The Origins of Money, Considered from the Economic and Historical Point of View — 1897

THE ORIGINS OF CURRENCY. 387 general average for the value relationship more usual between money and bronze in the Greek world, it would be in the numbers between : : 1 : 120 and : : 1 : 100 that we would stop. This are those which are the most likely, both like business report and like report monetary, in countries which, during the second half of the fifth century and the course of the qua- third, cut their copper on the foot of their silver drachma (1). » II. — SUPPORT CURRENCY The complete monetary apparatus of a country, in the companies complicated of antiquity and of time modern, usually consists of coins minted in three metals, gold, money, bronze, or sometimes, in place of this last metal metal, zinc, nickel, lead, Tétain or iron. In their monetary role, these metals complement each other tempt each other; imposed by nature to choose human societies, they are all three indi- thinkable to meet the character of commo- said and of ease of use who must distinguish everything good system monetary destined to provide also good the medium of big business includes (1) Fr. Lenoriiiant, the currency in the anllqultc, t. I, p. Iô5; also see the same conclusion in Michel Soulzo, Introduction- tion to the study of currencies of Italy ancient, V'° part, p. 25.

388 THE ORIGINS OF CURRENCY. thanks. that the vehicle of small transaction tions of every day. Gold constitutes more easily that other metals, large sums, the ar- gent is mainly used for average payments, and the bronze for small expenses. None of these three clements could not be eliminated without inconvenience ner his two auxiliaries, and respond, to himself and without hindrance, to the requirements of the trade. Gold, by example, is too scanty to be Tunic intermediary of trade; social relationships would suffer from the lack of cash. And then, he is too expensive to make them small coins divisional. Our room of five francs in gold is already so inconvenient because of his tenuity, that we hits it more hardly to present and that we thought about demonetizing it; that would it be, even more so, a coin of one franc in gold, weighing gr. 3226, or 50 cents in gold (Ogr. 1613) : an almost impal- dust pable. At the truth, we struck, in antiquity Greek, of small coins golden and especially of money which do not exceed these weights cramped, but similar pieces which do not meet, moreover, only in a state of exception, have they themselves I had only a fleeting existence. They cannot are going hardly circulate that collected in of scholarships, such as dust golden of old Egyptians : we quickly gave up on this little coinage practical. Money and the copper present disadvantages denies of another order Our five franc coin

THE ORIGINS OF CURRENCY. 389 in money, for example, is already very heavy and cumbersome. What would it be if we no longer had of gold money and if the high payments should be eGfected in money! On the other hand, parts of money below 20 centimes would be too much small for not be of great inconvenience said. We have pointed out the disadvantages of the bronze or iron coin, in the companies little progress where these metals were used as unique or main agent monetary. He must add that the price of copper on the market is submitted to of variations if abrupt and sometimes of a so great an amplitude that it was impossible to ])ility of constitute with this metal a currency right, that is to say whose nominal value was adequate to its intrinsic value. In short, of all necessity, it is necessary for the whole of the monetary system of a complicated society, gold coins, silver coins and coins of a base metal (1). For the latter series, copper or bronze was generally pre- popular everywhere, because of its intrinsic qualities; the iron oxidizes too quickly; lead is too soft, just like tin : the kings of Numidia have it (1) Nicolas Oresme, in the fourteenth century, wisely said : “The em- simultaneous folding of currencies gold, silver and billoii holds to the diversity of importance of commercial affairs. Glad to have a currency of a high price, which could be made more easily transport and accounts in major negotiations. Likewise, a currency less costly money is used to merchant acliat- say cheaper... » (Oresme, ed. "Wolowski, Introd., p. xv-xvi.) 22.

390 THE ORIGINS OF CURRENCY. yet employed long enough; zinc which has the same form defects too the main element lies of the sapeque Chinese. Today, we begins to replace bronze by the nickel in various countries, such as Belgium, Switzerland, the Holland, the United States, Germany. The Byzantines and especially the Arabs, in Egypt and in Syria, had glass coins. We sometimes have also resorted to leather, cardboard, year paper, although these various matters were more incomprehensible modes than metals. Whatever either, everywhere we recognized the need to monetize a metal base or a worthless material, next to metals precious, and in antiquity, as soon as the development development of trade and relations social allowed, the three metals appeared side by side in the monetary system. In Rome, the functions- naries responsible for control of manufacturing workshops cation bore the title of fresviri aiiro, argento, iQre flando feriundo^ and on the currencies of the imperial era, we often see the symbol type lique of three Coins^ personified by three women who each hold a scale and a cornucopia (1). Bronze sometimes has, in antiquity, notably in Rome, Alexandria and to Antioch, been replaced by sauced silver, that is- i.e. silver with copper mixed or tin in high proportions : this is what which we call billon or gossip money. (1) Fr. Lenormant, Coinage in antiquity, 1. 1, p. 145.

THE ORIGINS OF CURRENCY. 391 Whatever metal whose vile currency is made, next the conventions local, she is as essential as gold currency and that money. Under penalty of experiencing great discomfort in their everyday social relationships, everyone of we must wear them constantly on self, like a viaticum or a talisman. The rich do not would know to do without it no more than the poor, the boss like the worker, the inhabitant of cities like this one campaigns, and he was thus, in antiquity as now, in every country civilized : the Chinese goes about his daily business res with his necklace of sapeques like us with our parts of 10 and 5 cents and the English with their pence. 11 is a crowd of transactions of all the moments which can only be resolved through the help of this small change which fills the ap- point of payments made in gold and silver, and that we could, because of its role, qualify of substitute or accessory of the true precious metal currency (1). Now, the essence of this extra currency, which cjue either the substance of which it is made, bronze, lead, zinc, nickel, iron, or alloy of a little silver gent with copper, is from derogate to the rule constitutive of all good money, that is to say not having an intrinsic value consistent with his value legal, of not to be a currency right, a real and complete equivalent. In each (1) Michel Chevalier, La Monnaie, p. 570.

392 THE ORIGINS OF CURRENCY. country, the law confers to these infinite species one value conventional which is greater than him' metallic value. Our penny weighs one gram, which puts copper at 10 francs the kilogram, that is to say at a rate of about four or five times higher than lo copper price or. bars : our pennies and our double pennies are therefore not worth ity than a quarter or a fifth of their value merchant. The added value lecal attributed to the currency additional compared to to its value intrinsic, generates, as a forced consequence, the restriction tion of its emission and its liberating power, otherwise, it would have all the disadvantages of counterfeit money and would lead to the disasters that we have reported in countries where a debased currency and depreciated. A state does not must never lose from the view that the extra currency is only one auxiliary of the currency real in gold and silver which , she , must always form the essential basis of cash circulating. We know that for gold alone, in some countries, for For and money in others countries, everyone has the ability to transform its ingots in minted cash : it is enough for him to that of addressing the Mint, that is to say tell the factory officially charged by the State with to keep, for this purpose, available to individuals bind. The freedom of coinage of pre-metals heavens or one of these metals is unlimited, because that the money they produce is straight, and that,

THE ORIGINS OF CURRENCY. 393 in principle if not absolutely and always in fact, ingot and coin are the same thing to the point of value view. But such freedom does not could be granted to the additional currency without the most serious disadvantages. Suppose that, at us, the striking of bronze becomes free as that of gold : as long as its legal value de- strongly passes its value in trade, you \ wander all holders of copper ingots, all the owners of the mines of this metal are taking j) try to take their stock to the Mint, alin to earn the difference, very appreciable , who exists, by the law, between coined metal and the one who is not. The immense affluence of this currency with an inflated legal value would result in her her degradation : we have as proof the depreciation of the Chinese sapeque and that of billon coinage under the Roman Empire, at the third century AD : we would be inundated with these worthless tokens, of this counterfeit money that the State guarantee would not be enough to con- maintain public trust; speculators would leave her behind in all payments, passing, by application of the theory of Gresham, with a huge premium, all our good currency , that is to say all our gold and everything our money, abroad. This is why, in modern societies tied by lamentable examples, the strike of the extra currency is not free : it is reserved come to the State , and one rigorous law opposes this

394 THE ORIGINS OF MONI^AIE. that the State itself indulges in speculation that he prohibited to individuals : he does not have the right to mint extra coins in quantity ill- moth-eaten and it only issues each year for one relatively small sum and in relation to the needs of current circulation. On this account, the State French people still earn several hundred tons of thousand francs : the law prohibits him from looking for expensive by a more abundant emission to increase this income. A other necessary restriction placed on the circulation of the auxiliary currency, it is that of its liberating power. Since it is, in makes, if not legally, counterfeit money , no one could not be forced to accept it in payment : this is the principle accepted by all legislation modern, and the rigor is only attenuated in the restricted proportion that the interest of general circulation for small payments. In France , the bronze coin whose minting is a state monopoly, following the rule, and which remained for more than half of this century the only currency extra, does not have course legal and forced only up to 4 fr.99 : we ap- shovel, for this reason, the additional 5 francs, and no one is required to accept it for a sum perieur. The public coffers do not give it and even receive it for less than 50 cents. As for our currency money, the piece of 5 francs alone remained as 900 thousandths end, fixed by the law of year XI; all the parts

THE ORIGINS OF CURRENCY. 305 divisional (2 fr., 1 fr., 50 centimes and 20 cent- times) are reduced to title of 835 thousandths, and we explained above the reasons which dictated this modification by which all these es- Coins have become auxiliary currencies. Tan- say that a 5 franc coin contains 22 gr. 500 money end, five parts of 1 frank don't give a damn hold only 20 gr. 8T5. From which it follows that despite that we always count i^av francs any eva- any monetary relationship, the coined franc no longer really exists , but only nomina- ment; the expression of frank is become a unit of account which means the fifth part a five-franc coin; she stopped being re- presented by the piece on which we continue to engrave the inscription one franc. Apart from the appearance exterior, the only one differ- ence who subsists between our currencies division- naries in silver and our bronze coins, it's than the metal with which they are made the pre- miries is more expensive that the metal which has served for the seconds ; but both are auxiliary currencies, with conventional value, arbitrarily fixed and imposed by law. more or less above of their value intrinsic and merchant. Likewise for bronze, there would have great advantage for the audience or for the State to have silver coins minted without limit gent, and particularly the divisional parts become a log ; also, we had to, like us we exposed it in a previous chapter, sus-

396 THE ORIGINS OF CURRENCY. grant the public the right to monetize the ar- gent, and reserve this faculty to the State, while im- imposing on the latter the obligation not to abuse of this privilege. In Besides, the liberating power of these divisional silver coins was rigorously strictly limited to 50 francs for payments between individuals, and 100 francs for payroll ments to public coffers (1). The principles that we have just explained are mainly for currencies French extra- its, in silver or billon and in bronze, apply with rigor and the same way to big- chens, auxpfennings, to the kreutzers of the German countries pot holders, kopeks Russian, to pence, to shillings and all the silver coinage of the Year gleterre. Everywhere it was deemed necessary to impose a legal maximum in power liberator of currency extra, whatever either the metal of which she is done, and we found that everywhere similar measures are strictly necessary, if we do not want this currency to take hold to speculations detrimental to the economic order mic, or that it itself degrades into becoming too common (2). This being observed (1) Stanley Jevons, The Mint, p. 120. (2) By a rather curious coincidence, at the moment when I correct the tests of this work, we raise in certain border towns third countries, in France, particularly in Bordeaux, and in Marseille, a \ question of foreign money. In the Times of Thursday 3 September bre 1896, I read to this subject an article that I will be allowed to re- produce in part, because it confirms point to point the thesis that we support here : B There is a question of foreign money, and even in an acute state

THE ORIGINS OF CURRENCY. 397 In our modern societies, let us move on to antiquity. Apart from the primitive period and the exceptions tions that we reported, the currency of in certain regions, since it provokes small riots. On all border points and in ports, especially in those where ships coming from South America flock, we if- general one true invasion of exotic bronze, and like the administrations and the majority of traders in these regions considered it essential to se protect, in absolutely refusing this currency, this results in very frequent and very vivacious which degenerate sometimes in fights. Else leaves, we an- states that, from the return of Parliament, an interpellation will be addressed, on this subject, to the Minister of Finance. “But, it is obvious that the latter will only be able to respond once thing : it's that the decrees and laws in force prohibit meekly foreign money. The billon, in fact, is not about firstly speaking a currency, in the sense that its intrinsic value is very inferior at its nominal value : it's just an extra allowing you to complete an account or pay small expenses. his : even French pennies are, in France, only legal tender up to five francs; that is to say, you cannot force anyone to accept more than this amount in billon of the country. As for foreign money, monetary conventions keep quiet in ignore the existence and they have no value with us their exchange. “ They nevertheless circulate, and their circulation gives rise to a kind of contraband very lucrative. Individuals will look for abroad, especially in countries where we makes a large quantity of billon, pennies that they pay for the real value of the metal and, after the have fraudulently introduced, they interfere deny to make them pass for the amount recorded on the parts, hence a profit of up to 70%. It is this “trade” that indulged, we remembers it, thus, moreover, that his victim, the assassin Tremblier, sentenced two times to death by the jury. He concealed in his luggage thousands of pennies collected in Buenos Ayres and the then flowed to Bordeaux and elsewhere, against the real gold and silver currency. “Claiming tolerance for foreign money would therefore be all simply favor and extend the fraud of these honest in- 23

398 THE ORIGINS OF CURRENCY. base metal, in ancient times as now, was not always considered only as currency extra, with a nominal value and legal greater than its intrinsic value. They were tokens intended to replace the smallest divisions sions of the silver mite, too poor and incom- fashions or insufficient. The first consequence of this state of affairs was, we already know, that bronze coinage, at the Greeks, could not have, and she didn't have never, indeed, that one traffic res- hug; the agreement local who invested these tokens of no serious value from a liberated power any ratory, could not have the force of law dustriels. If the Cliainbre is located entering the question, she don't can only invite the minister to take measures to ensure that the law is rigorously applied everywhere... “Near the border, we apply the regulations; we also come of apply it abruptly, it seems, in Marseille, in Lyon and to Bordeaux, hence the protests that we have reported to beginning of our article. In addition, in these regions, some com- merchants, to attract customers, display in their windows that they accept money foreigners; he then ship them to cor- respondents in the localities where we let them circulate. n There is only one way to stop this waste and speculation. illegal actions, it's from prescribe a good once and for all the dots strict observance of the law. He It is necessary that these agents who feel comfortable with the binding circulars of their chefs be reprimanded and, if necessary, beaten. When we know that the sign prohibiting foreign money is not a simple decor and that all the public accountants, without exception, refusal smells like a foreign country, exploitation will soon disappear. If a few traders continue to accept exotic pennies, they go away will dispose of as they will be able to: the essential is that the State does not become an accomplice to their maneuvers..."

THE ORIGINS OF CURRENCY. 399 for foreign countries, and foreign trade does not admit or could admit ({ue the equivalent real (1). The currencies that the king of Persia hit for the whole extent of his empire and for his re- trade relations with the Greeks, Darica and the medical century, are exclusively in gold and in money : it does not emit none currency extra, leaving this care to the cities of his empire, if they consider it suitable and useful for their business local. The Greek cities, for their part, did not monetize rent, for more than two centuries, that money, equivalent real and complete, going down to the the most tenuous divisions to cope with payroll tiny amounts. Athens which strikes back in abundance silver coins from the end of the seventh century BC our era, does not begin to monetize the bronze that in the year i06, under the archonship of Callias ; and if we think about the economic crisis and politics that su- then kissed the capital of Attica, during which the Athenians saw themselves forced, fault î| of money, to throw into the crucible the gold of the Victories of Parthenon, we will not hesitate to consider the prc- (1) We will cite for example, the accounts of the hieropes of temple of Apollo, at Delos, where we find listed coins gold and silver from the regions the most diverse, while there is, in fact of bronze money, only coins from Delos (-/aXxol em- I -/wpoi, yaXxôç AriXio ;) ; and yet the sanctuary of Apollo to Delos was frequented by pilgrims from all countries. (Th. Hornolle, in the Hellenic Correspondence Bulletin, t. IV, 1882, p. 133.)

400 THE ORIGINS OF CURRENCY. mirres Athenian bronze coins, not even as extra currency, but as simple obsidian tokens, baby parts ceded, with conventional value, intended to be refunded by the State, to the holders, in good money with full and straight monetary value, immediately that economic circumstances and financial beyond the Republic had to allow it. These parts bronze were only common in the city and its suburbs : beyond our borders, says Aristophanes, we pay our debts with coins good metal, that is to say silver, while with us, “we only use bad parts of copper, coated of the more rude em- imprint (1). » Following Gresham’s theorem, the good money emigrated abroad, while the bad one, left alone, infested and impoverished the country : the Athenian Republic had neglected to take for its safeguard legal measures latives that modern people impose on themselves to restrict the emission and the liberating power of the currency extra. So what happened? for remedy the evil and stop on the slope who inevitably would have led the Republic at the bankruptcy, the demo- netization of bronze. It's Aristophanes again which informs us of this protective measure, in a passage from the Ecclesiazusœ (around 81G and (1) Aristophanes, the Frogs, around 720 and scholia; cf. above, p. 337.

THE ORIGINS OF CURRENCY. 401 next), comedy represented, for the first times, as we knows, in 392, that is to say, only thirteen years after the first broadcast bronze coins. The poet refers to a recent official edict under which Tusage copper currency was now declared illegal, and silver currency only admissible in commerce and in public coffers. The demonetization of bronze, in Athens, takes place towards 39i, so that the use of this currency, without intrinsic value , lasted barely twelve years (1). Instructed by this passing experience, the Atheists niens preferred to continue to hit, for the small payments, parts money from a tee- extreme overnight stay, for example, the tartatemorion and Yhemitartcmorion which weigh only Ogr. li and gr. 07. Sixty years later, however, at the time contemporary of Philippe de Macedonia, the in- convenience and fragility of similar currencies whose use was essential every hour of the day, carried Athens, following the example of a large number other cities, to renew the test of the currency of bronze. We issued chalques of which the weight is not regular (they weigh from i gr. 80 to 6 gr. 50), and it was decreed that the drachma corresponding money would lay i8 chalques (2) ; that is to say that one silver weight of i gr. 3*2 would be approximately, (1) Barclay V. Ilead, Historia numorum, p. 314-315. (2) Pollux, IX, 65; cf. Brandis, op. cit., p. 292; Fr. Lenor- mant, the Mint, p. 153-154.

402 THE ORIGINS OF CURRENCY. taking an average, at 300 grams of cooked vre. The rate official of report of value of two coined metals was therefore like 1 at 60 approx. But we don't soaps not what was the real and commercial relationship, nor what was the importance launches the added value imposed by law on new good spare change. Aegina, Reu])ée and the other islands of the Aegean Sea, the Peloponnese, Corinth, Corcyra, Thebes do not include did not lie to monetize the bronze before the linen of the fifth century or even the course of the fourth third, and it is the same for the cities of the Tlirace and of the Macedonia, good that then, in all these countries, silver coinage was minted sword already since more than two centuries. The cities of Asia Minor also had no bronzes before the same time, and everywhere, these currencies of which the nominal value is very su- perieur ù the market value, circulate that in the extent of territory of cities who the have issued. Some cited even, like Clazomene and Byzantium, in moments of necessity , coined the iron, but without don- ner, of course, to these 7'.ixptz'., the weight suffice- health for that they were, like the pdaiior of Sparta, real equivalents : they were sim- ples obsidian tokens of which we let's talk again soon. Outside of countries where it extended, by tra- edition or for other reasons, Va's system serious, that is to say where the currencies of bronze

THE ORIGINS OF CURRENCY. 403 were cut to be equivalent real, as in Sparta, in the Peloponnese before Phidon, among the Italiots before the third century, in Egypt of the Lagids and to Carthage, he is easy to observe that the currency of copper is treated everywhere as if no one cared of his value intrinsic. We don't attach hardly importance to size and weight of parts; we saw it in Athens, and we could do the same check for everything the world Greek. The chalques of Alexander the Large, by example, vary of 8 gr. 50 to 5 gr. GO, of so that it is only by approximation that we can fix their weight regulatory to approximately 7 or 8 grams. Those of Lysimachus and of Case- zander rarely exceed 6 grams, while those of the Seleucids range between 9 gr. and 6 gr. 70. He doesn't should not, nevertheless, allow yourself to this negligence in the size of bronzes, for believe that there was no regular system in these currencies, and conclude that there is no serious weight change indicating the scale of their divisions. Far from it, if we take into account the li- particularly extensive cence that were given to each other workers in the height and weight, when we delivered himself at numerous weighings, on parts belonging to the same country and at the same time, he one emerges formal law and immutable; of even that in Rome, under the Republic, despite the gap that exists between the weight of the species sem-

404 THE ORIGINS OF CURRENCY. able, we can reconstruct the system of the ace and its divisions, likewise, most of the monetary series of Greek cities (|ues provide by the weights, types and dimensions of the blank, elements of criticism which allows res- enter the graduation of the parts whose the chalque is the normal base. On bronzes of the kings of Syria, are inscribed letters which indicate their legal value : A, B, A respectively mean a cJialquc, two chahjucs and four chalques. However, the tetrachalques the most heavy as I am weighed, do not exceed 20 gr. 25, and I can even cite one, well preserved, which weighs only 9 grams. 25; two dichalques, in good condition, from the Cabinet of medals, marked with the letter B, provide re- specifically 7 gr. 10 and 6 gr. 20. Thus, on the one hand, the letters, a mark of value, certify that the size of the bronzes should, theo- rically, obey fixed laws, like size our five and ten centime coins; and more On the other hand, the effective weight of the parts indicates that we only vaguely conformed to the theory. The rule, moreover, varied according to the times and city to city. In Chios, at the beginning of the do- Roman mination, we have bronzes which bear their names in full and we can see, by this, that the system in use on this island was different from that of Syrian bronzes, not only lies for the weights, but for the appellations parts; we has thus all the divisions follow- boasts, with their names :

THE ORIGINS OF CURRENCY. 405 OBOAO!:, weight varying from 16 gr. 47 to 7 gr. 36 TPIA ACCAPIA 21 gr. 84 to 6 gr. 40 AVO ACCAPIA 10 gr. 80 to 4 gr. 50 ACCAPION HMÏCV (an ace 1/2 j 11 gr. 50 to 3 gr. 30 ACCAPION '... 1 1 gr. ;iO to 5 gr. 90 HMIACCAPIOX 4 gr. at 2 gr. oO TETPAXAAkON 3 gr. 20 TPIXAAKOX 3 gr. 13 AIXAAKON 2 gr. 40 to 3 gr. XAAKOX 2 gr. Thus, we see how difficult it would be to recognize in the middle of all this tangle of weight, without the name official registered in the parts field. A bronze from Abydos of Troas, which dates back to fourth century, door the inscription XAAK. III [cold chalks) and weighs just the same as the contemporary triobole of this city. Here, the chal- that therefore appears carved on the foot of Fobole d'ar- gent, but nothing determines its legal value. It is generally accepted that, in coinage of Alexander, the silver drachma is worth 60 chal- ques; as it weighs i gr. 32 and the chalque in- around 7 grams, the theoretically accepted legal relationship between the two metals would have been like 1 : 96 approximately (1). But, we cannot do enough repeat, weight uncertainty currencies of copper, by demonstrating that they were considered as extra parts, does not allow us to say what was the difference between monetary value (1) Fr. Lenormant, Currency in antiquity, t. 1, p. 154. 23.

406 THE ORIGINS OF CURRENCY. copper and its substantial value, not counting that this double value varied according to time and the places. There is no weight ratio, for example, between the bronze piece of Ghios which bears 0B0A02Î: XIQN, and that of Metaponto which also re-registration OBOAOI!, although all both legally representing, without doubt, an mite money. We cannot bring them together either. effectively bronze pieces which have the le- people : AIAPAXMOX, in Rhodes, ÏPIQBOAON in Sainothrace , IIMIOBEAIN AlHON, at iEgium from Achaia, APAXINIA, to Byzantium. These thoughts also apply to coinage of the Sicily, where bronze is cut so as to conventionally represent divisions of the silver litva : the bronze litra, Yhemi-litra, the grouse or third of litra, the shins or quarter of litra, the ounce, do not have, in done, weights gradually- staggered according to their legal value as in a way very approximate and imperfect. The tangle of these weights has always been confusing the numerous scientists who have tried to determine the value relationship, legal or commercial, between money and bronze. This was not nor the view nor the touch that could guide those who use go from similar parts, but only the valuable brands and sometimes also the large types ved on their blanks, which varied according to the divi- legal positions of currency. Thus, the value given among the Greeks to coins these extra is purely conventional and se

THE ORIGINS OF CURRENCY. 407 modifies city to city, next the whim of local regulations. We therefore cannot that subscribe to the conclusion of Fr. Lenormant on the same subject : “ Except where the system of Tf^i^s' cjrave, that is to say where we have the habit to use copper coins circulating for their value metallic and weighing more than 100 grams, such as among the Italiotes before the third century front key BC, in the Egypt of the Ptolemies and in Car- thage, fluctuations in the reciprocal value of copper and money have no real importance stance from a monetary point of view. The species of copper still has too much of the character of money extra; they represent too small sums mes so that we attach an interest Serious link to the accuracy of their weight and their in-value trinsic, even where we seek to keep it related close to their nominal value (1). » In Rome , after the introduction of the silver denier g-ent, bronze coinage had a tendency to abandon its character as a real equivalent to to be nothing more than an extra currency. This pro- pension is manifested by the gradual decrease of the weight of bronze species , which always goes growing more and more more, in the continued of time : “Every time new broadcast, said the Baron d'Ailly, the ace had a weight less than in the one which preceded it, and by this reduction, (1) Lenormant, t. I, p. 175.

408 THE ORIGINS OF CURRENCY. insensible to the eye and the hand, we arrived, under the even legislation monetary , to a degenerates- cence of weight which is surprising, when we compare the point of departure with that of arrival (1). » That these gradual and necessary reductions in weight of the ace and all the parts of the mo- netaire are, as some claim, unconscious alterations and unnoticed idiots temporary, or that they have summer, like others support it, wanted and decreed by laws, always is it that these reductions which go for the ace, gradually from 327 grams up to less than 27 grams, prove, of a eloquent way, that the bronze had, little by little, in Rome, ceased to be an equivalent; he became an auxiliary currency, with a conventional value. In 89 BC, the Papiria law completed officially create this character by decreeing that “for 1 silver he was enough to give under the coined form a weight of 56 in copper (2) » ; This was at most half of what he would have had to be given in commerce. Thus reduced, the bronze coin debases more and more more; we reached the point of hitting ace which weigh only an eighth of an ounce ; then, towards the In the time of Sulla, broadcasting was even stopped altogether. sion bronze coinage in Rome. She don't reappeared only around the year 15 BC. The ace, which became (1) Baron d'\iUy, Research on i-ovian currency,i. I,p.'i3. (2) Fr. Lenormait, 1. I, p. 170.

THE ORIGINS OF CURRENCY. 409 a simple token, was then hit with the weight of a third of an ounce, either 9 grams; this weight se maintained quite regularly during all the duration of the High Empire. Under Augustus, in the year 16 or 15 before AD, the Roman Senate lost completely and forever days the right to issue gold and silver currency gent; the emperor does not him left that the right of mint bronze. Gold and silver coins are now all struck in the name of the em- father (1) ; those of bronze bear the letters S C [senatus consiilto) which indicate their origin. Besides this bronze coin senatorial, there had still, in most provinces of the empire Roman, the bronzes struck by the pro-authorities provincial and municipal. In the early days of the imperial era, the corner bronzes Roman were divided into two series : some , the sestertius and the dupondius, were made with yellow copper or orichal- than (brass), while the ace and the smaller divisions They were made of red copper. \)\]}vq^)\. Mommsen the ratio of monetary metals to each other was the next : Or.

410 THE ORIGINS OF CURRENCY. “Later,” adds Mr. Mommsen, the propor- tions changed, but as these changes are due, less to a real modification made ted in the weights proportional to a series of fluctuations arbitrary, he is difficult to the d- lead to a general formula... » Anyway, the handing over of the care of striking bronze coinage to the Senate or to the authorities municipal authorities of provincial towns, had for effect excellent to restrict the emission of this mon- born within the normal limits where it should be maintained kept extra change. Control of the emission sion was surrounded by more guarantees than if he had been left in the hands of imperial authority : the strike being lucrative, the latter would have summer, more easily than the Senate, inclined to abuse this means of increasing one's income or extinguishing one's debts. And in fact, the senatorial safeguard now held for several centuries to the currency of bronze its character as an auxiliary currency, issued in a proportion commensurate with the needs of commercial traffic. “The goal that we continued, said again Mr. Mommsen, was perfect fully achieved, because the depreciation of the currency Rome did not come from copper, but from silver, and yet we can say that cash in copper should have been the weak part of the mon- nay Roman, since this metal did not have, since (1) Mommsen, t. III, p. 42-43: cf. Fr. Leiiormant, the Mint in antiquity, t. I, p. 170.

THE ORIGINS OF CURRENCY. 411 long, more than a fictitious value, and that this during we go away was even used to pay considerable sums (1). » Unable to benefit from the profits provided the striking of bronze in the Senate, the imperial authority imagined him compete with another currency of which she would have, herself, exclusively the right to issue : this was the mon- billon wall, created by metallic weathering silver denarius. From the reign of Nero to than that of Septimius Severus , the weight of the denarius was from 1/9G^ of book (3 gr. 41), and the title of pieces remained excellent for a long time. But when we arrive at Septimius Severus, we notice a profound alteration in the purity of the metal, alteration ration which is increasing rapidly, so good that at the end of the reign, the pieces are only of billon and contain at less as much of copper than metal end. In 215, Caracalla inaugurated gura the coin strike if widespread, call lee argenfeus antoninianus, who weighs approximately 5 gr. 45 . and contains barely 20% money ; she arrives soon, under his successors, to don't even contain 5 % ; then, until Diocletian it is confused with copper. This profound alteration of silver currency gent ends up making the right of the Senate illusory and provincial towns to mint the base currency bronze point; also, around the time of Gallienus, (1) Monimscii, Ilisl, from Roman coinage, t. III, p. 12.

412 THE ORIGINS OF CURRENCY. all the bronze coinage of the provinces disappears rait; in Rome itself, under Aurélien, the right of Senate was legally abolished (1). If the new currency extra, original imperial, had was hit in the conditions who must settle any change of this like, that is to say in limited quantity and with a power restricted liberator, she would have returned the same services and filled the same role than the old senatorial bronze coin. Unfortunately, from the reign of Caracalla , imperious authority rial, as needy as she is unscrupulous, who y saw an important source of income, se began to strike these low billon coins or sauced bronze, in one such abundance that the The public was literally flooded. “The first result of this measure was first, in a few years born, one unprecedented depreciation of denier, remained until then the unit of account. No law could maintain its nominal value, and under Elagabalus and Alexander Severus, to establish some fixity in public revenues, we had to decide that the payments to state coffers would henceforth be made but exclusively in gold (2). This legal decision was, following Mr. Mommsen's right remark, a real bankruptcy, like would be the one who today, at home, would declare that the public coffers will no longer receive the coins (1) Moniinsen, l. III, p. 12-13. (2) Lampridc, Sev. Alex. 39; cf. Fr. Lenorinant, t. I, \>. 18'.; Mommsen, t. III, p. 142.

THE ORIGINS OF CURRENCY. 413 of bronze nor those of silver, because their value nominal is overrated. We ended up with this initiative monstrous fairness that the imperial government paid his debts in billon, at the same time as he refused to receive this same bill from the hands of its own debtors. Such a deplorable state of things ended, as was natural, in depreciating extra change : she was discredited as much than our assignats, under the Revolution. A large disruption ensued ; public wealth too good that the fortunes private go away found shaken to the point that it resulted in the great political unrest and social issues that history goes through tory of the Roman Empire in the third century. Let's stop here : we we don't have point to ra- recount the great monetary reform of Dioctetian who restored fine silver coinage alongside the extra coin in copper. The example that we have just cited established with the latest evidence that the economic laws which govern the emission extra currency among modern nations nes, are also verified in antiquity : these are social laws, immanent and intangible, because that they are in the very nature of things. mr. — THE CHARACTERS OF FIDUCIARY CURRENCY AND REPRESENTATIVE Arriving at the end of this historical study and economical on training and development means of exchange necessary for any society,

414 THE ORIGINS OF CURRENCY. let us recall that we witnessed the slow genesis tement progressive of the currency metallic, equivalent real and complete as the objects in nature to which she se substituted by reason of convenience and ease of use; that the currency metallic gold and silver , arrived at its form definitive in the seventh century BCE, must retain its equivalent character, failing which it generates social unease, even financial crisis which can lead a State to bankruptcy queroute; (|ue the cash of billou or gossip ot the one of l)i'eleven or any other low metal, is not (juiiu auxiliary of the currency real, a substitute whose creation is required by the aptitude of metals precious to constitute the small change in a practical form and com- fashion. We finally saw that these auxiliaries if useful of the real money would become a danger social, because of the inferiority of their value their intrinsic in relation to their nominal value nale and legal, if their broadcast and their power liberator were not rigorously restricted by the laws. It still remains for us, to be complete, to say a few words about two other means of exchange very widespread in modern societies, and that antiquity also knew, but without their give such a broad and learned extension : we want to talk about fiat currency and representative. Already among the Greeks, in moments of birth

THE ORIGINS OF CURRENCY. 415 cessation, in times of political and financial crisis, in the midst of the embarrassments of a war, of a siege or for any other abnormal cause, the public authority blique was forced to issue these currencies fictitious which carry in history, next the time or circumstances, different names :my- paper money, paper money, obsi- dionals, seat vouchers, assignats, tokens or tests monetary security, etc. The principle of this species of currency , it is not only, as the mon- extra bed , which she does not carry within herself its warranty, but which it nominally replaces gold and silver currency ; the government which issues it, only resorts to it when constrained and forced and because that there is a lack of cash ; by throwing it into the traffic, he recognizes and admits his dismay and his distress financial, but at the same time, to inspire public confidence , he takes the pledge to repay in good cash his- nantes this bad paper money or other be material vile, as soon as the momentary crisis that he crosses will be conspired and that he could have re- t-establish your finances. If the public accepts these good ones which represent nothing, it is because it presumes that a day will come when the state transmitter will be in able to meet its commitments. The go- government expects the future, and the public is confident done credit to the State which he admits, following the word popular, (jue the signature worth of gold. But, despite the most beautiful and solemn promises commitments of the public authority, security

41G THE ORIGINS OF CURRENCY. rite of the bearer of vouchers cannot be complete, because the credit of the State may be impaired by thousand various circumstances and become a pure iîction. First of all, from the moment it pleased the legislature lator to issue paper money , he can also depend on a law to modify it, alter, sup- primer the purely nominal value and legal, while it does not depend on the legislator of mo- dify the price of a metallic currency whose intrinsic value is adequate to its nominal value nal (1). Paper money, like all evil good money, can only circulate within the extent of the country where it was issued; the stranger does not recognize him only a depreciated and mobile value is born, in relation with the confidence that power inspires in him tor. In Besides, the credit enjoyed the paper- currency is, as for extra currency, in direct relation with the quantity of this paper which was launched into circulation : if this quan- tity does not seem exaggerated , but normal , if the public is convinced that it does not exceed the resources financial that the State will one day be to even to obtain, to make its reimbursement sows, everything is fine, and the paper circulates without obstacle. But come the temptation to the State, embarrassed in his finance, to issue paper too much great abundance, distrust immediately takes hold ment of the public, and this distrust, the laws coer- quotes that we enacted to stop it, do not, at the (1) Courtelle-Seneuil, Treatise on political economy, t. I, p. 2i5.

THE ORIGINS OF CURRENCY. 417 central, that accentuate it, even if they do not not escalate into panic. It's there , in particular, what arrived for the assignats issued by the Convention and the Direc- tory. When the public suspected that the government lying at bay and freeing himself from all scruples, don't would not fulfill his promise, that he issued his currency of paper for of are fabu- them, and especially when the does not live not back down in front recognition official of the depreciation ciation of his clean currency , this was a de- botch immense in which engulfed for for a long time the fortune of the State as well as that individuals. “ The assignat of 5, 10 or -20 francs of the French Revolution, says Michel Chevalier, amounted to a commitment which would have summer thus designed : The State recognizes that it owes the bearer S5, or 50, or 100 grams (Vsilver in title of 7th end, and in postscript : but the State absolutely refuses to pay the bearer the above-mentioned quantity of money gent, however required he may be to be. When the assignats were, what soon came to them, depreciated by three quarters, and that the State issued them on the basis of depreciation itself , the imposture was blatant (!) » Antiquity knew how to resort, like governments modern ments, to purely fiduciary money ciaire with promise of reimbursement in gold or in money as soon as the circumstances the allows (1) Mr. Chevalier, the Mint, p. 428-42it.

418 THE ORIGINS OF CURRENCY. milked. We saw that the first broadcast bronze coins in Athens, VOG, had this character. A more testimony precise we is provided by Aristotle; it relates to the shipping of Conon against Olyntlie : money having come to miss, the general Athenian made money from copper with price (.rarycnf, and he distributed in pay- lies to its troops and army suppliers this kind of paper money, promising to withdraw it and reimburse all carriers in money at the end of the campaign (1). The iron money that was struck momentarily nely the panting of Clazomène (2), and the one that Byzantium and some other cities emerged in the same metal, at the time of the Peloponnesian War nese, also had an obsidional character and trustee (3). To deal with financial embarrassment- However, Dionysius of Syracuse, in turn, issued a provisional tin coins, giving to the drachma of this metal the nominal value of a tetradrachmc silver altica (4 ). There is also nothing to prevent (1) Pseucl. \n?,l.,Œconom., II, 2.23; Polyen, 111, 10, 1 ; Bœckh, Staatshansli. said Atkener, 1. 1, p. 769; Beulé, the Coins of A- thenens, p. 71. (2) Ps. Aiist.. Œconom., II, 2, 23. ^ (3) Pollux, vn, 106; cf. l

THE ORIGINS OF CURRENCY. 41'J this (|u'on recognize a fiat currency and provisional in the parts of cxùr \z'aj-v/z>.) of which would be served, according to certain authors, the Cartha- ginois and the Lacedaemonians (1). Suidas talks about terracotta coins (z—pTAv/zi), and Cedrenus, do wooden coins that the Romans would have put in use in the difficult times of their most distant annals, but it is probably here of a simple fabulous tradition (2). Among the tokens and monetiform tesserae in lead, sometimes hell, in Egyptian porcelain or in terracotta, bearing letters on their faces Greek or of various symbols, he is without doubt one certain number to whom we must recognize also give birth to the character of obsidian currencies or trustees (3). In modern times, a new element is taken into account, alongside the currency, as intermediary and sign of commercial exchanges thanks : it's the representative ticket, which we considered as an improvement of the fiat currency as we come from the (1) Seneca, De bcneficY, 14; Eckhel, Doctr. num. vet., t. I, Introd., p. XX;Fr. Leiiorraanl, op. cit., t. 1, p. 220; Bernardakis, in the Journal des Economistes, t. XXXIII, p. 353; St. Jevons, Mint, p. 160 et seq. (2) Suidas, 'Aicjapia; Eckhel, Doctr. num. vet., t. 1, p. XX; Fr. Lenorinant, oj). cit. t. L, p. 215. (3) Albert Dumont, De plumheis apud Grxcos tesseris (Paris, 1870, in-S^); Ach. Postolacca, KsptAxTia 2'j[JLoo),txâ in the A 6rivaiov, 1880, t. YIII, p. 1 and following. ; A. Engei, in the Correspondence Bulletin pond, Hellenic, i. VIIL 1884, p. 1 and next; Fr. Lenormant, the Currency in antiquity, t. I, p. G7 et seq. and p. 207 to 211.

420 THE ORIGINS OF CURRENCY. define. Fiat money represents nothing that a more or less serious promise for the come ; representative currency replaces effect- tively and represents either metallic currency or another real value. Since money is not made for be consumed and destroyed by the person who possesses it sede, but that it must circulate from hand to hand, he is obvious that we can replace it with a other object which takes its place, made help of any material. “We cannot replace place wheat or coal or a wealth any by simple sheets of paper on which we would have had 100 hectoliters of wheat or 100 quintals of coal. These are not these sheets of paper which can feed us and warm us... 3But, in our civilized societies the usefulness of coins is all immat- rielle. A coin is nothing else than a voucher which gives us the right to make ourselves deliver, under certain conditions, a part of existing wealth. However, this good role maybe played by a sheet of paper as well as by a piece of metal » (1). This assessment of certain economists could be applied to metallic money, equi- worth real , since a good is in itself a piece of paper without value, while the (1) Ch. Gide, Principles of political economy,'^. 233. On the o- origin of paper money in China, see Klaprotb, in the Jour- asian nal, t. I, 1822, p. 257 et seq.

THE ORIGINS OF CURRENCY. 421 currency gold or silver has a value intrinsic- seque by itself (1); but it fits well to the representative currency and we understand under this denomination the tickets bank, checks, drafts, promissory notes, bills of exchange and all the papers, securities and credit instruments said, which constitute the greatest part of if- genes of exchange in modern commerce, then that they circulate there, it is said, for a laughing to ten billion. Although the plan of this study don't includes not the examination of processes commercial, banks and change in antiquity or contemporary times, we However, we will note, in conclusion, that all these tickets representative, which whatever they are, don't would only be able to inspire legitimate trust if they are really the replacements of a ma- value any material, either from gold or silver, either an industrial or commercial value which stay in pledge at the debtor. They are affirmation by the issuer, State, bank, house industrial or commercial, whether the value ins- written actually exists, and that we can achieve it in real money, either to everything moment, either to an agreed time. The issuance of tickets is not therefore, basically, only a form of borrowing; so that the public lends, that is to say accepts the tickets in return of your merchandise, it must be insured to be reimbursed one day or the other. Opposite- (1) Compare above, p. 137 and, sniv. 24

/j22 the origins of L.\ CURRENCY. to what some theorists maintain, the credit does not create and does not would know create capi- rate, that is to say any real value : his role is only to be a cog, an agent of transmission of capital or of the value real (1). Hence it appears that credit securities can only have value if they are guaranteed by realizable capital. Generally, for the banks, these capitals are in gold or silver and are called Vf/uaisse. The Bank of France, by example, holds, immobilized in its cellars, a cash in gold species and money intended, the if necessary, to reimburse the tickets she put in circulation. In the 1895 balance sheet, the proportion of cash in the amount of traffic, rose at 91% ^ that is to say (peak 100 francs of notes are guaranteed by 91 francs in cash; they are in addition by the numerous debts that the Bank that the state owns, on Tindustric and on the commerce. In a industrial establishment or commercial, the amounts stipulated on the securities or tickets, if one has been issued, are guaranteed by guarantees pits put in reserve, by the value of the material first to exploit, by the products of industry sorts, by the foodstuffs or goods to be sold, by the land occupied and the equipment used, by the very work of the workers, and it is in this sense only that we can find a part of truth in the sophism proclaimed by some economical (1) See above, p. 138 el seq.

THE ORIGINS OF CURRENCY. 423 mistcs and that we applied ourselves to refu- tci', to know, that we can mint money with no matter what (l). Only, it is necessary to add : as long as this anything has a value no precarious and variable, but very real, easily achievable at all times and not subject to depreciation. Therein lies the danger of re-currency presentative : he doesn't not only enough that she replaces a value, you must be certain that this value can be easily realized at the price that gives him the paper. The principle of banknotes bank of Law, like that of the assignats of the Revolution, is perfectly admissible : we can monetize commercial products as well as cultivable soil itself. But it is dishonest to do it for more than their value real ; it is unwise to do so for this purpose. their real self, up to the amount of its total evaluation, because she is subject to de- preciation which will make it ambiguous the stipulation of effects, and which will be all the more to be feared as the request for realization will be more sudden. Let's conclude : the principles which dominate the world is representative, whatever form it takes, are the same ones who preside over the issuance of metal money : Tune and the other must be a value real and right; Tunic said the e- ence who the characterizes, like us we have it (1) See above, [>. 144.

424 THE ORIGINS OF CURRENCY. done come out, it's that the currency metallic carries within itself its own value, while representative currency splits, like the body and his shadow. To help us with another comparison, its value plays the role of ballast in a ship; she is placed in reserve, and alone, the paper who is delegated to attest to its existence , cir- culminates in the hands of the public whose he requests the confidence. I END,

TABLE OF MATERIALS Pages. Foreword seen CHAPTER ONE BARGAIN AND THE FIRST STANDARDS OF VALUE I. — The natural principle of exchanges 1 II. — Barter in contemporary times 7 III. — Barter in antiquity 18 lY. — Livestock money 24 CHAPTER TWO LINOOTS AND METAL UTENSILS USED AS CURRENCY I. — Characteristics of uncoined metallic standards. . . 33 II. — The uncoined metallic standards of the ]iou- modern ples 38 III. — Metallic standards in ancient Egypt. 18 IV. — Metallic standards in Assyria and Clialdæa. . . 55 V. — Metallic standards at the Hebrews and the Phoenicians Nice GO VI. — Metallic standards at the populations i>im- mitives of the Giece 09 VIL — The stallions metal in central Italy and the remainder of Europe 81 25

426 TABLE OF CONTENTS. CHAPTER THREElEiMl': THE FIRST MONETARY TESTS. — the ÉKIODE OF CURRENCY PRIVATE Pftges. I. — private life among Nutderne peoples '.•:> II. — the currency private among the Greeks !(•:! III. — the Jn-Ivean currency in Merovingian Gaul. \:i\ CIIAPITRK FOURTH THE FIRST TESTS MONETARY. — I..\ GUARANTEED CURRENCY BY the State I. — Role (the equivalent “read must rcmplii' good mowing currency Kv') II. — Gresham's law 1 IP) III. — Disadvantages of currency private 1 15 IV. — Ni'cessité d(> State intervention 16fi CHAPTER FIFTH THE TRADITIONS OF ANTIQUITY REL.VTIVE TO THE INVENTION FROM I.A CURRENCY I. — Development gradual and spontaneous first monetized ingots isl II. — Monetary ingots of Central Italy 187 III. — The Greek traditions relating to the iiidon of Argos. 20* IV. — The Lydians : Gyges and Croesus X'15 CHAPTER SIX gold and silver - IN ANTIGLITY L — Precious metal prices i20 11. — Abundance of gold and silver in antiquity. . 2b()

TABLE OF CONTENTS. 427 the ages. III. — The exploitation of gold mines and money in the year- tiquity ^H^>> CHAPTER SEVEN THE REPORTS OF GOLD ON MONEY AMONG THE ELDERLY I. — listalility natural of the relationship of gold to silver. iHO II. — The relationship between gold and silver, (Mi Egypt, in As- Syria, Persia, Asia Minor oi)H III. — Reports of gold to money in the Greece from Europe 330 IV. — The relationships between gold and silver in Sicily and Italy. 3-l(i CHAPTER EIGHT AUXILIARY CURRENCY IN ANTIQUITY I. — The currency of bronze, equivalent real ot34 II. — Extra currency 387 III. — The characters of liducial currency and rei)d- aretive 414 END OF THE TABLE.

^^ -é v*^v _ he H.G. 237 53 Babelon, Irnest Charles Francis The origins of money considered from the point of view economic and historical PLEASE DO NOT REMOVE GOLD CARDS SLIPS FROM THIS POCKET UNIVERSITY OF TORONTO LIBRARY

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