The stone money of Yap is an interesting case to consider when
thinking about what money is and what role it plays in the economic and
social affairs of a community. This article by Michael Bryan of the
Federal Reserve Bank of Cleveland describes the stone wheels of Yap,
how they were obtained and used as gift markers both within and between
tribes, and whether the stones fit the textbook definition of money:
Federal Reserve Bank of Cleveland, Island Money, by Michael F. Bryan:
...In this Commentary, I … consider… the unique and curious money of
Yap, a small group of islands in the South Pacific. … For at least a
few centuries leading up to today, the Yapese have used giant stone
wheels called rai when executing certain exchanges. The stones are made
from a shimmering limestone that is not indigenous to Yap, but quarried
and shipped, primarily from the islands of Palau, 250 miles to the
southwest. The size of the stones varies; some are as small as a few inches in
diameter and weigh a couple of pounds, while others may reach a
diameter of 12 feet and weigh thousands of pounds. A hole is carved
into the middle of each stone so that it may be carried, either by
coconut rope strung through the smaller pieces, or by wooden poles
inserted into the larger stones. These great stones require the
combined effort of many
men to lift.
Expeditions to acquire new stones were
authorized by a chief who would retain all
of the larger stones and two-fifths of the
smaller ones, reportedly a fairly common
distribution of production that served as a
tax on the Yapese. In effect, the Yap chiefs
acted as the island’s central bankers; they
controlled the quantity of stones in circulation...
The quarrying and
transport of rai was a
substantial part of the Yapese economy.
In 1882, British naturalist Jan S. Kubary
reported seeing 400 Yapese men producing
stones on the island of Palau for
transport back to Yap. Given the population
of the island at the time … more than 10 percent
of the island’s adult male population was
in the money-cutting business.
Curiously, rai are not known to have any particular use other than as a
representation
of value. The stones were not functional,
nor were they spiritually significant
to their owners, and by most
accounts, the stones have no obvious
ornamental value to the Yapese.
If it is true that Yap stones have no nonmonetary
usefulness, they would be
different from most “primitive” forms
of money. Usually an item becomes a
medium of exchange after its commodity
value—sometimes called intrinsic
worth—has been widely established...
Precisely how the value of each
stone
was determined is somewhat unclear.
We know that size was at best only a
rough approximation of worth and that
stone values varied depending upon the
cost or difficulty of bringing them to the
island. For example, stones gotten at
great peril, perhaps even loss of life, are
valued most highly. Similarly, stones that
were cut using shell tools and carried by canoes are more valuable than
comparably
sized stones that were quarried with
the aid of iron tools and transported by
large Western ships. The more valuable
stones were given names, such as that of
the chief for whom the stone was quarried
or the canoe on which it was transported.
Naming the stone may have secured its value since such identification
would convey to all the costs associated
with obtaining it...
Consider the case of the Irish American
David O’Keefe from Savannah, Georgia,
who, after being shipwrecked on Yap in
the late nineteenth century, returned to
the island with a sailing vessel and proceeded
to import a large number of
stones in return for a bounty of Yapese
copra (coconut meat). The arrival of
O’Keefe (and other Western traders)
increased the number and size of the
stones being brought back to the island,
and by one accounting, Yap stones went
from being “very rare” in 1840 to being
plentiful—more than 13,000 were to be
found on the island by 1929. No longer
restricted by shell tools and canoes, the
largest stones arriving grew from four
feet in diameter to the colossal 12-foot
stones that are now a part of monetary
folklore. Yet the great infusion of stones
did not inflate away their value. Since the
stones of Captain O’Keefe were obviously
more easily obtained, they traded
on the island at an appropriately reduced
value relative to the older stones gotten at
much greater cost. In essence, O’Keefe
and other Westerners were bringing in
large numbers of “debased” stones that
could easily be identified by the Yapese.
While it’s clear that the Yap stones have
value for the Yapese, can the stones really
be called money? The answer, of course,
depends upon how you define money. If
you rely on a standard textbook definition,
you’d describe money in terms of its
functions, for example, “Whatever is
used as a medium of exchange, unit of
account, and store of value.”
Certainly, Yap stones performed at least
one of these functions quite well—they
were an effective store of value (form of
wealth). But every asset—from bonds to
houses—stores value and is not necessarily
labeled money.
To be called money, at
least according to the textbook definition,
an asset must serve two other functions. It
must be a medium of exchange, meaning
that it can be readily used either to purchase
goods or to satisfy a debt, and it
must be a unit of account, or something
used as a measure of value.
Yap stones were not the unit of account for
the islands. Pricing goods and services in
terms of the stones would probably have
been difficult for the average islander. ... According to Paul Einzig, prices on
the islands were set in terms of baskets of
a food crop, taro, or cups of syrup, staples
that would be easy for a typical islander
to appreciate.
Furthermore, there is some question
whether Yap stones were commonly
used as a medium of exchange. To be
used in exchange, an item must possess
certain characteristics—it must be
storable, portable, recognizable, and
divisible. Certainly, the stones were
storable; they can still be found in abundance
on Yap, and they have maintained
their purchasing power reasonably well
over time (particularly compared with
other fiat monies, including dollars).
And while it is sometimes claimed that
Yap stones suffer as an exchange medium
because they lack portability, this may
not be completely accurate. In the case of
the larger, more easily identified stones,
physical possession is not necessary for
the transfer of purchasing power. Those
involved in the exchange need only communicate
that purchasing power has been
transferred…
But while storability and portability may
not have limited the use of these stones
as a medium of exchange, the other two
characteristics—recognizability and
divisibility—probably did. The stones
were primarily used in exchanges
between Yap islanders. … Yap historically did not have
close cultural ties with any of its trading
partners and trade with off-islanders was
somewhat infrequent, the stones did not
facilitate transactions on these occasions.
When transacting with other islands, the
Yapese used woven mats (a common
exchange medium throughout the South
Pacific), while trade with Westerners
often involved an exchange of coconuts.
Even on the island, the indivisibility of
the stones necessitated the use of other
items as media of exchange for most
transactions. Most rai are highly valued:
By one account, a stone of “three spans”
(about 25 inches across) would have
been sufficient in the early twentieth
century to purchase 50 baskets of food
or a full-sized pig, while a stone the size
of a man would have been worth “many
villages and plantations.” Obviously,
these stones do not change hands very
frequently, since expenditures of such
magnitude are rare. For more ordinary
transactions, the Yapese either used
pearl shells or resorted to barter.
Clearly the stones of Yap do not fit neatly
within the textbook definition of money…
But … what role do the stones
play and how is that role similar to that
played by dollars?... [T]he stones, particularly the
larger ones, acted as markers, changing
hands in recognition of a “gift.” Stones
were often merely held until the gift was
reciprocated and the stone could be
returned to its original owner. For example,
islanders wishing to fish someone’s
waters might do so by leaving a stone in
recognition of the favor. After an appropriate
number of fish were given to the
owner of the fishing waters, the stone
would simply be reclaimed. Occasionally
a stone was “exchanged” when one
tribe came to the aid of another, say for
support against a rival tribe or in celebration
of some event. But the stone would
reside with the new tribe only until such
time as aid of a similar value could be
given in return. The stones, then, act as a
memory of the contributions occurring
between islanders. Anthropologists refer
to this as a “gift economy,” where goods
aren’t traded as much as they are given
with the expectation of a comparable
favor at some later date.
So Yap stones serve as a memory of
one’s contributions on the island. … But this raises an intriguing question. If
the stones of Yap were merely markers
and nothing more, why did the Yapese
expend such great resources to carve
them out of the mountains of Palau and
carry them all the way back to their
island? Wouldn’t any marker work just
as well? It may be that the Yap chiefs
did not have sufficient “credibility” to
simply decree an object’s value. That is,
the Yapese may have needed some
assurance that the object on which value
has been assigned could not be easily
replicated for the mere benefit of the
issuer...
