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Eilserus
Master of Realmslore
USA
1446 Posts |
 Posted - 16 Jan 2016 : 04:03:27
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Hi all,
So I'm curious about the practice of moneylending. I understand the parts where they will trade foreign coin for local cash and also the lending money with interest rates etc.
What I'm trying to understand is the practice of where they convert goods into cash. So on page 32 of the Who's Who in Waterdep (Book 2 of the 2E City of Splendors), it mentions: "the conversion of one currency to another, including goods (such as furs or weapons) into hard cash - is the daily bread and butter of moneylenders, who make a 10%-15% profit on such transactions"
Why would someone use a moneylender to trade in a crate of swords or a crate of furs for cash? Why wouldn't you sell those goods to a weapons merchant or a merchant that works with leather? The moneylender is like a middle-man, why not cut him out and go to a merchant wouldn't you get a better rate?
The only reason I can think of this making sense is if a person has a haul of goods and just wants to get rid of them quickly or doesn't want the hassle of running all over the city attempting to find the best price or doesn't have the time to find the right merchants to sell the wares to. Is it because the average shop merchant might buy 5 swords and not 100 at a time and the moneylender knows all the merchants and so could turn the crate of swords over quickly?
Curious what others think. Am I missing something here?
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Kentinal
Great Reader
4694 Posts |
Posted - 16 Jan 2016 : 05:42:40
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Money lending and sale of goods are two different topics.
Money lending in Medieval times tended to be something of the order of: I give you money you want for your income producing property and I keep all profit I make until you pay back the amount I lended you (often with a forfeiture clause that the loan needed to be paid back within a year or two). D&D started out with money lending with you providing an asset worth more then the the coin provided (Think pawn shop) and would charge a holding fee. The banks to hold your cash deposits often charged you a fee to protect your coin, which might be worth it (A PC can only carry so much and if got defeated or robbed has nothing of wealth if they live though an encounter that goes bad).
The sale of goods does include part of the carry of coins, if you have 100 swords or 20 furs to sell, it becomes rather hard to go to person to person to make a best deal. There of course is the option to try to open your own store, however for and adventure the supply of goods are required you you to be away from the store.
The last point actual money changing, coin minted by Waterdeep is easy accepted as good coin. Coin of Luskan will not be as trusted and those of Waterdeep might refuse the Foreign coin. The Money Lenders deal in many cions and will translate Luskan coins into Waterdeep coins in Waterdeep, they also will translate Waterdeep coins into Luskan coins in Luskan. To do this they have costs involved with sometimes just waiting, however often need to transport coins from one city to the other. Transport also requires guards and or magical protections. All which cost money.
The NPCs need to earn money as much as the PCs.
In the grand scheme of things the exchange rate is too simplistic, the rule set did not wish to include supply and demand cost factors in any real way. Example to consider: If a community had 3 swords per Fighter and smiths able to maintain them, how much would they give a stranger for an goblin sword of inferior construction? |
"Small beings can have small wisdom," the dragon said. "And small wise beings are better than small fools. Listen: Wisdom is caring for afterwards."
"Caring for afterwards ...? Ker repeated this without understanding.
"After action, afterwards," the dragon said. "Choose the afterwards first, then the action. Fools choose action first."
"Judgement" copyright 2003 by Elizabeth Moon |
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Cards77
Senior Scribe
USA
747 Posts |
Posted - 16 Jan 2016 : 22:28:15
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There is quite a bit of information both in the 3.5e, 4e and 5e source books as well as these boards on what Ed refers to as "Manycoin Services". Moneylenders can be pawnshops or banks or both. Think of modern pawn shops, they will collect collateral for money which can be repaid and the collateral retrieved for a fee, or buy goods outright at less than their face value. This is what is meant by "trading goods into hard cash". If you bring a $100 stereo to a pawn shop to sell, you won't get $100, you'll be lucky to get $50. The pawn shop then sells the stereo for $80.
Same thing with money lending, think of a Dollar Tree type place. They will give you a $200 advance on your paycheck, and charge you $250. Same with money lenders/money changers.
Manycoins services can charge more because they can do more. They have more cash on hand. Maybe the weapon shop can't buy all your 20 swords but the money changer can. You won't get full value but there is inherent value in just having the cash on hand to outright purchase in quantity.
As far as the above comments about "foreign coins", most money changers will accept any coin from a reputable city or mint as long as they have no reason to suspect a fake. While certain coins are worth more in certain cities (like Harbor Moons in Waterdeep), all coinage is still based on metal content. So as long as the metal content looks correct, money changers will accept most any coin.
They have no choice. Nearly every city and every kingdom mints their own coins and business wouldn't occur if Waterdeep merchants/money changers only accepted Waterdeep minted coins. Most city specific coins that are worth more within the city that created them are more about convenience and carrying less coins.
Money changers charge a premium simply because they are the ones that have the large amounts of coin on hand, the necessary security, etc to handle various needs. That in and of itself has a value beyond the simple coin changing, which is why they charge a fee.
It's quite common for people of all kinds to carry goods or valuables rather than coin. It's common throughout history. Coins are HEAVY! Why carry 2,000 gold pieces when you can just carry a few bales of furs?
It's common for merchants to buy say furs in Silverymoon and spend several hundred gold pieces, take those furs to Waterdeep where they are worth more coin and then unload them. Money changers are just the people who have the cash on hand to convert the wealth from one coin to another.
Same thing with precious stones and jewelry. Easy way to carry and hide large amounts of wealth. |
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moonbeast
Senior Scribe
USA
522 Posts |
Posted - 17 Jan 2016 : 05:10:15
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All this talk of moneylenders and interests owed …. gives me an idea about how many urban Half-Orcs find employment as "debt collectors" and repo men in cities like Waterdeep and Baldur's Gate.
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bloodtide_the_red
Learned Scribe
USA
306 Posts |
Posted - 18 Jan 2016 : 03:31:58
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| A lot of merchants won't simply make a deal with anyone off the street. Business is far more a personal thing, not the more modern Wal Mart view. E-bay, with it's trusted uses and reviews might be a good modern example. A merchant often has a set network, and it is quite a closed one. A moneylender type, on the other hand, will buy anything from anyone anywhere. |
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Moneylending Practice
