The Alienage
All Things Relating to Trade, Shipping, and Commodities

The Usurer

Undarshil of Orlym - Usurer of the Alienage

Good Day and Welcome

As title says, I am Undarshil, sole freemaster usurer in the Alienage. Watch the dogs now, they are harmless; but don't make any sudden movements or raise you voice unduly. I had human guards once, but these guards have proven to be more diligent, loyal and trustworthy. By coming here I must surmise you need my services or maybe you have some questions as to what services I can provide. Well, information is free, up to a point; however, if you do not understand how my profession works how am I to make a profit then.

To the point, we usurers specialize in loans of various kinds, currency exchange and we even issue commercial notes of various kinds; such as promissory notes. Further on I discuss and present information relating to these operations. Under loans I will present the various methods used and how they impact commerce. In the area of exchange I will endeavor to discuss the coinage of the kingdoms of Hârn and the mainland. Commercial document and their uses are many and I will also attempt to give some insight on these also. Finally, I will also include other items of interest as they come to mind. Enjoy and feel free to comment or inquire about what I have presented on all matters relating to the usurer's trade.

Promissory Notes

"The closest thing to paper money on Hârn. There are not nearly enough coins in circulation to cover the value of goods traded, so nearly all large payments are made by way of these notes. A usurer's note will be redeemed in full when presented back to him; a guild master in another city will also redeem their colleagues' notes at a discount of 5-20%, although higher discounts usually apply to foreign notes."

A promissory note is, in fact, a crude form of a bill of exchange. Although its origins can be traced back to early Venarian Sea cultures; it is currently in widespread use throughout Hârn and Northwestern Lýthia. However, within the Venarian Sea region it has been replaced by the more advanced and efficient bill of exchange.

There are two types of promissory notes; a bearer note and a personal note. A bearer note can be cashed by anyone in possession of it; whereas, the personal note my only be cashed by the personal named or his representative (appointed by the owner's power of attorney).

A promissory note acts as an exchange operation in that one type of currency is paid for the note at point (A) and when cashed at point (B) another form of currency is usually issued. With a promissory note this requires the usurer at point (B) to convert the stated amount to the local currency. Unfortunately this process will also incur a larger discount to offset the exchange action. After all, if you obtain a note for which you paid 200d Melderynian pennies and take it with you to Palithane where you expect to cash it in order to pay for food and lodging while traveling about this country. Why would you want to get the original currency back in a foreign country; in stead you need to be given the equivalent in Palitanian silver pennies, minus the discount for the service. The usurer at point (B) can then use the note himself for business transactions if a bearer note; or forward it back to the originator for full payment if a personal one.

Sometimes a promissory note could also involve a loan. The lender (usurer) writes a note for an individual for a specific amount that included the amount of the loan and the interest due when it matured. These notes are all personal notes and will only provide the amount of the actual loan when cashed to the person named. A usurer who cashes such a note must usually wait one year before redeeming it with the originator who will pay in full the amount shown for the loan. The usurer who cashed the note will then tear off the bottom of the note and present it to the individual cashing it. This stub is the debtor's instructions to have his loan, plus interest, paid in full by a certain date. All of these details are spelled out on the note itself and a copy is maintained by the lender for his own records in case of default. This form of promissory note is a recent adaptation and another move towards a true bill of exchange.

Unlike a bill of exchange, a promissory note had to be returned to its original writer in order to get its full value. The bill of exchange was a strictly a one way transaction and addressed to a specific individual, at a specific location and involved an exchange operation for the bearer and a credit operation between the issuer and the payer.

Currency Exchanges

"Most civilized states produce their own silver pennies. Coins from Azadmere have universal acceptance throughout Hârn; coins minted elsewhere are discounted 10-20% outside their own territory. Rethemi coins, due to chronic problems of clipping and debasing, are hard to pass outside Rethem."

Not all currency is equal. Some coins have a higher content of silver than others or may weight more than similar coins. Because of this usurers have devised ways of determining exchange rates between various currencies. The usual method is to identify a stable currency type within a region and establish it as the benchmark upon which all other currencies are measured. Once this is done, then exchange rates are established using a ratio of silver pennies per pound. For example, Kaldor has a stable currency due to the annual influx of silver coming from its trade with Azadmere. Therefore, its currency is a benchmark for exchange and has a ratio of 284.44 pennies per pound of silver; or a fineness of .900 (90% silver and 10% tin), other currencies are rated in a similar manner.

Through a network of messengers, itinerant merchants and other travelers, usurers exchanged information regarding the current ratios for currencies within their own region and regions that they normally deal with. using this information they are able to generate the going exchange rates for the various currencies they commonly deal with. If they come across a currency that they do not know about, they will usually have a goldsmith assay the metal content of the coins to determine its fineness and use that to determine an exchange rate.

The idea that all coins will be discounted outside of their region of use is not feasible. Since some currencies have a higher silver content than others, this should be the determining factor for the rate of exchange. Therefore, Kaldoran pennies with a fineness of .900 (284.44d/lb) when being exchanged for lets say a currency that has a fineness of .850 (301.18d/lb) would give an exchange rate of 1.06d of the new currency for each 1d of the Kaldoran. Therefore, an individual changing 100d Kaldoran would receive 106d of the new currency. From this amount the usurer would deduct his 10-20% discount for the service. As small as this difference is, exchanging small amounts is usually not worth the effort. Exchanges are usually done for large transactions (e.g. £5 or more).

Later on I plan on posting some statistics for Hârnic currency fineness and exchange rates; maybe even go so far as to include currencies from the mainland.

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