[...]... used mainly by the uneducated, the scope for gradual, and sometimes not so gradual, debasement was greater and was totally at the expense of workers and peasants ‘Honest’ petty coinage was unprofitable: the tradition of honest money in countries such as England was, from most other points of view, beneficial, but this very honesty caused a shortage of petty coins for trade The gap was filled partly... invention of money (Hemming: 1970) Eventually, societies developed the idea of coined metal Its natural advantages tended to supplant rival forms of money, and a sophisticated monetary economy developed in the ancient world It is quite clear, from even a cursory reading of the sources, that many of the problems and events we shall discuss had their parallels in earlier centuries I can offer only a tantalising... historian, as it presumably did for the contemporary accountant Cipolla SOME CONCEPTS OF MONEY 17 (1967) discusses the problem of what he calls ‘ghost money , units of account which have names based on actual coins which have disappeared from circulation It arose, of course, from depreciation and the phenomena of bimetallism and petty coins The Carolingian system of pounds shillings and pence had survived... could be based on a silver or a gold standard, or very occasionally on black money Two systems often existed side by side The value of actual real coins could fluctuate in terms of the appropriate money of account and this was often based on a ghost from the past In England, at least, it can be assumed that the term pound either refers to a weight of bullion, or to the value of 240 pennies, as the context... paying £3 17s.6d on the spot a discount of less than 0.5 per cent Debasement It is a modern fallacy that monetary debasement is exclusively a disease of paper money The history of coined money is a history of an intermittent and from time to time dramatic fall in value The reason is not hard to find There is an interesting example in the famous Thalers or ‘Pieces of Eight’ of the Spanish Main, so called... than ‘in tale’ (their official legal value) The purchasing power of coins may change without any debasement; the value in trade of the coinage metal itself may change The monetary system may be threatened by clipping and counterfeiting and, even if rulers and citizens are scrupulously honest, the coinage has to contend with fair wear and tear All these factors are relevant even with a simple coinage... introduced a formal gold standard, using silver only as a subsidiary coinage, while British India operated a silver standard Some countries, notably France and the United States, attempted a bi-metallic standard: both gold and silver were legal tender and were exchangeable into each other at a legally determined rate of exchange This worked fine so long as the ratio did not vary too much Indeed, as with... depreciation of the base penny, meant that by 1340 the undebased florin was worth 384 pennies This rate was then to remain stable for the next sixty years, and during this period stability may well have been taken for granted, much as later generations have regarded any period of exchange rate stability of more than a couple of decades as normal and permanent—in spite of the lessons of history During this... shaken violently The coins would emerge showing the type of wear normally associated with a couple of years circulation and rattling in people’s pockets and purses, and after regular repeats of the process, a small but useful amount of gold or silver dust would accumulate in the bag This was one of the perquisites of being a money changer: there was, in this and other ways an extra profit to be made... several Anglo-Saxon Kingdoms which now constitute England The prolific and attractive coinage of King Offa of Mercia (757–96) is a significant early example This relationship between the pound as a weight of silver and the pound as a unit of money did not last long although it survived rather better in England than elsewhere During the Anglo-Saxon period of sound money, the weight of the penny fluctuated . States, Canada, Europe, Australasia and the Far East. He is currently on the editorial board of Treasury Today published by the Institute of Chartered Accountants. A HISTORY OF MONEY From AD 800 John. cursory reading of the sources, that many of the problems and events we shall discuss had their parallels in earlier centuries. I can offer only a tantalising glance at a few of these earlier events history of coinage actually begins in about 800 BC when the first coins were struck from electrum, a naturally occurring alloy of silver and gold, bearing the sign of a half lion as a guarantee of