Gold – according to Dominic Frisby: Medieval Coinage

The Byzantines had their solidus, the Arabs had their dinar, both around 4.5g of gold, but in Dark Age Europe, gold was notable by its absence.

Silver was money, and librae, solidi and denarii, or as we call them, pounds, shillings and pence – £sd – were the measures. The origins were Roman, but Charlemagne brought the system to Europe and Offa to Britain.

There were 12 silver pennies to a shilling, and 20 shillings, or 240 pence, to a pound. A penny was about half the weight of a 1p coin today, around 1.5g.

The mathematics of such a system may seem horrendous to our decimalized brains, but actually it worked. It enabled many fractions of a pound – tenths, eighths and sixths. When dealing with items in dozens, multiplication and division are straightforward. If a dozen pints cost four shillings, then each pint is fourpence. Basic addition, it should be stressed, is easier with decimals.

There were no coins at the time that weighed a pound of silver, whether in Britain or on the continent. The pound or livre was a unit of account. Today we would call it the Troy pound (around 12 ounces or 373g).

In Northern Europe, early in the second Millennium, they began to do things, quite literally, by half measures, well, ⅔ measures. The Mark, which would become the currency of Germany, and probably has its roots in the markets of Cologne, was a weight of about eight ounces. Again it was a convenient divisor, especially as wages were counted in pence. It was 160 pence, or 13 shillings and fourpence.

The £sd system continued for a thousand years or more. The United States of America dropped it in 1792, not long after its revolution. Revolutionary France followed in 1795 – one franc was 10 decimes or 100 centimes. But the UK stayed with it till 1971.

By the 13th century, with Europe’s silver mines exhausted and economics in Italy buoyant, gold began its comeback. Florence led the way with its florin, three and a half grams of pure gold. This would be the first gold coin struck in Europe for maybe 600 years to play a significant commercial role. But with Florence’s extensive trading and banking networks it quickly became the dominant coin for large scale transactions, replacing the bulky Mark bars.

By the fourteenth century, there 150 different varieties of the coin stamped by various issuers around Europe, most notably the Hungarian forint. (Hungary’s mines provided Europe with much of its gold, until the Spanish discovered America).

The original florin saw Florence’s emblem, the fleur-de-lis (literally lily flower, but actually the iris flower) on one side, and John the Baptist on the other. Elsewhere, John the Baptist would be replaced by other patron saints and sometimes kings.

One florin was tradable for a lira (pound) of silver, although it seems the Florentine lira, perhaps for reasons of debasement, only contained around 35 grams of silver. (Silver mines in Europe were heavily exhausted at this point). So the ratio of silver to gold was 10:1.

The French franc, first introduced in 1360, was 3.9 grams of gold (just 0.4g heavier than the florin) and its value was set quite specifically in law as one “livre tournois”. A “livre tournois” was 240 deniers, or 20 sols – the same as pounds, shilling and pence in other words. This was set by decree, rather than the market, and French silver coinage had been similarly debased.

The Dutch guilder has its roots in the florin too. Its symbol was Fl. or ƒ.

England too minted florins – the first coins of Edward III in 1344 – and it seems the reason for doing so was that the 3.5g continental florins were underweight for their value relative to British silver coins. Edward’s coins were effectively double florins, containing 7gs of gold, with a value of six shillings or 72 pence. That would mean 112g of silver had a value of 9g of gold and that the gold-to-silver ratio was thus 11, which ties in with historical averages.

Barely 30 years after Florence struck its first florin in 1252, Venice struck its first ducat, meaning “of the duke”, in 1284. These too contained 3.5g of 24-carat gold. Venice was following the Florentine and Genovese, as it happened, models. One side of the ducat shows the doge kneeling before St Mark, the patron saint of Venice, the other shows Jesus Christ.

Shakespeare fans will recall that 3,000 ducats is the loan Antonio wants to borrow from Shylock, the money lender, in the Merchant of Venice. If he fails to repay, Shylock will cut out a pound of flesh.

Italy’s striking its own coins was no doubt spurred on by Byzantium debasing its gold coin, the hyperpyron or “bezant”, which had for 200 years been the dominant coin of the northern and eastern Mediterranean. Today’s leaders take note: China’s development of its own digital coinage today is no doubt spurred in part by the US’s debasement of its dollar.

As with the florin, other European nations, including Hungary, Austria and Holland, minted their versions of the ducat. Later there would be imitators in Spain, Persia (the Mamluk ashrafi) and the Ottoman Empire (the saltun). Though at first the florin was more widely circulated than the ducat, by the 15th century international traders shifted to the ducat as their preferred currency. The Venetian ducat would become the standard money of the Holy Roman Empire, and the dominant currency of world trade.

Soon, however, when Spain got its hands on American gold, the Spanish dollar came to dominate. And the dollar will be the subject of my next piece.

* Dominic Frisby, author of Daylight Robbery – How Tax Shaped The Past And Will Change The Future, out now in paperback at Amazon and all good bookstores with the audiobook, read by Dominic, on Audible and elsewhere.