Friday, 17 February 2017

Coins and money in history

As a child, I collected coins. Mostly old British (I did like the pre-decimal system of 12d in a shilling, 20s in a pound, 21s in a guinea, 5s in a crown, 2s in a florin. It was delightfully complex) but also a few foreign ones.

We think of coins as being small, round, copper, silver and gold-coloured. And that’s true for a surprisingly large amount of history.

But not all of it.

Pre-unification, China was split into several different kingdoms, each of which had their own currency. These were often in strange shapes, such as spades or knives, some with holes, some without. One, Chu, had small square coins of gold.

Qing-era Chinese coins from the 17th to 20th century
It wasn’t long before a different design was settled upon, though. Qin, the ultimate victor (Qin Shi-Huangdi uniting China and becoming the first emperor) opted for round coins very similar to what we have today in basic shape. Except the round coins had square holes in them. This was actually quite cunning. If you’ve read ancient Chinese classics (I recommend Outlaws of the Marsh) you may have read the term ‘strings of cash’. These refer to, er, strings upon which coins were placed. Hence the need for a hole.

However, there was still the odd return to fancy shapes, including the Yi Dao Ping Wu Qian, a knife coin (a round coin with a hole, from which a key-like limb stretched) which came into being in the 1st century AD.

In the West, Lydia was reportedly the first country to use metal coins. They were neither gold nor silver, but an alloy of the two called electrum. The immense wealth of Lydia, aided by the quality of its coinage, helped Croesus to fund the Temple of Artemis, a Wonder of the Ancient World. However, this didn’t stop him taking dodgy advice from an oracle and starting a war with Persia, which he lost (although Cyrus was a nicer chap than many of his successors and Croesus became his adviser and friend). The Persians themselves used both gold and silver (separately) in their coinage.

Earlier, you may have noticed I used 12d rather than 12p to describe pre-decimalisation British pence. This was not a mistake. Just as the Russians sometimes claimed to be the Third Rome, the British Empire quite liked emulating the Romans. The ‘d’ is for denarii. Yes, I know we didn’t use denarii then, but that’s still what it stands for. In the same way that the £ sign is effectively an L with a line through it (for libra pondo, the Latin for a pound by weight), the imperial British did like the Roman links (they weren’t alone in that, of course. Just look at the architecture of America’s chief political buildings).

The Romans used not only silver and gold but also large amounts of bronze in their money. Bronze bullion weighing about 3lb, in fact, which is not only money but also a doorstop, or a last ditch weapon if someone tries to mug you.

When Augustus became the first emperor, the Republic gave way to the Empire and coins from then on bore the image of the man (or men) who claimed to be emperor. This feels very natural to us (well, those of us living in a monarchy). Prior to this, images of the gods or of Romulus were commonplace.

However, Rome ended up with a money problem. The problem was caused by the donative, which was effectively a massive bonus every soldier in the army got when a new emperor took over. It doesn’t take a genius to see that this could cause soldiers (especially disaffected ones) from trying to impose a new emperor, to get the bonus (imagine if you gave every child in class £5,000 every time they got a new teacher. Teacher life expectancies would go down rather quickly). Not only did this cause mass instability and civil war (especially in the third century), it also caused massive inflation. This meant the prices of ordinary goods increased rapidly, making them less affordable for ordinary folk, who didn’t get a placating bribe thrown at them by a nervous new emperor.

Related to this was the debasement of the coinage (debasement being when the silver or gold content in a coin was diminished in favour of far less valuable, base metals). This meant more coins could be made but their ‘real’ value declined. Historically, people were very aware of this, and they’d know the ‘same’ coin from five years ago might be worth more than one made yesterday. Paying large numbers of soldiers (separate from the inflation-stoking donative) was another factor, as sufficient coins had to be minted, and if a massive military effort was under way there simply might not be enough silver to do it without reducing the content in each coin.

Debasement and inflation were not problems unique to the Romans. Henry VII was careful with cash, but Henry VIII was not. He spent a fortune, which then meant he ran out of money and chose to ransack the monasteries. During his time, the coinage was debased significantly, which in turn led to very high inflation.

It’s also worth noting inflation can happen in weird ways. The Black Death of the 14th century immensely reduced the work force. This meant both that farm labour was more valuable, increasing wages, and food scarcer, increasing food prices. However, the cost of things like swords declined. Because so many people had died, there were a lot of weapons and suchlike that belonged to the recently departed. Inflation, therefore, was affected in opposite directions for different things but caused by the same plague.

During the medieval period, there was another type of coin which did not survive to the imperial British era: the mark. The mark was two-thirds of a pound, or 13s 4d in old money. It’s an interesting value, and looks quite clunky to modern eyes, used as we are to 100p in £1. However, it could be handy. Suppose you wanted a vile criminal to be taken. You might offer fifty pounds for him alive, and fifty marks for him dead.

Generally, from the Qin period to today, coins have been round. There are variations (the new British £1 will be twelve-sided, or a dodecahedron) but they’re basically all the same. Now and then a funky shape shows up, but, essentially, coins now are round and occasionally have a central hole.

Historically, silver and gold were used to determine value, that value varying in practical (though not nominal) terms according to the percentage of precious metal used. Nowadays, coins have very little inherent value (with rare exceptions, such as gold sovereigns).

Which does raise an interesting point. The actual coins you have are worth almost nothing. But because society all agrees to pretend they have value, they do.

Anyway, a bit of a ramble (just for a change), but there we are. Coins. They’re marvellous. You can even use them to buy my excellent new book, Journeys, featuring stories by Adrian Tchaikovsky, Julia Knight et al.,


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