The History of Currency, 1252 to 1896

by William Arthur Shaw

reduced to the testimony of prices and the Mint records.

COURSE OF MONETARY DEPRECIATION

In France, at the beginning of the period (in 1308), the mark of gold was coined into 44 livres, and the mark of silver into 2 livres 19 sols. At the close of the period, or towards it, in 1475, the mark of gold was coined into 118 livres 10 sols, and that of silver into 10 livres.

In Germany the mark of gold was coined into 66 gulden of 23 carats in 1386, and into 71-1⁄3 gulden of 18 1⁄2 carats in 1495—a depreciation of 34.36 per cent. In Spain the mark of silver was coined into 130 maravedis in the year 1312, and into 2210 maravedis in 1474. This latter case is, however, so inextricably complicated with considerations of mere, i.e. arbitrary, debasement, as to render it useless for any estimation of the natural appreciation of the metals. In England our earliest gold coin weighed 128 4⁄7 grains, and was tariffed at 6s. 8d. In 1489, 80 grains of gold were equivalent to the same, 6s. 8d.—a reduction of 37.94 per cent. Within the same period the weight of the silver penny sank from 22 to 12 troy grains, a reduction of 45.45 per cent. Eliminating cases of arbitrary debasement, a rough average for the period might fairly give 40 per cent. of depreciation through the two centuries.

The case need hardly be laboured statistically, for the legislative history of all the countries forming the circle of commercial Europe in the fourteenth and fifteenth centuries witnesses this general downward

movement—this appreciation and restriction of currency—in grim and unmistakable manner; and it is the expression of this general movement in their legislations that gives the test and measure of the earliest bimetallic troubles of Europe. In many ways the problem before the various Governments was a more difficult one than that which besets the modern world. There was, for instance, nothing like an equal and generally recognised ratio of value between gold and silver prevailing at any one single point of time. At one and the same date a ratio of 7 or 8 to 1 prevailed in the Moorish parts of Spain, and 12 to 1 in the Christian parts (the kingdom of Castile). Similarly, at a later period, in 1474, the ratio in England was 11.15, in Germany 11.12, and in France 11.00, in Italy 10.58, and in Spain 9.82.

The natural result of such a state of chaos, if it had been permitted to work itself out unhindered, would have been arbitrage transactions of such a nature—a flux and reflux of the European currencies so perpetual—as would have induced a yearly and universal bankruptcy. In spite of frantic efforts on the part of ruler after ruler, such results did partially come about, and they sufficiently account both for the distraction of Governments and the hatred universally visited upon the Jew in the Middle Ages. The measures which were adopted by the various States to counteract this invisible, insidious, and wasting process, partake of the roughness and unscientific character of the age. The export of gold

and silver was forbidden on pain of death; and it was no mere paper threat, for prominent London merchants were drawn and quartered for the offence. The rates of exchange of foreign coins were fixed by proclamation, and the office of exchanger limited to a particular place. When all this proved ineffectual, the coins were cried down, and violent and sudden changes in the ratio enacted. What made the jerk and friction of such a process worse was that such measures were not merely defensive, but intentionally offensive. The wish of the fourteenth and fifteenth century ruler was not merely to defend his own stock of precious metals from depletion, but—having gained the conviction of the insufficiency of the production of those metals for the needs of Europe—to attract to himself the stock of his neighbours by whatever craft. There was a general struggle for the coverlid of gold, and the methods of that struggle were almost barbaric in their rudeness, violence, craft, and dishonourableness.

Italy.

On account of their knowledge and practice of the science of exchanges and finance, the metallic history of the Italian states is of chief importance for this earliest period. At a time when the northern nations show signs of an infancy of commerce merely, Italy was advanced in the art and practice of a most highly developed commercial and financial state. It is to her that we owe our system of book-keeping and