CURRENCY

THE function of currency is to facilitate exchange by providing something for which people are always ready to give goods. Without currency we have barter of goods, where goods are exchanged for goods directly without the medium of currency. Barter is a very awkward process, and dissatisfaction is often the result. A person wishing to exchange something has to find another, who not only has what the first desires to have, but who also desires to have what the first seeks to give. Such a consummation is rarely attained in individual cases, but where there are many transactions, the result is more satisfactory. The system of barter in West Africa between natives and Europeans was especially maleficent, when, as often occurred, there was only the one European trader on the spot and as a consequence he had the monopoly of supply and demand. In that case the natives were often compelled to take such goods as the trader chose to give, generally articles that he could not dispose of, as "half-empty bottles of ale and porter, and damaged claret" .1 Naturally with such methods, trade would never grow, since the natives preferred to produce nothing, when they could not get what they wanted. Barter, then, possessed, besides its intrinsic awkwardness, a scope for sharp practice, for squeezing the natives, and in addition the lure of making a " double-profit" at one transaction. This idea of earning a " double-profit" is a great delusion, for what may be gained in the individual deal is more

288 than lost in the general turnover. The general verdict is that" where this system has been replaced, and cash is now offered for produce and accepted for goods sold, trade has increased greatly." 1 Despite all this Sir Frederick Lugard reported in 1919 that "trading by barter is still carried on in some parts of Nigeria, in spite of all the efforts of the Government to put a stop to it ". He went on to say: "The growing scarcity of ginformerly the chief article of barter-has done something to affect improvement, but there are still districts in the Benue region in which the native in exchange for his produce can only obtain articles which he does not want. He sells them for what they will fetch in the native market, where in consequence they may often be bought at a much lower price than from the merchant's store". 2

The first step from simple barter in West Africa was the adoption of a commodity currency, which only differs from goods exchanged in barter, in that the commodity used as currency is known to be generally acceptable and so comes to be employed more or less extensively for exchange and not for consumption. Thus sometimes bottles and cases of gin were passed from hand to hand in trade for years without being consumed. 3 One of the first articles to attain this position in the public estimation was the iron imported from Europe, on acount of its usefulness for forming the instruments both of war and of husbandry. The result was that " iron soon became the measure by which the value of all other commodities was ascertained." A bar of iron of specified dimensions became the unit of currency, so that" twenty leaves of tobacco, for instance, were considered as a bar of tobacco, and a gallon of spirits as a bar of rum j a bar of one commodity being reckoned equal in value to the bar of another commodity."4 Other commodities were added to the list of currency-commodities, such as crystal beads and brass pans, which were equally in universal

demand. In the nineteenth century a new and popular form of commodity currency was introduced into West Africa from India, that of cowrie shells which were used as ornaments as well as currency. In addition to cowries there were also copper wires, called "cheethams" or " citims " (after Cheetham, one of their manufacturers), brass rods, small alloy horse-shoes called "manillas", bottles and cases of gin (which appreciated in value and depreciated in quality the further inland they penetrated), and, most important of all, slaves. All the above commodities were in constant demand, and passed readily from hand to hand. Cowries were employed for small payments, slaves and gin for large payments, while the other and metallic commodities were utilised for intermediate payments, so that a rough and ready gradation of currency was attained. Despite the system's apparent convenience, it was in reality riddled with imperfections. Brass rods, for example, varied in size, and thus varied in intrinsic value. Slaves, again, were so various that, like the hand-minted coins of earlier times, the value of each one had to be assessed separately. Then again, the value of the commodities varied according to time and place, as there was a plethora or a shortage, and as the natives desired the goods with intensity or otherwise, since the value of a commodity currency is always based very intimately on its utility as an article of consumption. It would seem that in certain parts at any rate a commodity currency was introduced and was in use among the natives themselves, while the system of barter still lingered on in the transactions between European traders and the natives. 1 The lack of valuable exchange commodity was the reason for the use of slaves as currency, especially in the interior parts of West Africa. A Report of the early 'Nineties of last century lamenting the status· of the slave in this respect said: "He has been the cheque book of the country, and has been necessary for all large payments. Unfortunately, he has a trick of dying, while passing from hand to hand, and it is possible that the less perishable currency [sc. of silver coin] will oust him from the commercial field."2