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Category: Gold – according to Dominic Frisby

Gold – according to Dominic Frisby: The birth of central banking

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In late medieval and early modern England, banking was mostly the domain of goldsmiths. The wealthy merchants of London needed somewhere to store their gold and the vaults of the wily goldsmiths were the safest place. The merchants paid a fee, and the goldsmiths issued receipts certifying the quantity and purity of the metal they held. Only the original depositor could collect the stored goods.

These certificates evolved into promissory notes, redeemable to the bearer whether he was the original depositor or not, and so did the goldsmiths’ paper become currency. The goldsmith paid one rate of interest to depositors and then lent out the gold at higher rates. The notes he issued to depositors – known as running cash notes, effectively a promise to pay the bearer of the note gold or silver – were the first bank notes and the goldsmiths of London became the forerunners of its great banking tradition, creating this new money based on credit.

No surprise, the rates of interest payable on the gold the smiths lent out were high, often as high as 20%. Interest rates got so high that in 1624 King James I declared they must not exceed 8% and then in 1660 Parliament passed The Usury Act 1660 – “An Act for restraining the taking of Excessive Usury” – which reduced the maximum rate to 6%.

In that same year, Charles II was restored to the throne following years of civil war – ultimately a conflict over who had ultimate power, Parliament or the crown. Parliament won, but something like 4% of the population lost their life in the process.

Charles II was a big spender. A war monger (which king wasn’t?) almost constantly fighting the Dutch during his reign, and a notorious bon viveur – hence his nickname the Merry King – who fathered at least 12 illegitimate children. His spending habits were considerable. But Parliament had a tight grip of the amount of money he could raise through traditional means.

Charles was not a man to be held back, however. To support the Royal Household, which “needed” an annual income of £1.2 million, he persuaded Parliament to impose hearth taxes on the British people. Twice a year tax inspectors would demand entry into your home, rather in the manner of a BBC licence fee collector today, to count the number of fireplaces, and you then had a tax imposed on you. The English hated it, but it became the Crown’s largest single source of income.

Charles secured an alliance with his cousin, King Louis XIV of France, and a pension, by promising to convert to Catholicism.

But above all, he borrowed like mad. By borrowing from the goldsmiths of London, who had a virtual monopoly on banking, Charles was able to bypass Parliament. He effectively sold “tax futures” – future tax tallies to the goldsmiths at a discount, in exchange for gold now. These tax futures were recorded on sticks of wood – tally sticks. Wood for gold has never been a bad trade.

With promissory notes now payable to the bearer, the smiths were able to sell the King’s debt into the secondary market. Thus could the King raise funds for his wars against the Dutch. It was a good trade at first and the Crown would never default on its loans, thought the smiths. But there was a limit to this debt expansion: the amount of gold in London’s goldsmiths’ vaults. Eventually it ran out.

By 1671, the discount on the King’s tax debt reached 10%. New funds barely covered maturing loans. At which point that 1660 Usury Act was cited: interest rates above 6% were against the law – thus were all those recent loans made to the Crown illegal. The King’s tally sticks became worthless. The goldsmiths and their customers had “drawn the short end of the stick”, as the saying derives. They owned the King’s debt, which was illegal for him to repay.

“Gentlemen”, Charles wrote in a letter to the goldsmiths – or words to this effect – “I’m an honest man but unfortunately I am unable to pay my debts back on this occasion. Sorry – will see what I can do”.

This became known as the Great Stop of 1672. Most of London’s goldsmiths were ruined and 10,000 wealthy families in England were “financially embarrassed”. Just as the third Anglo-Dutch War was beginning, the goldsmith bankers of London ceased all further credit to the Crown, and Charles II was forced to recall Parliament to plead for funds for the 82 ships with which he wanted to attack the Dutch.

In 1673, Parliament, concerned with Charles’ alliance with the Catholic French King Louis XIV in a war against the Protestant Dutch, and fearing invasion from Catholic Ireland, declared that all office-holders must deny Catholic ‘transubstantiation’ and take Anglican Communion. Charles’ brother James refused and, suddenly, the possibility that Charles would be succeeded by a Catholic became very real in the public eye. Parliament refused to fund Charles II’s war, and it soon ended with the Second Peace of Westminster, a treaty ratified with exceptional speed and greeted with enthusiasm in both countries, perhaps most of all by commercial interests in Amsterdam and London.

To ease public fears that the royal family was too Catholic, Charles had his brother James’s daughter, Mary, marry the Protestant King William of Orange. The pair would soon become monarchs, overthrowing King James II, Charles’ heir, in the Glorious Revolution of 1687.

To ingratiate the newly crowned monarchs with the conquered people, and ‘to erect a lasting monument of their Majesties’ goodness in every hearth in the kingdom’, Parliament repealed the loathed hearth tax. But it left the new monarchs with a problem. Their largest source of revenue was gone – and the King had wars to fight, against France this time and in Ireland and Scotland, not to mention that £1.2 million cost of the Royal Household.

Charles approached the goldsmiths of London, who said no. But, in 1691, a Scottish businessman by the name of William Paterson came up with a plan for a new type of bank. Members of the public could lend the crown £1.2 million in exchange for 8% interest. A royal charter would enable the bank to operate as a joint-stock company with limited liability, and those who signed up to the scheme become shareholders. No other joint-stock banks would be permitted to issue bank notes, so the bank would have special status and considerable competitive advantage.

The company was called ‘The Governor and the Company of the Bank of England’. In 1694 Charles Montagu, 1st Earl of Halifax, enacted Paterson’s plan. That £1.2 million was raised in just 11 days from 1,268 different people.

The bank was established in an old Roman temple in Walbrook, a street in the City of London, where Mithras was worshipped. Mithras was, among other things, the Roman god of contracts.

And central banking was born.

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

Gold – according to Dominic Frisby: The fragility of paper

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“Money is gold and nothing else”, said the legendary financier J.P. Morgan when testifying before the US Congress.

That’s something I want to think about today as we investigate the history of paper money. Gold is one of, if not the most malleable metals known to man. It is similarly ductile. And yet it has little industrial use, apart from in electronics, dentistry and a few other things.

You can beat gold into a sheet barely an atom thick, but it is almost impossible to destroy it. It can be dissolved through using aqua regia, but the gold can be reconstituted again. All the gold that has ever been still exists. Gold is perhaps the oldest substance on earth, thought to have originated as a result of collisions and explosions in the stars billions of years ago. All that gold created still exists – somewhere. Some of it embedded in rocks deep beneath the earth’s surface, some of it hanging from people’s necks.

This permanent substance with no use. What a contradiction.

Gold’s only purpose is to be wealth, to be a store and display of wealth. It is money, pure money.

Gold was the first metal that man made use of. He was hanging from his neck the gold nuggets he found in riverbeds as he hunted and gathered to display beauty, wealth and status, and giving them to other humans as reward, thousands of years before he discovered smelting and began using the other metals he encountered – tin, copper and silver – to make tools.

Stone Age man used gold to store and display wealth, and to transfer it. He used gold for exactly the same reasons as does his 21st century descendent. Gold is pure wealth. It is pure money.

But it is not the only money, and it never has been, not since the dawn of civilisation. In Ancient Mesopotamia, man used mud tokens, representing sheep or barley, baked inside clay balls to log debts owed. He began inscribing bits of mud for the same purpose, and so did man begin writing. In Ancient China, man recorded his debts on bits of leather. After the invention of printing he started using paper. Today the records are stored on and exchanged with computers. This is promissory money, debt money – the credit JP Morgan was referring to in the pre-amble to the above quote.

Promises disappear. Gold doesn’t. They are two quite different forms of money and it’s important in one’s mind to distinguish between the two.

Promissory money has evolved as communication has evolved. Shortly after the first cables were laid across the Atlantic Ocean in the mid-19th century, the first money was sent – hence why the pound-dollar exchange rate is still known as cable. But gold wasn’t actually sent across the Atlantic. Just a promise was sent, between two parties who trusted each other. Today millions of promises are sent across the internet every second. Promissory money evolves with communication technology. In fact, promissory money is often the spur, the impetus for communication technology to evolve. Promises transfer as quick as words.

The history of promissory money, the history of credit in other words, and the history of communication technology are thus intertwined.

The breakthrough communication technology of the Middle Ages was of course Gutenberg’s printing press, and paper money soon followed.

China had been using leather promissory notes as far back as 118BC, and Carthage even earlier in 146BC. Carthage is generally thought to have been the first user of lightweight promissory notes. Bank notes began appearing in China in the 7th century, during the Tang and Song dynasties – China was ahead of Europe as far as printing was concerned.

During the crusades in the 12th century, the Knights Templar issued promissory notes to pilgrims. A pilgrim could deposit valuables with a local Templar before embarking on his quest for the Holy Land and receive a document indicating the value of his deposit. On reaching the Holy Land, he could use his document to receive funds from the treasury of equal value. I imagine fraud must have been an issue for the Templars, but at least the pilgrim mitigated any potential financial damage from being mugged en route.

The use of paper money spread for this very reason. Paper is more portable than metal. The trader, merchant or voyager carrying paper is less vulnerable than if he were carrying metal, and the use of paper promises grew. They became written orders to pay the amount to whoever had the note in their possession. The term “bank note” is thought to derive from the benches (“banchi”) of Florence in the 14th century – the stone benches and tables that once proliferated on piazzas, streets, loggias, and palace façades, where people sat, talked, traded and exchanged. In many cases there were rows of benches and tables – effectively outdoor civic centres. A holder of “nota di banco” – a note from the bench – could exchange his note for the gold or silver of a banker. Although the practice of banking goes all the way back to Ancient Babylon, the word derives from those benches of Renaissance Italy.

But Gutenberg’s invention opened the door in Europe for paper money to proliferate. Paper would become currency, and by the 17th century those Italian paper promises would become institutionalised with the first central banks.

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

Gold – according to Dominic Frisby: Big heads, crowns and bobs

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Today, as we continue to trace our way through the history of money, we look at English money in the early modern period and beyond. I’m not sure how the early modern period got its name, as, while it is early, it is not modern.

I’m reluctant to put precise dates on it as some historical pedant will no doubt start trolling me on Twitter if I do, but, when we say early modern, we are talking , roughly, about the 300 years from the mid-15th century through to the mid-18th when the far more dramatically named Age of Revolutions began.

We start with one of my favourite kings, Henry VII. His successors, Henry VIII and Elizabeth I, tend to get most of the publicity, but Henry VII was one heck of a king and a shrewd businessman at that.

Henry ruled for 22 years from 1485-1509, and, going against the tendencies of the English kings of the previous 350 years, his reign saw just one overseas conflict. Instead of war, he pursued overseas marriages and alliances. His taxation and legislation (he banned private armies) of the barons effectively ended their power, and with it feudalism; without private armies the barons struggled to enforce the collection of tithes. His policies established the supremacy of the crown and the freedom of the mercantile classes. It laid the foundations for the extraordinary expansion that took place in Tudor England. He was the first English king for centuries, if ever, to run a surplus.

He embraced economic change and new technology. The wool trade exploded. England got its first blast furnace (to manufacture cannon balls) and so began its iron industry. Weights were standardised and, of relevance here, new coins were issued to standardise money.

The penny was the basic monetary unit of the period. It had been for centuries and its symbol – d – goes all the way back to the denarius of Britain’s Roman rulers over 1,000 years earlier. 240 silver pennies made a pound – a pound of sterling silver. There was not a pound coin, as such – it would not have been practical; it was a measure of weight and a unit of account. Its symbol – £ – the letter L with a bar through it, was an abbreviation of the Latin word “libra” meaning pound – hence lb. Like pounds, shillings had not previously been minted, though their value had been used for accountancy purposes for many centuries – 20 shillings equalled one pound.

Henry began minting 12d coins known as testoons. These were basically copies of the Italian coin, the testone, which means “big head”, and the testoon was the first English coin to bear a real, rather than representative portrait of the monarch.

Testoons quickly became known as shillings, carrying the symbol s – an abbreviation of sestertius. 12 pennies equalled a shilling and 20 shillings equalled a pound – thus 240 pennies also equalled a pound.

The shilling had a weight of about 1/5th of an ounce and legend has it that one shilling bought you a sheep.

Despite numerous debasements, it was an extraordinarily successful coin that was minted in the reign of every monarch since, including Elizabeth II. The shilling lasted until decimalisation in 1971, but even today we refer to the 5p (of which there are twenty in a pound) as a shilling. The shilling had the nickname a “bob” – as in “it cost me ten bob”.

The minting of shillings was part of a wider trend in Europe towards larger silver coins, which would eventually lead to one ounce Spanish dollars, English crowns, pesos, tholars, daalders and dalers, and eventually the US dollar itself.

It was Henry VII’s successor Henry VIII who gave England its first crown coin in 1526 – but this was made of gold. The first silver crown came in 1551, during the reign of Edward VI. It was roughly an ounce of 92.5% silver, and 7.5% copper (for added hardness to discourage clipping). Soon coins came with milled edges too in order to discourage such nefarious activity. The crown had a value of five shillings.

When the United Kingdom united in 1707 the English crown became the British crown, still with a value of five shillings and still sterling, i.e. 92.5% silver. As it was the same size, the crown was often nicknamed the dollar. Its circulation as a currency began to fall into decline in the 19th century.
The silver content in the crown fell from 92.5% to 50% in 1920, and then altogether after 1947. After decimalisation in 1971 its nominal value was 25p – still five shillings, although from 1990, the face value of new crown coins was upgraded from five shillings to five pounds. There’s debasement for you. The value of a pound has fallen to a shilling.

Henry VII also gave England its first gold sovereign, half an ounce of 23-carat gold, which had a value of one pound and one shilling. Henry VIII reduced the carat to 22 (92% purity), which became the standard. Even today sovereigns are 22 carat.

The sovereign lasted over a hundred years until King James I issued a new coin in 1604 called the ‘unite’ – to symbolise that he had merged the Scottish and English crowns. It never really took off. It was replaced by the laurel, then the broad and eventually the guinea in 1663.

The guinea, so called after the West African region where most of the gold to mint it was mined, was one quarter of an ounce of gold and started with a value of a pound. This fluctuated, depending on the price of silver, but Sir Isaac Newton’s Great Recoinage of 1716 fixed the value at 21 shillings, until the next great recoinage in 1816, when it ceased circulation.

Even after the guinea was replaced by the sovereign in the Great Recoinage of 1816, and the pound became the major unit of currency, the guinea was long used as a unit of account, retaining its value of 21 shillings (£1.05). With its aristocratic connotations professional fees, land, horses, art, bespoke tailoring, furniture, and other ‘luxury’ items were often quoted in guineas even until decimalisation in 1971.

The other great evolution in English money, which began in the early modern period, was the use of paper – and we’ll cover that next time.

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

Gold – according to Dominic Frisby: How the dollar got its name

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At the beginning of the 16th century, a mining prospector by the name of Stefan Schlick found silver in the Ore mountains of Bohemia, not far from what today is the border between Germany and the Czech Republic.

As is the way with mining discoveries, many soon moved to the area in search of opportunity. The mining camp became a village which became a town – the town of Joachimsthal – literally Joachim’s Dale or, better, Joaquin’s Valley. Stefan Schlick’s family fortune was made for generations. We now know him as Count Schlick, and his descendants would be known for their military endeavours and for their amours, as well as for their silver.

Schlick started minting coins with his newly mined silver, similar in size and weight to the Guldengroschen (shortened to Guldener), which were just gaining popularity at the time – each 1⁄8th of a Cologne Mark of silver. Schlick called his coins, which weighed roughly an ounce and were an inch and a half (4cm) across “Joachimsthalers”. German speakers to the north and west shortened this to “thaler”, while Czech and Slavic speakers to the south and east called them “tolars”.

On one side the coin was Joachim, father of the Virgin Mary, and on the other the Bohemian lion.

The Holy Roman Empire adopted the denomination, and the Reichstaler, 401 grains of silver (a little bit less than an ounce) became the standard coin of the Holy Roman Empire from 1566 to 1750.

Large silver coins were becoming ubiquitous in the period; the corresponding English coin would have been the crown. The French had their ecu, the Spanish their peso, the Dutch their daalder, the Scandinavians their daler and the Swiss the thaler.

But with the large quantities of silver discovered by the Conquistadors in Mexico, Peru and Bolivia in the 16th century, it was the Spanish peso that would become the most widespread, a coin of worldwide importance, essential to trade between Europe, America and even Asia. It was more commonly known as the Spanish dollar, and many historians see the Spanish dollar as the first international currency, although Alexander the Great might have something to say about that.

It was a truly international coin though, as it made its way across the high seas through Spanish trading networks, which, thanks to the voyages of Vasco de Gama, now extended to South-East Asia as well the Americas. The Spanish dollar became the basis for national currencies from as far as Japan and the Philippines to China and India and all the way to Canada, not to mention the Spanish speaking nations of South and Central America somewhere in between. Over the course of several centuries, millions of Spanish dollars were minted, made possible by the extraordinary silver discoveries in the New World, especially at Potosi, Lima and Mexico City.

Why did every pirate’s parrot worth his salt greedily cry “pieces of eight”? The reason was the Spanish dollar. One Spanish dollar was eight reales. It was, literally, a piece of eight. It even had an 8 stamped on it. No wonder pirates craved it. From the 16th to the 19th century, the Spanish dollar was probably the most stable and least debased silver coin in the Western world.

In the 17th and 18th centuries it became the most widely circulating coin in North America too. Spanish dollars made their way into North American colonies via trade with the West Indies.

There was a shortage of British coins in North America thanks to Britain’s typically short-sighted policies towards its colony. British authorities refused to allow the colonists to mint their own money. Worried about shortages at home, they also limited the export of gold and silver coins. Settlers, who were not usually rich in gold and silver anyway, often ran out of hard money, and, early on, found themselves adopting the wampum shells favoured by the Native Americans as currency. In 1637 Massachusetts even declared them legal tender.

Settlers also used commodities such as cod, corn, beaver skins, nails and tobacco as money, such was the shortage of coin. This led to all sorts of problems. Tobacco crops, in particular, deteriorated quickly and so lost value. Nails led to people burning down barns to get at the “money” that held them together.

Colonial governments also issued paper money to facilitate economic activities, but, despite the British Parliament passing several currency acts to regulate colonial paper money, it kept losing its value, even between states.

No wonder Spanish dollars proved so useful and became so widespread. Colonists wanted them for the same reasons as their pirate cousins.

With the cries “no taxation without representation” the colonists rose up against their British overlords in 1776, finally winning their independence in 1783. To fund their war effort, the colonists began issuing their own paper money – the Continental. But it quickly lost its value, mainly through overprinting to meet the cost of war. British counterfeiters did their bit for the war effort too, duplicating the notes to devalue them.

First issued in 1776, by 1778 the notes had lost 80% of their value. By 1780, the notes were worth 1⁄40th of their face value. By 1781, they had become so worthless they ceased to circulate as money. Hence the expression, “not worth a Continental.”

The runaway inflation and the collapse of the Continental is what prompted the Founding Fathers to include in their Constitution that often quoted phrase: “No State shall … coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts.” The US authorities broke that contract, of course, in 1971.

After the Revolution, Alexander Hamilton, Secretary to the Treasury, had the task of forming a currency for this fledgling nation. He had a random selection of Spanish dollars weighed, and based on the findings, specified in the Coinage Act of 1792 that the U.S. dollar would contain 371.25 grains (24 g) pure or 416 grains (27 g) standard silver, so that it would have “the value of a Spanish milled dollar as the same is now current”. The dollar, the basic unit of account for the United States, was modelled on the Spanish dollar. Even the “$” symbol was based on the inscription on one side of the Spanish dollar – the old pˢ (for peso) looking, to our modern eyes, like an S.

Spanish coinage remained legal tender in the United States until 1857. The pricing of equities on U.S. stock exchanges in 1⁄8-dollar denominations persisted until 1997.

The global reserve currency of the world – built on a Bohemian name, a Spanish network and solid south and central American silver.
And all a dollar means is, “from the dale”.

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

Gold – according to Dominic Frisby: Medieval Coinage

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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.

How the Pound Sterling got its name

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Today we consider the coins of Anglo-Saxon Britain.

The winter of 406-7 was cold, very cold in Europe; the Rhine froze over. Hoards of Alans, Vandals, and Suebi made their way across and into the Roman empire, no doubt violent with hunger from the cold, and greedy for what they had admired for so long on the other side. But the devastation they wrought met with no effective response from Rome.

In Britain, Rome had already lost the north and west to warlords. The Roman armies in Britain, who had probably not been paid, now feared these Germanic tribes would next cross into Britain. So, led by Constantine III, who would declare himself Western Roman Emperor, they made their way across the Channel into Gaul, leaving ‘Britannia’ to fend for itself. We do not really know if it was Rome that gave up Britain, or Britain that gave up Rome, but, either way, the Dark Ages had well and truly begun.

Gold, silver and bronze coins had found widespread use under the Romans. They were used to pay taxes, and often re-minted to pay the army and the civil service. With Constantine’s departure, there was almost no new minting and very little importation of new coins. Judging by the numerous hoards found from the period, many buried their money – presumably to keep it safe in this unruly new environment of no military protection and merciless invasion from Angles, Saxons and other tribes from the continent. With the lack of new supply, existing coins were re-used. Clipping became widespread. The previously vigorous late Roman monetary system lay in tatters. Minting did not properly start up again for at least another 200 years.

The Anglo-Saxon invaders, at first, did not use gold coins so much as money but for decoration. King Eadbald of Kent was the first Anglo-Saxon to mint coins around AD 625 – small, gold coins called scillingas (shillings), modelled on coins from France. Numismatists now call them thrymsas.

As the century progressed, these coins grew increasingly pale, until there was very little gold in them at all. From about 675, small, thick, silver coins known as sceattas came into use in all the countries around the North Sea, and the gold shilling was superseded by the silver penning, or penny. Gold fell out of use almost altogether, though silver had something of a boom.

It’s thought the word ‘penny’, like the German ‘Pfennig’ might come from the pans into which the molten metal for making was poured. ‘Pfanne’ is the German for ‘pan’.

The Mercian king Offa – he of dyke fame – reigned for almost 40 years from 757 to 796. He must be seen as one of the greatest Anglo-Saxon kings, certainly the greatest of the 8th century. As well as his dyke, which protected his kingdom from Welsh invaders, he is credited for the widespread adoption of the silver penny and the pound as a unit of account. His coins, with portraits and intricate designs, were as accomplished as anywhere in Europe at the time.

His system, though probably imported from the Franks, for reasons which will become clear, almost certainly dates back to the Romans. 12 silver pence equalled a shilling. 20 shillings equalled a pound weight of silver. Thus 240 silver pennies, weighing about 1.4g each (sorry for mixing imperial and metric) was equivalent to one pound weight of silver. Thus was the pound a pound of sterling silver.

The Latin word for a ‘pound’ is libra and the pound sign, £, is a stylised writing of the letter L. The d meanwhile used for pence comes from the Latin denarius. Thus the roots of the system were almost certainly Roman.

Offa’s system remained standard until the 16th century and, in many ways, until decimalisation in 1971. You had to add up each unit of currency separately in this format: £3.9.4, which would be spoken “three pounds, nine shillings and four pence”, or “three-pounds, nine and four”. To add, you would calculate each unit separately, then convert pence to shilling, leaving leftover pence in the right column, then convert the shillings to pounds (with leftover shillings in the middle column), and then add up the total pounds.

Offa’s systems were gradually consolidated over the subsequent centuries, especially as the kingdoms of Anglo-Saxon Britain began to merge. In the 860s, for example, the kingdoms of Mercia and Wessex formed an alliance by which coinage of a common design could circulate through both of their lands.

The Viking invaders over this period found coinage systems far more sophisticated than their own and the Danegeld, with which they were bought off, was paid in silver pennies. I had always thought the “geld” in Danegeld meant “gold” but in fact it means yield, and the Viking invaders demanded this tribute wherever in Europe they ravaged.

The system was quite efficient – on both sides. For the invaders, they were often paid more than they could raise by looting, without having to fight. For the locals, the ravaging was avoided, although, as Rudyard Kipling noted in his poem on the subject, “if once you have paid him the Dane-geld, You never get rid of the Dane”.

The Danegeld probably also motivated improvements to Anglo-Saxon coinage. To pay his own soldiers, to build forts and ships and to pay Dangeld, Alfred the Great increased the number of mints to at least eight. His successor Athelstan had 30 and, to keep order, passed a law in 928 stating that England should have just one currency. Ever since there has been just one. This was many centuries before standardisation in France, Germany or Italy.

When William Duke of Normandy invaded England in 1066, he succeeded where his Viking ancestors had failed for 270 years: he managed to conquer England. It meant he could take control of English coinage, which was far superior to that which he possessed in his homeland. William’s coins struck back in Normandy are remarkable for how poor they are, compared to their English counterparts. He had at least seven types of English pennies struck with his name on. It meant he was able to achieve the rebranding that was so important to him. No longer was he William the Bastard, as he was then known. Now he was William the Conqueror. He let the world know through his coins. And that’s how we know him today.

* 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.

Gold – according to Dominic Frisby: How the Pound Sterling got its name

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Today we consider the coins of Anglo-Saxon Britain.

The winter of 406-7 was cold, very cold in Europe; the Rhine froze over. Hoards of Alans, Vandals, and Suebi made their way across and into the Roman empire, no doubt violent with hunger from the cold, and greedy for what they had admired for so long on the other side. But the devastation they wrought met with no effective response from Rome.

In Britain, Rome had already lost the north and west to warlords. The Roman armies in Britain, who had probably not been paid, now feared these Germanic tribes would next cross into Britain. So, led by Constantine III, who would declare himself Western Roman Emperor, they made their way across the Channel into Gaul, leaving ‘Britannia’ to fend for itself. We do not really know if it was Rome that gave up Britain, or Britain that gave up Rome, but, either way, the Dark Ages had well and truly begun.

Gold, silver and bronze coins had found widespread use under the Romans. They were used to pay taxes, and often re-minted to pay the army and the civil service. With Constantine’s departure, there was almost no new minting and very little importation of new coins. Judging by the numerous hoards found from the period, many buried their money – presumably to keep it safe in this unruly new environment of no military protection and merciless invasion from Angles, Saxons and other tribes from the continent. With the lack of new supply, existing coins were re-used. Clipping became widespread. The previously vigorous late Roman monetary system lay in tatters. Minting did not properly start up again for at least another 200 years.

The Anglo-Saxon invaders, at first, did not use gold coins so much as money but for decoration. King Eadbald of Kent was the first Anglo-Saxon to mint coins around AD 625 – small, gold coins called scillingas (shillings), modelled on coins from France. Numismatists now call them thrymsas.

As the century progressed, these coins grew increasingly pale, until there was very little gold in them at all. From about 675, small, thick, silver coins known as sceattas came into use in all the countries around the North Sea, and the gold shilling was superseded by the silver penning, or penny. Gold fell out of use almost altogether, though silver had something of a boom.

It’s thought the word ‘penny’, like the German ‘Pfennig’ might come from the pans into which the molten metal for making was poured. ‘Pfanne’ is the German for ‘pan’.

The Mercian king Offa – he of dyke fame – reigned for almost 40 years from 757 to 796. He must be seen as one of the greatest Anglo-Saxon kings, certainly the greatest of the 8th century. As well as his dyke, which protected his kingdom from Welsh invaders, he is credited for the widespread adoption of the silver penny and the pound as a unit of account. His coins, with portraits and intricate designs, were as accomplished as anywhere in Europe at the time.

His system, though probably imported from the Franks, for reasons which will become clear, almost certainly dates back to the Romans. 12 silver pence equalled a shilling. 20 shillings equalled a pound weight of silver. Thus 240 silver pennies, weighing about 1.4g each (sorry for mixing imperial and metric) was equivalent to one pound weight of silver. Thus was the pound a pound of sterling silver.

The Latin word for a ‘pound’ is libra and the pound sign, £, is a stylised writing of the letter L. The d meanwhile used for pence comes from the Latin denarius. Thus the roots of the system were almost certainly Roman.

Offa’s system remained standard until the 16th century and, in many ways, until decimalisation in 1971. You had to add up each unit of currency separately in this format: £3.9.4, which would be spoken “three pounds, nine shillings and four pence”, or “three-pounds, nine and four”. To add, you would calculate each unit separately, then convert pence to shilling, leaving leftover pence in the right column, then convert the shillings to pounds (with leftover shillings in the middle column), and then add up the total pounds.

Offa’s systems were gradually consolidated over the subsequent centuries, especially as the kingdoms of Anglo-Saxon Britain began to merge. In the 860s, for example, the kingdoms of Mercia and Wessex formed an alliance by which coinage of a common design could circulate through both of their lands.

The Viking invaders over this period found coinage systems far more sophisticated than their own and the Danegeld, with which they were bought off, was paid in silver pennies. I had always thought the “geld” in Danegeld meant “gold” but in fact it means yield, and the Viking invaders demanded this tribute wherever in Europe they ravaged.

The system was quite efficient – on both sides. For the invaders, they were often paid more than they could raise by looting, without having to fight. For the locals, the ravaging was avoided, although, as Rudyard Kipling noted in his poem on the subject, “if once you have paid him the Dane-geld, You never get rid of the Dane”.

The Danegeld probably also motivated improvements to Anglo-Saxon coinage. To pay his own soldiers, to build forts and ships and to pay Dangeld, Alfred the Great increased the number of mints to at least eight. His successor Athelstan had 30 and, to keep order, passed a law in 928 stating that England should have just one currency. Ever since there has been just one. This was many centuries before standardisation in France, Germany or Italy.

When William Duke of Normandy invaded England in 1066, he succeeded where his Viking ancestors had failed for 270 years: he managed to conquer England. It meant he could take control of English coinage, which was far superior to that which he possessed in his homeland. William’s coins struck back in Normandy are remarkable for how poor they are, compared to their English counterparts. He had at least seven types of English pennies struck with his name on. It meant he was able to achieve the rebranding that was so important to him. No longer was he William the Bastard, as he was then known. Now he was William the Conqueror. He let the world know through his coins. And that’s how we know him today.

* 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.

Gold – according to Dominic Frisby: From Constantine to the Islamic empire

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By the time Rome fell in 476 AD, after a hundred years of struggle against Goths, Huns and other barbarians, the nucleus of the empire had long since moved east to Constantinople, today Istanbul.

The emperor Constantine I had declared it a ‘New Rome’ in 330 AD, and this ‘Eastern Roman Empire’ would survive another thousand years, a trading hub and military buffer between Europe and Asia, before it finally fell to the Ottomans in 1453.

We may call it the ‘Byzantine Empire’ today, but its citizens called themselves Romans and their empire was, to them at least, the Roman Empire. Its zenith came during the reign of Justinian I, who ruled during 527–565, when much of North Africa, as well as Italy and Rome itself, had fallen under its authority.

War with the Sasanians to the east in the early 7th century, however, exhausted the empire’s resources, and paved the way for the Muslim invaders to take many of its richest provinces from Egypt to Syria.

Byzantine money, meanwhile, followed the trajectory of the money of most empires: it started sound, and ended worthless.

Diocletian had introduced the solidus in 301 AD to Rome to replace the aureus, and under Constantine I use of the solidus became widespread. Constantine I, or Constantine the Great as he is known, must be one of the more capable individuals who ever lived. Despite being of low birth, he fought and won battles as far afield as Persia and Britain, emerged victorious from the Roman civil wars, relocated Rome to Byzantium, founded an empire that lasted 1,000 years and eradicated the rampant inflation that had infiltrated the empire with the implementation of the solidus, the gold coin that became the standard for Byzantine and European currencies for hundreds of years.

The solidus was 4.5 grams of gold, and it remained essentially unaltered in weight, dimensions and purity, until the 10th century. Most were minted in Constantinople itself, but other cities of the empire such as Thessalonica, Rome, Syracuse, Alexandria, Carthage, and Jerusalem would also mint coins. In medieval Europe, one solidus was worth 12 silver pennies, and the Italian word for money, ‘soldi’, has its roots there. In Western Europe, the valued Byzantine solidus also became known as the “bezant”, although legally solidi were not supposed to be exported beyond the empire – else how would the emperor get his taxes?

Smaller denomination money tended to be bronze. Silver was not as widespread as it had been under the Greeks or Romans.

It was in the 11th century that the debasement began in earnest. The debasement was gradual at first then accelerated rapidly – heard that one before? The carats were reduced from 24, to 21 then to 18; to 16, to 14 to 8 and eventually below. That process took 50 years. The solidus was then abandoned and replaced with another coin, the hyperpyron. By the time Constantinople fell to the Ottomans, Byzantium had stopped issuing gold coins altogether. The silver stavraton was the currency.

Constantinople may have fallen, the Byzantine empire may have gone, but the golden constant had not. It lived on elsewhere.

Thanks to victory in battle, exhausted Byzantine and Sasanian empires, astute occupation of trade routes and promises of equal treatment for all, within three decades of the death of Mohammad in 632AD, the Islamic empire had become one of the largest in the world. Arabian solidi, minted from the captured gold supplies of the upper Nile, were soon circulating.

The Islamic armies swept across North Africa and eventually into Spain. All fell before them. Conquered lands put up little resistance. Heavily burdened with taxes as they were under their previous regimes, they had neither the means nor the inclination. “In the name of God, the Merciful and Compassionate”, exhorted a conquering general, “become Muslim and be saved. If not, accept protection from us and pay the poll tax. If not, I shall come against you with men who love death as you love wine”. Death, taxes or Islam – that was the choice. Many chose Islam. Even those who did not convert were often glad of the relief the Islamic invaders brought. The largest body of converts were Christians.

Islamic money soon followed, and, just as they would leave existing tax structures in place, the Islamic conquerors mimicked the money of their predecessors. Even the word dinar comes from the Latin denarius. But the denarius was a silver coin, the Arabic dinar was 4.4 grams of gold, similar in weight to the solidus. However, the overtly Christian symbolism inscribed on the solidus would, first, become religiously innocuous pillars on the Arabic equivalent and, eventually, simple inscriptions, expressing the ruler’s faith.

The silver dirham – about 3 grams of silver – also came into widespread use. Like the Roman denarius, and the Greek tetradrachm before it, these tended to be minted wherever soldiers would be receiving their pay – from Andalusia in Spain, through North Africa to Georgia, as far as Pakistan and India.

Islamic gold coinage became one of the senior currencies of the medieval world, especially across the Mediterranean. Silver dirhams even reached Scandinavia, probably as a result of the fur trade.

The word dirhem derives from the Greek drachma, meaning handful, although, like the dinar, the dirhem was a measure of weight. Both the dinar and the dirhem predate Mohammed, even if they were embraced by his successors. Currencies of the same name are widely used throughout the Arab world today, from the Moroccan dirham to the Kuwaiti dinar, although sadly, like their western counterparts, which have also kept their names, none have kept their underlying gold or silver.

* 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.

Gold – according to Dominic Frisby: The rise and fall of sound money in ancient Rome

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Ancient Rome is probably more famous for debasing its money than for its money itself. But for its debasement to have been so effective and so prolonged, it needed an established and widely- recognised, credible money as a starting point. The geology of central Italy is not particularly abundant in gold and silver, and it was only really after Rome began expanding beyond central Italy in the third century BCE that it started using gold and silver. Commodity money tends to be determined by the resources available. Bronze (copper and tin) is abundant in the area, and bronze, in the form of weights – aes rude or ‘rugged bronze’ – often as heavy as 300 grams (11oz), was the early currency of choice.

But as the Republic expanded, so did access to gold and silver – either from loot, tributes or mine supply – and so these precious metals made their way into Roman money.

The first silver denarius was minted in 211BCE. Within 50 or 60 years Roman coinage was widespread across Italy. Much of the silver to mint the coins came from mines in Macedonia, which Rome now controlled. For the next 500 years this silver coin, containing about 4 grams (0.12oz) of silver – a little bit more than the weight of a 1p coin – would be the backbone currency of Rome. One denarius was exchangeable for ten pounds of bronze – hence its name, which means “containing ten”.

The purchasing power of a denarius would be more than the underlying metal value – ranging between 1.5 and 3 times the value. That’s seigniorage for you

The denarius lives on today, especially in many Latin languages. The Italian word for money is “denaro”, “dinero” is Spanish, “dinheiro” is Portugese, “denar” is Slovenian. In several Arab nations, the currency is the dinar.

When the denarius was introduced it was 95-98% pure silver. To give you some kind of benchmark, sterling silver is only 92.5% pure. The infamous debasement began shortly after the Republic became Empire, and control of money passed from the Senate to the Emperor. It lasted several hundred years. Heads of emperors began to appear on coins, and so, as a result, did their use as imperial propaganda. The more coins circulating around the ever-growing empire, spreading the message of Roman imperial might, the better.

By the first century AD, taxation and tribute only covered around 80% of the imperial budget, however. The shortfall was met by mining and the loot of newly conquered nations. But mining is a fickle business at the best of times, and the empire was no longer expanding at the same rate, so this was a risky strategy that could lead to shortfalls, especially under extravagant emperors. The solution to excess spending, as today, was not to rein it in, but to debase the currency. In AD 64, the Emperor Nero reduced both the amount of silver in a denarius (to 3.5grams) as well as the purity of the metal itself (to 93.5%).

A few decades later, the Roman Empire reached its greatest extent, under Trajan. From that point on, it receded. That meant the supply of loot from newly conquered territories also shrank.

By lowering the amount of silver in its coins, Rome could produce more coins and ‘stretch’ its budget. Successive emperors followed Nero’s strategy. As with boiling frogs and the debasement of currency today, the process was gradual. 100 years after Nero, around 150 AD, the purity of silver had been reduced to 83%. By 250 AD the silver purity was 50%. By 275 AD it was just 5%. As time progressed, the sleight of hand was exposed. By the time of Diocletian, who was emperor from 284 to 305 AD, there was so little precious metal in the money the emperor had to resort to price controls. It was under Diocletian that the last denarii were minted.

By the way, you can pick up genuine denarii on eBay for less than fifty quid, sometimes even under a tenner – surprisingly cheap given the underlying history, I’d say.

The most important gold coin of Ancient Rome was the aureus, similar in size to the denarius, but containing roughly twice the weight of precious metal – 8 grams, or ¼ ounce of gold (gold is denser than silver). It would be roughly the same weight as a 2p today. 25 denarii would get you an aureus, so the gold-silver ratio would have been about 1:12, the historical norm.

Nero then reduced the gold content to 7.3g, which perhaps coincidentally, was the same weight as the sovereign of the British Empire. By 210 AD the gold content had fallen to 6.3g. However, unlike the silver denarius, the aureus kept its near-100%, 24-carat purity.

By the fourth century, the idea of obtaining an aureus for 25 denarii was long gone. In 301, one gold aureus was worth 833 denarii; barely a decade later, that same aureus was worth 4,350 denarii.

In 337, Constantine replaced the aureus with the solidus – about 4.5 grams of 24-carat gold. Initially, one solidus was worth 275,000 denarii, but by 356, one solidus was worth 4,600,000 denarii. The good money had chased out the bad. Talk about inflation!

In a breath-taking blow of hypocrisy, that even leaders today would struggle to pull off, the Roman authorities, despite the declining quality of the metal content of their denarius, refused to accept anything other than gold and silver in payment of taxes.

By the way, you can’t pick up aureus in eBay for anything like as cheap as you can a denarius. Pure money keeps its purchasing power. In fact, the solidus outlasted the Roman Empire itself. I’ve got one minted by the Byzantine emperor Justinian. I got it for little more than the value of the underlying metal. Seigniorage doesn’t always last!

Of course, one key reason for the relentless debasement was a bloated Roman state that was incapable of living within its means. But another reason must be lack of raw material. As we have already noted, central Italy had little mine supply so the metal had to be obtained elsewhere. Much of it came in the form of war booty from newly defeated territories, and the subsequent tributes and taxes levied. The problem with this model is that it relied on constant expansion. When the expansion ceased, Rome had to rely on new mine supply alone to expand its money supply. So instead it turned to debasement.

No wonder Rome was constantly at war. That was its business model. But with the expense of continual wars, without the corresponding payback of loot from the newly conquered, the model was unsustainable. It’s not unlike the two world wars of the 20th century for the British Empire. The wars of previous centuries had more than paid for themselves, but for their efforts in the Second World War, as far as the loot of a newly conquered nation is concerned, the British got very little.

One final titbit. Consider the Roman aureus of Hadrian from 117AD, when he became emperor, and when the Roman empire was at its most extensive. On the reverse, Trajan, the previous emperor passes a globe – the empire – to Hadrian who accepts it. It seems the Romans knew then that the world was round.

* 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.

Gold – according to Dominic Frisby: Coins in Ancient Rome

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Coins in Ancient Rome Dominic Frisby

Rome was founded by refugees fleeing the Trojan war. The poet Virgil tells the story of prince Aeneas and his band who fled Troy by boat as it fell to the Greeks. After many months and rough seas, they landed on the banks of the river Tiber. The men wanted to go back to sea, but the women persuaded them to stay. The women got their way. Given what Rome achieved later, it was probably a good decision – easy to say with hindsight, of course – although Virgil says it was not so much a conscious decision, as destined by the gods.

Another Roman founding story gives us the precise date on which the city was founded – 21st April 753 BC. The background is this. There was one King Amulius who deposed his brother to take the throne of Alba Longa. His brother’s daughter, Rhea Silva, meanwhile was raped by Mars, the god of war, and gave birth to twins, Romulus and Remus – demi-gods, no less, and also descendants of Aeneas. Fearing for his kingdom, King Amulius ordered they be drowned, but a she-wolf saved them and went on to rear them. When the twins were old enough, they came and dealt with the treacherous Amulius, restored their grand-father to the throne and founded the city of Rome.

Rome began as a kind of sanctuary for estranged young men, exiles and the unwanted. To bolster its population they took to kidnapping maidens from nearby kingdoms.

At this point in the story of Rome, coins barely existed in Italy or anywhere else. It was across the Mediterranean in Lydia (today’s Turkey), that the technology of coinage was first employed around 600BC, some 150 years after Romulus and Remus ‘founded’ Rome. Over the next few centuries coins would gradually spread across the Mediterranean. In Italy, the Etruscans were using coins before the Romans.

Rome ‘transitioned’, to use an awful modern word, from monarchy to republic in 509BC. The next five hundred years would see the Roman Republic fight a seemingly never-ending series of wars as its empire gradually expanded. Their enemies were Latins, Etruscans, Celts, Gauls, Samnites, eventually Carthaginians, Iberians, and Macedonians. First they took control of central Italy, then the south and into Sicily. From Northern Italy they took control of Provence. They expanded into Greece, Spain and North Africa. By 52BC, seven centuries after Romulus and Remus, the Romans had taken Britain.

By then Roman coinage was widespread and established. But the process was slow and gradual.

Salt was an essential commodity and reasonably fungible, so it also found use as money. In ancient Greece salt was traded for slaves. It’s thought the expression ‘not worth his salt’ – unworthy of his pay – has its roots here. Soldiers of the early Roman Republic in the fourth and probably fifth centuries BC would receive a handful of salt as pay – from where we derive the word, ‘Salary’.

This prized commodity, over which wars were fought, was part of the reason the Romans began building their great roads. The salt trade was both lucrative and essential, and they needed to get salt back to Rome to support its growing population. The Via Salaria was built to move salt from the pans at the mouth of the Tiber inland to Rome itself.

Sheep were also used as money, it seems, and the Latin word for money (pecunia) is thought to derive from the word for sheep (pecus). Irregularly shaped pieces of rough bronze, which needed to be weighed with each transaction, were also used, and this same bronze would make Rome’s first standardised coins.

The Republic started minting its own coins from about the third century. Rome seems to have been rather slow adapting coins compared to the rest of the Mediterranean, especially Greece and Asia Minor. The Romans were limited by the natural resources they had available. Silver and gold were scarce, though the bronze that made its first coins was abundant in central Italy. It seems silver coins were gradually devised for trade with the Greeks in Southern Italy.

As the Republic expanded, and access to silver grew, the silver denarius evolved and the denomination remained in circulation for 450 years. They were produced by ‘mint magistrates’, junior officials who choose the designs and legends, often advertising the officials’ families for political purposes.

But eventually Roman currency would be widely used throughout Europe, western Asia and northern Africa right into the Middle Ages. It would become the model for later currencies – the currencies of the Islamic and the European states during the Middle Ages and the Modern Era. Their names too derive from Rome. The Arabic dinar, for example, comes from the denarius. The British pound, the Italian lira, the French livre and Hispanic peso are all translations of the Roman libr.

* 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.