John Maynard Keynes in Volume 1 of his Treatise on Money, published in 1930, says that:
A district commissioner in Uganda today, where goats are the customary native standard, tells me that it is a part of his official duties to decide, in cases of dispute, whether a given goat is or is not too old or too scraggy to constitute a standard goat for the purposes of discharging a debt.
Often goats shared with cattle the role of currency, a store of value, and standard of deferred payment in Uganda well into the twentieth century. Like many livestock standards, the rate at which goats and cattle could be traded for each other was fixed. The goats circulated more easily in subsistence economies and were often used to buy weapons and salt. Goats could be loaned out for interest; a chief might send a herd of goats to be kept by his subjects, and receive every third kid born to the herd as interest. The government also fixed fines payable in goats.
In Tanzania 25 goats were equivalent to 1 cow or ox, and 1 goat equaled 1 hoe. The exchange rate between goats and oxen varied between districts. The Masai rated 1 ass at 5 goats, an iron spear at 2 goats, and a big cattle bell or a small ax at 1 goat. They also paid bride money in goats.
In equatorial Africa goats often served as a store of value and a standard of deferred payment, but not a medium of exchange. Bride money was paid in goats and sheep; in order for a man to marry, he had to be able to borrow goats and sheep.
Societies living closer to the threshold of survival found food items useful as money because food was what everyone needed, and a large share of each individual’s activity was devoted to securing food. Therefore food items were an obvious choice as a readily acceptable medium of exchange. The problem with much food, such as grain, was that it was perishable, hampering its usefulness as a store of value, one of the important functions of money. Livestock not only made excellent food, but also reproduced, solving the problem of perishability, and even earning a crude form of interest. Therefore livestock could serve both as a medium of exchange and a store of value. Because livestock could be counted on to maintain their value, creditors preferred to define debts in terms of livestock. Livestock shared with other commodities one important defect as a medium of exchange. The quality of livestock varied because of age and health and people invariably sought to repay debts with inferior animals, creating conflicts of the sort referred to in the quotation from John Maynard Keynes. Also livestock are often bulky and difficult to transport.
Livestock money is not necessarily a symptom of primitive economics and culture. Remote areas often suffer shortages of coins and other forms of money and turn to commodities as a medium of exchange. The American colonies resorted to commodities as money at a time when the world economy was flush with supplies of precious metals from the New World. The Massachusetts Bay Colony enacted a law for cattle being driven to Boston for payment of taxes, providing “if they be weary, or hungry, or fall sick, or lame, it shall be lawful to rest and refresh them for a competent time in any open place, that is not corn, meadow, or inclosed for some particular use” (Nettels, 1934).
