MOVEMENTS OF SILVER IN GERMANY, 1300-1500, AS ILLUSTRATED BY THE GROSCHEN.Date.The Cologne Mark coined intoOf AlloyEquivalent Value (as expressed in the 20-Florin Standard).Pieces.Loth.Qr.Kreutzers.Pfennige.1226(Gros Tournois of France)551⁄1056210216⁄5511296631⁄2150172110⁄1271309631⁄214016218⁄1271324(Meissen)641⁄215017133⁄48134178100926⁄1313509114011214⁄911364741⁄2909036⁄1491378701411511⁄141380721301321⁄6—(Meissen)911109024⁄91139085100835⁄17—(Meissen)90907214077240⁄131808157⁄296141282403226⁄411444887136243⁄132—160160721459101594034⁄101147010020⁄3075032507⁄5121490103503258⁄103
TABLE OF THE MOVEMENT OF GOLD & SILVER IN GERMANY 1300-1500.TABLE OF THE MOVEMENT OF GOLD & SILVER IN GERMANY 1300-1500.
THE MOVEMENT OF GOLD IN GERMANY, 1300-1500, ILLUSTRATED BY THE MOVEMENT OF THE GOLD GULDEN (RHEINISCHE GULDEN).Date.Cologne Mark coined intoAlloy.Equivalent Value(as expressed in the 20-Florin Standard).Pieces.Carats.Grains.Florins.Kreutzers.Pfennige.1252(Florentine Florin).443⁄82406223405⁄2911137166231462434⁄78113866622641185⁄7811409662203553517⁄7811419641⁄219032812851⁄3053142868190317318⁄120714427219036314⁄2131477691⁄318103323104⁄15194
In France during this same period the ratio of gold to silver was changed in a single century more than a hundred and fifty times, and with a roughness that is quite inconceivable to the modern mind. To take a period of ten years for example:—
In1303the ratio was10.26"1305"15.90"1308"14.46"1310"15.64"1311"19.55"1313"14.37
France presents the utmost difficulty to the student of metallic money during this earliest period, by reason of these violent and arbitrary alterations of the coinage. The extreme diversity of the coins, and the perpetual changing of the composition or alloy, make it almost impossible to estimate the fluctuations in the value of money in relation to goods, or gold in relation to silver. Apart from the international struggle for the precious metals, France was torn and ruined by the English invasions, and debasement after debasement of the coinage was resorted to as a means of raising money to continue the struggle. Such debasements mark the reign of Philip le Bel, 1285-1314, and of each succeeding king, from his days to the final ejection of the English invaders, and after. A single instance will serve to show their nature. In 1342 the mark of gold, which in a normal time just preceding was valued at 41 livres 13 sols, was proclaimed equal to 117 livres, and in 1360 the mark of silver, valued normally at 5 livres, rose to 102 livres.[5]It stands to reason that such abnormal movements must be neglected in any attempt to determine the course of such fluctuations in value of the metals, and the ratio of gold and silver, as arose naturally from the metallic and currency history of the time. Eliminating, therefore, this element of forced and accidental debasements, due to political circumstance, the natural history, if it maybe so styled, of the French coinage displays the same tendency to an appreciation of money metal which marks the history of the other European countries.
TABLE OF THE MOVEMENT OF GOLD & SILVER IN FRANCE, 1300-1500.TABLE OF THE MOVEMENT OF GOLD & SILVER IN FRANCE, 1300-1500.
TABLE OF THE MOVEMENTS OF THE COINAGE OF FRANCE, 1300-1500.[6]Date.The Mark of Silver coined intoThe Mark of Gold coined intoLivres(Tournois).Sols.Livres(Tournois).Sols.Deniers.1309(Philp le Bel.)2194400131521445001343344368135055531891361506000138158601001422707650142780720014297077100144671088261456810100001473100110001475100118100
In this table each of the points or dates taken marks a period of return to good money after a period of debasement, and in the mind of the legislator such return to good money (monnaie forte) can only be construed as based on an estimated general or normal rate of monetary values, for each particular succeeding point of time. Atevery return to good money a proclamation was issued, expressing the determination of the administration to adhere to good money, as in the halcyon days of St. Louis, etc. etc., and fixing the rate at which the monies should be coined and current. By taking these points or dates of return to good money, therefore, we eliminate the arbitrary action of the Government in periods of debasement, and arrive at a net result showing thenaturalmovement of the metals.
The general trend of the table—or of the metals whose movements it portrays—is perceptible at a glance, and will, moreover, be found exactly similar to that of the cases of England and Germany below. On account of the arbitrary debasements by the Kings and of the numerous feudal coinages struck independently by the bishops and subsidiary lords, the question of the friction with which this process of metallic appreciation worked itself out cannot be so well illustrated in the case of France as in that of England. But so much as this may be briefly indicated. In 1294 the scarcity of silver coinage was so great that a proclamation was put forth ordering silver to be brought to the Mint, and forbidding the export of the metals. In consequence of the futility of this ordinance, a further proclamation was issued in 1309, forbidding the circulation in France of English silver sterlings and gold florins of Florence, and crying down the exchange denomination of all other foreign coins. Similar proclamations were issued again and again—notably in 1328. But the complaints as to the depletion of the coin of the realm became much more serious in France after Edward III. had instituted his gold coin in 1344. There was henceforth a process of double friction—(1) as arising from the difference of the declared value of the French King's coin, as compared with foreign tariffs of coins; (2) as arising from the difference between the ratio of gold to silver in France and that prevailing in other countries.
ALTERATION IN SILVER RATE
In 1336 Philippe de Valois had fixed the ratio at 1:12, "the cause which moved us to this being that so our people who were in great privations and straits for money may more abundantly and quickly be filled again with money new and current." This was re-enacted in 1339, but proved quite inoperative to rule the market rate, and in 1346 Philippe found himself obliged to tolerate the advance which had been put upon the good monies in the market, by allowing provisionally thechaise d'orto be current for 30 sols Tournois. Four years later the silver rate was altered by a proclamation conceived in these terms: "As the changers and merchants who are accustomed to bring bullion to our Mint have ceased, and do daily cease to do so, so that the working of our Mint is greatly impeded, to the great prejudice of our people if no remedy is applied, we therefore order that for each mark of silver brought to the Mint there shall be delivered out by the Mint another 8 sols Tournois in addition to the 112 sols Tournois fixed by law."The immediate consequence was a hoarding and disappearance of the gold coins, and in the following year, 1351, the tale of thedenier d'or aux fleurs de liswas altered from 50 to 54 to the mark.
There is here no question of an arbitrary debasement. It was simply an attempt to preserve the currency from the action of a changing market ratio, which led to the withdrawal now of the one, now of the other coins, and to the circulation meanwhile of foreign coins at a rate apparently disproportioned to the metallic content.[7]In 1361 evidence was given before the Mint authorities that "in payments the people do by abuse give foreign monies at a higher rate than they are worth, viz. themoutonsof Flanders and Brabant at a higher rate than thefranc d'or, of which saidmoutonsthe best specimens are worth 18 denars less than the saidfranc d'or; a silver piece calledchartainfor 16 and even 18 denars, which is worth no more than 10," and so on. Two years later it was declared that the Mint at Tournay was on the point of stopping work, "the people having been accustomed for a long time to give a higher price for the mark of gold than in the case of other monies of this kingdom, and this by reason of the foreign merchants." Towards the close of his reign CharlesV., finding his kingdom filled with depreciated imported specie, while all the good native pieces had been drawn out of the land, sought and obtained from the Pope, 1372, a Bull of Excommunicationagainst neighbour powers who should counterfeit his monies. It was not until 1391 that the proper defensive measure of a change of ratio was resorted to, and by that time the conditions of the Mint rates in surrounding nations had so altered as to render the change partially inoperative. In 1393, accordingly, there was a great lack of the smaller silver coin, which led to a proclamation by CharlesVI.on the 2nd April of that year for encouraging the minting ofpetiz deniers Tournois. The same complaint was, however, re-echoed in 1395 and 1396, but, as it appears, quite futilely, for nine years after another proclamation had to be issued against the currency of foreign coins of Scotland, Navarre, the Rhenish and Netherland provinces, etc., "which have course in our kingdom for a greater value than they are worth, by which means our monies are arrested in their course and greatly withdrawn; the gold and silverdeniers a l'écuwhich we have minted having been melted down."
ACTION OF THE STATES-GENERAL IN 1420
When the States-General met at Paris in 1420 the depreciated state of the coinage was laid before the assembly as of prime concernment, and it was by its advice that the proclamation of the following year was issued fixing theécu d'orat a tale of 66 to the mark and of thegros d'argentat 861⁄4, "it being come to our knowledge that for some time past the money in our kingdom is so diminished and enfeebled that by this means the gold and silver which abounded is in very great measure drawn away and transported,and the traffic of strangers here almost ceased, and all necessaries of life put at a great height," etc. The result of this reformation of 1421 was that during some portion of the succeeding years of CharlesVII.'s reign silver came from all parts in great abundance, although in 1436 complaints were again heard that money was not being coined and did not suffice for the public needs. At this point, however, the complaints apparently ceased, and it was not till twenty years later that the step was again taken of decrying and forbidding the circulation of foreign specie.
The ceasing of the disorders in the French money is attributed to the expulsion of the English invaders, but there can be little doubt that much more simple and natural laws were at work. From the reign of LouisXI.onwards these natural laws had freer play as against the disturbing influence of mere arbitrary debasements, and it is easier to analyse their influence.
FRANCE IN 1488
From his accession in 1461 onwards the monetary history of France displays many analogies with that of the Netherlands (seeChapter II.). Thus in 1470, finding the market rate of foreign coins driven above the home Mint rate by the licence of the people (i.e.by normal market action), Louis issued a tariff to regulate the exchange rate in which the prevailing prices of the foreign specie were tolerated as an interim for a period of three months. At the end of that time it was manifestly impossible to secure a permanent reduction, and in order to prevent thetransport of specie it was found necessary, 4th January 1473, to raise the value of the home coin both gold and silver (see account of French monies inAppendix No. VI.). Still the export continued, and in 1475 the process of enhancement had to be repeated as a measure of defence for the gold specie. Thirteen years later similar precautions were taken for the silver specie by CharlesVIII.'s proclamation of 24th April 1488.
This is the last defensive measure of the first period of the monetary history of France, and no further act is on record previous to the great change in the relative values of the precious metals which ensued upon the discovery of the New World.
THE RATIO BETWEEN GOLD AND SILVER IN EUROPE, 1300-1500.Date.Italy.France.England.Germany.Spain.Burgundy.Date.Florence.Venice.Milan.A.B.125210.75................12521257........9.29........12571284..10.84..............1284129611.10................12961303................12.11303130510.88................13051308..................13081315..................1315132413.6213.99..............13241338......12.61..........13381343..................13431344........12.59........13441344........11.04........1344134511.04................13451346......11.1111.5711.33......1346134710.91................13471348................12.113481350..14.4410.59............13501351............12.3(Lübeck)....13511353........11.15........13531361......12.0..........13611365..........11.37......1365137510.77..........12.4(Lübeck)....13751379..13.17..............13791380..................13801386............10.76(Rhine Provinces)....13861391......10.74..........13911399..11.69........11.16....13991400....11.630............1400140210.58................14021406............10.66(Rhine Provinces)....14061411............12.0(Lübeck)....14111412........10.33........14121417..12.56..10.67..........14171421......10.29..........1421142210.16................14221427......9.00..........14271429..11.04..............14291432......10.87......5.822..14321435......12.32..........14351441..........11.12......14411443..12.1..............14431446..................14461447......11.44..........14471450....10.965............14501455............12.2(Lübeck)....14551456......11.77..........145614609.33................146014629.37................1462146411.42......11.15....9.824..1464147110.58................14711472..11.13..............14721474..10.97..11.00..........14741475..............10.41..1475148010.83............10.87..1480148510.46................14851486..............10.98..14861488......11.83..........1488149510.46................14951497..............10.01..14971500....10.975............15001506..............10.262..1506Germany—A, as determined by the purchase prices of the two metals in the Lübeck Mint.B, as determined by the Mint ordinances.
Germany—A, as determined by the purchase prices of the two metals in the Lübeck Mint.B, as determined by the Mint ordinances.
ENGLAND: COINAGE OF 1344
Even before the adoption of a gold coinage by EdwardIII., England had felt the effect of loss by exchange, owing to the introduction of gold florins by means of the Flemish trade. In the Parliament of 1339, at Westminster, complaint was made of the want of coinage. It was proposed as a remedy—(1) that every merchant should bring in 40s. or more for every sack of wool that he should import, and (2) that it should be considered by the King and his council whether it might not be advantageous to permitflorins de écu(of France), and florins of Florence (i.e.gold), and other good florins to be current with theesterlings(i.e.the silver penny), "but only esterlings to be compulsory for under 40s. value." In less than four years good money was being carried out of the realm, and false money brought in at such a rate that Parliament was seriously perplexed. In its debate on the matter at Westminster, 1343, the result is thus stated: "All orders of persons in the realm had loss for a long time, on account of the florins which were delivered in payment in Flanders, bearing so high a value there as to occasion a loss of one-third on all merchandise imported thence." Certain goldsmiths of London were therefore ordered to be called in to advise and to refine one or two of each kind of florin, so as to rate the fine gold in them according to the true value. And it was proposed that of this fine gold one kind of money should be made inEngland and Flanders, provided the Flemings were willing, to be current in both countries at such an alloy and value as should be determined by the King and Council, and all other gold money to be taken at bullion value, and all silver money to be reckoned thereby ("other sufficient money to be received according to the value of the fine gold").
The result was the first practical issue of English gold. In 1344 an indenture was made between the King on the one part and George Kirkyn and Lotte Nicholyn of Florence, goldmasters and workers, on the other, for the coining of three monies of gold, one to be current at 6s., and to be equal in weight to 2petits florinsof Florence of good weight, 50 of these being coined out of the pound Tower of London.
In this indenture Edward copied the ratio prevailing in the French kingdom, viz. that of 12.61 to 1 between gold and silver. That ratio was considerably too high, and he quickly experienced the same effects which were felt by the French King from it. During his reign (1327-50) Philip of Valois coined more species of new money than all his predecessors put together, but owing to the adoption of this too high a ratio the country was gradually depleted of good money. In order to induce people to bring bullion to the Mint he offered to coin free of cost, but found nothing of avail until he followed the example of England and altered the ratio.
In our own country the same truth had been quickly grasped. It was found that the new gold money wasrated too high,i.e.overvalued in relation to silver, and was therefore refused. By a proclamation of the same year, therefore, 9th July, it was withdrawn and ordered to be taken only as bullion, and a new indenture was made for the coining of gold nobles—391⁄2out of the pound Tower, and at the value of 6s. 8d. The nobles were at once made current and tenderable along with silver, by proclamation; gold being ordered to be received in payment of 20s. and upwards.
GOLD NOBLES COINED
By this indenture the ratio was at once dropped from 12.59:1 to 11.04:1. This attempt to determine the rate of exchange is a common feature in the legislation of France and Spain as well as of England. It stands to sense, and is apparent on every page of the monetary history of the period, that it was absolutely imperative. The friction which accompanied the process can now only faintly be imagined, but that is a secondary consideration. The essential point was, that such changes were normal and inevitable, forced by sheer necessity upon Governments, such an one even as our own, which has always been most jealously conservative in matters of coinage.
TABLE OF THE VARIATIONS OF THE GOLD AND SILVER COINS OF ENGLAND, 1300-1500.Silver.Gold.Date.Weight of the Silver Penny in Troy Grains.Date.Coin.Weight in Grains.Value Declared.Price in Pence per Grain of Gold.s.d.1300221344Florin108600.66661344201⁄41344Noble1386⁄13680.57771346201346...1284⁄7680.62221351181353...120680.66661412151414...108680.74071464121460...120840.75001470Angel80681.0000
In the first issue of EdwardIII.the Troy grain of gold had been valued at .6666 of a penny. At such rate it was overvalued and refused, and in the second issue of the same year the value was dropped to .5777 of a penny. Gradually, as the ratio on the Continent changed, and came to bear on the English rate, this was in its turn found an under-valuation, and only two years later, 1346, the value was raised to .6222, making a ratio of 11.57 to 1. The change was made in consequence of loud and serious complaints of the scarcity of coin, good money being carried out and false "Lusshebournes" (Luxembourgs), worth only 8s. in the pound, being brought in. The grievance was so great that Parliament petitioned Edward most urgently to interfere, instancing in special the Lombards,"that they purchased English florins at a lower rate than that which was appointed," and praying "that such persons should not buy or sell the said money, nor make any agreement, in the sale of their merchandise, what money they would receive in rejection of English money." To this it was answered, that it should be commanded throughout England that all persons should receive for their merchandise gold, according to the currency ordained, without any agreement to be made, under pain of imprisonment and heavy ransom, and when any agreement had been made it should be at the will of the purchaser to pay money of gold or silver as he should think fit. At the same time, an ordinance was issued forbidding any person to carry out the King's good money or to bring in counterfeit.
TABLE OF THE MOVEMENT OF GOLD & SILVER IN ENGLAND 1300-1500.TABLE OF THE MOVEMENT OF GOLD & SILVER IN ENGLAND 1300-1500.
EDWARD III.'S CHANGES OF RATIO
The effect of Edward's change of ratio—from 12.59 (the same as the French rate) in 1344 to 11.04 in 1346—told immediately on the French currency, and at the first return to good money in the first year of King John (1350-64) the ratio in that country was changed at a stroke from 12.61 to 11.11. This in its turn acted upon precious metals in England, and for three years the English King found himself futilely struggling against an outflow of silver, by such measures as the hanging and drawing of merchants, before he discovered that it was due to an overvaluation of gold. In 1353, accordingly, he lowered the weight of the gold nobles from 1284⁄7grs. to 120. At the same time, the contents of the silver penny were reduced in a greater proportion (from 20 grs.to 18). By this means the ratio of 11.04, which had prevailed since 1346, was lowered to 11.15.
That this ratio achieved its purpose, as far as England was concerned, is apparent from the simple fact that it remained unaltered for over sixty years until 1414; that it acted adversely upon and drained France of her gold is apparent from the change of the ratio there at her first immediately succeeding return to good money. Two periods of debasement had marked the short reign of John of France (1350-64), and the effect of these and of the influence of the English ratio was such that in 1360 there was no gold in his kingdom. Towards the end of that year, and in the beginning of 1361, John promulgated a reformation of the coinage—a return to good or "forte" money, and in this reformation he adopted a ratio which would act on the English stock of precious metals.
In England, Edward's action in 1353 in lowering the contents of both silver and gold coins, and altering the ratio, had given rise to great discontent, to an extent which proved how wiser and truer to the nation's interest was the King than his people. This diminution of the value of these coins, says the Chronicle, made all things dearer, so that the workmen and servants became assuming and demanded greater wages.
There is as little foundation for such an innuendo as there is for the view which regards this depreciation as an issue of base money. It was simply ameasure of precaution, as stopping an invisible and insidious outflow of the currency.
ENGLAND AND FRANCE IN 1360
Looked at historically, and not at all controversially, such results as have been just described can only be attributed to the European monetary system of the time. Apart altogether from the arbitrary debasement of the coin, as,e.g., in France—apart even from changes of the ratio enacted with the mere crafty design of inducing a flow of gold, the monetary system of the time was so rough, so unscientific; the tariffing of the coins of different nations against each other was so inexact, so much a matter of rule-of-thumb, of hasty average, that it was simply impossible to issue such general tables of equivalents of coins and such a ratio as would have given stability to the various coinages of Europe. If the currency system of England had been of silver alone, a single enactment lessening the content of the unit coin, or crying up its denomination, would have stopped any outflow caused by under-valuation as compared with foreign money value. The same if it had been only gold. But being combined of the two, being, as it was, both gold and silver, it was necessary, in the case of such outflow, not merely to call down one or both of them below the value of foreign gold or silver, but also and at the same time to establish such a ratio between the two metals forinternalcirculation as would give no advantage to exchangers acquainted with a different ratio prevailing in some particular part of the Continent. And just the same for the other Europeanmoney systems. If, for instance, the English sterling had been called down to a value which would of itself have forbidden export to the Continent, but at the same time such a ratio had been left standing between these sterlings and the gold nobles (say 12:1) as was so far in excess of the ratio prevailing in some parts of Europe (say 11:1) as to overlap the amount by which the sterling had been called down, then the result could, and doubtless would, be an outflow of silver, in face and spite of the apparent higher tariff of the English sterling, as against the continental silver coins. This is the historic, patent, undeniable defect and weakness in the bimetallic system of the Europe of that day. It must be borne well in mind how different the problem then was from that which now besets the monetary world. To-day the flow of the precious metals is natural, the indicator, facilitator, and safety-valve of international trade. Such a conception was an utter impossibility to the fourteenth century. The rulers of that age had only one idea, the maintenance or increase of the treasure of the realm, first for military purposes, and then for trade; and their mental horizon was limited by the boundaries of each their little dominion. They could not grasp the idea of Europe as a monetary whole, each fought for his own head or land, and each found a ready weapon to hand in the monetary confusion of the time. In any system so rough and so non-uniform as that of Europe in the fourteenth century, any variation of one metal served as a vantage-point againstthe other, as a lever to press upon and force it out. One metal would have been safe (so long as no partial depreciation was allowed), two metals served simply as fulcra to each other's oscillations, to the undoing of both. The mediæval legislator could not grasp that there was a double train of principle and event transacting itself under his very eyes—the one, changes of denomination of coins; the other, changes of ratio. In less than thirty years after EdwardIII.had cried down the English coins to below the competing denominations of the Continent, the changes of the European ratio had produced their effect, and RichardII.found the realm denuded of its treasure and currency.
ENGLAND IN 1378
From 1360 the ratio on the Continent gradually sank from 12:1 till towards the end of the first quarter of the fifteenth century, when it stood in France as low as 9:1.
That France experienced the process, which must have been perfectly natural and due simply to relatively diminishing production of silver in those years, 1360-1425, is seen in her alteration of the ratio from 12 to 10.74 in 1380 and to 10.29 in 1422.
In England the same train of events made itself felt at almost the same moment. In 1378 great complaints were made of the export of gold and silver, and of the enfeebled state of the money which remained in the realm, "so that if a remedy be not speedily applied, the King will receive no more than 4s. where he should receive 5s."