Tales of Soft Money — Oceans of Wealth


Update 2020-02-02: This article is updated with further sources to better reflect its chapter in my book, Money Dethroned.

From the Maldives to Africa

Cowries, a word derived from Hindi, were special - they emerged as money, not only in Africa's interior, but in Asia as well. The type Monetaria moneta was useless in a practical sense, as there was no possibility to eat them, warm yourself with them, or make tools out of them. But they were undoubtedly beautiful, and adding to this beauty was the fact that, for inland communities, they might very well have carried a certain mysticism, giving rise to questions regarding their blue expanses of origin. It can be argued that seashells likely were rare ornaments or artefacts before being used as money.

When recalling his visit to the Maldives, the medieval traveler Ibn Battúta first mentioned this type of money:

From these islands [the Maldives] there are exported the fish we have mentioned, coconuts, cloths, and cotton turbans, as well as brass utensils, of which they have a great many, cowrie shells, and qanbar. [...] The inhabitants of these islands use cowrie shells as money. This is an animal which they gather in the sea and place in pits, where its flesh disappears, leaving its white shell. They are used for buying and selling at the rate of four hundred thousand shells for a gold dinar, but they often fall in value to twelve hundred thousand for a dinar. They sell them in exchange for rice to the people of Bengal, who also uses them as money, as well as to the Yemenites, who use them instead of sand [as ballast] in their ships. These shells are used also by the [blacks] in their lands; I saw them being sold at Malli and Gawgaw at the rate of 1 150 for a gold dinar. (Battúta, 1325-1354, p. 243)

This account from Battúta is quite fascinating, and the sheer discrepancy between valuing a gold dinar at 1 200 000 shells in the Maldives, and valuing a gold dinar at 1 150 shells in the West African Empire of Mali must have had a true impact on him. It is easy to understand the motivation that caused Yemenite seafarers to brave dangerous waters and use the seashells as ballast; as they unloaded their cargo closer to African markets, like the port town of 'Aydhab, they of course could profit greatly. It is generally hypothesized that these seashells reached West Africa through the well-developed trade routes stretching north of Sahara, rather than being transported across sub-Saharan routes. Evidence supporting this claim come partly in the form of archaeological findings of bags of seashells in the Saharan desert, just north of where the Mali Empire once stood (Garenne-Marot, 2009, p. 4). The main rationale in establishing the direction of that trade lay in the fact that, along with the abandoned seashells were copper rods produced north of the Sahara, headed for sale in the southern areas where copper was demanded. Leo Africanus observed seashell money in the 16th century as far from the coast as Timbuktu (Einzig, 1949, p. 141).

The Indian Hub

What more reason do we have to believe Battúta when he connects seashells in the Maldives with those traded in the far-away interior of Western Africa? It is already established that the Egyptian towns by the Red Sea were important hubs in the Indian trade with Europe and North Africa, and Battúta specifically mentions Bengal as one destination of the seashells exported from the islands. That last claim is partially corroborated by some of the earliest references to seashell money on the Indian subcontinent, which exist in the form of accounts on India and China by two Arab merchants - one living in the 9th century and the other in the 10th century. These references are not clear about the exact geography, but it is considered highly likely that the kingdom they speak of was situated within an area that would lend some support to Battúta's words:

Shells are current in this Country [Rahmi], and serve for small Money, notwithstanding that they have Gold and Silver, Wood-Aloes, and Sable-Skins of which they make the Furniture of Saddles and Housings. [...]

All these things [rhino flesh, rhino horns, girdles] are to be purchased in the Kingdom of Rahmi for Shells, which are the current Money. (al-Sīrāfī & Sulaymān, 9th-10th century, pp. 17-18)

In Henry Yule's 1874 version of the recounts of Marco Polo's travels, there are multiple instances of where Polo runs into this phenomenon as well, and where Yule consequently discusses it. We know of these stories due to them being written down by Rustichello da Pisa a few decades before Ibn Battúta set out on his journey. The two Italians were imprisoned together in Genoa during a war between that republic and Venice, and it was during that time Rustichello carefully listened to Polo's accounts of the East, and subsequently published those stories after his imprisonment ended. The first such mention of seashell money is when Polo entered the landlocked province of Carajan, which is modern day Yunnan in China:

Their money is such as I will tell you. They use for the purpose certain white porcelain shells that are found in the sea, such as are sometimes put on dogs' collars; and 80 of these porcelain shells pass for a single weight of silver, equivalent to two Venice groats, i.e. 24 piccoli. Also eight such weights of silver count equal to one such weight of gold. (Polo, The Book of Ser Marco Polo, the Venetian Vol II, 1271-1295, p. 39)

It is not exactly clear what exchange rate this indicated in terms of grams of silver. But Henry Yule does shine some light on later, much worse exchange rates, albeit to the Indian silver rupee and in a slightly different area:

The most comprehensive employment of the cowrie currency of which I have ever heard is that described by the Hon. Robert Lindsay as existing in Eastern Bengal during the last century. When that gentleman went as Resident and Collector to Silhet about 1778, cowries constituted nearly the whole currency of the Province. The yearly revenue amounted to 250,000 rupees, and this was entirely paid in cowries at the rate 5120 to the rupee. It required large warehouses to contain them, and when the year's collection was complete a large fleet of boats to transport them to Dacca. (Polo, The Book of Ser Marco Polo, the Venetian Vol II, 1271-1295, p. 44)

While in the city of Carajan (bearing the same name as the province), Polo described the seashell money again. And here he importantly states the connection to India, which very well could have meant Bengal:

In this country gold-dust is found in great quantities; that is to say in the rivers and lakes, whilst in the mountains gold is found in pieces of larger size. Gold is indeed so abundant that they give one saggio of gold for only six of the same weight in silver. And for small change they use the porcelain shells I mentioned before. These are not found in the country, however, but are brought from India. (Polo, The Book of Ser Marco Polo, the Venetian Vol II, 1271-1295, p. 45)

Moving forward in time a few centuries, it is in Albert Gray's translation of The Voyage Of Francois Pyrard Vol I, that the French navigator de Laval corroborates on at least one of the trade routes, as he and his fellow countrymen were shipwrecked and held captive in the Maldives:

There is another kind of wealth at the Maldives, viz, certain little shells containing a little animal, large as the tip of the little finger, and quite white, polished, and bright: they are fished twice a month, three days before and three days after the new moon, as well as at the full, and none would be got at any other season. The women gather them on the sands and in the shallows of the sea, standing in the water up to their waists. They call them Boly, and export to all parts an infinite quantity, in such wise that in one year I have seen thirty or forty whole ships loaded with them without other cargo. All go to Bengal, for there only is there a demand for a large quantity at high prices. The people of Bengal use them for ordinary money, although they have gold and silver and plenty of other metals; and, what is more strange, kings and great lords have houses built expressly to store these shells, and treat them as part of their treasure. (Pyrard, 1619, pp. 236-239)

Curiously enough, the only reason the Frenchmen were able to escape their captivity was a Bengal raid on the islands - something which very well might have had to do with the Bengali commanders realizing this is where money was produced and possibly stored. The Maldives were known as Divah Kavzah, or "Cowry Islands", after all (Quiggin, 1949, p. 28).

Transportation to the Lands of Scarcity

So in conclusion, it is quite clear that seashells were exported from the Maldives to mainly Bengal, and perhaps other Indian ports as well, only to branch out in northern and eastern routes to Tibet and China (an old Chinese word for seashells, pei, later came to mean "money"), and western routes to the coast of East Africa, perhaps through Yemenite ports. It is only logical that the seashells, where they were used as money, in general obtained higher value the further away from their place of origin. Battúta, as we have seen, observed incredible price differences, and there are indications that these lasted for many centuries even. Around the time Pyrard and his men had left the Maldives, European traders began exporting seashells not to Bengal or East Africa, but directly to West Africa. Hingston Quiggin referred to A. Churchill's writings:

The Boejies, or Cauries [cowries], which the French call Bouges, are small milk-white shells, commonly as big as small olives, and are produced and gather'd among the shoals and rocks of the Maldivy islands, near the coast of Malabar in the East-Indies, and thence transported as ballast to Goa, Cochin, and other ports in the East-Indies, by the natives of those numerous islands: and from the above-nam'd places, are dispersed to the Dutch and English factories in India; then brought over to Europe, more especially by the Dutch, who make a great advantage of them, according to the occasion the several trading nations of Europe have for this trash, to carry on their traffick at the coast of Guinea and of Angola, to purchase slaves or other goods of Africa, and are only proper for that trade, no other people in the universe putting such a value on them as the Guineans, and more especially those of Fida and Ardra have long done, and still do to this very day. (Churchill, 1744, pp. 338-339)

It may be claimed that the collection of seashells in the Maldives must more often than not have been a very profitable business. But before turning further to the production of this money, it is worth briefly mentioning its emergence and later dethronement in East Africa as well; Paul Einzig has gathered accounts from Germans that detailed exactly this in what is now Uganda - another landlocked area. He writes:

When cowries first made their appearance, they, too, were very valuable. It was possible to buy not only cloth and food but even boats and slaves with cowries. Two cowrie shells would purchase a woman. Subsequently large quantities found their way into the country. They became the principal medium of exchange and were also extensively used as a standard of value. In 1911 the value of a cow was 2 500 cowrie shells, that of a goat was equal to 500 cowries; a fowl was sold for 25 cowrie shells and a cock for 50; an ivory tusk weighing 62 lb sold for 1 000 cowrie shells. [...]

With the penetration of European civilization through the construction of the Uganda Railway, coins gradually took the place of cowries. As a result cowries depreciated. In 1896 cowries were exchanged for about 200 to the rupee, but by 1901 the exchange rate rose to 800. After 31 March 1901, cowries ceased to be acceptable in payment of taxes. At the same time the Government placed an embargo on the import of cowries, having received information that large amounts were being imported from German East Africa. (Einzig, 1949, p. 124)

With seashells now being imported to Africa from the east and west, there was nowhere for the state of relative scarcity of this money to escape anymore, and the money was eventually dethroned in all of these places. Many of these eyewitness accounts fit well in a Mengerian framework, in which seashell money, having just emerged as the most saleable good, is first highly valuable and then falls in value as producers of that money put more hands and capital to the task of providing more units to any market where they make a profit. The ease with which the sea shell money was produced, ultimately put such a severe dent in its price through inflation, that individuals found it uneconomical to continue to use it as a medium of exchange. Since the money lacked hardness it was naturally ruined and demonetized in favor of a harder money like silver or gold coins, which the Bengalis at the time of Battúta already happily transacted with. There is one interesting medieval account, mentioned by Alison Hingston Quiggin, which is helpful in further emphasizing this dynamic:

Masudi of Baghdad the Arab historian, who died about the middle of the 10th century, amplifies this account [cowrie production]. He records that cowries were the only money in the Maldives, and when the royal treasury was getting empty the Queen directed women to cut branches of coconut palms and throw them on the sea. The animals climbed up on to these and they were collected and spread on the seashore until only empty shells were left, which were brought in to replenish the treasury. (Quiggin, 1949, p. 28)

Similar resource allocation to further production was always going to be the end-point of seashell money. If becoming money in multiple empires, it follows that the people of the Maldives likely would have set up large-scale production in the form that is most efficient. It is not hard to imagine them constructing whole islands artificially for this purpose in order to profit, either for themselves or for others as slaves.

It is also finally worth emphasizing that before the disruptive waves of monetary inflation, seashells were not bad money, or it would not have emerged as such out of a number of contenders and in multiple societies no less. One hugely underappreciated aspect of this money was the ease of which forgery could be restricted, owing to the uniqueness of the species, and to the natural difficulty in which the shells could be imitated. The initial good monetary properties of seashells is further evidenced by the fact that Native American tribes, isolated from the diligent collectors on the Maldives, and from Indian or Yemenite seafarers, also used such a medium as money, albeit a different species. Instead of inflation through far-away islanders, the Native Americans had it served to them by European settlers that through technological superiority could mass-produce the animal and its shell. In other words, the same lack of hardness of this type of money made itself known there as well.