Large amounts of cash on ships

[vladthemad]

Isn't this one of the main reasons that the courier network exists? You make your sales and pick up more cargo, then plug in your credstick at a banking kiosk at the downport and make your deposit, noting your next planned port of call. While you are getting your ship, cargo, and passengers straightened out, that information is already being transmitted to the xboat tender. By the time you lift off, that information has already been transmitted to numerous xboats and is moving down the network carrying that information with it. That information continues on down the network being disseminated to all the banking kiosks.

Chances are that by the time you get to where you are going, that information should already be updated at the new downport...unless it's some backwater far off the mains, and even then it shouldn't be far behind you. Of course if you're also a qualified mail carrier, you may well be carrying that information on your own ship.

 

[alex_greene]

Exactly. But it still pays to deposit often and regularly in your local bank branches. Each branch would have your credstik and citizen ID, and any cash transactions would be taken out of your local branch's account first, and any outsystem accounts afterwards.

If you had a pile of bullion worth Cr 100,000 in your local branch in system, and a notation in your credstick that you had a deposit of gemstones valued at MCr 1,000,000 in the bank branch of the system two parsecs away, your bullion deposit in system could stand as collateral for the cool million in the system next door, until the clearing note comes along with the next courier.

It also pays to ensure that cash payments come in the form of some sort of material asset which is liquidable. Bullion, gemstones and bitcoin are liquidable. Shares in an investment are not that readily converted into cash, and you'd be looking into blue chip stock in that case - stocks which generate cash, high-interest savings accounts and so on.

Actually, the whole business of cash flow does send a shiver down my spine somewhat. As someone who is used to having next to sod all cash in the real world, I often imagine what it would be like to live in a universe like Traveller, and to be able to throw around large chunks of cash like this.

And it seems to me that this would be the way I would go about it, as a peripatetic itinerant native of that setting.

 

[Condottiere]

You have cash on hand for emergency expenses, like bribing customs officials and unexpected medical expenses, since it's unlikely you'll have medical insurance, or the hospital doesn't accept or recognize the one you do have.

Or just basic tax evasion and buying stuff from under the table or off the back of a lorry.

 

[steve98052]

I wouldn't say that commodities are necessarily stable or liquid. Popular varieties of bullion – such as gold, silver, and platinum in our world – are very liquid, but sometimes fluctuate wildly relative to major currencies. Gems are even more prone to fluctuation, and often not very liquid except in places where there's a very active market – and even then there's the complication of authenticating the goods. Other commodities – base metals, grain, maybe batteries – might be more stable, and probably more liquid than gems – but they're inconvenient to transport.

Those issues are the reason cash was invented.

Also, I think there would be variety in things that take the place of our credit and debit cards. (And I think the card format would likely persist, because it's handier to stick in a pocket than a stick.) There would be three types of cards: credit, debit, and stored-value. Credit and debit cards would likely have much more strict transaction limits on worlds other than the ones where they're issued.

Stored-value cards wouldn't have that problem (except on lower-tech worlds), but unless they included a refund procedure they wouldn't offer much advantage over cash. Even if they required some combination of biometric and password features losing them would still mean a tedious wait while the issuer authenticated that you hadn't already spent it; a thief might not be able to spend it, but you'd be out the money on it for a while too.

- - -

On a completely different topic, I recommend GURPS Far Trader as a sourcebook for all sorts of economic matters in the Traveller setting. At least one of the three authors is an economist in real life, and they all did their homework. It spells out things like letters of credit and balance of trade in ways that address most of the issues discussed in this thread in a very useful way.

 

[ochd]

On a completely different topic, I recommend GURPS Far Trader as a sourcebook for all sorts of economic matters in the Traveller setting.

Thanks for the tip. Another one to add to the wishlist.

Dan.

 

[alex_greene]

I wouldn't say that commodities are necessarily stable or liquid. Popular varieties of bullion – such as gold, silver, and platinum in our world – are very liquid, but sometimes fluctuate wildly relative to major currencies. Gems are even more prone to fluctuation, and often not very liquid except in places where there's a very active market – and even then there's the complication of authenticating the goods. Other commodities – base metals, grain, maybe batteries – might be more stable, and probably more liquid than gems – but they're inconvenient to transport.

That's just our world. The Third Imperium might have a far more stable market, because it's the Far Future, and I imagine that the science of economics might be far more advanced than our own current, limited understanding.

You never know - the Imperium might rule over the value of money and creds with an iron fist, maintaining a purely artificial gold standard that keeps the prices of commodities locked in, regulated, stable and predictable.

Most roleplaying game settings never go this deeply into economics, and bring in the instabilities and issues of the real world, To use game developer parlance, such thinking breaks immersion.

 

[phavoc]

I wouldn't say that commodities are necessarily stable or liquid. Popular varieties of bullion – such as gold, silver, and platinum in our world – are very liquid, but sometimes fluctuate wildly relative to major currencies. Gems are even more prone to fluctuation, and often not very liquid except in places where there's a very active market – and even then there's the complication of authenticating the goods. Other commodities – base metals, grain, maybe batteries – might be more stable, and probably more liquid than gems – but they're inconvenient to transport.

That's just our world. The Third Imperium might have a far more stable market, because it's the Far Future, and I imagine that the science of economics might be far more advanced than our own current, limited understanding.

You never know - the Imperium might rule over the value of money and creds with an iron fist, maintaining a purely artificial gold standard that keeps the prices of commodities locked in, regulated, stable and predictable.

Most roleplaying game settings never go this deeply into economics, and bring in the instabilities and issues of the real world, To use game developer parlance, such thinking breaks immersion.

Actually the idea of currency and valuation is nearly as old as humanity. We've been doing it for thousands of years. The idea is quite simple - the execution is quite complex. I seriously doubt the 52nd century Imperium, which is based upon mercantilist principles, will NOT have the same issues we have. None of the baskets of currencies today are fully backed by gold deposits. Gold is more of a mechanism to trade between countries, and even that is falling along the wayside as there simply isn't enough of it to fully back the value of the major currencies.

But modern currencies aren't based upon anything other than trust. The US Dollar is based upon the faith and trust of the US Treasury and the government. It's stability can be tossed out like many other nations have done, much to their economic regret. If trade is the backbone of a 1,000 worlds, then the Imperium won't have anything but a stable Cr to exchange.

Without local currencies on other planets the Cr can still fluctuate in local value. If grain is plentiful, 1 Cr will buy you more than when it's less plentiful. But that's economics and not monetary policy.

 

[PsiTraveller]

This is what I like about this board. You point out Traveller is based on a cash only economy, and that is could cause issues in gameplay, and a solution to that issue is created and fleshed out.

Is there any way this can get updated to the http://wiki.travellerrpg.com/Imperial_Currency page and replace the cash based economy page?

 

[phavoc]

I had never read the Imperial currency entry on the Traveller wiki, but after reading it I find it to be woefully lacking.

Currency in the 52nd century would work the same way currency has in the past. The concept of credit probably pre-dates, or at least created in parallel with currency. Even before precious metals many societies had the idea of currency. Things as simple as seashells have taken the place of currency. All forms share the same concept - that it has some value to the receiver. Early credit was simply a persons word. Later, as mercantilism became more advanced the idea of credit also became more advanced with it. And as societies spread across the globe currency and credit spread with them.

The Imperium is no different in this issue than was say Rome. It could easily take a courier six months to cross the span of the Roman empire. The Imperium substitutes starships travelling between star systems with horses and sandals. But conceptually the idea is the same. And in the past people acted upon letters of credit as well as cash. And people tried to game the system in the past, much as they would do in the future. It is inconceivable to consider that the Imperium will have perfected an economic system whereby people can't game it, can't commit thefts against it. Banking houses in the 52nd century will operate no differently than they did in the 6 B.C. The only difference will be that their tools will be far more sophisticated, as will the tools of the thieves hoping to steal from them.

So credit between planets will work the no differently than credit earlier. A letter or credit issued by a bank in one system will be valid elsewhere - but it will operate under the trust but verify concept. If the bearer has no history in the receiving system, the local bank won't just cash it, depending upon the value that is. If it's for Cr 100, probably no problem. If it's for Cr 1,000,000, a portion of the funds might be made available, but the bulk will be frozen until the next data update comes in from the other system. Traveller has already pushed the idea of limitless data storage. Which means planets will daily be sending out terabytes of updates, including banking data. It will be heavily encrypted and set to make it quite difficult to change to allow for theft - but we have that same thing today with data files and we do pretty well with it.

PsiTraveller is right.. .that particular Wiki entry is woefully out of date with even today's tech. It should be updated - assuming anyone actually cares.

 

[PsiTraveller]

Well the cash economy as mentioned in the article allows for robbing the stagecoach adventures, and piracy may make more sense if the ships safe has a few million in cash in it.

Going to virtual currency and information shifted by X-boat network allows for a more 'modern' banking system and data sticks and credit/debit cards. Adventure wise it offers hacking and rigging of electronic signals to try and pervert the banking data of a system in order to pull off a heist.

Lazarus Long pointed out that in space trade all sales are barter once the ship lifts. (Somewhere in "Time Enough for Love")

 

[Condottiere]

Recognized and accepted liquidable store of value .

 

[alex_greene]

Currency in the 52nd century would work the same way currency has in the past

That cannot be assumed to be correct. The economy of the Far Future might not work the same as the American economy c. 2017, any more than it can be assumed to work the way it used to c. 1977.

Whether or not the Imperium enforces the buying power of the credit through sheer might of political muscle, constraining the Free Market Economy and walling off certain kinds of trades such as currency speculation, or whether it operates on a more Socialist sort of level and "from each according to his gifts, to each according to his needs" being the motto, the economy is stable within the Imperium. The credit's buying power is stable everywhere. Ten credits will buy you one sack of grain in Capital or in some backwoods farm in Lanth - the people depend on that for trade to be conducted smoothly between star systems, and for peace to exist between the member worlds.

 

[PsiTraveller]

The stability of the currency is not the issue, it is the form of the currency that is recognized. A 10 credit note can buy a sack of grain on Lanth or Capital because the note is accepted. The issue is if the farmer on Lanth will take a Capital Credit Card on Lanth, or does the person wanting that bag of grain have to wait until the X boat courier arrives from Capital and updates the local bank database to cover the cost of the grain. As the article points out, the economy is a cash based economy.

This presents problems (to my mind anyway) of a ship carrying millions in cash because the ship may need to buy something at a Starport at some point. If the Jump drive fails and you need a few tons of replacements you may not want to wait while a courier is sent to a planet 6 Jumps back to go to the branch you deposited your cash into. So the problem is how to transport serious wealth between systems in forms other than a big bag of cash. If a merchant wanted to buy a million bags of grain would they be able to use an electronic form of payment or would they need 10 000 Low Passage bills weighing 5 kilos?

I keep thinking of the Breaking Bad scene with the storage locker. That is what will be in the corner of the cargo hold as the Trading Family saves to buy another ship.

https://www.youtube.com/watch?v=q3zdcwgPA6I

 

[steve98052]

. . .
But modern currencies aren't based upon anything other than trust. The US Dollar is based upon the faith and trust of the US Treasury and the government. It's stability can be tossed out like many other nations have done, much to their economic regret. If trade is the backbone of a 1,000 worlds, then the Imperium won't have anything but a stable Cr to exchange.

To bring canon into the discussion, there's the Long Night. It was precipitated by one major Second Imperium bank refusing to honor Credits issued by another major Second Imperium bank, followed by a cascade of additional banking panics. Without stable currency that worked between worlds, traders didn't have a convenient way to get paid, and didn't have a way to borrow money to build new starships. Trade collapsed, and systems that were dependent on food imports starved until they were depopulated to levels that could support the population with local resources. Widespread recovery took almost two millennia.

The canon Long Night came about in much the same as the way banks failed in the Great Depression and triggered all sorts of problems that stretched beyond banks, and triggered economic depression in countries that had nothing to do with the conditions that precipitated it.

As a trip-wire to avoid another Imperium-wide Long Night, Third Imperium currency includes the name of the domain that issued the currency. If one domain's banking system collapses, the rest of the Imperium may choose to treat that domain's currency as foreign exchange, but maintain the faith and trust of the treasury for other domains, so economic chaos in one domain doesn't bring down the entire Imperium. (In the Rebellion time-line, I suppose it also allowed the rulers of competing factions to operate their economies independently, but I haven't read enough Rebellion canon to say for sure.)

Without local currencies on other planets the Cr can still fluctuate in local value. If grain is plentiful, 1 Cr will buy you more than when it's less plentiful. But that's economics and not monetary policy.

Exactly. Defining a currency in terms of commodities doesn't make sense when scarcity varies and the commodities are not easy to transport. The faith and trust of the treasury is – one hopes – constant throughout the Imperium, and to some distance beyond it. Even enemies of the Imperium might find the stability and trustworthiness of the Imperial Credit attractive enough to recognize it as a useful currency, and non-aligned entities outside the Imperium would almost certainly find it useful.

. . .
This presents problems (to my mind anyway) of a ship carrying millions in cash because the ship may need to buy something at a Starport at some point. If the Jump drive fails and you need a few tons of replacements you may not want to wait while a courier is sent to a planet 6 Jumps back to go to the branch you deposited your cash into. So the problem is how to transport serious wealth between systems in forms other than a big bag of cash. If a merchant wanted to buy a million bags of grain would they be able to use an electronic form of payment or would they need 10 000 Low Passage bills weighing 5 kilos?

It's definitely a good idea to keep millions in cash in the captain's strong-box if you can afford it. It's also a good idea to keep millions on deposit in a bank on each world where one might be able to perform an unanticipated repair – though if the jump drive is looking questionable, it might be an even better idea to overhaul it next annual maintenance, or even wall off a segment of the cargo hold for the replacement parts one anticipates needing when it does fail.

I keep thinking of the Breaking Bad scene with the storage locker. That is what will be in the corner of the cargo hold as the Trading Family saves to buy another ship.

https://www.youtube.com/watch?v=q3zdcwgPA6I

I don't see that as the likely way one would safe up for a new ship. Instead, every time one visits a starport with a decent correspondent bank branch, they'd haul their surplus cash there and have it dispatched to an account on the world where they plan to buy their next starship (or have one built). That scene from Breaking Bad would be more applicable to player characters who have themselves broken bad. They'd have that heap of cash in the ship's strong-room, and have a constant struggle to figure out how to unload large-denomination notes with serial numbers that are on official watch-lists.

 

[phavoc]

Currency in the 52nd century would work the same way currency has in the past

That cannot be assumed to be correct. The economy of the Far Future might not work the same as the American economy c. 2017, any more than it can be assumed to work the way it used to c. 1977.

Whether or not the Imperium enforces the buying power of the credit through sheer might of political muscle, constraining the Free Market Economy and walling off certain kinds of trades such as currency speculation, or whether it operates on a more Socialist sort of level and "from each according to his gifts, to each according to his needs" being the motto, the economy is stable within the Imperium. The credit's buying power is stable everywhere. Ten credits will buy you one sack of grain in Capital or in some backwoods farm in Lanth - the people depend on that for trade to be conducted smoothly between star systems, and for peace to exist between the member worlds.

I wasn't basing it on just US currency, especially not 1977. If you want to use the US as your basis you could go back to the 1800s, or even the founding of the US. You could use the British Empire circa 1800/1700. You could use the Ottomans, the Romans, pretty much any of the ancient Western empires would be sufficient. A number of the Eastern ones are also applicable (I woudn't per se use Mongols, as they are an exception the Empire ideal, but any ancient China ones would work). You didn't see the same level of mercantilist efforts in the central and south American civilizations. Persia had a similar economic model and had a relatively large empire for it's day.

Your statement "The credit's buying power is stable everywhere. Ten credits will buy you one sack of grain in Capital or in some backwoods farm in Lanth - the people depend on that for trade to be conducted smoothly between star systems, and for peace to exist between the member worlds." is not backed by economic theory that has take place for the last 1,000 years. It's far to simplistic and not at all realistic. PRICE is NOT the same as buying power. If you don't believe me ask the Spaniards who live through the Golden age in Spain. Golden age is both literal and figurative. The sheer amount of gold being brought back to Spain devalued the currency because they were so flush with it. If you traveled to Paris or Rome a piece of gold retained it's relative value. But in Spain that was not true. There was so much where it used to cost 1 piece of gold for say a horse the price was raised to 5 or 10 pieces of gold. Traders could make a good buck by exploiting the cost differential, but getting there with your goods (and getting back) made such activities uncommon.

You also can look at any area that has ever gone through a mineral rush. California & Alaska of the 1800s had the same thing. Shops charged $20 for a shovel that normally would not even be a dollar elsewhere. But gold miners paid it (a) because they had no alternatives, and (b) that $20 shovel might allow them to make $100 in gold in a week. So it was all relative.

If you want a more modern example you can look to the Dakota's during the Black Gold rush that occurred just 10 years ago. Or Aberdeen, Scotland during the height of the North Sea oil drilling.

Of course this is all reality-based fiscal issues. In a game setting it's far easier to say a credit is a credit is a credit no matter what planet you are on. I'm just saying that does not, and has not, happened in the thousands of years that humans have used currency. And I would say that all the evidence and economic theory says otherwise, too.

 

[phavoc]

. . .
But modern currencies aren't based upon anything other than trust. The US Dollar is based upon the faith and trust of the US Treasury and the government. It's stability can be tossed out like many other nations have done, much to their economic regret. If trade is the backbone of a 1,000 worlds, then the Imperium won't have anything but a stable Cr to exchange.

To bring canon into the discussion, there's the Long Night. It was precipitated by one major Second Imperium bank refusing to honor Credits issued by another major Second Imperium bank, followed by a cascade of additional banking panics. Without stable currency that worked between worlds, traders didn't have a convenient way to get paid, and didn't have a way to borrow money to build new starships. Trade collapsed, and systems that were dependent on food imports starved until they were depopulated to levels that could support the population with local resources. Widespread recovery took almost two millennia.

The canon Long Night came about in much the same as the way banks failed in the Great Depression and triggered all sorts of problems that stretched beyond banks, and triggered economic depression in countries that had nothing to do with the conditions that precipitated it.

As a trip-wire to avoid another Imperium-wide Long Night, Third Imperium currency includes the name of the domain that issued the currency. If one domain's banking system collapses, the rest of the Imperium may choose to treat that domain's currency as foreign exchange, but maintain the faith and trust of the treasury for other domains, so economic chaos in one domain doesn't bring down the entire Imperium. (In the Rebellion time-line, I suppose it also allowed the rulers of competing factions to operate their economies independently, but I haven't read enough Rebellion canon to say for sure.)

I don't recall seeing that as a cause of the long night. Not to say that it wasn't, but from what I remember of Megatraveller supplements the Long Nights were political in nature, and economic instability followed the inability of the government to maintain the peace and keep the various worlds together. When the politcal system falls apart the economic system typically falls with it (and vice-versa, as we've seen throughout ancient and modern history).

 

[Condottiere]

Setting prices and mandating forms of payment, never work on the macroscale, and certainly not over an extended period of time.

Planetary economies need to be able to redeem the CrImp for something they need.

You can set up a foreign exchange reserve, but hording the little green things for their own sake is just asking for trouble.

 

[steve98052]

. . .
Planetary economies need to be able to redeem the CrImp for something they need.
. . .

Of course that's the case. But it goes both ways: they need to be able to sell things for a currency that others will accept.

The starport will have transactions that bring in the standard currency:
- Planetary retailers selling goods and services to visitors who use them themselves
- Planetary wholesalers selling goods to visiting traders who engage in speculative trade
- Planetary wholesalers selling goods to distant customers through contracts
- Planetary financial markets selling stocks, bonds, real estate, and other assets to offworlders
- Planetary providers of entertainment or information sell it to visitors or distant offworlders

The starport will also have transactions that bring in assets at cost of the standard currency:
- Offworlders are paid to perform services for locals
- Offworlders sell trade goods to locals, whether through speculative trade or through distant contracts
- Locals buy stocks, bonds, real estate, and other offworld assets from distant financial markets
- Locals buy entertainment or information from offworld providers

In the short term, those transactions will typically not balance; selling a seasonal cash crop will bring in lots of money, building up currency reserves, while buying an imported deep meson defense system will deplete currency reserves or accumulate debt.

But in the long term, those transactions will balance. Even running a persistent trade surplus of goods and services will be balanced by purchases of offworld assets through financial markets, and running a persistent trade deficit will be balanced by sale of local financial assets; if the world has a strong economy, bonds it issues to pay for its trade deficits may be regarded as respectable financial investments.

Even in the short term, however, transactions will be pretty close to balance. For every container load of fashionable local handcrafts one broker sells for cash, some other broker will be buying a container load of manufactured ground-car tires. So although the short term balance of trade won't be exact, it will be approximate.

 

[Saladman]

Although there may be little Imperial presence, it's close enough to the Imperium that the Imperial Credit could be the standard currency. In the real world, any time a nation has been in a state of economic chaos such that their own currency was distrusted, major country currencies – US Dollars, Euros, etc. – have been favored over the local currency.

Before the Euro, the US Dollar was widely used in Europe as a medium for international exchange, even though there were plenty of respected European currencies to choose from, simply because it avoided issues like a French business and a German business arguing over whether to price a deal in Francs or Marks. I seem to recall reading in the 1980s that there was more US cash (in dollar volume, mostly in $100 notes) in Europe than in the US, because it was immune to political squabbles between European nations.

Based on that, I would expect that the Imperial Credit would be the standard currency of trade well outside the Imperium – probably well outside the region in which the Imperium would have any other influence – except in places where it was politically toxic. So trade deals might well be priced in Imperial Credits deep into Gzaefueg sector, two sectors from the Imperium, but maybe not in Cronor subsector, just outside the Imperium.

Just to add to this, here's how one Mexican drug lord stored his money:

Supposedly that is $22 billion, mostly in US dollars. Of course if you buy something in a store in Mexico you need pesos, but that doesn't mean people don't recognize the value. So I agree the Imperial Credit could have similar staying power.

 

[Condottiere]

They deliberately cap the greenback at a hundred bucks, to make money laundering difficult, and drug dealers store them in cereal boxes.

In order to stuff that much money into a box of Apple Jacks, you'd have to use a mix of high-denomination bills that have been taken out of circulation and a 21.7-ounce family-sized package. That calculation is based on three assumptions: 1) that the box, which is 321 cubic inches, could hold 4,658 bills, each of which is 6.14 by 2.61 by 0.0043 inches; 2) that you would lose no space to air or the unavoidable folding of bills; and 3) that you have access to all of the highest-denomination bills currently in circulation.