natives the medium of exchange is the ripe coconut, from which copra is made
Between traders and natives the medium of exchange is the ripe coconut, from which copra is made; they have in general agreed upon a rough standard of values for the articles most commonly in demand; for instance: the price of a large pilot biscuit is three coconuts; a stick of “nigger-head” tobacco, together with a box of Japanese safety matches, is worth six coconuts.
The most extravagant deal I heard of was negotiated by that same royal old Ronoboi, who paid twenty thousand coconuts for a cooking stove, “made-in-Germany,” of thin sheet-iron. He was absolutely shut up in measureless content with his bargain, and vowed he was going to make bread in it; doubtless the kind of bread he will bake in it will, if possible, augment his content, but he will be forced either to begin or end with a new set of teeth and a rejuvenated digestion.
“The Island Of Stone Money” [paper] by Milton Friedman:
The Yap Islanders regarded stones quarried and shaped on a distant island and brought to their own as the concrete manifestation of wealth. For a century and more, the “civilized” world regarded as a concrete manifestation of its wealth metal dug from deep in the ground, refined at great labor, and transported great distances to be buried again in elaborate vaults deep in the ground. Is the one practice really more rational than the other?
What both examples—and numerous additional ones that could be listed—illustrate is how important “myth,” unquestioned belief, is in monetary matters. Our own money, the money we have grown up with, the system under which it is controlled, these appear “real” and “rational” to us. The money of other countries often seems to us like paper or worthless metal, even when the purchasing power of individual units is high.