The fortune that lay
at the bottom of the sea
In 1903 the American anthropologist William Henry Furness III landed on Yap, in Micronesia, and was told of a family whose wealth no one disputed, although no one had ever seen it: it lay under many metres of water.
Money that was never moved
The people of Yap counted their wealth in rai, also called fei: limestone discs pierced at the centre, the largest more than three metres across. The island produced none: the stone had to be quarried in Palau, more than four hundred kilometres away, and brought back on rafts. A rai was valued for its size and the fineness of its grain, but also for the story of its voyage, men lost on the way included. Once set down beside a path it never moved again. When it changed hands it was not carried anywhere: the transfer was announced, and the village remembered.
Furness records the limiting case. An ancestor was bringing back an exceptional stone from Palau when a storm caught the raft; to save themselves the crew cut it loose and the disc sank. Since the loss was accidental, no one held that the family had stopped being rich. Two or three generations later that rai, which nobody had ever seen again, still counted in their estate, its purchasing power as valid, Furness wrote, as if it stood against the wall of the house.
The German colonial administration, which bought the Carolines from Spain in 1899, drew a quick lesson. Wanting the paths repaired, it did not try to seize stones that nothing could shift: it sent officials to paint a black cross on the rai, a mark meaning that the government now claimed them. Once the work was done the crosses were wiped off. The islanders held themselves rich again.
Money is a ledger, not an object
Yap shows that a currency need not circulate at all to work. What circulates are the claims; the stone is only an anchor whose ownership the community keeps in mind. It is a shared accounting, kept without writing, in which everyone knows who owns what. The idea is that of the ledger, and it lights up what a bank account, a book-entry security or a blockchain really are: lines that are updated, not things that are carried.
Milton Friedman drew a famous comparison from it in 1991. In 1932 the Bank of France, fearing that the United States would abandon the parity of $20.67 an ounce, asked for its dollar assets to be converted into gold. To avoid the crossing, the Federal Reserve Bank of New York simply moved the bars into drawers labelled as French property. The press spoke of a gold outflow and the dollar was judged weaker. Between a black cross on a stone and a label on a drawer, Friedman asked, where is the difference?
An invisible stone stays a fortune as long as the neighbourhood agrees to remember it.