Sandfort[SMTP:sandfort@mindspring.com] wrote:

C'punks,

I ran into a western version of "hawala" about 15 years ago. It was a "blocked currency" service offered by a financial group. Here's how it worked:

This type of thing is old - The Knights Templar set up a system by which a pilgrim could deposit money in his home country, and get a letter of credit which would enable him or her to draw on that at Templar preceptories across Europe and into the Holy Land (12th century). I wouldnt be suprised if there were Roman or earlier versions as well.

If you live in a currency-blocked country (South African was one, I think it still might be) you couldn't legally move more than a certain amount out money out of the country. To get around this, you would be asked to tear a small denomination piece of paper money (e.g., a 1 rand note) in half. You would keep one half and the financial group would get the other half. Both halves of the bill would have the same serial number, of course.

Later, you would get a call telling you where to take the cash you wished to move out of the country. At the appointed time and place an agent of the financial group would meet you. To prove he was the right guy, he would present the group's half of the bill. You would give him the money and the next day an equivalent amount would be on deposit in an account in your name in whatever country (and currency) you specified. The fee for this was usually just the normal money changer's exchange rate. Of course, the original cash never left South Africa, just as the cash in the hawala system never leaves the countries in question either.

The split-bill technique has old roots. http://www.slais.ubc.ca/news/slaisconference/miller.html "By the thirteenth century in England, private dealers, accountants and businessmen were using a royal financial system of the twelfth century to commit their business transactions to a physical medium. Their motivation was only to monitor and keep track of the multitude of transactions with clients in order to protect their self-interest. Thirteenth-century English businessmen used tally sticks to record a proof of payment for goods purchased or to show the liability of one party to make payments to another. Tally sticks were made of hazel wood and the transactions taking place would be recorded and reflected by notches carved into the tally with a knife. The names of the parties involved in the transaction were recorded with ink beside the notches, usually in Hebrew, Latin or French. Tallies have also been found to have seals attached to them, which were most likely used to authenticate the record. The size and shape of the notches, and therefore the terms of the transaction, would be mutually agreed upon by both parties, at which time the tally would be split down the middle. The two halves could then be brought together, like two pieces of a puzzle, to attest to the actual occurrence of the transaction and to protect against forgery (10). The tally stick is a bipartite record whereby both parties have a portion of the record to keep for their own interest and for evidence should they need to prove an obligation or right. Medieval chirographs are also characterized by their bipartite nature. Chirographs recorded agreements and transactions of many things including the exchanges of goods and services for financial consideration. The terms of the contract are written out twice (once on either side of the parchment) and one large title is then written across the top of the parchment spanning both instances of the contract. The parchment was then split down the middle, so each party could retain a record of the contract. Like the tally stick, the two pieces of parchment could be brought together and if the title at the top of the parchment lined up correctly, the contract was deemed authentic." ---------- [These tallysticks piled up in government archives, and were kept long after no one could read them (the dead media problem isn't new, either). In 1834 it was decided to dispose of them by burning, but the fire got out of control and burned down the Palace of Westminster] More recently, in (I think) Philadelphia, people were able to claim rewards for anonymous tips by sending in a torn sheet of paper along with the tip. They could later pick up the cash from a designated bank by producing the other half, and showing that the two matched. No ids where required.

One more aside. For a brief period when New Zealand was heavily socialist, the government wanted to stop people from traveling (and spending money) abroad. Instead of banning travel, which would have caused a shit storm of controversy, thy just limited the amount of cash that could be taken out of the country to something like a few hundred bucks. Of course, resourceful Kiwis just used their credit cards...

Britain did this in the late 60's, with a 50 pound limit. It was widely evaded. Graham Greene features it in 'Travels with my aunt" (which I reccomend highly).

S a n d y