It’s easy to think that derivatives are becoming more and more complex, exposing businesses to crazy risks if their view of the world turns out to be wrong. But an excellent new publication called An introduction to Derivatives, published by Reuters and John Wiley, tells how, during the American Civil War, the breakaway Confederate States of America once raised a loan denominated in sterling with the option to repay in French francs. That’s a reasonable degree of sophistication for a part of the world that was busy engaging in mass slaughter because it didn’t like political union – or the common greenback currency. But the book tells us that the lender had the option to convert the repayment into cotton. Fortunately the Rebels didn’t have a minimum wage law to jack up the cost of that swap arrangement.