King's Imprimatur

Basic Information

The King's Imprimatur refers to a monarch's Royal Seal or guarantee. The term may refer to a Royal Decree, or official approval, or just the symbol of such.

On Money:

The King's Imprimatur also appears on money in a Feudal or Monarchal system. This certifies that the money is not counterfeit, is official and legal tender, made with the proper amount of gold (or other precious metal). Such assurances, however, can be a slippery slope if the government is dishonest, greedy, or unstable. With a simple decree, most monarchs can change the metal content of their coins.

Another money making scheme for governments is to periodically change the design of coins and declare the old design no longer legal tender - users are then obliged to exchange their coin for a fee (either direct to the mint or from a money changer who is farming the business) which serves as a de-facto tax. This has the marginal benefit to the economy of keeping the specii in good shape and clearing out worn and clipped coins. If the government is able to refrain from debasing the currency this can actually be relatively positive for the local economy.

Where imprimatur exists, there will generally be controls on the holding and spending of foreign (and obsolete local) currency - these may amount to an absolute prohibition, with all incoming currency being obliged to be exchanged for local money (usually for a fee), or the government may tolerate a grey-market in "alternative currency" but demand the payment of taxes, court fees and similar things in approved coin (and possibly forcing some or all licenced businesses such as guilds to do the same), thus tending to drive out other coinage.

Historically, economies tend to follow this general pattern:

• Start with Barter¹.
• The rarer or more valuable items become Commodity Money.
• Become formalized with Grain-based Local Currency.
• The Royalty or other governing body forms a National Currency of Representative Money, often based on the Gold Standard.²
• The King declares that local currencies are invalid, and the power transfers from communities to the central government.³
• The coins are struck with the King's Imprimatur, and over some period of time their value lies not in the metal they are made of but in the government's promise. This money is valuable because the King says it is! It becomes Fiat Money.⁴
• This leads eventually to something akin to the Federal Reserve System, where the lines between the bank and government blur a bit.
• The power transfers from the Royalty to the Bank - the bankers own the nation, and the money is based on debt.⁵

See Also:

Coiner
Crooked Banker
Dual Currencies
Imprimatur
Monopoly by Royal Decree
News/Interview: Beyond Life Inc - Talking with Douglas Rushkoff

Sources

Bibliography

1. Interview with Douglas Rushkoff

2. Wikipedia on the Imprimatur of the Roman Catholic Church - article has a tiny section at the bottom on other uses of Imprimatur

Game and Story Use

• The transition times, when power shifts from the communities to the government, or from the government to the banks, can be times of great strife and tumult.
  • Speaking of which, the intermediate stages, with private banks issuing currency, can be "interesting", with all sorts of hilarity from having to negotiate the discount on your banknotes, to following fads and fashions on the exchanges, through to sudden runs on banks leaving you essentially potless.
    • Hilarious unintended consequences for PCs who seize the villain's gold from a bank vault (or when in transit), only to find that they have fatally damaged that bank's reserve capacity and caused a local economic disaster or even just that the rumour that they have (or the effect on the bank's reputation for security) has generated much the same effect.
  • Note also the possibility that a change in government can make the imprimatur essentially worthless.
  • Likewise the sad spectacle of a king in exile grandly issuing currency which is (at best) only valuable in the event of his success in returning to power.
    • Unlucky PCs may by paid in such "sub-scrip" material and be obliged to accept it at risk of being labelled disloyal. There may be an outside chance that the exiled monarch's hosts or other backers may exchange such currency for something less useless.
    • The Emperor Norton made a substantial chunk of his income by exchanging "Imperial currency" for that issued by the US Federal Mint …
• Royal Decrees and other things bearing the King's Imprimatur (say, the papers granting a Monopoly by Royal Decree) might serve as a MacGuffin, Treasure, or Reward.
• A plot pinched from Tim Severin's Viking trilogy: A corrupt coiner is manufacturing coins under a royal minting licence for a government known for its strict controls over the quality of its bullion coins and whose specii is thus accepted internationally (specifically the court of Knut the Great). He cannot debase the current issue as his produce is subject to audit and assay and the penalties for forgery are severe … however he can (and does) forge the previous issue, debasing it heavily. These counterfeit coins are then artificially aged and either dumped into foreign markets (that still regard them as valuable based on the mint's reputation for strict currency control) or laundered back into the domestic economy in exchange for the new issue of coins where it is difficult to distinguish them from genuine coins of the previous issue, which typically keep coming in for years following a re-coining.
  • This is, apparently, pinched from real life - US Dollars are very widely accepted worldwide and, whilst not the hardest currency to reproduce, are still difficult and risky to counterfeit in their home territory. Instead, counterfeiters have been known to produce a reasonably facsimile of the real thing and then spend it overseas - typically to buy goods which can then be re-sold for genuine currency (black or grey market gemstones are popular but any commodity that is commonly purchased for cash and can be re-sold cost effectively will also work).
• Another plot idea might be for a corrupt coiner to make a bad batch which will not pass inspection and then arrange for it to be stolen en-route to the proof-house. The profit may be from precious metals not used in striking the batch, or insurance … or both. PCs who foil the robbery will probably not be thanked, and may even be scapegoated for "switching the real coins with a load of fakes" when they return the bad batch. Smart PCs who have not broken the coiner's seals until some authority figure is there to witness it may well have a defence … others could be in deep trouble very quickly.
  • A suitably malevolent coiner might even skip the robbery, hire the PCs for the transport job, and then claim they made the switch in transit.
• King Henry VIII was, at one point, known as "Old Copper Nose" for issuing "silver" coin which were actually silver plated copper. Apparently the silver quickly wore away from the raised areas, including the king's face on the coin. Previous English kings had debased the currency with tin, which was at least harder to spot.
  • Hence an example of how the imprimatur might do more harm than good - in this case the "bad money" will then famously drive the "good money" out of the economy (because exchanging the former for the latter at face value represents a significant loss in real terms) and will tend to lead to parallel currencies, oppressive currency control laws and eventual degeneration towards a barter economy (much as tends to happen when a fiat currency becomes inflated). This is said to have been amongst the many factors that lead to the collapse of the Western Roman Empire.

Footnotes

1. This is, at least, the accepted theory - some economists point out that known pre-money and low money societies actually operate by gift and obligation (I give you part of my kill this hunt, I expect that next time you have spare meat, I can claim some. The king gives me title to this land, at harvest time I must pay him a third of the harvest.) and money may instead come about as a way of quantifying obligation as societies expand and have more relationships than can easily be kept track of.

2. This can also occur on a free-market basis - the Letter of Credit issued by a banking house can quite easily evolve into commodity-backed (usually gold backed) paper money which is then freely traded, sometimes at a discount depending on the proximity and reputation of the issuer.

3. This may also occur by default if a central bank - or the national exchequer - decides to underwrite commercially issued banknotes. Note that this phase occurred within the 20th Century in the modern world.

4. This is often the logical result of a fractional reserve backed paper currency - as long as the issuing authority is trusted to pay its debts they can issue currency without needing to demonstrate they hold commodity to support it.

5. Typically this will mean, at least in part, that a significant part of the assets that back issued currency are actually property mortgages and commercial debt bonds - this can make national currencies very vulnerable to a property price collapse.