History of European Coins - 500 to 1500

The history of money is often glossed over in books about modernity or narratives about money. Assumptions and myths abound. But the reality of money’s history corresponds to no simple myth. Money has ebbed and flowed over millenia, with societies moving in and out of monetized relations as they are blown about by the winds of change. Slavery, war, mining, all play an essential role in this history. But the history also tells a fascinating tale of the nature of sovereign power and the relationship between public and private life. In some sense, money comes to define the very boundary between public and private as it both empowers and binds the behaviour of sovereigns.

Perhaps most deeply misunderstood is money in medieval times. The money and coinage of medieval Europe evolved from the fallout of money in Rome. Rome was a highly monetized society, but in the wake of its collapse it is sometimes presumed that nothing of interest happened monetarily until the 16th c. Nothing could be further from the truth, for it was during this period that, as names and types of money proliferated, in western Europe at least there emerged a general structure and story, captured by the eternal legacy of the pounds, shilling, and pence. This is a brief account of that story.¹

The original terms are the libra, solidus, and denarius, which date back to Rome. The libra - actually, the libra pondo - was a unit of weight, literally, a “pound by weight”. The solidus and denarius were gold and silver coins respectively. Minting of the silver denarius began circa 200 BC in order to pay for the Punic Wars. Coinage as a medium has its origin in war some ~400 years earlier, where it was first used by Lydians as a convenient means to pay their soldiers (i.e. to distribute hunks of metal to a large number of people). The word soldier in turn derives from the word solidus. This basic use case of coinage - of paying for soldiers and war - would resonate through the ensuing millenia.

Rome’s silver denarius continued to be minted until about 200 AD. The gold solidus, however, only began to be minted in the early 300 ADs. By then, the denarius had been debased to copper. At a point in late Rome, a gold solidus was worth some 7200 copper coins. A Roman senator could make 100k-350k solidus per year, and could buy a slave for ~20 soldi. Copper coins could be used for small day-to-day purchases in the towns.²

The coinage of late Rome thus had no silver - just gold and copper. Copper is less important to our story as copper coins did not become the basis of our units of account in Europe the way gold and silver coins did. There is much more background to Roman coins, essentially the story of ancient coinage and money. But that’s a story for another time.

Our story - of the pounds, shilling and pence, or the libra, soldi, and denari - is a story about the separation between units of account and media of exchange, between the names used to refer to debts, and the physical materials used to settle them. In today’s money, this distinction is all but gone, for most people associate the dollar of account with the dollar in their wallet or bank. But this is a modern invention. As we will see, for a long time, there was no coin worth a “pound,” there were only pennies. From time to time a new coin might be introduced that was worth exactly a pound, but that value would hardly last. Money is not a static institution, violated only by the actions of greedy kings. Money generates its own dynamic instability.

Let’s take a closer look, starting with medieval money’s material basis: the metals.

The Metals

An essential force behind the evolution of coinage is the availability of metal, which comes either from having access to a mine, or else from a trade surplus with another region. States can also exact payments in metal from other regions by force or political decree, though this generally produces less metal than mines and trade, and is more unstable. Until the modern era, Europe has generally been at a trade deficit with the rest of the world. There are periods where Europe exports so many slaves that they generate a surplus (and even rename slavery after the people being enslaved, the Slavs),³ but this is an exception.

There are also two metals - gold and silver - and relative value between them, which differ between places and times. Europe has long fixated on a ratio of 1:12, with gold worth 12 times as much as silver. But Europe also has millennia long history of mining silver, with little gold. Much of the gold has come from Africa, where the ratio with silver has been much lower, say, 1:6. The Italians made a habit of accumulating silver from Europe and trading it for African gold. Thus the history of European money has largely hinged on the availability of silver mines, the political capital to exploit them, and the capacity to convert silver to gold - at least until gold mining began in Europe in the 14th c.

The history of mining gives some structure to the monetary and political history of Europe. It alternates between periods with access to mines, and periods without. Successful mines might be reasonably exploited for some ~100 years. The times with access are boom times. Those without are busts, where bullion famine can become severe. Both boom and bust can leave lasting impressions on institutional structure.

There are 4 major periods of mine exploitation in Europe between Late Rome and the 16th c. The first three involve silver, and mark eras of important reforms or “revolutions”. The last involves gold, marking its return. Europe had been without gold for virtually a millennium. The periods are as follows:

• ~600s-800s - Silver mines in Melle in western France - Charlemagne’s Reforms, the silver denier, a false dawn of coinage. Rise of feudalism from lack of gold
• 960s-1030s - Silver mines in Goslar in the Harz mountains in Saxony - Urban Renaissance, mints and markets come back all across northern Europe and England
• 1160s - 1330s - Silver mines in Germany and Bohemia (Czech) - “Commercial Revolution”, Fairs of Champagne, International English Silver Sterling and Italian Gold Florins
• 1320s - 1400s - Gold mines in Hungary - Hungarian Florins, English Nobles, French Ecus, and the return of gold to Europe at large

Once we know what metal is available when, its easier to follow the history of the coins.

Fallout From Rome

Before the Melle mines came into play in the 7th c, we are left in the 5th c, with the collapse of Roman political authority, no mines, and a decaying coinage. In England, minting appears to have stopped for some 200 years.⁴ The German kingdoms that succeeded Rome - primarily the Merovingian Franks in “France/Germany” and the Visigoths in “Spain” - tried to maintain the coinage best they could as minting became increasingly fragmented and variable across Europe. The silver was non existent, the copper had mostly disappeared, and the gold was draining out.

The old Roman solidus continued to be minted, along with a coin 1/3 its size and value, the trimissis, or triens. As the coinage debased and gold continued to drain, the solidus itself disappeared in favour of the triens. But the word “solidus” continued to be used to denominate debt. Except now a solidus did not mean one solidus coin, since such coins didn’t exist anymore. Instead, it meant three triens coins. The solidus had thus become a unit of account, the triens its medium of exchange.

By the 7th/8th c, there was such a dearth of gold that Merovingian kings and lords did not have sufficient gold to pay warriors. So they started paying them in grants of land, and hence initiated the rise of feudalism as a form of social organization.⁵ The use of coinage continued to decay.

Melle, the Franks, and a False Dawn

In the early 7th c, silver was found in Melle (western “France”) and a mine was opened.⁶ The Merovingian Franks restarted silver coinage in the form of the new denier. The triens was still being minted, a gold coin a bit bigger than an American dime, but now debased to only 1/3 gold. The new denier was modeled after the triens, but made of silver. If gold was twelve times as valuable as silver, a triens of 1/3 gold was worth 4 of the new silver deniers. So 12 deniers were worth a solidus. Since 240 of these deniers could be cut from a silver pound ,⁷ we arrived at the familiar ratio, 1 libra = 20 soldi = 240 deniers had emerged.

So here we have the relationship that would define moneys of account throughout Europe for centuries. That 1 pound, libra, lira, livre was worth 20 solidus, soldo, sou, shilling, each of which was worth 12 deniers, pennies, pfennigs, pence.

When it was first minted, or at least for some time, 240 denier coins were minted from each pound of silver by weight. This relationship presumably lasted long enough that the libra would come to mean 240 deniers - the libra became a unit of account! But mint policies are rarely stable, and coinage generates its own endogenous instability: as coins are worn from use and reduce in metal content, they come to differ from new coins. This difference puts strain on the declaration that they are one thing (“a denier”), as the fact they can be distinguished changes how they are used (e.g. hoarding the coins with more metal, spending those with less). At the same time, those with worn money haven’t done anything wrong, and the king has promised them that a single coin can be used to settle debts of 1 denier. Why should that promise be broken because there’s a bit less silver?

This is the wedge that opens between a weight and a unit of account - a physical measure and a legal name. How much value can a name add to a weight, and at what cost? What’s in a promise from the king, and what does it cost him to enforce it? This is the problem of sovereignty expressed in coinage.

Mints respond occassionaly to the wear on money by adjusting the standards of new coins to meet the silver content of the old ones. With less silver per coin, more coins can be cut from a pound of silver, and hence more can be distributed to those involved in minting. Some goes to run the mint itself (brassage), some goes to the king (seigniorage), and some goes to whoever trades their metal for coin. People are therefore incentivized to bring their metal to the mint, for the king enforces that metal is worth more as coin, and a pound of silver by weight yields more than a pound of coins by account. The unit of weight had decoupled from the unit of account.

Back to the Merovingians. Their minting had become quite fragmented, with hundreds of local mints and minimal standardization. Many of them were minting deniers inscribed with just their location, and no royal authority. Over the years, the deniers diverged from eachother and came to contain less and less silver. The coins were debased especially to raise funds to pay for war with the Umayyads coming up from “Spain.” The number of coins struck from a pound of silver by weight increased from 240 to as high as 300.⁸ The libra of account, which always meant 240 deniers, had decoupled from the libra of weight.

When the Carolingians took power under Pepin the Short, the coinage was strengthened - reducing the number of deniers cut from a pound of silver. The libra as unit of account continued to mean 240 deniers, but its value in metal increased or decreased with the mint policy. When Pepin’s son Charlemagne took over, he saw to it that the coinage was strengthened even further, and standardized under royal authority across the empire. Thus he set a new standard for the quality of silver coinage in Europe - the denier carolingienne.⁹

This return to silver coinage led to the flourishing of a peasant agricultural economy and a return of markets for peasants to meet and exchange goods for coin. It also engendered occasional inter-regional markets, like the Fairs of St Denis, just North of Paris, which seem to arise in the 7th c, and prosper through the 9th. The silver deniers were the money of the markets, the money of the fairs.¹⁰ But it was a new money, unlike that of Byzantium or the old Rome.¹¹

Ultimately, however, the Melle mines and the Carolingian standard were a false dawn for coinage in Europe as the mines ran down, the Carolingian dynasty fractured, and the new currency devalued over the 9th c. This short resurgence of silver coinage in Europe was dealt its fatal blow by the Vikings, who basically came to take it all.

With the collapse of Carolinginan political authority, the counts took over their local mints and minting fragmented again. There was an overall decline in the use of money. The Vikings, who were extracting payments from kingdoms across Europe, didn’t care so much for coinage as such, and treated it all by weight. Thus silver came to accumulate in the north.

Saxon Silver

The real start to coinage in Europe did not come from the Franks or Charlemagne, though they provided the renewed libra/solidus/denier standard. The real start came from Saxony, in the north, when in the 960s silver was found in the copper and lead mines in the Harz mountains near the town of Goslar.¹² The silver that flowed out of these mines led to an explosion of commercial centers across Germany and England as mints and markets popped up together across northern Europe.

The silver caused a surge in minting in England, which by the late 10th c had become fully monetized.¹³ The English maintained such tight control over their coinage that they began a program of coinage renewal, the renovatio monetae.¹⁴ Every some years, the entire coinage was recalled and re-minted. The king collected a tax from the re-minting, and the old coinage was demonetized. This practice had the dual effect of restoring the coinage and raising revenues for the king, and would be later mimicked in eastern Europe.

By the early 11th c in England and Germany, everyone was using coins.¹⁵ There was an urban renaissance.¹⁶ Some rents and taxes in England and Italy were collected in coin.¹⁷ Europe monetized. Coin came to be seen in the north increasingly as currency, not just as weights of metal. Kingdoms of Bohemia, Hungary, Poland, Kiev, and Norway accept Christianity and start minting coins (according to the standards of their Christian advisers).¹⁸ But by the 1030s, the silver from Goslar was on the decline, and by the later half of the century, the general reduction in coinage brought about a recession across northern Europe.

At the very end of the 11th c, Europe experienced a new wave of activity engendered by the Crusades. Raising the funds for the crusades was a heroic feat, perhaps aided by the new silver that had accumulated. But Europe’s chronic trade deficit, and the massive expenses of the Crusades, caused this metal to drain out to Italy and the East.

The silver of Saxony did not seem to make much way into France.¹⁹ And by the late 11th c, minting fragmented again across the continent. England and Italian City States managed to maintain strong centralized control over their mints. But across France and Germany, it became necessary to qualify units of account by location. Charlemagne’s common monetary standard was long lost. The ‘period of regional pfennigs’ had begun.²⁰

The Silver of the Commercial Revolution

In the 11th and 12th centuries, the coinage continued to diverge. By the early 12th century, Europe was experiencing bullion famine, amplified greatly by the first two Crusades. But major new sources of silver were about to be discovered in a series of mines centered around Prague. It began in the 1160s with Freiberg, or “free mountain” (alluding to the freedoms granted to the miners), a town set up in the eastern end of the Holy Roman Empire created to exploit the newfound silver. Freiberg was followed by mines in Bohemia to the south-east, at Jihlava, and then Kutna Hora. Around the same time that this silver was being found in the Empire and in Bohemia, silver was also being found in Italy, first in Tuscany, and later and more significantly in Sardinia. Silver was mined more or less continuously in one region or another from the late 12th c to the early 14th.

The new silver led to a heyday in feudal coinage. There was so much silver, every minor baron could run a mint.²¹ Amidst the chaos, certain silver pennies stood out. In 1180 England, King Henry II, who ruled England and eastern France, established the fine sterling standard with the new short-cross penny. At 92.5% fine silver, it was less susceptible to wear than finer silver coins, and yet strong enough to become a widespread standard.²² Italians would come to accumulate this sterling at the Champagne fairs,²³ which peaked in the late 12th/13 century, and presumably benefited substantially from the new silver boom. The common unit of account of the fairs, the livre provinois, was based on the silver denier provinois minted in Provins, in the County of Champagne. In Paris they were minting the denier parisis, and to the southwest at the Abbey of St Martin at Tours was minted a coin that would soon become standard across France, the denier tournois.

Perhaps emboldened by the silver flooding into France, in the late 12th c, Philip II Augustus styled himself King of France (his predecessors were King of the Franks), and embarked on a determined project of state building and centralization. In the early 13th c, having conquered Tours from the English, he set about making its long admired currency, the denier tournois, the currency of all of France. The denier tournois was fixed at a rate of 4/5 of the denier parisis, which continued to be minted in Paris for centuries, until it was finally phased out. The denier provinois continued to be used in Champagne, but by the end of the 13th c, the French kings were intervening in the fairs, sending them into decline. The denier tournois thus became the dominant standard for coin across France, and the livre tournois the dominant unit of account.

While silver coinage was having its heyday, ingots of silver, valued by weight, also saw extensive use as a means of payment. These ingots were measured in a unit of weight called the mark, and were widely used for larger purchases and trade across the continent, and with the rest of the world. Different standards for silvers fineness and definitions of the mark proliferated. Coinage standards came to be defined in number of coins cut per mark of metal. The mark of Troyes in the County of Champagne saw centuries of use in France and the Low Countries.

If the new silver strengthened the kings of France, it all the more so strengthened the Italian merchants and their city states, especially when imposed on the new networks of colonization and trade they had built through the Crusades in Northern Africa, Byzantium, and the Near East. Armed with new sources of silver, the crusades resumed with fury in the late 12th c and carried on all through the 13th. With the Fourth Crusade in the early 13th c, a new silver coinage arose in Venice that would soon spread across Europe.

The crusaders were supposed to pay the Venetians some 85k marks of silver for transport in the Fourth Crusade. But the Venetians needed this silver to be distributed to a large number of people, and doing it with their small denari would have required minting way too many coins. By now their denari had been heavily debased, containing little silver. So they made a new “great” silver coin, the grossi, worth 24 of the old denari.²⁴ The old denari went on being minted, but came to be known as piccoli for “little ones”. Thus a new tier had been added to the monetary system, a large silver coin minted alongside a small one. The grossi and denari. The Venetian Grossi also came to be called “ducat”, from the word “dux” on the back (the Venetian gold ducat was still decades away).

In Italy, coinage was divided by city state, and each city had a unit of account and coinage that evolved in its own way. They all followed the same recipe of libra, soldi, and denarius, but only the denarius was an actual coin, while the soldi and libra were units of account, worth 12 and 240 denari, respectively. By the early 13th c, in addition to the denarius, every important Italian city north of Rome was minting its own silver grossi.²⁵ In Tuscany, their grossi was valued at 12 of their denari, or 1 soldi.²⁶ In other words, the Tuscan soldi, which until then had only been a unit of account, finally materialized as an actual coin - the grossi.

The same thing happened in France, in 1266, with the new silver gros tournois, worth 1 sous tournois.²⁷ The sous tournois was also just a unit of account, but with the new gros it too became a real coin for the first time. But these grossi would not be worth a soldi or a sous for long, as the sous of account was defined as 12 deniers, and the denier continued to lighten or debase. Thus the unit of account would devalue, and the value of the grossi in the unit would be “cried up” as a gros became worth more than 12 deniers. Hence we see the tension between the unit of account and the medium of exchange, expressed so clearly in a world where multiple kinds of coins (ie. the denari and grossi) are meant to express values in the same unit of account. As one or the other coin changes in metallic content, the relationship between them, defined in the unit of account, is put under stress. Its usually the smaller coin (the denari) which is debased, leading the larger coin (the grossi, and later, the gold coins) to be cried up.

Minting of grossi spread across Europe, where they were used for wages and rents, while deniers went on being used for smaller purchases and alms. In certain places, a unit of account would form independently around the grossi, using it as the new basis - effectively replacing the penny as the basis for the unit of account. This was the case in Low Countries, where the large silver groot become a dominant coin, and units of account came to be reckoned in pounds, shilling, and pfennigs of groot.²⁸ 240 groot coins made up the new groot pound. The groot had become the new denier.

The Venetians, which invented the grossi in the Fourth Crusade, were also that Crusades major beneficiary. The 4th crusade culminated in the Sack of Constantinople, which greatly weakened Byzantium and strengthened Venetian control over the Mediterranean. The new silver in general helped the Italians stabilize control over the Mediterranean network, and served as essential fuel for harnessing that network throughout the 13th c. For the Italians were everywhere looking to turn silver to gold.

By the mid 13th c, the balance of trade for the Italians was such that large amounts of gold were flowing into the northern city states, sufficient for them to start minting gold currency in Europe for the first time in some 500 years. To be fair, gold coinage had existed in southern Italy, which was part of Byzantium, for much of this period. Alas, we will not cover Byzantine or Arab coinage, despite the major impact it had on the medieval European coins (for starters, the design of the Merovingian deniers was taken from the Umayyads²⁹).

Within a few months in 1252, both Florence and Genoa started minting gold coin of almost identeical weight.³⁰ They would later be joined by Venice with its gold ducat in 1284. For Florence, its florin was initially worth 1 Florentine lira. Thus the Florentine lira, which had only ever been a unit of account, finally materialized as its own coin. For Genoa, its lira had not devalued as much as that of Florence, and it’s new gold genovino coin was worth 8 Genoese soldi. These coins are remarkable for the role they came to play in international trade.

The massive injection of silver led to a resurgence in trade across Europe. This “Commercial Revolution” was epitomized by the rise of the Italians and the ways they conducted business. The central pivot of this revolution were the Fairs of Champagne, which the Italians had been frequenting already in the 12th c, but which rose to new importance as a rendezvous point across all European trade. It was here that new credit instruments, like the Bills of Exchange, appear to have become more widespread, facilitating the conduct of commerce from afar. The role of paper in monetary affairs was greatly facilitated by the arrival of Hindu-Arabic numerals and bookkeeping in Italy, from at least the time of Fibonacci’s great book of 1202, if not earlier. Bookkeeping would also lead to the rise of deposit banking, providing new means to expand the money supply on the ledgers of banks.

The Commercial Revolution saw a separation of roles for merchants, and the emergence of a new stationary class. Italian businessmen conducted their business from home, making ample use of carriers to travel between places with goods and letters, and of trusted (often family) factors, agents, and correspondents spread across the cities of Europe, executing transactions on their behalf.³¹ Italian pre-eminence in business and monetary matters led them to run mints and mines across Europe. The growth of their economies allowed them to do import replacement,³² producing locally things they previously needed to import. And finally, they opened the gateway for the return to gold in Europe.

We have focused here on the role of the coins in the commercial revolution - the gold coins for long distance trade and the large silver coins providing a new larger denomination to pay wages and rents. But arguably, the bill of exchange would have a more significant impact on long distance trade than gold coins, and deposit banking would have a more significant impact on local circulation than the new silver grossi. Thus the commercial revolution marked not just the rise of new coinage types, but of a new paper-based system of banking that within a few centuries would come to transform the way people conceived of and used money.³³ But the history of banking is a story unto itself, a story for another time.

Victory of Gold

Just before the mining of silver in Europe began to run down, around 1320, new gold mines opened in Hungary (in Kremnica, now in Slovakia) and unleashed a torrent of gold. By 1328, Hungary was minting the first successful gold coin beyond the Alps, a copy of the florin. So much of this gold was traded for Bohemian silver that the Bohemians soon followed suit with their own gold coin.³⁴ In the same year, mint reforms in Venice moved the city from a silver standard to one based on gold.³⁵ Across Italy, new units of account emerged based on the new gold coins. By 1355, with silver mining having dried up, silver grossi were no longer being minted in Venice, and accounts began to be reckoned in lire, soldi and denari di grossi a oro - the grosso was no longer a real coin, but had dematerialized into a unit of account worth 1/24 of the real gold ducat. A similar thing happened in Florence, as their unit of account came to be based on the lire, soldi, and denari affiorino.³⁶ As silver mining gave way to gold mining, so too did silver units of account give way to units of gold.

This re-emergence of gold put Europe firmly on a bimetallic monetary system. The relative mint prices of gold and silver in different countries led to bullion flows across borders as merchants sought to take advantage of arbitrage opportunities across mints. France tried to start minting their own gold coins - the various flavours of ecu d’or - as early as the late 13th c to compete with the Italians, but they didn’t take off until the 14th c. Ecu (in Italian, scudo) means “shield”, and the different ecus “of gold” that emerged over the years were named according to the image on their obverse.

The 1330s saw the start of the Hundred Years War, of which the new gold played a key part. Both Edward III of England and Philip VI of France begin minting their respective gold coins, the English noble and the French ecu a la chaise. While both coins were originally designed independently of the florin, over time they would come to align more directly with it.³⁷ Philip’s ecu a la chaise were originally worth 1 livre tournois (materializing the french unit of account as a coin),³⁸ and were used to subsidize his allies in the Netherlands. These ecu would be cried up over the years as the unit of account devalued. Edward also raised significant sums of gold florins from his Florentine bankers (who he would famously default on), used to pay for his own allies in the Netherlands. Thus did significant amounts of gold start to collect in the Low Countries.

In 1360 John II of France started minting his ecu a cheval, which also came to be known as the franc.³⁹ It was initially valued at 1 livre tournois, and the word franc became synonymous for the livre tournois, the dominant French unit of account. These ecus would also come to be cried up as the unit of account devalued over time. In the late 15th century Louis XI started minting the ecu au soleil, a variant of ecu a la couronne, both of which were named for the appearance of a sun.

By the early 16th c, ecus were circulating of which 64, 65, or 66 were cut from a marc of Troyes. Independent of these coins, but likely inspired by them, a unit of account had emerged for use in exchange by bills, the ecu de marc, that was defined as 1/65 of a marc of fine gold. As the ecu au soleil settled for a time at a value of 45 sous tournois (up 2.25x from when an ecu was worth 1 livre, or 20 sous), it inspired a new equivalence for the ecu de marc in terms of the french unit of account. Thus it came to be that the exchange bankers set the value of 1 ecu de marc to be equal to 45 sous tournois.⁴⁰ This value persisted even as the ecu au soleil was cried up over time.

The ecu de marc served as the basis for the network of exchange by bills, dominated by Italian exchange bankers who facilitated exchange between units of account across Europe. But instability in the French unit of account triggered a crisis for this network in the late 16th century, ultimately leading to the end of the medieval monetary system and to the rise of a new monetary constitution - that of modernity. But that too is a story for another time.

References:

• Spufford - Money and its use in medieval Europe
• Boyer-Xambeu, Deleplace, Gillard - Private Money and Public Currencies
• Arrighi - The Long Twentieth Century
• Braudel - Civilization and Capitalism