[Column written by Martha Harris Myron]
A financial remembrance of growing up in “the olden days” in our Bermuda community and a serious reminder that physical cash access is still needed in times of natural catastrophes and lack of digital access.
Cash used to be tangible. You could touch it. You could count it. You could smell it. It was dirty. So many hands passing it back and forth. You could feel its power because you had physical control. Cash literally represented part of your identity because for that brief tangible moment, you could feel rich.
A few long years ago, you were paid in mostly coin cash, weekly, receiving that precisely distributed little brown paper packet, 20 shillings and sixpence [don’t forget the change], please. Or more! You could use it then, amazingly, to communicate, to build relationships with your retailers, vendors, employers, friends and family.
Ritually, once a month, 70 long years ago, thruppence [or sixpence] was enough to take “de bus” to town.
Back then, money was different, too, as Bermuda was still under the base 12 duodecimal system. Back then, physical transportation only: no private cars and taxis allowed until 1946.
Or you’d ride your no-gear bike, basket in front, men’s pant legs clipped, ladies’ skirts pulled up with clothes pegs, if you weren’t in a hurry – all to avoid bike chain grease.
You’d stand in line, say, at the “lack-o-light company” to pay your utility bill, then rotate the same errands around various businesses. Bill paying, settling your accounts, was a social event.
Heading to town was a way to connect with the community, almost a party at times. Everyone felt collectively involved in managing their money, trading tips on bargains, family interests, upcoming events, catching up on happenings, weddings, funerals.
Getting some real gossip was an additional bonus. Plus, it felt good to be part of the group-in-the-know. There was that personal pride, the satisfaction in not owing anyone for another month.
Then, you took whatever you had left back home, stuck it in the cookie jar or allocated various sums to your next week’s or month’s budget envelopes.
The carrying around of heavy coinage and later paper bills, settling up and spending down, left a tangible financial cash hole in your pocket or purse.
Emotionally, you experienced the real loss of feeling somewhat rich, if even for a moment. But you knew exactly what you had left to budget until next payday.
Cash was real. You saw it, you held it. It’s there; then, it’s gone.
Today, it is no coincidence that there are numerous websites and social media chatter reinvigorating this time-proven basic budgeting of using the 100-envelope challenge and related methods for the digital age.
Cheques started the non-cash management evolution
Originating in the eastern Mediterranean during the first millennium as a convenient form of payment between local merchants, cheques became more versatile through the development of negotiability in 16th century Europe.
The suppression of banknotes in 18th century England further promoted the use of cheques.
In the United States, 19th century legislation started to discourage other payment methods and eventually led to a nationwide cheque payment system.
In the 20th century, under the US Federal Reserve’s leadership, cheques expanded rapidly and became the nation’s default payment method.
Cheques had ease of use, which provided advantages over other payment methods, but created higher risk for businesses and banks.
Cheques’ evolution was sophisticated, but it came with a high cost relative to other forms of payment, as documented by The Evolution of the Cheque as a Means of Payment: A Historical Survey Federal Reserve Bank of Atlanta Economic Review, volume 93, number two, 2008.
So, after almost 400 of years of metal coins as cash, followed then, by paper money in Bermuda, then implementing the very traditional passbook saving method, the infrastructure to handle efficient cheque processing was available on a global scale.
International and local banks moved on to personal chequing and savings accounts.
Prestige accompanied the ownership of a chequing account, taking out your chequebook carrying some personal graphic image statement on its cover – that reflected your personality and viewpoints – remember making those choices?
It felt so important.
I remember distinctly young women excitedly talking about having their own chequebook and chequing account where their spouses deposited household budget monies each month.
They had control.
But, when asking them how much their spouses earned? Did he have any other bank accounts in just his name? Did he get bonuses, have life insurance, a pension etc., the questions were met with perplexity, bafflement, and outright hostility for the questioner’s nosiness.
They did not begin to know the half of it.
Paper checks still effectively represented cash, because you had them in your hand. But you had to make sure you endorsed them, made sure they didn’t get wet, then you had to take them to the bank, mail them to your household vendors.
So, now you were standing in line at the post office. Not so much fun. Certainly, no relationship building.
Money, as part of your identity, was your ability to pay by what you held in your hand.
Still, it was somewhat basically tangible. You knew that if you spent it all, your budget was emptied; however, the immediate physical loss of control was escalating because now you had check your bank statements, also mailed to you once a month.
That was then.
The tangibility of person-to-person finances diminished and has now almost disappeared.
Anonymity Replaces Relationships
We have moved on to credit and debit cards to completely anonymous digital cash transactions. Banks have fewer locations, teller stations and personal finance meetings.
New finance-type businesses [sprouting up on every digital corner, it seems] generally have no personal physical interactions and certainly no teller lines.
They are completely internet-access grid-functioning dependent.
What’s gone is the loss of personal communication as finance becomes more remote, more frustrating when you have a problem where your only options are online chat or a call somewhere to some foreign-sounding person.
And if you’re lucky to reach them, they don’t know you. They may actually be a robot with a script. Any deviation from their list of common problems, good luck getting your issues resolved.
The sheer frustration of client interactions with the myriad numbers of digitally-structured businesses has grown astronomically.
You’ve gone from feeling powerful, in control of your finances, to a pawn in the payment game.
The Electronic Grid and the Ultimate What-if Finance Disruption
There are 4,500+ satellites circling the earth in internet exchange. 35% are singularly owned.
What happens if the electronic grid/internet goes down through malfunctions, sabotage, financial disruption, or discretionary disconnections?
Try buying gas, groceries, utilities, commuting/working, sheer living without the means to pay because the grid is down and commerce has no ability to accept physical cash. IOUs every time just won’t cut it.
Are we far too complacent in assuming the grid will be with us always?
Where is the personal control then?
– Martha Harris Myron is a 25 year [1,500+ articles] international finance journalist and a retired US CPA/international financial planner with a MSc in Law in International Taxation and Financial Services. Her work is featured in Google News, Substack, LinkedIn, Amazon, Bernews, Facebook & Bermuda/US PondStraddler Finance Media Productions.
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