The History of Currency, 1252 to 1896 Part 4

United States Reports of the International Monetary Conference. 1878. (Embodying an invaluable series of reprints.)

J. Laurence Laughlin The History of Bimetallism in the United States. New York, 1894.

Dunbar Laws of the United States on Currency and Banking, etc.

Of the almost endless series of Government Reports, a full bibliography will be found in Soetbeer's Litteraturnachweis.

The American Mint Reports, and the Austrian _Statistische Tabellen zur Wahrungs-Frage der Osterreichisch-ungarischen Monarchie_ (Vienna, 1892), deserve separate and special mention for their unequalled usefulness.

I am deeply indebted to H.C. Maxwell Lyte, C.B., Deputy Keeper of the Records, for references to the Patent and Close Rolls, the Exchequer Records, and other sources, which I have attempted to work into the tables of the French coins (Appendix VI.).

The Index of Coins at the end of the present volume is intended mainly for the purposes of historical research. It has been compiled, along with the General Index, entirely by my sister, Miss Edna Shaw, to whom my warmest thanks are due.

CONTENTS

CHAPTER I

From the Commencement of Gold Coinages to the Discovery of America, 1252-1492

Recommencement of gold coinages in Europe, 1; in Italy, 3; Germany, 6; France, 9; Flanders, 10; Holland, Spain, and England, 11; characteristics of the first period, 13; general depreciation of the standard, 15; monetary experience of Italy, 17; the Florentine troubles, 18; monetary experience of Spain, 23; the Cortes of Valladolid, 24; monetary experience of Germany, 25; the Mint conventions, 26; tables of the groschen and gulden, 30, 31; monetary experience of France, 31; arbitrary debas.e.m.e.nts, 32; course of the monies under Philippe de Valois, 35; the States-General of France, 1420, 37; Charles VII., 38; Louis XI. and Charles VIII., 39; general statement of the ratio, 40; monetary experience of England, 41; Edward III.'s issues of gold, 42; the measures of, 1353, 45; complaints of 1381, and the monetary investigation, 50; recoinage of 1414, 55; recoinage of Henry VI., 58.

CHAPTER II

From the Discovery of America to the End of the First Cycle of the Influence of the Metals of the New World on European Currencies, 1493-1660

General characteristics: First movement of metals from the New World, 61; mercantile importance of the Netherlands, 63; statistics of the production of the precious metals, 65; statement of the Mint ratio, 69; operation of the Netherlands plakkaats, 71; list of ditto, 76; tables of ditto, 79; monetary experience of France, 83; course of the monies under Henry II. and Charles IX., 84; the States-General of 1575, 87; Henry III.'s reform of 1577, 88; checked by Henry IV., 1602, 89; the monetary experience of 1614, and reform of 1615, 90; recoinage of 1640, 91; Florence, 93; Germany, 95; table of the groschen and gulden, 97; Imperial Mint Ordinances of 1524, 1551, and 1559, 98, 99; Mint disorders, 100; _Kipper und Wipper Zeit_, 102; Imperial basis of 1623, 106; Spain, 107; her function as a distributor, 108; England 113; tables of gold and silver coins, 113; recoinage of 1527, 118; export of 1537, 119; measures of 1544, 121; the Tudor debas.e.m.e.nt, 123; Elizabeth's recoinage, 1559, 129; the mistake of 1600, remedied by James I., 132; export of 1607 and 1611, Sir Walter Raleigh's opinions, 134; crisis of 1620-22, 139; the State prosecutions of 1638, 148; the troubles of 1649 and 1652, 151.

CHAPTER III

From the End of the First Cycle of American Influences to the Present Day, 1660-1894

Statistics of the production of the precious metals, 154; statement of the ratio, 157; development of theory of international trade, 160; free trade in the precious metals, 163; place of discount and interest rates in the modern system, 165; monetary experience of France, 167; recoinages of 1689, 1726, and 1785, 168; Calonne's ratio, 172; monetary action of Republican France, 173; the law of 1803, 176; bimetallic experiences, 1803-76, 179; movements and mintings of the metals, 183; measures of 1835, 187; French monetary commissions, 188; formation of the Latin Union, 190; its history, 193; Germany, 197; Zinnaische standard, 199; Leipzig standard, 1690, 200; Austrian or Convention standard, 201; South German standard, 202; Prussian standard, 203; Conference of Munich, 1837, 204; Mint conventions of Dresden, 1838, and of Vienna, 1857, 205-212; agitation of 1857-70, 213; new Imperial system, 215; England, 219; recoinage of 1696, 222; Newton's report, 1717, 229; recoinage of 1774, 233; silver legislation, 237; Bank Restriction and the Act of 1816, 240; movements and mintings of the metals, 244; United States, 246; beginnings of a national system, 247; reports of Morris and Hamilton, 249-251; Act of 1792, 253; gold export and the law of 1834, 255; silver export and the law of 1853 and 1873, 259; Acts of 1878, 1890, and 1893, 262; movements and mintings of the metals, 265; Netherlands, 268; Portugal, 272; the international conferences, 274; Paris conferences of 1867, 1878, and 1881, 275-280; Brussels Conference of 1892, 285; India, 293; her historic function, 293; movements and mintings of the metals, 299.

APPENDICES PAGE APPENDIX I. The Monetary System of Florence, 1272-1530 301 " II. " " Venice, 1284-1790 310 " III. " " Spain, 1250-1894 319 " IV. " " the Netherlands, 1250-1894 345 " V. " " Germany, Austria, and Prussia, 1250-1894 360 " VI. " " France, 1140-1894 396

THE HISTORY OF CURRENCY

CHAPTER I

From the Commencement of Gold Coinages to the Discovery of America, 1252-1492

The monetary history of Europe begins in the thirteenth century, and in the Italian peninsula. Its starting-point is the era of the reintroduction of gold into the coinages of the Western nations, and is definitely marked for us by the minting of the gold florin of Florence in 1252. For all practical purposes gold had gone out of use since the seventh century, and after the submersion of the Roman Empire; and the currencies of the nations of mediaeval Europe rested on a silver basis entirely. There are limitations to the truth of this statement, but they are of such a nature as not materially to affect it. In Spain, for instance, the Moors kept up a tradition of gold coinage similar to that of Rome, from the eighth to the middle of the thirteenth century. But its influence on the monetary system of Christian Spain is not even a matter of question. At the other extremity of the Mediterranean, at Byzantium, seat of the Eastern Empire, the best traditions of the coinage system of Rome were preserved for centuries after the imperial city had fallen before the invasions of the northern barbarians. Indeed, the monetary system of the Eastern empire, by becoming, as it did, the model which Charlemagne copied in his currency enactments, became the basis of all the modern European systems. Further than this, the presence of gold _Byzants_ can be traced here and there, at isolated points and dates, all over the darkness of those early centuries of the Middle Ages, when all coining art seemed forgotten among the races of Central Europe.

Notwithstanding such limitations, however, it still remains true that the monetary history of the modern world dates from the thirteenth and not the seventh century, and from the little commercial states of Italy rather than from Byzantium. Previous to the minting of the gold florin of Florence there is no trace of any independent minting of gold coins on a commercial scale by any state of mediaeval central Europe. The currency system of England, for instance, from the time of the Saxons to the days of Henry III. was based entirely on silver. In endless variety and under a diversity of names the silver penny was the unit coin current of the realm. Its equivalent in the Frankish Empire was the silver denarius, which Charlemagne had made the unit of his system, and which so continued for both the kingdom of France and the Holy Roman Empire till the fourteenth century. Finally, among the numerous states of Italy, with each their little independent Mint, there is no trace of the coinage of gold until the days of the commercial greatness of Florence and Venice. For eight centuries or more those races of Europe, which were to turn the course of the modern world and build its civilisation anew, were ignorant of the commercial use of what has been through all history the most potent factor in civilisation--gold.

[Sidenote: THE GOLD FLORIN OF FLORENCE]

The explanation of the reintroduction and recoinage of gold is to be found in the history of the Crusades and of the commercial growth of the petty independent states which sprang from the political confusion of Italy. No sooner had they achieved each their little autonomous existence than they threw themselves with feverish energy into the development of the trade with the East. Florence and Venice, Pisa and Genoa, led the way and reaped the fruits; and it was in her most flourishing time, when she had conquered her rivals, Pisa and Siena, and was enjoying a prosperous peace and active trade, that Florence, at the instance of the chief of her merchants, resolved on the coining of the gold florin (1252).[1]

The mere idea of such a gold coinage could only be derived from the East--from Byzantium. But it is a curious fact that the importation of it should be due in the first place to the Crusades. Frederick II. of Sicily was elected Emperor of the Holy Roman Empire in 1212. Sixteen years later he headed the Fifth Crusade, and the gold coin (_Augustale_) which he issued some time between his return from that crusade and his death, probably commemorates his wish to rival the appearance of opulence of the Eastern court. This Sicilian coin is the direct ancestor of the florin of Florence, and to it would fitly belong the honour of leading in a new era, were it not that the superior beauty of the Florentine coin gave it universal currency and reputation, and extinguished the memory of its predecessor.

The gold coin of Genoa (_Genoviva_) is supposed to have issued in the same year as the florin (1252). Five years later (1257) Henry III. of England imitated the florin in his gold _pennies_, and more than thirty years (31st October 1284) later Venice followed the lead of Florence and inst.i.tuted a coinage of gold _zecchinos_, under the dogeship of Giovanni Dandolo.

Two conditions were essential to the bringing about so momentous a revolution as this, however little the mind of contemporaries may have known it as such. In the first place, the foreign trade of the Italian republics must have become so extensive as to demand a currency medium of higher denomination than silver; and, secondly, that trade must have developed in such directions as to tap gold-using or gold-bearing regions in order to supply the Italian mints. It is a curious fact that both these conditions were realised through the instrumentality of the Crusades. The quickening effect of these vast movements on the trade of the Mediterranean is well known, but their influence in the second direction has not hitherto been pointed out. In the Fourth Crusade Venice lent the force which captured Byzantium (1203), and when, by her arms, Baldwin, Count of Flanders, had been seated on the Eastern throne, Venice reaped her reward in three-eighths of the territories of the Eastern Empire. She received Peloponnesus and a chain of islands in the aegean, and by the hold she had on Constantinople secured the virtual control of the Black Sea. In its turn the control of the Black Sea brought with it the monopoly of the overland trade with India.

[Sidenote: THE TRADE OF VENICE]

At one and the same moment, therefore, Venice acquired possession of a huge treasure of gold wrested from the conquered city, and of the then only gold-yielding districts--the Crimea--and of an intercolonial trade, demanding a more enhanced currency medium. The result of such a combination of circ.u.mstances was irresistible. During the continuance of the "Latin Empire" at Byzantium, Venice and her sister state were practically the only merchants of Europe.

The inst.i.tution of a gold coinage among the Italian republics, therefore, marks for us an era of commercial expansion which is only fitly to be compared with that of Holland in the seventeenth century, or of our own country in modern times.

We are not concerned with tracing the effects of this extraordinary movement further than as they bore in their train the dower of a currency of gold.

In the European system, Venice was the intermediary between the spice-laden east and the wool-bearing north. England, the wool-growing country of fourteenth-century Europe; Flanders, the home of the weaving industry; the Hanse Towns of Germany and the gradually forming kingdom of France were successively brought face to face with the new medium of currency; and if the story of the gradual adoption of that new medium could be written, it would form one of the most instructive of all chapters of currency and commercial history.

As it is, we have only uncertain and scattered data.

In the case of Germany--of chief importance in the process by reason of her geographical position midway between the Mediterranean and the north--the first minting of gold in imitation of the Italian states fell in the second quarter of the fourteenth century. Of the two types of gold monies issued by the Emperor Louis IV., surnamed "Bavarian," the first, struck some short time before 1328, was in direct imitation of the florin of Florence. The second, struck some little time later, was a copy of the _ecu d'or_ of Philip VI. of France.

In 1337 our own King Edward was made vicar-general and lieutenant to the Emperor, with powers to coin monies of gold and silver. He accordingly kept his winter at the Castle of Louvain, and caused great sums of money both of gold and silver to be coined at Antwerp. Two years later, this same Emperor Louis, the Bavarian, granted to the Duke Rainhold of Gueldres the right to mint gold coins, "after the valuation of the gold monies of the Archbishop of Cologne, the Duke of Brabant, and the Counts of Hainault and Holland." In the following year he granted to the free state of Lubeck a similar right--the patent expressly stipulating that their gold coins should not exceed in weight or value the gold florin of Florence.

[Sidenote: BEGINNINGS OF A GOLD COINAGE IN GERMANY]

Sixteen years later (1356) the general liberty of coining gold was conceded to the seven Electoral Princes by the Golden Bull of the Emperor Charles IV., and subsequently state after state and free town after free town purchased or were granted the right. Even as late as 1372, in the patent granting to Frederick of Nurnberg this so eagerly solicited liberty, the stipulation is made that the gold gulden to be coined should be of as good gold and weight as "the gulden or florin of Florence."

In the case of Lubeck direct doc.u.mentary evidence of transactions relating to the introduction of a gold coinage has survived among the archives of that state. The privilege of a Mint and of coining (of silver) was first granted to Lubeck by Frederick II. in 1226. But it was not until a century and more later that Louis the Bavarian, by his bull of 28th November 1340, conceded the right of coining gold "in pieces which were to be neither heavier nor of higher worth than the florin of Florence." On the 8th September in the following year the Lubeck Mint made its first purchase of gold from a certain Jacob Grell of Zutphen in Holland. The purchase consisted of 4 marks 1 loth 8 pfen. weight of gold (Lubeck weight), and the price paid was 24 solidi the carat. In other parcels, up to Michaelmas of 1341, the authorities remitted to the Mint a total weight of metal of 50 marks 2 oz. 3-1/2 ang., varying in fineness from 15 to 23 carats. The consignment yielded in the pot 46 marks 1 oz. 7 ang. of pure metal, and was coined into 3199 pieces of a total weight of 47 marks 5 oz. 10 ang., being 67.08 gold pieces to the Lubeck mark. The coins were issued on the 18th February 1342, and bore on the one side the lily of Florence and on the other the figure of John the Baptist--all in direct imitation of the florin. The total issues made in the immediately succeeding years from the Lubeck Mint were:--

1342 24,783 florins 67.26 to the mark.

" 5,483 " 67.11 " "

1343 30,436 " " " "

1344 32,590 " " " "

With more or less irregularity the earliest German guldens imitated the florin, and maintained something like a steady and uniform denomination quite up to the beginning of the last quarter of the fourteenth century.

[Sidenote: GOLD COINAGE IN FRANCE]