Tales of Soft Money — Mountains and Deserts of Salt


Salt is boring. But it still gives us quite a good example of how a commodity can evolve and then devolve as money; this consequently helps us better understand some of the proper frameworks for studying money. Historically, salt was often used to prolong the lifespan of food products, and so functioned as a vital hedge against periods of hunger. This function, among others, had it traded against other goods on marketplaces all over the world, across all ages. But only at a few of these markets did it function as money. The question is why? Let's look at some of these places.

I have earlier mentioned Marco Polo's discovery of paper money as he traveled the vast lands of Kublai Khan. But the fact is that he observed other curious forms of money as well. One such instance is reported by Polo when passing Tibet:

They [the Tibetans] have none of the Great Kaan's paper money, but use salt instead of money. [1]

Further east, the province of Caindu (modern-day Xichang) was also reported to utilize salt for the same purpose:

The money matters of the people are conducted in this way. They have gold in rods which they weigh, and they reckon its value by its weight in saggi, but they have no coined money. Their small change again is made in this way. They have salt which they boil and set in mould, and every piece from the mould weights about half a pound. Now, 80 moulds of this salt are worth one saggio of fine gold, which is a weight so called. So this salt serves them for small change. [2]

Henry Yule, the well-known British translator of the transcribed recounts of Polo's travels, also refers to more modern sources that corroborated the above. Salt brought to wild mountain populations in the region could fetch as high price as 40 pieces of salt moulds per saggio of gold, indicating local gold abundances and salt scarcities. Similar observations could be made by the Portuguese Francisco Alvares, in his description of Ethiopia a few centuries later:

There is in it [the land] the best thing there is in Ethiopia, that is the salt, which in all the country is current as money, both in the kingdoms and dominions of the Prester and in the kingdoms of the Moors and Gentiles, and they say that it goes as far as Manicongo. [...] They say that in the place where the salt is collected a hundred and twenty or a hundred and thirty stones are worth a drachm [...]. Then, at a market which is in our road, at a town named Corcora, which is about a day's journey from the place where the salt is got, it already is worth five or six stones less, and so it goes on diminishing from market to market. When it arrives at court, six or seven stones are worth a drachm; I have seen them at five to the drachm when it was winter. [3]

Further west on the continent, a couple of centuries earlier, Ibn Batuta had traveled over one of the many north-south Saharan trade routes and had the following to say:

I proceeded from this place in the beginning of the month Moharram, and of the year 753 [February 1352], with a large company of merchants and others; and, after a journey of five and twenty days, arrived at Thagari, a village in which there is nothing good, for its houses and mosques are built with stones of salt, and covered with the hides of camels. There is no tree in the place; it has nothing but sand for its soil; and in this are mines of salt. For this they dig in the earth, and find thick tables of it, so laid together as if they had been cut and placed under ground. No one, however, resides in these [houses] except the servants of the merchants, who dig for the salt, and live upon the dates and other things which are brought from Sigilmasa, as well as upon the flesh of camels. To them come the people of Sudan from their different districts, and load themselves with the salt, which among them passes for money, just as gold and silver does among other nations; and for this purpose they cut it into pieces of a certain weight, and then make their purchases with it. [4]

So, here we have a few examples of salt being used as money, in different places on Earth and across different time periods. The reason for all of them is simple: salability. Salt, being highly salable across scales and relatively salable across space, could only become money where it was also salable across time. This means that salt became money where it was relatively scarce, and salt was relatively scarce where it was relatively hard to produce. To gain any monetary premium, it probably had to have local scarcities comparable to that of gold. In Yule's annotations, he briefly mentions a note from a certain M. Francis Garnier, that shows the essence of this scarcity:

Salt currency has a very wide diffusion from Muang Yong to Sheu-pin. In the Shan markets, especially within the limits named, all purchases are made with salt. At Seumao and Pouheul, silver, weighed and cut in small pieces, is in our day tending to drive out the custom; but in former days it must have been universal in the tract of which I am speaking. The salt itself, prime necessity that it is, has there to be extracted by condensation from saline springs of great depth, a very difficult affair. The operation consumes enormous quantities of fuel, and to this is partly due the denudation of the country. [5]

Salt, in other words, probably evolved as money only where its stock-to-flow was relatively high; no producer could then flood the market with it, which would have caused immediate dilution. In addition to the instances discussed above, this happened also in New Guinea, Borneo, the Alu islands, Zimmé, Sema Nagas, Guely, Zambia and in many other places.

Had certain salability components been drastically higher, it is easy to imagine what quickly would have happened to these salt-based monetary systems. From western China stretched the Silk Road - a rather heavily trafficked trade network reaching as far as the Mediterranean. Maybe unbeknownst to many of its travelers, it circumvented the Dasht-e Kavir, or the Great Salt Desert, in what today is Iran. Even though extremely inhospitable, salt mining was definitely possible, especially with the use of slaves. Had such salt been more easily stored and transported, any salt money within caravan reach would have been brutally demonetized.

There were documented salt production closer to the salt-money societies, but it is unclear to what extent this production caused demonetization in the end. Polo:

A great amount of salt also is made here [Coiganju, or Hwai-Ngan-Chau], furnishing some forty other cities with that article, and bringing in a great revenue to the Great Kaan. [...]

At every place between the sea and the city [Tiju] salt is made in great quantities. And there is a rich and noble city called Tinju, at which there is produced enough to supply the whole province [...]. [6]

Marco Polo mentions whole mountains of salt in Taican - modern day Kunduz in Afghanistan - which is still quite far from China's and Tibet's salt money markets, but which still may have caused considerable inflation:

After those twelve days' journey you come to a fortified place called Taican, where there is a great corn market. It is a fine place, and the mountains that you see towards the south are all composed of salt. People from all the countries round, to some thirty days' journey, come to fetch this salt, which is the best in the world, and is so hard that it can only be broken with iron picks. 'Tis in such abundance that it would supply the whole world to the end of time. [7]

As soon as the owners of these deserts and mountains were to get word of monetary systems based on salt, and if these systems were geographically close enough for salt's physical properties to survive over time and space, be it by horse or camel, you know that their attention quickly would have turned to how to extract the commodity in the greatest quantities possible.

[1] Marco Polo. (1271-1295). The Book of Ser Marco Polo, the Venetian Vol II. Translated by Colonel Henry Yule, C.B. London: John Murray, p.29.

[2] Ibid., p.35.

[3] Francisco Alvares. (1540). Narrative of the Portuguese embassy to Abyssinia during the years 1520-1527. Translated by Lord Stanley of Alderley, London: Printed for the Hakluyt society, pp.89-99.

[4] Ibn Batúta. (1325-1354). The Travels of Ibn Batuta. Translated by Samuel Lee. London: The Oriental Translation Committee, pp.231-232.

[5] Marco Polo. (1271-1295). The Book of Ser Marco Polo, the Venetian Vol II. Translated by Colonel Henry Yule, C.B. London: John Murray, p.37.

[6] Ibid., pp.114-116. 

[7] Marco Polo. (1271-1295). The Book of Ser Marco Polo, the Venetian Vol I. Translated by Colonel Henry Yule, C.B. London: John Murray, p.145.