Written and adapted by Kveldulf@aol.com and posted here with his permission.

One of the first problems faced by the four races who settled the Frontier (Humans, Dralasites, Vrusk and Yazirians) was the creation of a trading system which could be agreed to by all the four races. Each race had its own system, usually based on the value assigned to a particular metal or element of practical or symbolic value to that species. Unfortunately, none of these elements were valuable (or as valuable) to all 4 species - leading to (sometimes violent) trade disputes over payments.

These and other trade problems led to the creation of the first megacorp in 230 pf. "Megacorp" at that time described any corporation with operations in multiple solar systems, but this status was not officially recognized by the Frontier's member planets until 37 pf. The new corp was named Pan Galactic Corporation or PGC and its founding planets included all the settled systems of the Frontier of the time (Fromeltar, Theseus, Prenglar and Cassidine). The first major problem for PGC was the creation of a new universal unit of exchange for trade; the second was exploration of new systems for settlement and exploitation, but that's another story...

After nearly a decade of research, negotiation and hard bargaining, PGC announced the introduction of the SEU exchange system. Energy, measured in SEU's (Standard Energy Units), was to be the new basis of exchange on the Frontier. Energy was universally useful (able to power machines, cause or accelerate chemical reactions, sustain life support systems, etc), was portable in many forms (direct transmission, batteries, etc), and easily quantified for use in transactions. Over the ensuing two decades, PGC developed conversion systems for the old currency units of the four races and procedures for determining the SEU values of thousands of products and services; the expertise and proprietary methods developed by PGC during this period would later become the basis for its recognition as the first megacorp in 37 pf, a status which gave it even more trade leverage with corporate and planetary customers. The SEU exchange concept was accepted by PGC's investors and customers, and interstellar trade soon took off.

In this early period, trading vessels could often be easily identified by their huge generators and battery systems for generating and storing energy. The SEU exchange system led to a huge increase in trade on the Frontier. PGC capitalised on this by building thousands of power generation facilities (solar power satellites, fusion / fission geothermal / hydroelectric plants, etc) across the Frontier and offering discounted SEU's to company traders. However, over several decades, problems with the SEU system became apparent. Although the SEU system created a universal basis for trade, it required either a direct payment in SEU's or payment in goods or services useful to the seller and valued according to PGC's ever-changing valuation schedule. Using the valuation schedule to price out good s and then exchange them essentially was barter using a common reference, and a buyer would at times simply not have anything the seller needed and did not have enough SEU's on hand to pay outright in energy.

PGC solved this new exchange problem by developing a credit system. The PGC credit was first used unofficially by the corp and its traders, but later expanded to all of the Frontier. PGC credits were backed by the corp, and were good for SEU's from any one of PGC's thousands of stations across the Frontier (by 100 pf it owned virtually every generating plant on the Frontier). Credits could be exchanged with the absolute certainty that could be at any time redeemed for SEU's. The credits themselves resided in PGC's financial computers, and were exchanged either electronically or as thin, nearly indestructible plasteel cards implanted with chips which kept track of the card's value and fused themselves into useless slag if the chip were tampered with.

A vast change in the credit system came about with the aftermath of Sathar War I and the creation of the UPF. The Frontier's planets and smaller corps had been chafing under PGC's thumb for several decades by then; PGC was easily the dominant economic force on the Frontier at the outbreak of SW I, able to dictate trade terms to nearly any planet it liked. When PGC's executives received the text of the new UPF treaty they were enraged. The UPF member planets established a new currency unit for all member planets, the UPF credit; although PGC would be the exclusive backer of the new credit for 50 years, at the end of that time any corporation would be allowed to become part of the credit backing system - ending PGC's nearly century-old monopoly on credits. Not only that, but the new UPF government allowed any planet, corporation or individual to build commercial power generation plants, something PGC had prevented by choking off investment capital for such projects. With PGC's financial stranglehold on the Frontier broken, a pair of new megacorps emerged from private investment groups - CDC and Streel - who prospered in the reconstruction boom of the post-SW I years.

As 50 fy and the expiration of its monopoly approached, PGC tried a new approach. In the decade before the expiration, it began furiously buying up independent power facilities across the Frontier in an attempt to regain its monopoly and prevent rivals from accepting UPF contracts to back the credit. This desperate move failed when thousands of small power corps banded together to form a new megacorp themselves, the AIPS (Association of Independent Power Suppliers).

The UPF credit is now the entrenched currency standard of the Frontier, and unlikely to be significantly altered or discarded for a new system. It has been adopted by the new races of the UPF (including the Eorna of Volturnus and the Mhemne of Snowball) as well as on the Rim, where the UPF credit became the first coherent basis for trade among the Rim races - blunting to some degree the infamous negotiating tactics of the Ifshnits, who nevertheless have embraced the credit and the increased trade it has generated. Few younger - less than 50 years old (even the shorter-lived yazirians live into their 100's and 120's)- Frontier citizens even remember the PGC credit or the SEU exchange system. Young traders are sometimes surprised when they come across a remote asteroidal or lunar colony isolated since before SW I; the locals often will only pay in SEU's or (more rarely) outdated PGC credits, which can be frustrating for a trader to say the least. Modern credits, like the old PGC credits, are exchanged either electronically in the banking systems and datanets of the Frontier, or by the rarely used UPF credit chips. Like their PGC counterparts, UPF credit chips are thin plasteel cards somewhat smaller than a progit; the cards contain a chip which verifies the authenticity and value of the credit(s) contained in the card. Modern credits are backed by a variety of power producers and validated by the UPF government, and are valid currency on every planet of the Frontier and Rim.

Reprinted with permission.