Note Payable

Jean Baptiste Monge (artist)

Notes payable are legal instruments that allow individuals in a barter economy to make formal agreements surrounding payments to be made in the future, either at a set date or upon the payee's request, based on predefined conditions. When someone entrusts goods to another party, and repayment is necessary, the party responsible for repayment can issue a "promissary" note. This effectively functions as a private currency, representing the full value of the deposited goods and promising their eventual settlement.

In a designated local, commonly a hamlet or village, the payee introduces the note to a creditor before a predetermined date. Within regions operating on a bartering system, especially in a developed hex that lacks a coin symbol, personal acquaintance among all three parties — the payer, payee, and creditor — is essential. A payer won't commit to a note for an unknown entity, and similarly, the creditor won't recognize a note without familiarity with both involved parties.

Challenges of a Barter Economy

In the absence of a standardized currency or a centralized banking system, trust plays a pivotal role in a barter economy. As seen in the scenario, personal acquaintance and trust among all parties involved are prerequisites for transactions. This reliance on personal relationships often limits the scope and scale of trading, making expansive trade networks challenging.

The introduction of a "creditor" and the use of notes suggest an emergent credit system. This is an advanced concept within a barter economy, allowing for time-delayed exchanges and potentially enabling more complex transactions than simple direct trades.

Transactions therefore take on more personalized and trust-based dimensions. For instance, when a farmer delivers produce to a garner or a carter post, the typical mediums of exchange, like coins, might be absent. The facility or transporter might not possess the necessary currency to compensate the farmer directly. Moreover, for the farmer, carrying coins back home, storing them, and then taking them to a local market can be cumbersome and risky.

Instead, in such situations, the farmer opts for a note — a tangible promise of due compensation. Upon reaching the village market, this note can be redeemed, allowing the farmer to acquire the desired goods or services without the direct exchange of physical currency. This system streamlines transactions and mitigates the hazards associated with transporting money.

In a parallel scenario, a carter might engage with a garner to move goods. Rather than a direct exchange of commodities or coins, the carter issues a note to the garner, who can then redeem it in the village market in a similar fashion as the farmer.

Banking

In places where bank branches are found, notes payable serve as a means to transfer the request for sums between large cities where bank houses exist. Such notes are elaborate and often magically protected, to ensure their security.

See also,
Coin (symbol)
Debt