When the bling don't bling...

May 28, 2009 12:01 PM

$Filter: Was there ever a time when gold was NOT accepted as a medium of exchange?

That's not to ask, "Was gold ever not a currency?", but rather: Is there any historical event/period in which gold was REFUSED as a commodity?

I guess personal accounts are fine too (!), but what I'm really after is an at least quasi-systematic institutionalized [however small, localized, or short-lived] debasement of gold. (If so, interesting to know what actually was valuable in that context--and why...)

posted by TigerMoth to work & money (14 comments total)

During some siege type situations I imagine the value of gold diminished to nothing in comparison to the value of food and water.
posted by pseudonick at 12:26 PM on May 28

Holy Shit! Pre-colonial meso-American tribes considered gold to be the "excrement of the gods" and did not use it for currency.
posted by Pollomacho at 12:43 PM on May 28 [2 favorites]

I guess it depends on what you mean by a medium of exchange. I don't know a single person or store who would accept gold as payment for goods or services; I would have to find a specialized business to convert the gold into currency. So you could say that gold isn't a medium of exchange at present, at least not in my circles.
posted by Juffo-Wup at 12:45 PM on May 28

Like Pollomacho said, there's lots of anecdotes about pre-conquest Americans considering gold to be worthless.
posted by motsque at 12:48 PM on May 28

Err...

One of the problems with your question is that "value" and "currency" are not always the same thing.

Gold has almost always had some "value" to humans for three reasons: 1.) it's shiny, 2.) it doesn't corrode, and 3.) it is easily malleable and thus workable into trinkets, etc. It's probably the first metal we ever worked with.

Gold ingots were used in trade as far back as 3,000 BCE, however at the time gold (and silver and copper) were valued by weight. This had obvious disadvantages as you could never be sure the gold you were getting in trade was pure. Also, ingots were heavy and only useful for buying really big things... like an army.

This changed in the 8th century BCE with the accidental discover of the touchstone. Since the purity of gold could finally be agreed up, gold began to circulate in the form of true currency. One of the first being the Lydian stater, circa the 6th century BCE.

Certainly there are examples throughout time where one form of currency was devalued by war or disaster. "A horse a horse my kingdom for a horse," to borrow a notion from the Bard.

But in general, in functional, surplus based societies, particularly those which rely on trade, from prehistory forward, gold has always been the primum mobile.
posted by wfrgms at 12:53 PM on May 28

The Incan empire had no currency, yet they had and used gold for art - it held only aesthetic value for them.

So around 1400 AD gold was not a currency for at least one civilization. This can be twisted to say that gold would have been refused as a commodity, but that's only because everything would have been refused.
posted by jpeacock at 1:06 PM on May 28

pseudonick hit on what I was after--sieges and that sort of thing, though Juffo-Wup diced the question nicely with the Ockham's Razor I so deserved! ;) Still, back to sieges, etc, anybody got any specifics of something like this...?
posted by TigerMoth at 1:55 PM on May 28

So, when you say "institutionalized... debasement" of gold — you're looking for situations where gold is so worthless that even the gold-buying specialists Juffo-Wup is talking about stop buying it?
posted by nebulawindphone at 2:22 PM on May 28

Piggyback, please? The wikipedia touchstone entry is really short. How do you actually use one to assay the purity of gold?
posted by Meatbomb at 2:31 PM on May 28

From April 5, 1933 til December 31, 1974 it was illegal for US citizens to possess more than a small amount of gold, excepting gold for "customary use in industry, profession or art." Similarly, contracts were forbidden to have clauses specifying payment in gold from 1934 til 1977.

So as a practical matter gold was not usable for trade in the US for about 40 years.
posted by jedicus at 2:43 PM on May 28

I just read Black Elk Speaks, which was narrated by a Sioux medicine man. Talking about how the government broke their treaty by taking the Black Hills, he said:

"Later I learned too that Pahuska [Custer] had found there much of the yellow metal that makes the Wasichus crazy; and that is what made the bad trouble, just as it did before, when the hundred were rubbed out.

Our people knew there was yellow metal in little chunks up there; but they did not bother with it, because it was not good for anything."
posted by showbiz_liz at 2:49 PM on May 28

Sieges are rarely the airtight affairs that you might think them to be. If we're going far into the past, there is plenty of evidence to suggest money was needed to buy supplies, for bribes, etc. There was plenty of interaction between the two sides in a siege, as well as with smugglers and other third parties. So I can't imagine currency not coming into play.

As for whether or not this currency was gold (or products made of gold), that would depend on the time and place. I'm sure gold was always around in some form, though silver was always a more popular precious metal for currency than gold.
posted by hiteleven at 4:26 PM on May 28

though silver was always a more popular precious metal for currency than gold.

It is not perhaps the most accurate source, but the Bible begs to differ:

All King Solomon's drinking vessels were of gold, and all the vessels of the house of the forest of Lebanon were of pure gold; silver was not considered valuable in the days of Solomon.

--2 Chronicles 9:20
posted by jedicus at 5:03 PM on May 28

The wikipedia touchstone entry is really short. How do you actually use one to assay the purity of gold?

Some info here. Basically the touchstone is ground smooth on one side. A gold coin (or whatever) can then be rubbed against it, leaving a mark. The color of the mark is compared to known standards.
posted by wfrgms at 8:09 PM on May 28