The Wheat Standard of the Meseta

Ever since 1603, when the vellón—an alloy of silver and copper—was "refreshed" into 100 percent pure copper, its value in the market had plummeted to the level of pocket change used to buy a chicken. People refused to trade in anything but reales, but silver coins had long since vanished from circulation.

There were many reasons for this, but the government always demanded taxes in silver while paying out exclusively in copper vellón. They hoarded the international currency of silver for foreign trade while forcing the domestic economy to survive on base metal. It reached a point where even the nobility, lacking silver, were forced to stack piles of copper coins just to get by.

Eventually, as the value of these unwanted coins hit rock bottom, ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠the government resorted to "re-stamping." They would take a two-vellón coin, strike a "4" over it, and declare, "From now on, this is worth four!" After the floods of 1626, they used the "one more time!" chance to bump the face value up to eight vellóns, and with that, all commercial trade in Spain ground to a halt.

In a Kingdom of Castile where merchants would rather let their goods rot in warehouses than accept anything but silver, and where farmers and artisans were withering away, a customer like Juan—who paid in silver alongside his "free-trade" friends from Portugal—was a noble guest whom everyone scrambled to serve.

Juan, who had passed through nothing but desolate, lifeless squares in every village he visited, felt a strange sensation the moment he entered this particular town.

"Ribeiro."

"Yes, Excellency."

"Do you not feel something strange?"

"...The square is alive with activity, sir."

The square served as the marketplace. In small villages, the square in front of the church was often the only market and the only gathering place. Ribeiro, understanding his task, approached the merchants to observe what they were doing.

They were trading jars of wine in exchange for scraps of paper.

"What is that?"

When Ribeiro casually asked the wine merchant who had just finished a transaction, the merchant was so startled, as if he had been caught committing a grave sin, that he dropped the paper.

"Ah, you scared me! What do you want, friend?"

Ribeiro reached down to pick up the paper for the merchant, who was frantically trying to retrieve it, but the merchant moved with lightning speed to snatch it away.

Seeing the merchant’s wary expression—as if he were looking at a thief—Ribeiro raised both hands and said, "I’m just curious why you’re handing over wine for a scrap of paper."

"Friend, are you from out of town?"

"I’ve come from quite a distance."

"Go away. This is no place for an outsider to meddle."

Dismissed by the merchant, Ribeiro had to retreat.

"Ribeiro, we shall stay here for the day. Find out the details."

"Yes, Excellency."

Following Juan’s orders, Ribeiro left the group and waited for his chance, observing the local and foreign merchants. He asked about the paper several times, only to be met with suspicious glares or even threats of violence.

After much struggle, he finally bought a meal and drinks for a merchant and learned the secret of the paper scraps.

"Don't go telling anyone else. People don't like ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠it when word gets around."

"My lips are sealed. Just tell me plainly."

After enjoying the food and drink, the merchant finally revealed the truth.

"That is a warehouse receipt you get when you deposit goods in the Marquis's warehouse."

"What?"

Warehouse receipts were a system used by massive storage facilities. Portugal, which built its wealth on Atlantic and Indian trade, used them too, but only for the strict purpose of asserting rights and control. They were rarely used for small trades, let alone buying a single jar of wine.

"It’s literally a certificate saying, 'This item is mine.' You can take it and claim the same item or one of equal value whenever you want."

"Speak plainly, man. I don't follow."

As Ribeiro feigned ignorance to provoke him, the merchant grew frustrated but kept talking.

"Goodness, you’re slow on the uptake."

"Come now, have another drink! Tell me in detail. I’m a merchant too, just curious."

"Look, if you go straight down that way, you’ll see the large warehouses managed by the Marquis. You know that our fair and just Marquis doesn't charge trade taxes or tolls, only a small storage fee, right?"

If there were no trade taxes or tolls, who would cover the maintenance costs of the warehouses? Setting aside material costs, labor alone would be impossible to pay. If forced labor were used to maintain them, the goods would melt away faster than rats could eat them. Ribeiro felt a sense of unease at a situation that defied common sense.

"Is that really the case?"

"You must be from very far away! It’s common knowledge in these parts that if you want to buy or sell goods, you go to the Marquis’s warehouse city."

"Anyway, any goods will do. From ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠dried linen to stone, fuel, sausages—anything that doesn't rot easily can be stored for a small fee. Then you find someone who wants to buy your goods and sell them there. It’s a place where merchants flock from the ruined Medina del Campo, the flood-damaged Valladolid, Zamora—which survives on smuggling—Salamanca, which has nothing left but its university, and even as far as León or Burgos."

Medina del Campo had once been the site of Europe’s largest periodic market, trading the golden wool of Merino sheep. But it had ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠lost its status after the serial bankruptcies of the Madrid royal family at the end of the 16th century. Burgos was also declining as the wool trade moved elsewhere. All the cities the merchant mentioned were either in decay or crippled by floods.

"Since last year, there aren't many people in this area who don't live off the bread made from the wheat in the Marquis’s granary. See here? The variety of wheat. The grade. And this is a receipt received for depositing wheat in one-fanega units."

Hearing that they specifically deposited in one-fanega units to get receipts, Ribeiro stopped acting the fool and asked, "Doesn't that increase the fees?"

"You know a bit, don't you! The storage fee at the Marquis’s warehouse is cheap, but issuing these documents has a fee. Paper is expensive and rare, so even our generous and kind Marquis can't help that."

The merchant praised the Marquis’s benevolence and fairness for a while before continuing.

"So these days, merchants from villages who go to the Marquis’s warehouse city often just use these wheat receipts as money. It happened because that disgusting wretch Olivares stole all the silver and turned the copper coins into toilet paper."

The merchant chewed on the sausage Ribeiro had bought and said, "If you want to do business here, friend, put your goods in the Marquis’s warehouse and trade with the receipts. If you carry the goods yourself, the wicked tax collectors and disgusting gatekeepers will strip you of everything."

"I heard the grain from the Marquis’s territory feeds this whole region. Are you saying people go there to sell wheat?"

Ribeiro pointed out the contradiction in the merchant’s words.

"Goodness. There’s no silver, and no one accepts copper. If you cut up silver coins to trade, you lose value. And what do the merchants here do with their profits anyway? They end up buying wheat from the Marquis’s granary. So instead of hauling it back and forth, they just re-deposit it in the Marquis’s warehouse."

The merchant, speaking as if he were depositing silver or gold in a bank, took a long drink of wine and pulled a bundle of papers from a secret pocket inside his clothes.

"If I carry it around, I have to pay transport and storage fees eventually. Who knows when it will rot or when it will be stolen? But if I keep it safely in the Marquis’s warehouse, there’s no way I’ll lose it, even if you beat me to death."

"What makes you trust someone else’s warehouse? It’s common for them to take good wheat and give you back rotten grain."

"At least the Marquis is not that kind of man! You outsiders speak too carelessly. If I hadn't enjoyed your food and drink, I would have taken a club to you, so watch your tongue!"

"No, even if the Marquis is fair, what if the warehouse keeper underneath him does something untoward..."

"All such malicious warehouse keepers have been 'terminated' by the Marquis, and he compensated for every loss."

"Even if the Marquis is fair, what if rats get into the granary or a fire breaks out? What will you do then?" Ribeiro asked again, unable to understand why he trusted the wheat in someone else’s warehouse so much.

"Then I’ll just take next year’s fresh wheat."

Ribeiro, dumbfounded by the merchant’s nonchalance, replied sarcastically, "Is farming something that just happens as you please? Total failure is common."

The merchant looked at Ribeiro as if he had heard a ridiculous joke. "You really are from far away! Have you not heard the fame of the Marquis, who was promised by God to lead this land to a bountiful harvest? Your faith is lacking."

"Isn't that all a lie? How can one grain of wheat yield ten..."

At Ribeiro’s words, the merchant jumped up and pointed a finger. "Halt! How can you be so blind to the flow of the times? I am a man who has seen it with my own two eyes! Even in the great drought three years ago and the great flood two years ago, the Marquis, who harvested more than an average crop, harvested fifteen grains for every one grain of wheat last year! Everyone in this town survived by eating that wheat, so don't go around calling it a lie. You might actually get beaten to death."

"A...alright. Calm down."

Leaving behind the merchant, who was trembling with rage as if his faith had been denied, Ribeiro returned to his master.

After organizing the information he had gathered and reporting it to Juan, Juan said, "Theoretically, it makes sense. But with what confidence can someone who has held his title for less than a year make such aggressive investments? If he earns money so openly, surely half his wealth will be extorted by Madrid, will it not?"

Juan knew well the wicked clutches of Olivares, who always coveted the wealth of the nobility. He could clearly see how cruelly they would tear it away if he made money so blatantly.

They would slice him open like a slaughtered pig, stripping him of every scrap of entrails. In truth, Spanish nobles knew how to make money by using their servants; they simply didn't do it because there was no reason to, knowing it would only be extorted as taxes or "donations."

Juan’s suspicion and curiosity continued to grow. It became even more pronounced once he began to encounter the Marquis’s territory—or rather, his "settlements." In a settlement where about 60 to 70 households lived, a massive church was being built, the scale of which would have been appropriate for a Villa with over 300 households.

The village was on a slight hill, and only the church site and warehouses in the center were made of stone; the rest were made of common mud bricks. But the structure was strange. The church was large, and the square was large. Beside two general warehouses, three granaries were visible, and unlike the village perimeter, which had no stone walls and only a few shrubs, it was wrapped in thick mud-brick walls like a fortress.

And there were no beggars. A village without beggars, the most common profession in Spain!

Juan approached a man who appeared to be an hidalgo, wearing a sword.

"Who are you?"

"Just a passing traveler, I have a question."

"Speak."

"I’ve never seen a village without beggars. Is something going on here?"

At Juan’s words, the hidalgo replied with a look of utter normalcy. "Beggars? Do you mean those who crave bread without working?"

"No... that’s not quite..."

"Our proud Marquis’s 6th Temporary Settlement does not permit inefficient people like beggars."

At the hidalgo’s firm words, Juan spoke of the duty of charity as a Catholic. "W...what does that mean? One must practice charity..."

"Charity practiced when there is no great disaster by which God tests us is not the front door to heaven, but climbing over the back wall. The Marquis, the protector of all grain in the Meseta, follows the Benedictine rule of 'Pray and Work' deeply, and gives vagrants bread and jobs together. He is awakening diligence and sincerity to heal the lazy nature within humanity and leading them on the path to heaven."

Juan was shocked by the bizarre words he had heard for the first time in his life.