François Velde if the Federal Reserve Bank of Chicago Research Department submitted this note on the earliest paper money issued during a siege.
I'm replying belatedly to the claim made in the February 21 issue:
The siege of the city of Leyden, in modern day Netherlands, is
believed to be the first instance wherein paper money of necessity was
used. Although Leyden boasts a wide variety of metallic siege coins
from the 1570s, it was here that the first paper siege notes were
issued. These "notes" are not notes at all but are, more properly,
considered coins. [...] These cardboard "notes" became the first
paper money to appear in the Western world. Prior to this only the
Chinese used paper money.
There is at least one earlier instance of paper money issued during a siege, almost a century before the Leyden example.
The town of Alhama de Granada, in southern Spain, was taken by the Christians in 1482; sometime between 1483 and
1485 the Muslims besieged it, and the commander, the count of Tendilla, issued paper money in different denominations with a promise to redeem the notes after the siege, a promise he apparently kept. The story is told by a contemporary, Fernando del Pulgar who was secretary of the Catholic King Ferdinand.
This incident is referenced on 220 of The Big Problem of Small Change, the book François authored in 2002 with Thomas J. Sargent.
To read the earlier E-Sylum article, see:
QUERY: TERM FOR PAPER PRESSED INTO COIN FORM SOUGHT
Wayne Homren, Editor
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