Gold ProductionThe cost of everything in the system is based, first and foremost, on the value of gold. Gold is measured in both pure ounces and in coins, the latter being a metal alloy (added nickel, manganese and silver) that gives it hardness and durability. Our first task is to assign an amount of gold equal to one reference - that is, the amount of gold produced in an average location over the course of a year.
We have three methods of determining how much gold that would be.
Method 1: relying on my numbers. I began by taking the total amount of gold produced in the world in the present day and dividing that number by 500, as an approximate ratio to reflect both population change and industrialization, giving me a number for world gold production for 1650 (the date of my world): 311,529 oz. This is then compared by the total number of times I have found 'gold' associated with places and geographical regions in my source material (an encyclopedia, examined page by page): the number of gold references being 236. This gives us a total of around 1,320 oz. of gold produced per reference, per year.
Method 2: use an historical example. I found myself frustrated in attempting this method. There are no good numbers for gold mining prior to the last thirty years, where the amount of gold produced in a given mine is accomplished with cyanide heap leaching, dredging, hydraulic mining and very heavy equipment, along with massive smelting processes that can wrest gold from a mass of rock that would be impossible even a century ago. Discovering how much gold was produced at a single mine at, say, the height of the California gold rush is impractical since we don't know how many mines were in existence. Modern estimates say that 12 million ounces of gold were likely removed during the first five years of the gold rush, but how to divide this up into specific places and mining operations is anyone's guess (the number would be for the whole of central California, an area about the size of England). Still, with intense research someone might produce a usable number.
Method 3: make a number up. This is easiest; just set an amount of gold per reference that works for the world being built - remembering that the number can be adjusted, at will, later on.
Whatever method is settled on, remember that ad hoc adjustment after the fact will make the number used - and the system - meaningless. It is recommended that once settling on a number that the reader should resist changing it; the trade system will eventually return numbers that will seem "too high" or "too low," causing the user to think something about the system must be broken. It should be remembered that in any system, some things, even things that we perceive are absolutely certain, won't be available! This system is designed to reflect a medieval world, where shipping is very difficult and manufacture numbers are small - and where players are encouraged to do without.
CoinageWhatever particular exchange system between gold, silver, copper and other coins may exist, we must first determine how many gold coins we want to exist in the system. Silver and copper metals exist in such plentiful amounts that it can usually be assumed that there is enough of either in the world to sustain the amount of less valuable coinage that exists (always remembering that coins are not pure gold, silver or copper, but always an alloy of some kind), so it is the amount of gold that matters.
The solidus, the Roman gold coin issued by Constantine, had a weight of 4.5 grams, which is generally assessed to be about 95.8% pure at the time of its issuing (this declined over time). Comparing that with troy ounces (which are 31.103 grams), this means that an ounce of gold could be used to make 7.215 gold coins. In my game, I used some source for purity (long lost) that caused me to settle on 8.715 coins per ounce of gold (with a larger, 8 gram gold coin that's less than half pure).
If we presume that 100% of the gold mined is used to make coins (a convenient number), then we can find a number for how many gold coins are created each year. This lets us compare that production figure with the production figure of every other good in the world, meaning we only have to account for one year of production and not the total accumulated quantity of that good. This makes things easier. Gold for any other reason (jewelry, gilt, etc.) can then be assigned as waste against the coin supply (which doesn't matter right now, but is worth noting for later). Our primary concern just now is the coin supply.
Assigning Quantities for Other GoodsHaving determined the value for gold references, we can now apply ourselves to the value of other goods in our system. Before doing this, however, is must be understood that every reference in the system has the same value. This is what makes calculation possible. The key is in realizing that a reference of bricks contains a far greater weight in bricks than the weight of gold it represents. The weight in bricks may be hundreds of tons - but what we are attempting to express here is that those hundreds of tons of bricks are exactly equal to 1320 ounces of gold. The price is then assigned according to that difference.
But what is that weight of bricks? We could attempt again to try one of the three methods listed above, but we have at hand an easier method that can be applied to any of the raw products above. I caution the user from employing this method with manufactured products, as doing so will considerably reduce the trade system's incorporation of geographical concerns where it comes to raw materials vs. the processing of those raw materials, which may take place hundreds of miles apart.
Therefore, let us set aside brewing, cloth, leather goods, meat, metal goods, pottery, skins, wine and wool. This leaves us wanting a quantity for bricks, cattle, clay, fish, grain, gold, grapes, horses, ores, salt, sheep, spices and timber.
If the reader has been a DM for some time, then probably there will already exist a price for each of these things in your world. If not, some thought should be given right now for what a rock bottom price for any quantity of the above should be. For example, the original Players' Handbook gives a price of 10 g.p. for one cow and 2 g.p. for one sheep. We can use these values to reverse engineer the number of cows or sheep that are accounted for by one reference very easily.
If a reference for gold = 11,504 pieces of gold, and 10 g.p. equals one cow, then the number of cows per reference is 1,150 (ignoring the fraction). However, we can assume that the price we started with is an average, and postulate that a rock bottom price would be 5 g.p., giving us a total of 2,301 cows per reference (never mind about bulls right now, we will address that later). Likewise, we can use the same reasoning to give us 11,504 sheep per reference.
The same Players' Handbook gives us a cost of 1 s.p. for grain, horse meal, per day. A little research tells us that a horse eats 2.0 - 2.5 pounds of air-dry feed daily per 100 lbs. of weight. A light horse weighs between 800 to 1200 lbs., so from this we can pick our numbers and do our math: I'll calculate 2 pounds x 10 for a thousand pound horse per day, so that 1 s.p. in the Players' Handbook buys 20 lbs. of grain. If we again look for a rock bottom price for grain, 1 s.p. buys us 40 lbs. of grain. A reference is worth 184,061 s.p., so 1 reference equals 7,362,440 oz. of grain, or 3,681 tons.
We must remember that for each reference we add, we're making it possible for more people to live in the kingdom (but we will again address that later).
Here are some numbers I've pulled together for the list of raw goods that we're using (skipping gold), based not on the Players' Handbook but on my own research. I will be using these numbers for later discussion of the trade system, but feel free to plug and play whatever numbers work for your game.
Note that the total amount per reference can be reduced by any factor if the reader wants to simply multiply the number of references by the same factor - and of course no one has to use my numbers at all.
This satisfies this step in the trade system process. Next we will want to address the problem of physically locating references in our game world.
See Trade System