Tales of Soft Money — The Trail of Beads
Staying in Africa, we continue to explore the work of Karin Pallaver, who on behalf of the British Museum has researched the 19th century extensive use of glass beads on caravan routes stretching from the east coast of modern day Tanzania, to the large lakes in the country's western interior.
Mapping the Trade Networks
Pallaver starts by describing a couple of shifting dynamics in the 19th century East African trade networks. The monsoon winds of the Indian Ocean had for centuries taken goods from India and the Arabian peninsula to Zanzibar and the towns cluttering the coast of eastern Africa. Meanwhile, trade between Africa's interior and these coastal towns had been limited at best. As demand for slave labor rose in the 18th and 19th century, and as Europe and India slowly stared to appreciate the physical properties of East African ivory in full, this lead market mechanics to push for more and larger trade connections between the coast and the interior. The Nyamwezi people were one of the groups quick to seize on this new opportunity.
As for the monetary systems used for those trade routes, they were complex. Maria Theresa silver thaler, named after the 18th century Empress of Austria, Hungary and Bohemia, was used in the coastal towns and on Zanzibar. As were the co-existing Indian Rupee and the Spanish piastre dollar. While these more modern types of money were demanded in the east, trade caravans had to stock up on slightly more conventional commodities before leaving for the interior. The most common of these commodities were, according to Pallaver's sources, cloths, glass beads and metal wires - all of which by European observers sometimes were referred to as 'African money'. Especially cloths were used by the caravans to bribe their way through territories of certain chiefs (something that tangents what we know about certain cloth-based monetary systems on the far away western coast of the continent). Having further been referred to by missionaries as 'the gold and silver of Equatorial Africa', cloths were evidently an important part of the crude monetary systems in eastern Africa.
Second only to the cloth goods in demand were glass beads; this demand was especially high far inland close to Lake Victoria and Lake Tanganyika. The supply of glass beads to the caravans was initially monopolized by Zanzibar-based Banyans (Indian traders), who according to sources imported these beads to the islands 'by the tonnes'. These beads trickled out to the various complicated trade networks, towards places were they ultimately were more scarce. To quote Pallaver:
[...] among the most requested there were the same same, or sami-sami beads, made of red coral, the white beads, popularly known as merikani, the gulabi beads made of pink porcelain, the black beads called bubu, the sungomaji, white and blue beads produced in Nurmberg, and a variety called sofi, Venetian cylindrical beads available in different colours. 
Sir Henry Morton Stanley, in his 1871 work 'How I Found Livingstone', elaborated on these bead-based monetary systems that he had had the (un)fortune to run in to while traveling the interior:
Thus, in Unyamwezi, red (sami-sami) beads would readily be taken, where all other kinds would be refused; black (bubu) beads, though currency in Ugogo, were positively worthless with all other tribes; the egg (sungomazzi) beads, though valuable in Ujiji and Uguhha, would be refused in all other countries; the white (Merikani) beads though good in Ufipa, and some parts of Usagara and Ugogo, would certainly be despised in Useguhha and Ukonongo. Such being the case, I was obliged to study closely [...] 
Not only did different tribes accept different type of beads; this acceptance schedule changed drastically with time as well, which made the matter even more complicated. Merchants caught owning certain types of beads for too long could see their entire wealth evaporate as those beads 'fell out of fashion' for one reason or another. English explorers Speke and Burton apparently managed to hold one type of beads long enough that they were unable to even give them away as gifts. Henry Morton Stanley complained about the subject as well:
The various kind of beads [to be carried into the interior] required great time to learn, for the women of Africa are as fastidious in their tastes for beads as the women of New York are for jewelry. 
In any case, as soon as the trade caravans had reached the lakes, they generally had sold most of their imported goods, with especially the beads fetching many times the market price as they did on Zanzibar. Personnel costs and tributes on the way back to the coast were mostly paid for in goods acquired in the interior.
Lake Tanganyika - A place where sacrifices in beads were made to local gods. It was here that Stanley's guide warned him that, unless beads were thrown in to the lake, anyone trying to pass would get lost and drown.
Pallaver makes an interesting observation of the fact that the trade route economy rested mainly on three different value protocols. Cloths, being the most sought after goods in the interior, were used mainly for high-value transactions like slaves or ivory, while beads and copper wires were, often but not always, used for smaller ones. This, of course, is not random, but the result of money protocol efficiencies evolving to cater transactions of different sizes, just like different metal coin denominations facilitated similar efficiency improvements in more developed parts of the world.
Now, as we know what the trade caravans brought in to the interior, and what they subsequently brought back to the coast, let's look a bit closer on especially the glass beads. A common misconception is that Europeans were the initiators of supplying glass beads to the Africans. The first beads in East Africa, according to Pallaver, originated from East Asia, and the initial attempts to introduce for example Venetian beads apparently failed as no one accepted them as money. Even as Henry Morton Stanley managed to match the supplied bead types with what the locals actually demanded, he noticed (to his probable disappointment) that beads of low quality could buy him vegetables, but not eggs, milk or fowl.
Luckily, in some of the larger financial centers in proximity to the caravan routes (for example Tabora and Ujiji) existed markets where all beads fetched prices in relation to each other. Beads could in these cities also be used to buy food, among other things. The German explorer Hermann von Wissmann reported that in the Ujiji market the smallest coins were represented by red and blue glass beads. Cotton cloth and copper represented silver money, whereas slaves, cattle and ivory represented gold. The explorer Joseph Thomson corroborated this as he documented his visit to the market of Ujiji:
[...] they have made the first advance towards the use of money in the adoption of a bead currency, which performs all the functions of our coppers, cloth being the medium for the larger purchases. 
Missionary Edward C. Hore, also had this to say about the Ujiji beads:
Here for the first time we find a regular currency or money in use by the natives; it consists of strings of blue and white cylindrical beads, each string containing 20 beads. Bunches of 10 strings are called "fundo". From 9 to 11 fundo are given in exchange for 4 yards of good heavy American calico; the value varying daily, according to the quantity of cloth in the market. 
As information on the intricate glass bead trade networks trickled back to Europe and beyond, it became clear that the way to upend them with an inflow of new supply in order to profit was not as straight a forward path as one might have thought. As already mentioned, certain Venetian beads had already been rejected, so it was clear that the African tribes were not going to accept just any type of round glass objects coming their way when their century old bead network at the time consisted of hundreds of different bead types. This was of course a cause of annoyance among Europeans, some of whom attributed it to the vanity of African women, as is anecdotally indicated by Sir Stanley's comment on their changing taste for beads. It is likely that the ever changing bead type demand instead was a result of economic realities, like inflation - in other words quite logical from an economical point of view. One 19th century observer lamented on the subject:
In Europe it is generally thought that the savages of Inner Africa accept a string of beads or a yard of cloth as a sufficient recompense for dozens of elephants' teeth, and that the nourishment of a caravan is repaid by the honour of the visit. These happy days are long since passed. 
The happy days may indeed have been over, but when value protocols differing in hardness are set up against each other on a somewhat free market, one always cracks in the end.
A lavish wooden door in the bead-receiving port town of Stonetown. The rich Indian merchants residing here brought with them the tradition of having elephant protection on their mansions, even if there never were any elephants on the island.
Building from expertise stretching back to medieval times, Venetian bead production was by this time an ever increasing juggernaut that from the middle of the 19th century started serious mechanization efforts. These efforts greatly affected output, and was combined with Venetian officials forbidding, on pain of death, its bead producers to spread any knowledge about the production process. Apart from the earlier mentioned initial failed efforts to penetrate the complicated East African bead market, the Venetians evidently succeeded based on documented export numbers from the Venetian Chamber of Commerce. Their production centers still had to regularly change the glass bead types every year (sometimes almost monthly), which of course was a real but not insurmountable problem for them.
Curiously, the glass bead export was higher to neighboring European countries as well as to India, where they were not really used as money, but as accessories on clothes for example. This export is also partially explained by the fact that the beads often continued their journey to Africa from those ports instead. It should also be added that the negative effects of such supply inflation on the European sites were of course minimal, while the effects this output increase had on the East African economy were much more destructive in the long run (it is outside the scope of Pallaver's research). Glass beads often had many money properties temporarily superior to those of other commodity goods traded in regions of the interior (like iron horse shoes or bags of millet). Coming in strings, they were in effect divisible. They were also relatively fungible (at least in the interior cities with their bead traders), easy to carry and exchange, did not easily break or deteriorate, and they were relatively easy to use as a unit of account. The one fatal flaw - an ultimate end-point of easy money - was of course that they would eventually be mass produced, causing high inflation on tribes earning their livelihood in that exact money.
Despite the documented (what I consider to be) bitter-pill social defense strategies where Africans constantly tried to converge on new types of beads, the Venetian seignorage ultimately caught up with them, and in the fullness of time they had to abandon these value protocols in order not to face further poverty.
 Pallaver, K. (2009). 'A recognized currency in beads'. Glass Beads as Money in 19th-Century East Africa: the Central Caravan Road. British Museum Research Publication 171.
 Stanley, H.M. (1890). How I Found Livingstone: Travels, Adventures, and Discoveries in Central Africa. London: Sampson Low, Marston, Searle & Rivington, p.28.
 Bennett, N.R. (1970). Stanley's despatches to the New York herald, 1871-1872, 1874-1877. Boston: Boston University Press, p.5.
 Thomson, J. (1881). To the Central African Lakes and Back: The Narrative of the Royal Geographical Society's East Central African Expedition, 1878-1880. London: Sampson Low, Marston , Searle & Rivington, p.90.
 Hore, E.C. (1883). 'On the Twelve Tribes of Tanganyika', Journal Of The Anthropological Institute Of Great Britain And Ireland Vol.12, p.9.
 Rigby, C.P. (1878). Mr J.M. Hildebrandt on his Travels in East Africa, Proceedings Of The Royal Geographical Society Of London Vol.22, p.452. Translated from Hildebrandt, J.M. (1877). Proceedings of the Geographical Society of Berlin Vol.4.