From the Discovery of America to the end of the First Cycle of the
Influence of the Metals of the New World on European Currencies,
1493-1660
The last decade of the fifteenth century witnessed the discovery of
America, and therein the monetary salvation and resurrection of the Old
World. The end of the second quarter of the seventeenth century in its
turn witnessed the end of the first phase, and the most important, of
the New World upon the destinies of Europe. Practically and historically
the century and a half intervening between 1493 and 1660 may be treated
as a single cycle with a single aspect. It was a time of unexampled
increase in the imports of the precious metals, of equally unexampled
rise of prices, and at the same time of feverish instability and want of
equilibrium in the monetary systems of Europe. Two general statements
may be premised.
1. Broadly speaking--of prices, i.e.--no movement of any note is
perceptible, or records itself in legislative enactment until about
1520, so gradual and at first unimportant was the flow of metal from
America. What did come at first was not silver so much as gold, and
represents the puny and blood-stained plunder of ornaments from the
natives. If this import tended to turn the balance in any way, it was in
the direction of depreciation of gold as compared with silver. But
during this first quarter of the sixteenth century, possibly more
influence on the maintaining of equilibrium is to be attributed to the
largely increased home production of silver. The silver mining in the
Saxon Harz, in Bohemia, and the Tyrol, had received a strong impulse
towards the close of the fifteenth century, while gold was obtained
during the same period in appreciably greater quantities in the
archbishopric of Salzburg, and in Hungary, as well as from Africa.
[Sidenote: GENERAL STATEMENT]
2. In this second period of European bimetallic history, the centre of
European monetary exchanges passes from Italy to the Netherlands.
Antwerp takes the place of Venice and Florence. There is a double and
deep significance in the fact. It is not merely that the trade route had
changed in such a way as to lay the foundation for that development of
European commerce, of which England is the highest expression in our own
days; it is that by the change was provided a more effective safeguard
against precipitate and overwhelming depreciation. The centre of
European exchanges--Antwerp in the sixteenth, as London to-day--has
always performed one supremest function--that of regulating the flow of
metals from the New World by means of exporting the overplus to the
East. The drain of silver to the East, discernible from the very birth
of European commerce, has been the salvation of Europe, and in providing
for it Antwerp acted as the safety-valve of the sixteenth-century
system, as London has done since. The importance of the change of the
centre of gravity and exchange from Venice to Antwerp lies therefore in
this fact. Under the old system of overland and limited trade, Venice
could only provide for such puny exchange and flow as the mediaeval
system of Europe demanded. She would have been unable to cope with such
a flood of inflowing metal as the sixteenth century witnessed, and
Europe would have been overwhelmed. But the foundations of the commerce
of the Netherlands were laid wider. Together with Portugal she opened an
extensive empire along the coasts of Africa and in the Indian East; and
the very time which gave birth to the revolution in the production of
the precious metals in America saw provision made for the regulation of
its outflow through the commerce and exchanges of Antwerp to India. In
the modern system this would be a theoretically perfect world-mechanism,
and its working would be normal and healthy, and the safest indicator of
commerce. That it was not so to seventeenth-century Europe was simply
due to the existence of a disordered, understood bimetallic system, and
the crisis to which the working of this mechanism brought her has
perhaps not been since equalled at any point of time.
The underlying causes of this crisis have been already described. The
currencies of the trading nations of Europe were all unconsciously
bimetallic. Throughout, there was in existence one class who grasped the
_fact_ without any knowledge of the _theory_, and profited by it--the
merchant exchangers. There was constant oscillation--change of ratio,
and the least alteration of the condition of one metal made it a lever
for operations upon the other. These operations were arbitrage merely.
They had no relation to the ebb and flow of commerce as modern arbitrage
transactions have. It was a financier's opportunity of _private_ gain,
and for _private_ gain the system was worked. The ebb and flow of
European currencies, which the sixteenth and seventeenth centuries
witnessed, were as unnecessary (i.e. for the purposes of her commerce)
as they were disastrous.
It is sufficient to indicate the tendency of this argument, and to leave
the illustration of it to the following pages.
To return to the yield of precious metals during the years under
discussion. Any estimate must be conjectural, in the absence of the
accounts of the Spanish Mints.[9] This understood, it may be thus
tabularly represented.
[Sidenote: PRODUCTION OF THE PRECIOUS METALS]
+-----------+-------------+-------------+--------------+--------------+
| | Annual | Annual | Proportion | Proportion |
| Date. | Average | Average | of Gold | of Silver |
| | Production | Production | in Total. | in Total. |
| | of Gold. | of Silver. | | |
+-----------+-------------+-------------+--------------+--------------+
| 1493-1520 | L800,000 | L600,000 | 57% | 43% |
| 1521-45 | 1,000,000 | 1,100,000 | 47% | 53% |
| 1545-60 | 1,200,000 | 3,850,000 | 23.6 | 76.4 |
| 1560-80 | 855,000 | 3,640,000 | 20.8 | 79.2 |
| 1581-1600 | 1,030,000 | 4,945,000 | 17.2 | 82.8 |
| 1601-20 | 1,190,000 | 4,820,000 | 19.8 | 80.2 |
| 1621-40 | 1,157,850 | 3,916,300 | 22.8 | 77.2 |
| 1641-60 | 1,223,400 | 3,516,500 | 25.8 | 74.2 |
+-----------+-------------+-------------+--------------+--------------+
The general tendency of the first years of this period (1493-1520), if
discernible at all, seems rather in favour of silver, and to the
depreciation of gold. The average ratio was 10.75, speaking very
generally, and with every mental reservation as to its applicability at
any particular time and place. An equally rough average for the
preceding time (see Chapter I.) would give a ratio of 11.28, showing
apparently a movement in favour of silver owing to the increased
production of gold.
The succeeding quarter of a century, 1521-45, covers the time from the
conquest of Mexico to the commencement of the exploitation of the silver
mines of Potosi. Looked at from the point of view of prices in
Europe,--as evidenced most circumstantially in the _Plakkaats_ of the
Netherlands, to which reference will be immediately made,--these years
display stability--i.e. a steady maintaining of the advance gradually
and already made between the years 1493 and 1520, and chronicled for us
in the prices of 1521--rather than any further great and readily
perceptible rise. For example in brief. In the Flemish _Plakkaats_ the
French crown is quoted at an equivalent of 1 florin 15-1/2 stivers in
1499, and of 1 florin 19 stivers in 1522, when an attempt was made to
reduce it to 1 florin 15-1/2 stivers again. From 1522 to 1548 no further
advance, but retrogression rather is quoted thus:--
+-------+-----------------------------------+---------+-----------+
| Date. | | Florin. | Stivers. |
|-------+-----------------------------------+---------+-----------|
| 1519 | French Crown quoted at | 1 | 15-1/2 |
| 1522 | " " | 1 | 19 |
| 1526 | " " {(Real) | 1 | 19 |
| | " " {(Attempted) | 1 | 15-1/2 |
| 1539 | " " {(Real) | 1 | 17 |
| | " " {(Attempted) | 1 | 15 |
| 1548 | " " | 1 | 17 |
| 1552 | " " | 1 | 19 |
+-------+-----------------------------------+---------+-----------+
This general conclusion will be found quite invariably illustrated in
the tables of Netherland coins (below).
[Sidenote: CHARACTERISTICS OF THE PERIOD, 1493-1548]
With regard to the annual average production of the metal, there is
perceptible a slight movement towards the depreciation of silver or in
favour of gold. This might naturally be expected to express itself in a
somewhat higher ratio. But the differentiation is so slight as hardly
thus to indicate itself, and certainly not consistently, so far as the
ratio is capable of ascertainment.
In France the ratio in { 1519 was 11.76
{ 1540 " 11.82
In the Netherlands the ratio in { 1520 " 10.68
{ 1540 " 10.62
In England { 1527 " 11.23
{ 1552 " 11.1
In Germany { 1524 " 11.38
{ 1551 " 11.38
Broadly speaking, therefore, there is a certain homogeneity about the
first two periods, 1493-1520 and 1520-48, of the new era. These
fifty-five years mark a time of general advance on prices achieved by
1520 and maintained unequally up to 1548, but an advance which was
steadily and almost fairly level on the two lines of gold and silver, so
that the perfectly well-established advance of prices generally is
accompanied with no great disturbance of the ratio in itself.
In contrast with this all the succeeding periods have, up to 1660, a
distinct character and statistical bearing. An enormous and
ever-increasing advance in general prices occurs, but it is no longer,
as before, on level lines of the two metals equally. The proportion of
the production of the two metals changes, so rich was the yield of the
silver mines of Potosi. From being the same with that of gold, the value
of silver produced suddenly rises to three times and then to four times
that of its rival; and at once the ratio changes, bringing with it all
its accompaniment of feverish instability and flux.
[Sidenote: STATEMENT OF THE RATIO, 1500-1660]
The average result in the ratio was as follows:--
1545-60 11.30
1561-80 11.50
1581-1600 11.80
1601-20 12.25
1621-40 14.00
1641-60 14.50
1661 15.0
As far as can be ascertained the detailed statement of the ratio during
the whole period, 1500-1660, is as follows:--
+------+------+------+-------+------+---------+------------+-------+------+
| | | N | | | | | | |
| | | e | | | | | | |
| | E | t | | | Germany |S.W. Germany| | |
| Date.| n | h |France.|Spain.|(Imperial|(Wurtemburg,|Venice.| Date.|
| | g | e | | | System).| Strasburg, | | |
| | l | r | | | | Colmar). | | |
| | a | l | | | | | | |
| | n | a | | | | | | |
| | d | n | | | | | | |
| | . | d | | | | | | |
| | | s | | | | | | |
| | | . | | | | | | |
+------+------+------+-------+------+---------+------------+-------+------+
| 1474 | | | | 9.824| | | | 1474 |
| 1475 | | | |10.985| | | | 1475 |
| 1480 | | | |11.555| | | | 1480 |
| 1483 | | | |11.675| | | | 1483 |
| 1484 | | | | | 11.37 | | | 1484 |
| 1489 | | 10.5 | | | 11.2 | | | 1489 |
| 1497 | | | 11.83 |10.755| | | | 1497 |
| 1506 | | | |10.262| | | | 1506 |
| 1511 | | | | | | | | 1511 |
| 1517 | | | | | 10.31 | | 11.32 | 1517 |
| | | | | | (Erfuert)| | | |
| 1519 | | 10.15| 11.76 | | | | 12.04 | 1519 |
| 1524 | | | | | 11.38 | | | 1524 |
| 1527 | 12.23| | | | | | 10.03 | 1527 |
| 1529 | | | | | | | 11.07 | 1529 |
| 1537 | | | |10.760| | | | 1537 |
| 1539 | | | 11.68 | | | | | 1539 |
| 1540 | | 10.62| 11.82 | | | | | 1540 |
| 1542 | | | | | | 11.27 | | 1542 |
| 1548 | | 11.0 | | | | | | 1548 |
| 1549 | | | 11.86 | | | | | 1549 |
| 1550 | | | 12.07 | | | | | 1550 |
| 1551 | | | 11.47 | | 10.83 | | | 1551 |
| 1552 | 11.1 | | | |(Imperial| | | 1552 |
| | | | | | Edict) | | | 1552 |
| 1553 | 11.05| | | | | | | 1553 |
| 1554 | | 10.70| | | | | | 1554 |
| 1559 | 11.79| | | | 11.44 | 11.55 | | 1559 |
| 1560 | | | 11.77 | |(Imperial| | | 1560 |
| | | | | | Edict) | | | |
| 1561 | | | | | | | 10.81 | 1561 |
| 1562 | | | | | | 11.01 | 11.53 | 1562 |
| 1566 | | | |12.294| 11.55 | | | 1566 |
| 1572 | | 12.42| | | | | | 1572 |
| 1573 | | | 11.76 | | | | 12.33 | 1573 |
| 1575 | | | 11.68 | | | 11.11 | | 1575 |
| 1576 | | 12.67| | | | | | 1576 |
| 1578 | | | | | | | 10.61 | 1578 |
| 1579 | | 10.62| | | | | | 1579 |
| 1582 | | | | | | 11.40 | | 1582 |
| 1583 | | | | | | 10.93 | | 1583 |
| 1585 | | | | | 11.63 | | | 1585 |
| 1586 | | 10.66| | | | | | 1586 |
| 1587 | | | | | | 12.03 | | 1587 |
| 1589 | | 11.21| | | | | | 1589 |
| 1590 | | | | | | 11.86 | | 1590 |
| 1590 | | | | | | 11.32 | | 1590 |
| 1591 | | | | | | 10.95 | | 1591 |
| 1593 | | | | | | 11.18 | | 1593 |
| 1594 | | | | | | 11.70 | 12.34 | 1594 |
| 1596 | | 10.90| | | 11.50 | | | 1596 |
| 1597 | | | | | | 11.78 | | 1597 |
| 1597 | | | | | | 12.16 | | 1597 |
| 1598 | | 11.29| | | | | | 1598 |
| 1599 | | | | | | 11.05 | | 1599 |
| 1601 | 10.90| | | | | 11.86 | | 1601 |
| 1602 | | | 11.88 | | | 12.22 | | 1602 |
| 1603 | | 11.64| | | | 12.24 | | 1603 |
| 1605 | 12.15| | | | | 12.01 | | 1605 |
| 1605 | | | | | | 12.49 | | 1605 |
| 1606 | | 11.92| | | | | | 1606 |
| 1607 | | | | | | 12.61 | | 1607 |
| 1608 | | | | | | 12.16 | 11.04 | 1608 |
| 1608 | | | | | | 12.46 | | 1608 |
| 1610 | | 12.54| | | 12.2 | | | 1610 |
| 1611 | 13.32| | | | | 12.08 | | 1611 |
| 1612 | | | |13.52 | | 12.30 | | 1612 |
| 1613 | | | | | | 12.35 | | 1613 |
| 1613 | | | | | | 12.29 | | 1613 |
| 1615 | | 12.03| 13.90 | | | 12.31 | | 1615 |
| 1617 | | | | | | 12.58 | | 1617 |
| 1618 | | | | | | 12.11 | | 1618 |
| 1619 | | 12.10| | | | | | 1619 |
| 1620 | 13.34| | | | | | | 1620 |
| 1621 | | 12.5 | | | | | | 1621 |
| 1622 | | 12.65| | | | | | 1622 |
| 1623 | | | | | 11.64 | 11.74 | | 1623 |
| 1624 | | | | | | 13.42 | | 1624 |
| 1624 | | | | | | 12.58 | | 1624 |
| 1626 | | 12.65| | | | | | 1626 |
| 1630 | | | | | | | 10.31 | 1630 |
| 1631 | | | | | | 13.42 | | 1631 |
| 1633 | | 12.65| | | | | | 1633 |
| 1634 | | | | | | 15.10 | | 1634 |
| 1635 | | | | | | 14.80 | | 1635 |
| 1636 | | | 15.36 | | | | | 1636 |
| 1637 | | | | | | 15.10 | | 1637 |
| 1638 | | 13.39| | | | | 14.38 | 1638 |
| 1640 | | | 14.49 | | | | | 1640 |
| 1643 | | | 13.5 | | | | 15.37 | 1643 |
| 1645 | | 14.13| | | | | | 1645 |
| 1648 | | | | | | | | 1648 |
| 1651 | | | | | | | | 1651 |
| 1652 | | 14.13| | | | | | 1652 |
| 1653 | | 14.13| | | | | | 1653 |
| 1656 | | | 14.71 | | | | | 1656 |
| 1660 | | | | | | | | 1660 |
| 1663 | | 14.43| | | | | | 1663 |
| 1665 | | | |16.47 | | | 14.39 | 1665 |
| 1667 | | | | | 12.88 | | | 1667 |
| 1669 | 14.48| | | | 15.13 | | | 1669 |
| 1679 | | | 14.91 | | | | | 1679 |
| 1690 | | | | | 15.13 | | | 1690 |
+------+------+------+-------+------+---------+------------+-------+------+
To treat of these countries in detail.
[Sidenote: THE NETHERLANDS IN SIXTEENTH CENTURY]
Netherlands.
During the period under consideration, the seventeenth century
especially, the monetary history of the Netherlands supplies the key to
that of the surrounding nations. The history of her monetary exchanges
has yet to be written, and of her Mint ordinances very little is
accessible, as compared, e.g., with France. But this is more than
compensated by the numerous "plakkaats" or proclamations of the tariff
of coins, which are to us practical indicators of the rates of exchange.
The Netherlands, as has been already said, were the centre of European
commerce in the sixteenth and seventeenth centuries, as the Italian
States had been in the fourteenth and fifteenth; and every change in the
precious metals or in the coins showed itself in the Antwerp Bourse as
surely and swiftly as to-day in London. As prompt to take knowledge of
these changes as Florence had been two centuries earlier, the
authorities tabulated the various coinages which were current in the Low
Countries,--and practically that meant the coinage of commercial
Europe,--tariffed them against their own by proclamation, and instantly
accommodated themselves to each new change or variation of value by a
new proclamation and a new tariff. These proclamations, therefore, give
us the measure and course of the monetary movements of the time in
fullest and most welcome details.
It has been already shown that this action of the government of the
Netherlands has a twofold aspect. From one side it expresses and
regulates the natural flow and ebb of commerce, just as exchange rates
and bullion remittances do to-day. And in this sense it was perfectly
normal, healthy, and sound, more especially in so far as it provided for
the gradual drawing away overplus metal to the East. But the Governments
of Europe were yet under the spell of the delusion as to a balance of
trade payable in gold--that delusion which was, later, dignified in
history by the name of the mercantile theory. Nor had they yet lost the
traces of that mediaeval craft and lawlessness which rose from, and
prompted to, the mere desire of robbing or pilfering their neighbour's
store of precious metal as the first act of self-defence. Further than
this the monetary system of Europe--unconsciously bimetallic and with an
appalling variety of ratio prevalent at the same moment in different
places--lay open, helpless and defenceless, and inviting to the
bullionist, financier, or arbitragist. In so far as this element of
national greed and dishonesty, or private and unprincipled gain, entered
into the legislative enactments of the Netherlands, it condemns them as
mercenary, and the monetary straits or tightness, not to say crisis and
panic which ensued, as unnecessary and therefore in the highest degree
lamentable.
[Sidenote: SIXTEENTH-CENTURY ARBITRAGE]
In a blind way the age saw what was going on behind the financier's
screen, however little it understood the theory of it. In many a
sixteenth-century document, preserved among the State papers in the
Record Office at London, abuse is piled on the Netherlands for their
practices in enticing away the coin of the realm. One of the
correspondents of the Privy Council in the days of Elizabeth, 1575,
writes thus from the Netherlands: "The Low Country merchants return
great stores of money hither by exchanges, and by the proceeds, as the
exchange may serve for their purposes, they send away her majesty's coin
and bullion into the Low Countries in great quantities, and the rather
by reason of the Hollanders trading with the East, by which means the
realm will be secretly robbed, if it be not prevented." Twenty years
later the whole subject was again gone into, for the fiftieth time, for
the advice of the English Privy Council, and it was shown how "foreign
exchangers contrived, by arranging a rise or fall in particular monies,
to undervalue English monies, and draw them out of the kingdom.
Prevention has been vainly attempted by Acts of Parliament, by sending
over Sir Thomas Gresham to the Low Countries to complain, and by
establishing the office of exchanger, which was discontinued as
injurious to the State. A bank was proposed, but the Queen had not to
spare the L100,000 needed to start it. It is now proposed to settle the
exchange at 10 or 12 per cent., to be fixed yearly, according to the
state of affairs, 20 per cent. or more being sometimes paid now."
The _naivete_ and helplessness of the suggestions contained in these
concluding words need not blind us to the real and pressing gravity of
the monetary situation to which they relate, and which periodically
beset each and every European Government throughout the centuries under
consideration.
Such, therefore, is the aspect of these monetary ordinances or plakkaats
of the Netherlands in the sixteenth and seventeenth centuries.
To speak of them in detail.
The first of the Low Country proclamations, containing an _evaluatie_,
or tariff, is dated 2nd January 1516, and it marks the commencement of
the influence of the American discoveries. (See table below.) By the
succeeding proclamation of 4th February 1520, golden reals were
substituted for the golden florin. Its provisions remained nominally in
force for twenty years or so, but almost immediately the movement
towards higher prices made itself felt, and it was in consequence of
this, and after fruitless negotiations with the merchants of Antwerp,
that Charles V. issued a series of four closely consecutive
proclamations (1521, March 1522, 19th June 1524, 25th November 1525).
The first three concern gold, the last only bears witness to the rise of
silver by attempting to check it and call it down. Similarly, in his
ordinance of 10th December 1526, he enacted that the price ruling on the
4th February 1520 should be again used, and should be reached at two
drops or intervals, so as to create the less disturbance between debtor
and creditor. The ordinance proved fruitless, and was twice renewed, in
1531 and 1539. In spite of them all, the rise in prices against which
the authorities tried to fight, continued and had to be recognised. By
the ordinance of 11th July 1548 a higher limit of values was permitted.
Then, for a dozen years or so, attempts were made, by the proclamations
of 23rd March 1552 and 24th October 1559, to make those prices of 1548
the basis, and to compel a return to it in the future, while recognising
temporarily the higher prices ruling at the moment. And so the process
repeats itself continually--a further rise of prices, complaints of the
disorder in the currency and exchanges, and a new _evaluatie_ issued,
regulating the exchanges at the higher rate for the moment, and
providing for the reduction of prices to previous limits, from and after
such and such a date.
[Sidenote: THE NETHERLAND PLAKKAATS]
In the accompanying table wherever two figures are coupled together
thus,
2 4}
1 19}
the higher figure represents the price ruling at the date of the
ordinance, the lower figure is the price to which return was to be made
from and after some date fixed thereby. A simple glance at the tables
will show how futile and foredoomed was every such attempt to rule and
compel the exchanges. For the explanation of these tables it will be
sufficient to give the dates of the Netherlands ordinances, premising
that up to 1586 the series was applicable to the whole Netherlands, but
that from that date there is a separate series for the Seven United
Provinces, and for the Spanish Netherlands.
Netherlands Plakkaats.
27th July 1572.
7th February 1573.
22nd June 1574 (countenances the rise of prices over those of 1572
only until the end of the year).
3rd December 1575.
19th April 1576 (for Holland and Zealand, and to continue for only six
months, when, by the ordinance of 25th October of the same year,
a considerably lower limit was prescribed).
1579. In this year no less than four plakkaats were issued, with the
object of enforcing a reduction of prices, but in vain, and the
last of the four, issued on the 19th December, was obliged to
recognise some portion of the rise of prices which it was
attempted to counteract.
9th October 1581. In less than a year the effect of the strenuous
attempt in 1579 had been completely swept away, and a further
advance had to be recognised.
From 1586 the series of proclamations divides into two, as has been
said, owing to the revolt and establishment of the United
Netherlands.
The one set, relating to the Spanish Netherlands, includes
proclamations of
30th April 1590, again recognising provisionally a further advance,
and renewed on
15th December 1593,
21st October 1594,
16th November 1599,
23rd June 1602 (with some slight alterations),
30th December 1605, attempting to restrain a farther advance,
30th June 1607,
13th May 1609,
30th September 1610,
22nd March 1611, again recognising the inevitable advance.
The last named remained in force until 21st May 1618, with the
exception of not being applicable in Volkenburg, Dalen, and
Limburg, where the abnormal height to which monies had risen
necessitated a special ordinance (4th March 1616), lowering the
price to the limit of 22nd March 1611, by five separate
three-monthly steps or intervals.
[Sidenote: THE PLAKKAATS OF THE UNITED PROVINCES]
The second and separate series of monetary ordinances issuing from their
High Mightinesses, the States-General of the United Provinces, is
remarkably parallel to the above. It begins with the ordinance of 2nd
September 1594: "In view of the rising price of gold and silver," it
says, a "lessening of that price to the limit of 1586 is ordered at
three intervals, 15th September 1594, 10th November, 10th January 1595."
Like the contemporary enactment of the Spanish Netherlands, it proved
ineffectual, and a further rise had to be recognised in the ordinance
of 2nd March 1596, and again of 2nd April 1603. The preambles of these
ordinances, which are preserved in the huge collections of Can and
Scheltus, generally recite their purpose of providing against the
disorders in the coinage, caused by the daily rise in price, by the
greed and licence of the times, and by the inrush of the silver coins of
other states. Such is specially the tenor of that of 21st March 1606,
one of the most famous of these ordinances. Two years later an attempt
was made to reduce prices to the limit of 1606. It proved ineffectual,
and by the proclamations of 1st July 1610, 26th September 1615, and 13th
February 1619, further advances were recorded. By the last-named,
renewed on 5th June 1621, an attempt was made to re-establish the prices
of 1610.
So much for the ordinances themselves. It is only necessary to add, for
their general elucidation, that they generally contain and prescribe in
detail the value of each separate coin circulating in the Low Countries
at the particular time, coupled with an engraving of the coin, as an
assistance to the people in recognising them. Indeed, some of the
ordinances, that of 1606 for instance, contain engravings of upwards of
1000 different pieces--a significant witness to the international welter
of coins in the Netherlands exchange. Dissected in detail, with regard
to only a few of these coins, the tabular result is as follows:--
THE NETHERLAND PLAKKAATS
+---------------------------------++----------------------------------+
| German Gold Guldens. || Spanish Ducats. |
|(75 to a Mark of Gold, 18 Carats || (70 to a Mark of Gold, 23 Carats |
| 4 Grs. Fine.) || 7-1/2 Grs. Fine.) |
+-----------+---------------------++-----------+----------------------+
| | Declared Value || | Declared Value |
| | in Netherlands || | in Netherlands |
| Date. | Currency as by the || Date. | Currency as by the |
| | Plakkaats. || | Plakkaats. |
| +----------+----------++ +----------+-----------+
| | Florins. | Stivers. || | Florins. | Stivers. |
+-----------+----------+----------++-----------+----------+-----------+
| 1499 | 1 | 8 || 1499 | 1 | 19 |
| 1522 | 1 | 10 || 1522 | 2 | 3 |
| 1526 | 1 | 12 || 1526 | 2 | 4 |
| | 1 | 8 || | 1 | 19 |
| 1539 | 1 | 9 || 1539 | 2 | 1 |
| | 1 | 8 || | 1 | 19 |
| 1548 | 1 | 10 || 1548 | 2 | 1 |
| 1552 | 1 | 11 || 1552 | 2 | 2 |
| 1559 | 1 | 12 || 1559 | 2 | 5 |
| 1572 | 1 | 15 || 1572 | 2 | 7 |
| 1573 | 1 | 19 || 1573 | 2 | 15 |
| 1574 | 1 | 16 || 1574 | 2 | 13 |
| 1575 | 2 | 0 || 1575 | 3 | 0 |
| 1576 | 2 | 0 || 1576 | 3 | 3 |
| | 1 | 17 || | 2 | 12 |
| 1577 | 2 | 0 || 1577 | 3 | 3 |
| 1579 | 2 | 3 || 1579 | 3 | 4 |
| | 2 | 4 || | 3 | 0 |
| | 2 | 2 || | 2 | 18 |
| | 2 | 3 || | 3 | 0 |
| 1581 | 2 | 8 || 1581 | 3 | 6 |
| 1590 | 2 | 9 || 1590 | 3 | 10 |
| 1605 | 2 | 10 || 1599 | 3 | 15 |
| 1607 | 2 | 12 || 1609 | 3 | 19 |
| 1609 | 2 | 15 || 1618 | 4 | 1 |
| 1611 | 2 | 16-1/2 || |
| 1618 | 2 | 17-1/2 || United Netherlands. |
| || 1586 | 3 | 8 |
| United Netherlands. || 1594 | 3 | 12 |
| 1586 | 2 | 8 || | 3 | 10 |
| 1594 | 2 | 12 || | 3 | 8 |
| | 2 | 10 || 1596 | 3 | 9 |
| | 2 | 8 || 1603 | 3 | 16 |
| 1596 | 2 | 10 || | 3 | 15-1/2 |
| 1603 | 2 | 14 || | 3 | 15 |
| 1606 | 2 | 15 || 1606 | 3 | 16 |
| 1608 | 2 | 17 || 1608 | 4 | 0 |
| | 2 | 16 || | 3 | 18 |
| | 2 | 15 || | 3 | 16 |
| | | || 1610 | 4 | 0 |
| 1610 & | 2 | 18 || 1615 | 4 | 1 |
| onwards | | || 1619 | 4 | 2 |
| | | || 1621 | 4 | 4 |
+-----------+----------+----------++-----------+----------+-----------+
+---------------------------------++----------------------------------+
| Spanish Pistoles. || French Crowns. |
|(36 to a Mark of Gold, 21 Carats || (Old, i.e. not "of the Sun," 72 |
| 10 Grs. Fine.) || to a Mark of Gold, 22 Carats |
| || 4-1/2 Grs. Fine) |
+-----------+---------------------++-----------+----------------------+
| | Declared Value || | Declared Value |
| | in Netherlands || | in Netherlands |
| Date. | Currency as by the || Date. | Currency as by the |
| | Plakkaats. || | Plakkaats. |
| +----------+----------+| +----------+-----------+
| | Florins. | Stivers. || | Florins. | Stivers. |
+-----------+----------+----------++-----------+----------+-----------+
| 1548 | 3 | 12 || 1499 | 1 | 15-1/2 |
| 1552 | 3 | 18 || 1522 | 1 | 19 |
| 1559 | 4 | 0 || 1526 | 1 | 19 |
| 1572 | 4 | 4 || | 1 | 15-1/2 |
| 1573 | 4 | 16 || 1539 | 1 | 17 |
| 1574 | 4 | 10 || | 1 | 15 |
| 1575 | 5 | 0 || 1548 | 1 | 17 |
| 1576 | 5 | 4 || 1552 | 1 | 19 |
| | 4 | 13 || 1559 | 2 | 0 |
| 1577 | 5 | 4 || 1572 | 2 | 2 |
| 1579 | 5 | 10 || 1573 | 2 | 9 |
| | 5 | 10 || 1574 | 2 | 6 |
| | 5 | 5 || 1575 | 2 | 12 |
| | 5 | 8 || 1576 | 2 | 13 |
| 1581 | 5 | 18 || 1577 | 2 | 12 |
| 1590 | 6 | 4 || 1579 | 2 | 15 |
| 1605 | 6 | 9 || | 2 | 15 |
| 1607 | 6 | 12 || | 2 | 12-1/2 |
| 1609 | 7 | 0 || | 2 | 14 |
| 1611 | 7 | 2 || 1581 | 3 | 0 |
| 1618 | 7 | 5 || 1590 | 3 | 3 |
| || 1605 | 3 | 6 |
| || 1607 | 3 | 8 |
| || 1609 | 3 | 12 |
| || 1611 | 3 | 12-1/2 |
| United Netherlands. || 1618 | 3 | 14 |
| 1586 | 6 | 0 || United Netherlands. |
| 1594 | 6 | 6 || 1586 | 3 | 0 |
| | 6 | 3 || 1594 | 3 | 3 |
| | 6 | 0 || | 3 | 1 |
| 1596 | 6 | 6 || | 3 | 0 |
| 1603 | 6 | 15 || 1603 | 3 | 8 |
| 1606 | 6 | 17 || 1606 | 3 | 10 |
| 1608 | 7 | 1 || 1608 | 3 | 14 |
| | 6 | 19 || | 3 | 12 |
| | 6 | 17 || | 3 | 10 |
| 1610 | 7 | 4 || 1610 | 3 | 14 |
| 1615 | 7 | 6 || 1615 | 3 | 15 |
| 1619 | 7 | 12 || 1619 | 3 | 16 |
| | 7 | 6 || | 3 | 15 |
| 1621 | 7 | 12 || 1621 | 3 | 18 |
+-----------+----------+----------++-----------+----------+-----------+
+---------------------------------++--------------------------------+
| English Rose Nobles. || English Sovereigns. |
| (32 to a Mark of Gold, 23 || (40 to a Mark of Gold.) |
| Carats 8-1/2 Grs. Fine.) || |
+-----------+---------------------++----------+---------------------+
| | Declared Value || | Declared Value |
| | in Netherlands || | in Netherlands |
| Date. |Currency as by the || Date. | Currency as by the |
| | Plakkaats. || | Plakkaats. |
| +----------+----------++ +----------+----------+
| | Florins. | Stivers. || | Florins. | Stivers. |
+-----------+----------+----------++----------+----------+----------+
| 1499 | 4 | 5 || | | |
| 1520 | 4 | 5-1/2 || 1548 | 3 | 0 |
| 1522 | 4 | 10-1/2 || | | |
| 1526 | 4 | 17-1/2 || 1552 | 3 | 0 |
| | 4 | 5-1/2 || | | |
| 1539 | 4 | 10 || 1554 | 3 | 0 |
| | 4 | 5-1/2 || | | |
| 1548 | 4 | 10 || 1575 | 4 | 4 |
| 1552 | 4 | 16 || | | |
| 1559 | 5 | 0 || 1576 | 4 | 6 |
| 1572 | 5 | 3 || | | |
| 1573 | 6 | 10 || 1579 | 4 | 8 |
| 1574 | 6 | 6 || |
| 1575 | 7 | 5 || |
| 1576 | 7 | 10 || |
| 1577 | 7 | 0 || |
| 1579 | 8 | 0 || |
| | 7 | 10 || |
| | 6 | 8 || |
| | 6 | 14 || United Netherlands. |
| 1581 | 7 | 4 || |
| 1590 | 7 | 9 || |
| 1607 | 8 | 2 || 1586 | 5 | 1 |
| 1609 | 8 | 10 || | | |
| 1611 | 8 | 13 || 1594 | 5 | 5 |
| 1618 | 8 | 16 || | | |
| || | 5 | 3 |
| United Netherlands. || | | |
| 1586 | 7 | 12 || | 5 | 1 |
| 1594 | 8 | 0 || | | |
| | 7 | 16 || 1596 | 5 | 2 |
| | 7 | 12 || | | |
| 1596 | 7 | 13 || 1603 | 5 | 9 |
| 1603 | 8 | 8 || | | |
| | 8 | 7 || 1606 | 5 | 12 |
| | 8 | 6 || | | |
| 1606 | 8 | 9 || 1608 | 5 | 16 |
| 1608 | 8 | 16 || | | |
| | 8 | 12 || | 5 | 14 |
| | 8 | 9 || | | |
| 1610 | 8 | 16 || | 5 | 12 |
| 1619 | 9 | 0 || | | |
| | 8 | 16 || 1610 | 5 | 18 |
| 1621 | 9 | 0 || | | |
+-----------+----------+----------++----------+----------+----------+
+-------------------------------------++-----------------------------------+
| || Burgundian Gulden (or |
| Philippus Rijder. || Gulden Andries). |
|(67-1/2 and subsequently 70 to a Mark|| (72 to a Mark of Gold, 19 Carats |
| of Gold, 23 Carats 8-1/2 Grs. Fine.)|| Fine, from 1456 to 1567; later, 75|
| || to a Mark, 18 Carats 6 Grs. Fine.)|
+----------+--------------------------++-----------+-----------------------+
| | Declared Value || | Declared Value |
| | in Netherlands || | in Netherlands |
| Date. | Currency as by the || Date. | Currency as by the |
| | Plakkaats. || | Plakkaats. |
| +-------------+------------++ +----------+------------+
| | Florins. | Stivers. || | Florins. | Stivers. |
+----------+-------------+------------++-----------+----------+------------+
| 1499 | 1 | 19 || 1499 | 1 | 9 |
| 1522 | 2 | 3 || 1522 | 1 | 12 |
| 1526 | 2 | 4 || 1526 | 1 | 13 |
| | 1 | 19 || | 1 | 9 |
| 1539 | 2 | 1 || 1539 | 1 | 10 |
| | 1 | 19 || | 1 | 9 |
| 1548 | 2 | 1 || 1548 | 1 | 11 |
| 1552 | 2 | 2 || 1552 | 1 | 12 |
| 1559 | 2 | 5 || 1559 | 1 | 13 |
| 1572 | 2 | 7 || 1572 | 1 | 15-1/2 |
| 1573 | 2 | 15 || 1573 | 1 | 19 |
| 1575 | 2 | 18 || 1574 | 1 | 16 |
| 1576 | 3 | 3 || 1575 | 2 | 0 |
| 1577 | 3 | 0 || 1576 | 2 | 0 |
| 1579 | 3 | 3 || | 1 | 18-1/2 |
| | 3 | 0 || 1577 | 2 | 2 |
| | 2 | 18-1/2 || 1579 | 2 | 3 |
| | 3 | 0 || | 1 | 5 |
| 1581 | 3 | 6 || | 2 | 3-1/2 |
| 1590 | 3 | 8-1/2 || | 2 | 4 |
| 1610 | 3 | 18 || 1581 | 2 | 9 |
| 1611 | 3 | 19 || 1590 | 2 | 11 |
| || 1607 | 2 | 14 |
| || 1609 | 2 | 17 |
| || 1611 | 2 | 18 |
| United Netherlands. || |
| || United Netherlands. |
| 1586 | 3 | 8 || 1586 | 2 | 9 |
| 1594 | 3 | 10 || 1594 | 2 | 13 |
| | 3 | 9 || | 2 | 11 |
| | 3 | 8 || | 2 | 9 |
| 1596 | 3 | 9 || 1596 | 2 | 11 |
| 1603 | 3 | 14 || 1603 | 2 | 15 |
| 1606 | 3 | 15 || 1606 | 2 | 16 |
| 1608 | 3 | 17 || 1608 | 2 | 18 |
| | 3 | 16 || | 2 | 17 |
| | 3 | 15 || | 2 | 16 |
| 1610 | 4 | 0 || 1610 | 2 | 19 |
+----------+-------------+------------++-----------+----------+------------+
+--------------------------------++---------------------------------+
| German Thaler || Netherland Rijksdaalder |
| (Silver). || (Silver). |
+----------+---------------------++----------+----------------------+
| | Declared Value || | Declared Value |
| | in Netherlands || | in Netherlands |
| Date. | Currency as by the || Date. | Currency as by the |
| | Plakkaats. || | Plakkaats. |
| +----------+----------++ +----------+-----------+
| | Florins. | Stivers. || | Florins. | Stivers. |
+----------+----------+----------++----------+----------+-----------+
| 1539 | 1 | 6 || 1583 | 2 | 2 |
| | 1 | 7 || | | |
| 1548 | 1 | 8 || 1586 | 2 | 5 |
| 1552 | 1 | 9 || | | |
| 1559 | 1 | 10 || 1594 | 2 | 6 |
| 1571 | 1 | 11 || | | |
| 1572 | 1 | 12 || | 2 | 5 |
| 1573 | 1 | 16 || | | |
| | 1 | 14 || 1603 | 2 | 7 |
| 1577 | 1 | 18 || | | |
| 1579 | 2 | 1 || 1608 | 2 | 8 |
| 1581 | 2 | 5 || | | |
| 1611 | 2 | 11 || | 2 | 7 |
| || |
| United Netherlands. || |
| 1586 | 2 | 5 || United Netherlands. |
| 1594 | 2 | 6 || |
| | 2 | 5 || |
| 1603 | 2 | 7 || 1610 | 2 | 8 |
| 1608 | 2 | 8 || | | |
| | 2 | 7 || 1619 | 2 | 10 |
| 1610 | 2 | 8 || | | |
| 1619 | 2 | 10 || 1621 | 2 | 12 |
| 1621 | 2 | 12 || | | |
+----------+----------+----------++----------+----------+-----------+
France.
In France the result of the American influx of metals did not make
itself felt until the time of Francis I. During his reign the value of
the mark of gold increased 33 livres 4 sols. 2 dens., and that of silver
1 livre 10 sols.
The main reduction took place at two periods, 1519 and 1540, and with a
consequent change in the ratio slightly in favour of silver. The
earliest find in America was gold, and at first this metal shows a
tendency to depreciate. Concurrently silver, as the overvalued metal,
commenced to disappear from circulation. It was to prevent this export
that in 1519 the _ecu au soleil_ was advanced to 40 sols., and again in
1532 to 45 sols.--an advance of 12-1/2 per cent. The silver _testoon_
was advanced at the same time from 10 sols. to 10 sols. 6 dens., an
advance of 5 per cent. Even so equilibrium was not produced, and
disorders in the currency continued, along with the prevalence of
lower-rated coins. The town of Marseilles complained of it in a petition
to the King (8th May 1539), and the important edict of Blois, 1540,
which left the _ecus au soleil_ untouched at 45 sols., while advancing
the _testoon_ to 10 sols. 8 dens., was professedly and purposely issued
"to more equalise the silver with the value of the gold, and
consequently to make the value of our monies, both red and white,
corresponding." Two years later the States-General when they met
complained of the lack of currency, and demanded the opening of the Mint
at Aix. The request was granted, but without visible result.
The same process of advance, unequally maintained, continued under Henry
II. and Charles IX. (see accompanying tables).
[Illustration: TABLE OF THE MOVEMENT OF GOLD & SILVER IN FRANCE
1493-1662.]
TABLE OF THE MOVEMENT OF GOLD AND SILVER IN FRANCE, 1500-1660.
+----------+--------------------------+-----------------------------+
| |Price of the Mark of Gold.|Price of the Mark of Silver. |
| Date. +---------+-------+--------+---------+---------+---------+
| | Livres. | Sols. | Dens. | Livres. | Sols. | Dens. |
+----------+---------+-------+--------+---------+---------+---------+
| 1488 | 130 | 3 | 4 | 11 | 0 | 0 |
| 1519 | 147 | 0 | 0 | 12 | 10 | 0 |
| 1540 | 165 | 7 | 6 | 14 | 0 | 0 |
| 1549 | 172 | 0 | 0 | 15 | 0 | 0 |
| 1561 | 185 | 0 | 0 | 15 | 15 | 0 |
| 1573 | 200 | 0 | 0 | 17 | 0 | 0 |
| 1575 | 222 | 0 | 0 | 19 | 0 | 0 |
| 1602 | 240 | 10 | 0 | 20 | 5 | 4 |
| 1615 | 278 | 6 | 6 | ... | ... | ... |
| 1636 | 320 | 0 | 0 | 23 | 10 | 0 |
| 8th May | | | | | | |
| 1636 | 384 | 0 | 0 | 25 | 0 | 0 |
|22nd Sept.| | | | | | |
| 1641 | ... | ... | ... | 26 | 10 | 0 |
| 1662 | 423 | 10 | 11 | ... | ... | ... |
+----------+---------+-------+--------+---------+---------+---------+
[Sidenote: FRANCE: THE MINT INQUIRY OF 1575]
In the case of the latter monarch it is expressly stated that the
change, which was effected in 1573, when the ratio was established at
11.77, had been preceded by a period during which "the people" had of
themselves augmented the value of the _ecu d'or_ to 54 sols. At this
limit the Government was obliged to fix it, but by the year 1577 it had
risen successively to 58, 60, and 65 sols. The evil, as it was thought
to be, of the advance of the monies was attributed to the caprice and
unscrupulousness of "the people," and the King called several councils
of experts to discuss the matter. Still the process continued unabated,
and on the 19th December 1575, Henry III. assembled the States-General.
The _cour des monnaies_--the officials of the Mint--at once approached
him with a petition. Their representation is of peculiar significance:--
"In spite of the bad police prevailing, we draw in times of peace twice
as much silver from abroad as the foreigners draw from us. If the reform
we advocate were adopted we should double this net gain.... Between us
and the Netherlands and Germany, where we generally trade, there is this
difference, that 6 _ecus_, at the price at which they are exposed here,
only come to 5 in the said places, which has induced a sudden and
enormous dearness in the merchandise which we export from there, and
besides has caused us a great disorder--to wit, that the merchants have
transported all our _douzains_ and other billon money, to save
themselves from the loss they would have had to incur in settling in
_ecus_ or in any foreign species of gold or silver on which, at the
price they are current at by the caprice of the people, there would be a
loss in settlement of 15, 20, and 25 per cent.... The cause of the
enhancement of prices proceeds from the malice of several who turn into
bullion the best of your coins in order to fill the kingdom with others
of less goodness, enriching themselves thus with the blood and misery of
the people....
[Sidenote: FRANCE: THE REFORM OF 1577]
"The remedy is to lower the rate of the monies.... The _ecus_ ought to
come down to 50 sols., but for the present we would consent to it being
put at 60, awaiting a further reduction. The currency of all foreign
coins ought to be prohibited as the chief cause of these evils. For
although by all your ordinances they have been valued according to the
price of the _ecu_, yet the people have always increased them more than
they have your own monies, so that the _ecu_ at this moment, to be in
accordance, ought to pass for 78 sols. This arises from the craft of the
foreigner, and the only exceptions of importance are the _reals_ and
_pistoles_ of Spain, which are of known goodness and profit to the
melter. They have never brought us harm, but, on the other hand, they
are being melted down all over France, and at the present rate the
foreigner gets a profit of about 7 livres on the mark of them, so that
we advise prohibition of their circulation. Finally, we advise to do
away with the old reckoning by livres and sols, and substitute for it
the reckoning by ecus."
The States-General, adopting in part the weakest suggestion of this
remarkable paper, fixed the ecus at 65 sols. The Mint officials at once
represented that this only increased the evil. Henry accordingly
assembled at Pontoise a conference of experts, and as the outcome of
their deliberations decided on the adoption of the chief recommendation
of the Mint officials' representation. By his proclamation of 13th
November 1577, the reckoning by livres was abolished and that of gold
_ecus_ substituted, values of under 1 ecu or 60 sols. to be settled in
divisional coinage, and circulation of all foreign coins prohibited,
with the exception of Spanish and Portuguese gold ducats. It was
forbidden to constrain payment of any sum above 100 sols. in billon
money, and in sums below that amount to present more than the third of
the total sum in such billon money.
[Sidenote: FRANCE: FAILURE OF THE REFORM OF 1577]
This extraordinary and, on the whole, admirably planned reformation
merits so much detail because of the intense importance of its bearing.
It in effect anticipated the reformation which was only accomplished in
England in our own century. So far as it was actually put in practice it
made France monometallic. The instinct of the time had found its way to
a comprehension of the evil before it, and of the remedy. The evil was
due to a badly-regulated, weltering, bimetallic system; the remedy was a
monometallic system. It matters little that such terms were not in use
and that the theory of the matter was not enunciated. The essential
point was that the _fact_, the _situation_, was grasped in practice for
a moment, dimly it may be, yet sufficiently to illustrate the whole
antecedent and succeeding event. As a matter of fact the ordinance
remained practically in great part a dead letter. That it did so--that
it did not accomplish its purpose--has been attributed to the _malheur_,
the unhappiness, of the time. It was due to no such thing. It was due to
the simple fact that in the ordinance two quite distinct, and one of
them impossible, reforms were projected. The attempt to tie down the
_ecu_ to 60 sols. was foredoomed to failure, and as the eye of
contemporaries was fixed more entirely on prices rather than on method
of tender, the most significant part of the ordinance passed out of
mind; already by the time of the death of Henry III., "the people," it
is again said, had increased the _ecu_ to 64 sols. On the 30th March
1594 a proclamation was issued to call it down to the value prescribed
by the celebrated declaration of 1577, i.e. 60 sols. but, finding it
impossible, the whole system created by that declaration was abolished
(September 1602); the reckoning by _ecus_ was done away with, and the
old system of reckoning by livres returned to; the gold _ecu_ was
tariffed at 65 sols., and the circulation of foreign monies was again
permitted. Henry IV., in his proclamation abolishing the almost
invulnerable system established by Henry III., attributes to the
attempts at working that system "the present dearness of everything." It
is almost impossible fully to represent the unwisdom of this
counter-reformation. To the eye of the then legislator there was only
one evil--the rising of prices. If levelly effected it was, as a matter
of fact, no evil at all--far the reverse indeed, and he did not need to
concern himself about it at all. Besides, it was irresistible. The evil
that escaped his eye, or to which he was blind, was that unceasing
process of flux which was caused by the different ratios prevailing in
different parts of Europe. The scheme of Henry III. would have proved
effective, where no other measure or scheme of the time was or could be,
and its abrogation in 1602 by Henry IV. removed a bulwark and a barrier,
and made way for catastrophe.
Le Blanc considers that this repeal of the system established in 1577,
itself failed of its purpose, _because the increase of prices still
continued_. "In the seven years of peace which followed the ordinance of
1602, the depreciation of the gold _ecu_ was as much as it had been in
the preceding sixty-five years of war and trouble." The simple truth
was, that it was much more likely to increase in time of peace and trade
activity than in time of war. The point to notice was not at all how
much the _ecu_ did depreciate, but the relativity of such its
depreciation with that of the standard currency of other countries, and
the monetary disorder which the inequality of ratio and of rate of
depreciation induced.
Alarmed beyond measure at the evident failure of his plans, Henry IV.
summoned monetary conferences of his wisest and best, and they were not
even suspended by his assassination. The complaint again was, that the
permission to circulate foreign monies had led to the transport of all
the good coinage, to the ruin of commerce and great general disorder.
Assemblies were held all over France in the trading towns, and the
result of the advice of their delegates was the proclamation of 5th
December 1614 (issued early in 1615). By this proclamation silver monies
were left untouched, the tariff of the gold _ecu_ was increased from 65
to 75 sols., and the value of the mark of gold proportionally increased.
The ratio was thereby altered from 12.01 to 13.90. It is hardly too much
to say that this step and alteration in the ratio saved France from the
catastrophe which befell England and Germany in 1622 and 1623. The
arrangement established in 1615 endured unaltered until 1636, when a
slight reduction in the ratio was made to 13.61 (on the 8th May). Two
months later it was found that so serious an export of good coinage was
ensuing that "our kingdom would be entirely stripped of good currency,
to our great damage, etc." A proclamation was accordingly issued (28th
June 1636) attempting to regulate the course of exchange. The effort was
vain, and on the following 22nd September the ratio was suddenly and
violently altered to 15.36.[10]
[Sidenote: FRANCE: THE REFORM OF 1640]
A glance at the ratio prevalent in other countries will show how
masterful was this act of France, but it carried with it the seeds of
its own punishment. Such is the nature of the bimetallic law that any
overshooting of the ratio, on no matter which side,--in favour of silver
or in favour of gold,--establishes a differentiation, and the
differentiation at once gives to the one metal a fulcrum or lever
point--a purchasing power--against the other, and the undervalued metal,
whichever it is, at once tends to disappear. Four years after this
autocratic measure of France, it was found that her currency was in so
depreciated a state, through exchange, that the only pieces current were
lacking one-third of their full weight.
The recoinage established by her proclamation of 31st March 1640, which
established the new _louis d'or_, was intended as a complete and
permanent remedy, and it may reasonably claim the praise of having
effected so much. The alteration of the ratio established in 1640-41 by
this recoinage (from 15.36 to 14.49) was only made after most serious
deliberation. Monetary conferences of experts were held at Paris; and it
was found, after careful assays of all the monies of the surrounding
nations, that the prevailing ratios (1640-1) were at one and the same
time--
Germany 12 : 1
Milan 12 : 1
Flanders and Netherlands 12.5 : 1
England 13.33
It was therefore decided to adopt a higher ratio than all these, viz.
13.5.[11]
The history of the few years succeeding this measure is most
instructive. The depreciation of monies continued, and on the 4th April
1652 a proclamation was issued, forbidding the currency of certain old
monies of France, and again attempting to restrain the course of the
exchanges; and three years later, 1655, under pretext that false
moneyers were imitating the _louis d'or_ and the silver _ecus_, the
minting of _lis d'argent_ (lilies of gold and silver) was resolved upon.
"But," says Le Blanc, "everybody knows that the true motive was the same
as when a little later they resolved on the minting of 4-sol. pieces.
Under the above pretext, the ratio basis of 1641 was broken.
Remonstrances were vain until experience proved their weight, and the
minting of the _lis d'or_ had to be discontinued. The pieces already
minted received a value of 7 livres, and to correspond the _louis d'or_
was increased to 11 livres, by proclamation 15th March 1656." As silver
was left untouched, the resulting alteration of the ratio was from
13-1/2 to 14-5/7.
Florence.
With the advance of Antwerp as the centre of European exchanges in the
fifteenth century, the mercantile pre-eminence of Florence and Venice
decayed, and their monetary history loses its former prime importance.
But they by no means thereby lose their interest for us. Instead of
profiting as of yore by every veer in the winds of exchanges, they are
at the mercy of them, as was every other country outside the charmed
circle of the Netherlands. The influence of the changed conditions in
the production of the precious metals, due to the discovery of America,
does not show itself in Florence before 1531, when (4th August) the
price was by law advanced. Three years later, 5th March 1534, it was
found that the state was receiving damage from the foreign monies
circulating, and that the only native coin circulating was in a worn and
depreciated state. A recoinage was accordingly ordered, circulation of
all foreign monies of silver was forbidden, and all payments and
contracts were commanded to be made in gold _scudi_ of the state. In
order to inform the commercial element, the Mint masters were further
ordered to make trial every fifteen days of the value of any foreign
_scudi_, and to publish the result.
There is a wonderful simplicity about this enactment. In order to defend
themselves from a flood of cheap and cheapening silver, the Florentine
authorities adopted a virtual gold monometallism. That the enactment was
not permanently regarded and kept can only be attributed to the strength
of commercial custom, and to a true perception in the mercantile
community at large of the essential difficulty of the problem and its
remedy. The Florentines were simply obliged to circulate all coins, gold
as well as silver, because such was the universal custom of mediaeval
Europe. By 1552 silver foreign monies were again current in Florence, in
such quantities and with such effects on the native gold currency, that
they had to be again prohibited and banished (by law of 18th May 1552);
renewed three years later (28th February 1555), and again in 1557 (29th
April). Indeed, within the period here treated of, up to, i.e., 1660,
there is a series of thirteen or fourteen separate re-enactments of the
prohibition relating to these monies and the depreciated Florentine
billon money ("_quattrini neri_"). If, during this period, Florence had
occupied the commanding position that Antwerp did, quite unique interest
would attach to the record of this monetary policy or experiment. But
not being in that position, and being, too, quite apparently unable to
enforce her own enactments in her own territory, even this merely
depressive policy was partially broken down. In so far as it was broken
down she lay at the mercy of the monetary changes around her, and of the
Netherland financiers, as did every other country of Europe. By the law
of 5th April 1630, all species of foreign ducatoons were prohibited, "in
consideration that, within the short time they have been introduced, so
great a quantity, and of such differing standards, has been imported
from the various foreign Mints." Five years later the gold coin was in
so depreciated a state as to call for legislative interference (9th
February 1635, renewed on 5th February 1645); and again in 1661 (3rd
February) it was found necessary to prohibit the circulation of the
silver _reals_ of Peru and every other kind of Spanish silver, except at
bullion value. These are only a few from a long list of similar
enactments, but they serve adequately to show the trend of events on
small as well as large fields of operations. What an amount of
commercial disturbance and disaster lies behind the dry details of these
legal enactments, the case of England will serve to show.
Germany.
The monetary history of Germany is one of extreme confusion and
intricacy. The lack of coercive power in the central authority--in the
Emperor himself--was as conspicuously displayed in the monetary
ordinances of the empire as in the political sphere. The imperial edicts
were disregarded, and each separate circle of the empire, or each
separate prince or union of princes, left to shift or act for
themselves. Amid all the confusion of such a disorganised and reeling
system sufficient is perceptible to indicate the broad tendency of
events, and to show how closely analogous was her experience to that of
Europe generally within the same period.
In Germany, as in the Netherlands, France, and England, the influence of
the discovery of America only begins to express itself about 1520, and
in the usual way--influx, movements and disorders in the currency and
ratio, and general complaints. In 1520 a monetary convention was
summoned to meet at Forchheim. This was followed by the debate in the
Reichstag at Nuernberg (1522), where great complaints were made of the
unusable, false, and depreciated coinage, "due to the stealing away and
exchanging abroad of the gold _gulden_ and silver coins." It was in
consequence of the representations of this Reichstag that the first of
the series of three imperial Mint ordinances was issued by Charles V.
(at Esslingen, 1524). The main details of this ordinance will be found
in the accompanying tables and in Appendix V.
The effect of the first imperial ordinance was to change the ratio from
something between 10 and 11 to 11.38. The _gulden_ was raised from 17s.
4 pf. to 17s. 6 pf. All foreign gold was to be taken at equivalent
rates, and whoever gave more for foreign coins of gold was to suffer a
heavy penalty. Further, the export of gold and silver was forbidden, on
pain of life and goods.
The ordinance remained a dead letter, and the monetary disorder of the
country only increased.
THE MOVEMENT OF SILVER IN GERMANY, 1459-1621, ILLUSTRATED BY THE
MOVEMENT OF THE SILVER GROSCHEN, ACCORDING TO IMPERIAL AND OTHER
MINT REGULATIONS. (_See preceding Table on p. 30._)
+------+---------+------------+---------------------+-----------------------+
|Date. | Cologne | | Equivalent Value | |
| | Mark | Alloy. | in Convention | Treaty |
| | coined | | Money. | or |
| | into +------------+-----------+---------+ Ordinance. |
| | Pieces. |Loths. |Grs.| Krtzrs. | Pfnge. | |
+------+---------+-------+----+-----------+---------+-----------------------+
| 1501 | 126 | 6 | 1 | 3 | 2-37/42 |Treaty of Dukes Henry |
| | | | | | | and Erick of Brunswick|
| | | | | | | and Bishop Barthold |
| | | | | | | of Hildesheim, with |
| | | | | | | the States of |
| | | | | | | Brunswick, Hildesheim,|
| | | | | | | Hanover, Luebeck, |
| | | | | | | and Goettingen. |
| 1510 | 160 | 6 | 0 | 2 | 3-1/4 |Goettingen. |
| 1524 | 136 | 12 | 0 | 6 | 2-8/17 |First imperial Mint |
| | | | | 3 | 1-4/17 | edict of Charles V. |
| | | | |(1/2 Groat)| | at Esslingen. |
| 1533 | 123 | 7 | 0 | 4 | 1-3/4 |Augsburg Mint edict. |
| 1535 |91-47/131| 8 | 0 | 6 |2-101/874|Mint treaty between |
| | | | | | | Ferdinand and the |
| | | | | | | Counts Palatine of |
| | | | | | | the Rhine and the |
| | | | | | | States of Augsburg |
| | | | | | | and Ulm. |
| 1551 | 94-1/2 | 7 | 5 | 5 |3-59/567 |Second imperial Mint |
| | 100 | 7 | 6 | 5 | 2 | edict of Charles V. |
| | | | | | | at Augsburg. (Remained|
| | | | | | | inoperative like that |
| | | | | | | of 1524, _supra_.) |
| 1558 | 88 | 6 | 9 | 5 | 2-7/44 |Saxony Mint ordinances.|
| 1559 | 108-1/2 | 8 | 0 | 5 |2-26/217 |Mint ordinance of |
| | | | | | | Ferdinand I. |
| 1572 | " | " | 0 | " | " |Edict of the Lower |
| | | | | | | Saxony Circle. |
| 1610 | 234 | 14 | 4 | 4 |2-82/351 |Edict of the Lower |
| | | | | | | Saxony Circle. |
| 1617 | 144 | 8 | 0 | 4 | 0-2/3 |Edict of the Lower |
| | | | | | | Saxony Circle. |
| 1622 | 108-1/2 | 8 | 0 | 5 |2-26/217 |Edict of the Upper |
| | | | | | | and Lower Saxony |
| | | | | | | Circle. |
+------+---------+-------+----+-----------+---------+-----------------------+
THE MOVEMENT OF GOLD IN GERMANY, 1495-1621, ILLUSTRATED BY THE MOVEMENT
OF THE GOLD GULDEN (RHENISCHE GULDEN), ACCORDING TO IMPERIAL AND
OTHER MINT REGULATIONS. (_See preceding Table on p. 31._)
+-----+-------+---------------+-------------------------+---------------+
| |Cologne| | Equivalent Value | |
| | Mark | Alloy. | in Convention Money. | Treaty |
|Date.|coined +-----+---------+------+------+-----------+ or Ordinance. |
| | into | 24 | 12 | | | | |
| |Pieces.|Crts.|Grains. |Flrns.|Krtzs.| Pfnge. | |
+-----+-------+-----+---------+------+------+-----------+---------------+
|1506 |71-1/3 | 18 |6 gold | 3 | 6 |0-132/7597 |Treaty between |
| | | 3 |6 silver | | | | Bamberg, |
| | | | | | | | Wuerzburg, and |
| | | | | | | | Brandenburg. |
|1509 |71-1/3 | 18 |6 gold | 3 | 6 |1-3185/7597|Frankfort Mint |
| | | 4 |0 silver | | | | ordinance. |
|1524 | 89 | 22 | ... | 2 | 54 |3-5019/6369|Imperial Mint |
| | | | | | | | edict of |
| | | | | | | | Charles V. at |
| | | | | | | | Esslingen. |
|1551 |71-1/3 | 18 |6 gold | 3 | 6 |0-3682/7597|Imperial Mint |
| | | 3 |8 silver | | | | edict of |
| | | | | | | | of Charles V. |
| | | | | | | | at Augsburg. |
|1559 | 72 | 18 |6 gold | 3 | 4 |1-2267/3834|Imperial Mint |
| | | 3 |8 silver | | | | ordinance of |
| | | | | | | | Ferdinand I. |
+-----+-------+-----+---------+------+------+-----------+---------------+
[Sidenote: GERMANY: THE THREE IMPERIAL EDICTS]
In 1530 the Reichstag of Augsburg demanded the holding of a council, in
order to enforce the late edict, and for a due consideration of the
monetary situation. Several attempts were made with this object, but
fruitlessly, and the princes of the empire fell back on the only
feasible but fatal plan of smaller Mint conventions between contiguous
states. There is an endless series of these, and they render the history
of German currency a perfect jungle of intricacies. Nine years later
(1539), a monetary convention was summoned to meet at Augsburg by
Ferdinand, heir to the empire. It proved fruitless. Again, in 1548,
after the expiry of a similar period, the Reichstag at Augsburg declared
for another monetary convention to relieve the disorder. The opinions of
certain deputies to this convention, which met on the 8th October 1550,
were as follows: "For fifty or even eighty years and more the ratio
between gold and silver has been between 12 and 13. But in a gulden of
those days there was an equivalence of more silver than in seventy-six
of our kreutzers. Since then we apprise the Rhenish gold gulden and
kreutzers less than foreign nations. Therefore France and England seek
them."[12]
A thorough inquest into the subject, or evaluation, was therefore
ordered, and it was in accordance with the advice of the convention and
with the report of the evaluation that the second imperial Mint edict
was issued at Augsburg, 1551. This edict was drawn up on a ratio of
10.83 as a basis, and, as might be reasonably expected from the
different ratios ruling abroad at the time, it proved as inoperative as
its predecessor. The succeeding ten years witnessed a rise in the
relative value of gold, or depreciation in that of silver, and the third
and last of these imperial Mint edicts, that of the Emperor Ferdinand,
issued at Augsburg, 19th August 1559, fixed a higher ratio, viz. 11.44.
The Rhenish _gulden_ was raised from 72 to 75 kreutzers. The increasing
production of silver indicated by this change is still more clearly
marked in the resumption of the coining of the imperial thalers, at the
instigation of the Reichstag at Augsburg, 30th May 1566. The advice of
this Reichstag was the outcome of the monetary convention held at
Noerdlingen two years earlier, at which strong complaints were appointed
to be made before the Reichstag of the weak state of the coin, and of
its under-valuation.
In matter of fact, the Mint edict of 1559 remained a dead letter;
nominally, however, it continued in force up to 1600, although no less
than seven attempts were made at succeeding diets, from 1566 to 1596, to
enforce it and bring it up to date. In the Reichstag of Speyer, 1570,
complaints were made of the universal loss arising from the
non-observance of the edict. In place of an imperial coinage, nothing
circulated but foreign and counterfeit coins, and the necessaries of
life had risen to a prohibitive height. Similar were the complaints at
the succeeding diets at Frankfort, 1571, and at Regensburg, 12th October
1576, at which last Ferdinand's edict was again re-enacted, with a
command that the Burgundian circle and the Swiss should conform
themselves to it. Bitter complaints were made of the bad state of the
gold and silver coinage, and of the enrichment of the exchangers on the
Rhine. The circulation of Dutch and Swiss thalers was forbidden because
of the loss by exchange, and the export of all gold and silver again
forbidden. As an instance of the depreciation prevalent in the coinage,
it was noted that the silver _albus_ had lost one-third of its weight,
so that thirty-six were needed to purchase one gold gulden, whereas
formerly twenty-six were equivalent.
[Sidenote: GERMANY: DISORDERS OF 1580]
Four years later, 1580, Ferdinand, as Archduke of Austria, issued a
fresh tariff, with the object of checking exports, and in 1582 the
states, having consulted as to the condition of the coinage, strongly
advised a renewal of the prohibition of the export of coin, especially
by the Italians. This advice was adopted in the Reichstag of Augsburg,
which met seventeen days later, 20th September 1582. The preamble of the
Act then and there passed speaks of the export of a good portion of the
native currency, and of the unmeasured rise of prices, coupled with the
circulation of forbidden foreign specie, large and small.
This resolution of the Reichstag was followed by the enacting of the
Mint edict of 10th December 1582. It proved as futile as any of the
others; and two years later, July 1584, the deputies of the three
circles of Franconia, Swabia, and Bavaria complained that within the
four years immediately preceding several millions had left the country
by way of the Rhine provinces for the Netherlands, very little going to
Italy by comparison.
On this representation another useless edict was issued by the Emperor
Rudolph II., and in the following year the merchants at Frankfort Fair
found themselves obliged to agree upon a tariff of _ducats_ and
_Reichs-thalers_. The _Philipps-thaler_ was put at eighty-two kreutzers,
and the _Reichs-thaler_, which, by the Imperial Mint edict still
nominally in force, should have been at sixty-eight kreutzers, was put
at seventy-four. This arrangement of the merchants established a ratio
between gold and silver of 11.4.
Certain of these same merchants, examined as to their opinion of the
method of the export in January 1586, explained that it went by way of
Nuernberg, and that the arbitrage was attended with 9 or 10 per cent.
profit.
[Sidenote: GERMANY: THE KIPPER UND WIPPER ZEIT]
Nominally, however--or in theory--the arrangement of 1559 continued the
unenforced law of the land up to 1600, underneath all these attempts at
revision and underneath the different regulations of the various
monetary unions of contiguous circles or states. With the latter date
commences that extraordinary movement of monetary depreciation and panic
which is known as the "_Kipper und Wipper_" period. In great part the
extraordinary acuteness of the panic which ensued was due to internal
monetary confusion of Germany, but that internal confusion simply
ministered to the export of all good specie and metal, and in the end it
became simply a money corner. The movement began by a coining of the
lower denominations of monies on a different and depreciated footing or
basis. The _specie_ thaler began to part company from the current
thaler, and to rise to more than the 24 silver groschen or 36 Marien
groschen, to which by the Mint edict of 1559 it was declared equivalent.
By 1618 it had risen to 1 thaler 6 silver groschen (= 48 Marien
groschen), by 1620 to 2 current thaler, by 1621 to between 7 and 8
current thaler, while the ducat had risen to 13 florins 30 kreutzers.
Tabularly the statement of the movement of the _Reichs-thaler_ is
this:--