21 July 2014
Money Monday #4 - Certificado de Mercadoria (1970)
After the devastation of the Third World War the northern hemisphere was in ruins and the global weather patterns had shifted. The global economy suffered a catastrophic collapse leaving the surviving nations in chaos. Brazil made major changes in an attempt to avoid its own collapse. Surviving elements of the United States Navy would regularly use Brazilian ports in the years after the war. Since most currencies had collapsed the Americans had to pay for Brazilian help by helping their hosts maintain order.
As the turmoil began to slowly decline there was need of a stable currency to boost the sluggish economy. The Brazilain Real was experiencing extreme inflation and a loss of confidence. Local communities attempted to create their own currencies, some fiat, others based off labor. One of the more successful ones was the Certificado de Mercadoria (CM).
The CM was backed by the value of commodities that were supposed to be held in warehouses near major population centers. The certificates could be exchanged for the commodities listed on them at any time from these warehouses. This gave the certificates value and helped to counter the affects of inflation on the other currencies.
Every four to eight months a new series of certificates was issued. The new issue would have different exchange rates for commodities and some of the items listed on prior certificates would be removed while others added depending on supply. When a new issue was made older certificates were still good. This would lead to some confusion in exchanges but nobody wanted a currency that was only good for less than a year.
The Certificado de Mercadoria pictured above is from the second issuance of 1970.
The CM program was wrought with corruption, shortages of commodities, and other problems. However, it was still the most successful currency during in Brazil during the aftermath of the war. The last series for the CM was issued in 1981 and all outstanding certificates had to be redeemed by 1985 after the economy of South America recovered to a point where more traditional monies would function.
The text on the certificate reads: This Certificate of Merchandise allows access of commodities from the São Paulo storage facility as listed below. The exchange rate for this series (1970B) is based off ten-thousand (10,000) units.
Wheat 7,600 kg
Rice 7,250 kg
Sugar 2,000 kg
Coffee 120 kg
Corn 8,200 kg
Cotton 450 kg
Cement 17,000 kg
Copper 150 kg
Iron 8,000 kg
Aluminum 120 kg
Wool 80 kg
Peanuts 375 kg
This particular 1,000 CM certificate was exchanged in São Paulo during July 1974 by a construction company for 1,700 kg of cement.
The inspiration for this certificate comes from the Exeter Constant. Some information on that can be found at The History of Local Currency and in an article at Mother Earth News, The Causes of Inflation and a Commodity-Based Currency.
I designed a more colorful note and created it for a post-WWIII Brazil that was attempting to survive the collapse of the global economy. I used bits of an old one silver dollar bill from the US, as well as a $1,000 and $100 bill for elements of this design. I also copied a portion of a Brazilian bill for the top logo. Some color changes and other tweaks completed the design.