Book Five - The Middle Ages

Book Five. THE MIDDLE AGES IN the dark and seemingly bottomless quagmire of the Middle Ages, through which Western civilization had to pass before reaching the firmer ground of a new day, most of the institutions of antiquity perished, and among them money. Money, indeed, was perhaps the first to disappear in the tremulant depths, although, as we shall see, the monetary tradition of Rome was to remain, like a floating scum, to poison the economy of modern Europe in the freshness and vigor of its rebirth. /. Passage of Avernus WE have already traced the gradual disintegration of money in Rome. By the end of the fourth century it had practically disappeared in Europe, and with it went all the fabric of organized commerce and industry. Law courts and libraries, schools and posts and inns, even the organization of armies, all disintegrated in the miasmic atmosphere or were sucked down into the paludal mire. The Roman Empire had been split in twain, and then into many fragments, each of which became a separate kingdom; the kingdoms in turn became divided into numerous counties and duchies, and the latter into still more numerous realms. The world dwindled and the commonwealth "became the duke's courtyard." Over the Europe that had basked in the deceptive effulgence of the Pax Romana swept wave after wave of barbarism, producing convulsions in society like the social revolutions of the modern age, engulfing everything not of the most solid substance, leaving in their wake, as they receded, the detritus of a destroyed civilization.

This long period of decay and convulsion and racial migration lasted in Europe for some seven or eight hundred years. While its boundaries cannot be precisely defined, roughly they 55 56 MONEY AND MAN may be marked by the fall of Rome in 476—although the northern provinces of the Empire had long earlier passed into other hands—to the fall of Constantinople in 1204, which signalized the removal of the commercial center of the Mediterranean from the Bosporus to the city states of Italy, the recommencement of gold coinage in Europe, and the revival of money economy. When European civilization began finally to emerge from its intellectual coma and economic misery, and money, among other institutions of the past, began to evolve itself anew out of the fading gloom of medievalism, it appears to have been reinstated in the same tentative manner that it fell. The order of falling was from money to bullion, and from bullion to barter.

The order of revival was much the same. It began with the fixation of weights, and money was weighed in the scales and assayed or tried by combustion. Following this came pieces or sums with the names of weights—to wit, pounds, shillings, and pennies (dennies or denarii) which passed by tale, and which, although they never contained the weights of metal indicated by their names, afforded by means of these names a ready conception of their relative proportions of value. Some memory of Roman institutions was carried across the gulf of the Middle Ages in the designation of weights and the division of money standards, as weights and money slowly revived. The Roman pound, or libra, survived as a conception of weight; but its actual standard, even in Roman times, is today a problem baffling to scholars, and when it was revived the libra became different things in different localities. Each locality had its own variation of the standard, and weights had to be qualified by prefixing the name of the town or locality in which they were current, as for example, the livre of Tours, the Cologne mark and the pound sterling (Esterling). * * Such a system prevails in many regions of Asia today. Despite the spread of the metric system under the influence of authoritarian governTHE MIDDLE AGES 57 Toward the end of the Middle Ages, three standards of account, at least for weighing the precious metals, had risen to enough prominence to become the basis for currency in the chief countries of Europe.

In France, two standards of weight for money had come into prominence, the livre or poid de marc of Paris, which was the capital of the Frankish kings, and the livre of Tours, the principal trading city toward the Arabian border at the west. The livre tournois was about a fourth lighter; and either because of the profits to be derived from coining money according to the lighter standard or, as some scholars assert, to take advantage of the higher relative value of silver to gold in the nearby Moslem dominions, the feudal barons enjoying the mint franchise preferred to do their minting at Tours according to the Tours standard, while at Paris the French kings attempted to keep up a tradition of the better weight standard. By the time of St. Louis (d. 1270) the sol of Tours had become generally known as the gros deniers d'argent or the gros tournois, and in Germany, as the groschen, and it became for a while a standard of coinage which was widely imitated. The distinction between the livres tournois and the livres parisis was maintained until the days of Louis XIV, when (1667) it was abolished and reckoning by a single livre, sol and denier was established.

Due to the fluctuations in weights and coinages, and especially the practice of lowering the standard of weight for money to bring it in correspondence with a debased coinage, it is almost impossible to assign modern equivalents to the various livres in use. The Paris livre or poid de marc was equivalent originally to 7,555 English grains,1 but the livre as a weight soon parted company from the livre as a unit of money. D'Avenel states that in 1200 the livre tournois designated 98 grams (1,512.336 grains) ments and their Five Year Plans, local measures persist. Thus, in villages in Iran, work may be measured by one batman, grain by another, and vegetables by a third, while the standard may take its name from the city of its principal usage. In China, as late as World War I, merchants had to be familiar with the weight of a variety of taels and the commodities to which they applied. Vestiges of these differences remain in the English system of weights and measures, as in the ounce troy and the ounce avoirdupois, and the long ton and the short ton.

58 MONEY AND MAN of fine silver, but that by 1600 it had fallen to 11 grams.2 The unit of weight (for metals) eventually became fixed upon the mark of 4,608 French grains (3,777.5 English grains) divided into 8 ounces. It is upon this mark that most of the tables of French coinage down to the Revolution were based. In Germany, the standard of most common acceptance, which subsequently became the standard for weighing metals, was the Cologne mark, which at the beginning of the nineteenth century was equivalent to 3,608 English grains. The origin of the mark is unknown but it is conjectured to have been a degenerate descendant of the Roman libra in Venice, and to have weighed originally around 4,000 English grains. As the medieval period wore on, it partook of the general degradation of weights, falling in Venice to 3,681.5 grains, and in Germany generally from 3,681.5 to 3,608 grains, at which latter weight it made its way into Denmark and England in the ninth century.

Its weight was fixed in Cologne at 3,608 grains by edict of Charles V in 1524, who declared it the standard of weight for the precious metals throughout his German empire. Charles was at the same time King of Spain, and the mark, after some further degradation (falling to 3,557.5 grains in Valencia and 3,550.5 grains in Castile), was fixed in that country generally at 3,550.5 grains, and at this weight found its way to America where it was used to measure and coin the vast metallic productions of the newly-found continent.3 The pound avoirdupois of 7,000 grains in use in the Englishspeaking countries is apparently derived from the "old commercial" pound of 7,600 grains formerly used in Amsterdam, Hamburg, and Paris, and used in England for the assize of bread until 1815, and in Scotland for general purposes until late in the nineteenth century. The Anglo-Saxon pound, sometimes called the "moneyers' pound," sometimes the "pound tower,"

contained 5,400 grains and was used in the English mints previous to 1527. In that year Henry VIII issued his second coinage (Act of 18th Henry VIII), and the pieces were weighed by the troy or troyes pound of 5,760 grains, and this has continued to be used for weighing the precious metals in England ever since.4 THE MIDDLE AGES 59 In addition to a vague conception of a libra, which survived in Europe, some memory was also retained of the Roman division of the coinage. In Byzantium, where civilization was still flourishing, and whose contacts with Europe were numerous if not vital, the libra was coined into 72 solidi. When Charlemagne attempted, in imitation of Roman imperialism, to reestablish his own coinage throughout his dominions, he instituted a system based upon a libra, divided into 20 solidi, each consisting of 12 denarii. A gold solidus seems to have been provided for, but he never got beyond the coinage of a silver denarius, and with the growth of feudalism, the break-up of his empire, the multiplicity of coinages by local princes and feudal lords, all that remains of his system is the traditional division of the unit. This survives in the English system of pounds (£), shillings and pence (originally dennies, and still abbreviated as d.) and in the livre, sou (or sol), and denier which were the reckoning in France until superseded by the metric system at the time of the French Revolution.

As money slowly reestablished itself in Europe, we find a multitude of provincial and feudal mints springing up. Every petty baron or princeling decided to perpetuate his name or rule upon a piece of metal. The right of issuing money is a special prerogative of the sovereign power. It is enough to say that as this power gradually collected itself in petty feudalities on the map of Europe, like drops congealing on a window pane, the first emblem of its new-found majesty was a mint and a coin. As sovereign authority gradually coalesced and extended its sway over larger and larger territory, its first task was to recover the exclusive right of coinage. But it was a long and difficult task. In France, the Merovingians had been compelled to delegate the right of coinage to counts, bishops, and cities. One writer declares that members of the ancient corporation of moneyers of Rome (the Mint Commissioners), whose signature was the official guarantee of coinage, continued to coin in their own name and to their own profit from a great variety of types.5 60 MONEY AND MAN In the seventh century there might be reckoned in France hundreds or perhaps thousands of mints uncontrolled and offering no guarantee. Throughout western Europe the position was analogous; lords, prelates, and municipalities claimed to be absolutely independent in coinage matters.

Charlemagne, in his capitulary of 805, had prohibited every mint except the royal one, but his successors had not been able to maintain the sovereign authority, and according to letters patent in 1315, twenty-nine lords of France appear to have retained the right of coining money and determining the law, weight, stamp and value of the different specie.6 And toward the end of the Middle Ages there were in Germany, according to Karl Helfferich, 600 mints working.7 Most of these mints struck small silver or copper, and their diversity of sizes and shapes and fineness renders them almost impossible of cataloguing or defining. It is, in fact, not until the thirteenth century that it is possible to construct any intelligible story of money in Europe. That century was marked by the sack of Constantinople by the Crusaders in 1204, the end of the Eastern Empire, as such, and the transfer of the commercial hegemony of the Mediterranean to Italy. The capture of Constantinople and the establishment of the abortive Latin Empire on the Bosporus marked the end of the solidus, or bezant, as the universal standard of international trade, and prepared the way for the introduction of gold coinage into Europe.

The attendant circumstances of this transfer and their influence upon the monetary history of Europe are to be found in the history of the Crusades and of the commercial growth of the petty independent states which sprang up from the political confusion of Italy. The German invaders of the Peninsula had not swept away city life, as did their cousins in the provinces of northwestern Europe, and several of the older cities, such as Milan and Genoa, important in Roman times, continued to exist. Venice, founded during the disorders of the fifth century, began to attract settlers because of its comparative impregnability. The THE MIDDLE AGES 61 survival of these cities and the founding or revival of others was possible because of continued contact by sea with the civilized East, and toward the eleventh century they were sufficiently strong to throw off feudal and church authority and to organize local city states upon the basis of a commercial aristocracy. No sooner did they achieve each their little autonomy than they threw themselves with redoubled energy into the development of the trade with the East. Florence and Venice, Pisa and Genoa, led the way and reaped the fruits; and it was in her most flourishing time, when she had conquered her rivals and was enjoying a prosperous and active trade, that Florence resolved upon the coining of gold.

The influences which collected in the Italian city states, arising from their contacts with the East, molded and transformed under the peculiar forces of their own development, and finally emanating throughout Europe, were to affect profoundly the course of European civilization—in art, in commerce, in politics, in money—so profoundly in fact that the economic revolutions of today are but the distant convulsions produced by the subterranean conflict of the fire of Italy and the water of Europe. The concatenation of events that produced throughout Europe the almost simultaneous revival of gold coinage in the thirteenth century is attributed to various causes. According to some, the foreign trade of the Italian republics must have become so extensive as to demand a currency medium of higher denomination than silver; or that trade must have developed in such directions as to tap gold-using or gold-bearing regions that could supply the Italian mints.8 Alexander Del Mar, however, offers another theory of the correlation of the two events. According to his view, the coinage of gold has, since it first appeared in the monetary systems of the world, been the incontestable prerogative of sovereignty, and during the long period of the Middle Ages such was the majesty of the Eastern Empire, so powerful the tradition of Roman grandeur, so impuissant the multitude of feudal authorities, that 62 MONEY AND MAN no prince had the presumption to place his own seal and signature upon a piece of gold money. Even in those isolated cases where gold was coined by other princes, such as the coinage of Clovis, that of the kings of the Cimmerian Bosporus, or the coinages of the Roman generals, Roman suzerainty and majesty were acknowledged by placing upon the coins the imperial insignia.9 «§ §»> The reintroduction of gold into the coinages of Western nations is marked by the minting of the gold florin of Florence in 1252. Clovis had struck some gold coins of excellent quality, and Charlemagne may have issued a few, but Florence was the first state of modern Europe to establish a continuity of gold coinage. Genoa followed closely upon Florence in issuing gold, probably the same year, and in 1254, or possibly earlier, Louis IX of France (St. Louis) commenced the coinage of louis d'or.

Five years later (1257) Henry III of England imitated the florin in his gold pennies, while more than thirty years later Venice instituted the coinage of gold zecchinos (corrupted later into sequins). It was not until some seventyfive years later, in 1328, that gold coinage appeared in Germany, signalized by the issues of the Emperor Louis IV, surnamed "Bavarian," closely imitating the florin of Florence. In Moslem Spain gold coinage had prevailed since the Moorish invasion in the eighth century, but the first gold coined by Christian powers was the oro gran modulo (doblas de oro) of Alfonso XI of Castile (1312-1350). By the middle of the fourteenth century, therefore, we find the institution of money fully reestablished in Europe, with gold, silver and copper coins in circulation. Hardly, however, had money as an institution of organized economy, as a social mechanism, been reestablished, than it began to disintegrate under the destructive influences handed down from Rome, the sciolism of the age, and the moral infirmities of rulers.

THE MIDDLE AGES 63 //. The Color of Gold THE reappearance of money in Europe and the transition of society to a money economy was accompanied by the same phenomena that we have observed in early Greece and in the Roman commonwealth. Everywhere men were dazzled by its form, by the opportunities it offered for the accumulation of wealth, for the ease of movement, for the loosening of old ties and habits. Europe became money-mad; for the pursuit of spiritual peace was substituted that of the pursuit of the precious metals; the authority of the old morals and ethics were sensibly weakened, and life took on an unrestrained search for the pleasure, the ostentation, the movement, and the power that money offered. More than armies, or capable government, or sound administration, or a contented citizenry, as the bases of a prosperous and ordered society, was the presence and authority of money. With seeming suddenness one principle became the dominant chord and theme of contemporary thought and practice, and this principle was incorporated, like a heraldic device, in the attitudes of the day, by the phrase pecunia nervus belli (money is the sinews of war). It became the dogma of philosophy, the motto of princes, the adjuration of ministers. Gold, as the most precious of the metals, was elevated into the pantheon; the quest for the yellow metal became the occupation of alchemy, of statecraft, of war, of exploration. Letters-patent were freely issued by the kings to alchemists, permitting them to employ the means which they discovered "by philosophic art" to change impure metals into gold and silver, or to make gold and silver with mercury. It was so with Edward III, Henry VI, and Edward IV of England, and with the kings of France, and the German and Italian princes. The libraries of the day were rilled with volumes treating of the transmutation of the metals, crowding out the earlier works on the destiny of the soul, the nature of divinity, and the duties of the Christian life. Money became the basis of political philosophy, and Botero, Bodinus Besold, Ammirato, and other publicists of the epoch argued the need for money—even above man-power—for the successful prose64 MONEY AND MAN cution of war or state administration. The search for treasure, in the earth, in the crucible, in the Indies, and on the high seas, became the universal mania; and the voyages of the early explorers were not so much to discover spices as precious metals, or lands where the precious metals were abundant.

No sooner had Columbus taken formal possession of the island of Hispaniola than he asked the wondering natives for gold. "This fatal word," says Del Mar, "so fraught with misfortune to the aborigines that it might fittingly furnish an epitaph for the race, and so tainted with dishonor to their conquerors that four centuries of time have not sufficed to remove its stigma, seems literally the first verbal communication from the Old World to the New." Gold, indeed, became a fetish. "We allow the color of gold to be the noblest in the world," wrote Honore Bonet, in his Arbre des batailles, speaking of the colors of armorial bearings. "Now, this is the reason: gold of its own nature is bright and shining, and it is so strengthening and full of virtues that the doctors give it as a sovereign remedy to those who are weak even unto death. And so it represents the sun, the which is a very noble body if we consider it in regard to light, for the law says there is nothing more noble than brightness And the ancient laws formerly ordained that no man in the world should wear gold except princes."

<«§ $»> Perhaps nothing better illustrates the power of money in the Middle Ages and the mercenary quality of that period than the growth of the condottieri, or professional undertakers of war, and the general dependence of medieval princes upon the use of mercenary troops. For a long period wars were waged and states maintained by the use of bodies of professional soldiers, largely Germans, Swiss, and Spaniards, raised and equipped chiefly by Italians, and serving in any land or under any banner which could assure them of pay, and devoting their lives as a sacrifice to any prince whose only claim upon their loyalty was a full purse.

THE MIDDLE AGES 65 By the use of such mercenaries the French kings and German emperors expanded their authority, and the Thirty Years War was largely conducted. They remained an integral part of the French military system until the final downfall of the monarchy and were employed by the English government during the War of the American Revolution. The characteristic of the system is preserved in such terms as the Ribauds of the thirteenth century, or the Routiers, the Ecorcheurs, and Retondeurs of the fifteenth, and is nowhere better summed up than in the famous phrase, "blood for money; no money, no Swiss!" It is natural, under the influences and circumstances of this "raging avarice," that the mechanism of money should be utterly uncontrolled: there was no authority strong enough to assert itself over a territory of any consequence, and such authority as existed was without the courage, or the wisdom, or the morality, to undertake the control of money. It was an era of the most flagrant debasement, of money tampering and manipulation.

No one seemed to recognize the evils that were being piled up for subsequent generations by this practice, and if they were recognized no one seemed to care. "Many princes, both in the Middle Ages and later in the sixteenth and seventeenth centuries," says Richard Ehrenberg, "did a roaring business in currency depreciation." The right to clip, degrade, or debase the coinages, or to change the standard, was looked upon complacently as the prerogative of sovereignty. To debase the currency became, as it were, a crown right, and the process was given a sonorous Latin name, morbus numericus, as though it were a phrase of canon or civil law, an ancient and hallowed practice. Up to the reign of Charles VII, the "seignorage," i.e., the profits realized from the coining of money, was one of the chief revenues of the French crown. The idea was generally accepted that when the necessity of the state so required, the king could not only increase the seignorage, and raise still greater sums in the manufacture of 66 MONEY AND MAN money, but might also impair the coins by diminishing their worth. By some this process was considered a source of revenue that was prompter, easier and less burdensome than any other.

At the end of the thirteenth century the situation was so harassing that the towns pledged themselves to pay heavy taxes in order to obtain from their overlords the assurance of sound currency. This was the moneyage—a tax levied triennially as a recompense for the king "not to alter or debase the coin, which he was entitled to do by his prerogative." The difficulty in tracing the actual course of the depreciation is complicated not only by the lack of historical records and the confusion in those that exist, but by the variety of forms employed to achieve the ends. Three general methods were employed for the debasement of money. The most common, during the earlier period, were la mutacion du poids, which was a reduction of the weight or standard of the specie without diminishing proportionally its current value—the surreptitious debasement so common in Roman history—and la mutacion de la matiere, which was a change in the standard.

A more subtle method, involving no actual tampering with the coin, was la mutacion de Vappellation—a change in the legal denomination or standard of value, a practice also hoary in antiquity—the method no doubt used by Solon, and used even in modern times, as in the devaluations of the United States dollar in 1934 and subsequently. The gold florin, for instance, was originally struck at 53 grains, and it was of absolute fineness. As the process of wear and tear and abrasion went on, and the coins in circulation became less than the nominal standard, it became customary to buy and sell and enter into contracts on the basis of the standard or perfect florin, and its subdivisions, and accepting or tendering at a discount the actual coins in circulation, depending upon their degree of abrasion. The ideal or standard florin became the "money of account" in which books were kept and transactions predicated. This "money of account" received official sanction THE MIDDLE AGES 67 in 1321 when the ideal or standard florin was officially designated as the "florin of the public seal" (fiorino di sigillo).

Florins were tested and counted into small leather bags, which were fastened up and sealed with the seal of the city. These were known as fiorini di sigillo and were used in the payment of large sums. Current florins were then given an official rate of discount to these sealed florins at which they should circulate. Gradually, of course, since the bulk of the circulation consisted of the worn coins—the greater value of the sealed bags rendering them useful only in large transactions—the fiorini di sigillo came to be more a concept than an actual measure. This method of officially valuing the current coinage in reference to the theoretical, founded upon sound principle, thus came to be used as a device for readjusting the ratio between gold and silver, which was beginning to be a problem; and then, as the money of account drifted further and further away from an actual coin, and its concept as a physical unit was gradually lost, it became the vehicle for currency depreciation. On the pretext of adjusting the ratio between gold and silver, or to take official cognizance of a deteriorated state of the outstanding circulation, or as an accompaniment of a "recoinage," the value of the money of account was gradually lowered. By this process the gold florin was gradually raised, between 1252 and 1534, from 20 soldi to 150 soldi of account.

In the sixteenth century, so far had the Italian states fallen away from the former probity of their currency policy and practice that Bernardo Davanzati declared in his Lezione delle monete, which appeared in 1588, that the disorder of the monetary system had within a period of sixty years made away with a third of the public wealth. In France, the price of a mark weight of gold was gradually raised from 44 livres de compte in 1309 to 171 livres de compte in 1342. At this point of depreciation a new livre de compte, equivalent to four of the old, was instituted to an accompaniment of a solemn declaration on the part of the government "to adhere to good money, as in the halcyon days of St. Louis, etc., 68 MONEY AND MAN etc." In the terms of this new livre the price of the mark of gold was again brought to 44 livres. By 1419 the price of gold in terms of the money of account had again risen to 144 livres, when it was again reduced by one-half or to 72 livres by the introduction of a new livre de compte. Again the livre de compte continued to decline, and in 1709, just before the French currency came into control of John Law, it took 576 livres to buy a mark of gold. Between 768 and 1764 the livre of Charlemagne had declined to one sixty-sixth of its original value, according to the tables prepared by the Abbot of Bazinham,1 in which some forty different and distinct debasements are presented, or one on the average of every twenty-five years, while omitting many surreptitious and gradual debasements occurring between the major depreciations.

The course of depreciation in Germany was as definite as in France. To draw one instance out of an uncharted mass: the standard of Hamburg and Liibeck, the principal trading towns, was a schilling, originally coined as one-sixteenth of the Cologne mark, each schilling consisting of 12 pfennige. The coin and the standard soon parted company, the mark being retained as a unit of account, the schilling both as the name of a coin, and as a subdivision of the mark. In 1255 the two cities, recognizing the state of depreciation, agreed, as a sort of monetary union, to coin the mark of fine silver into 38 schillingen 10 pfennige: in other words, the mark of metal became equivalent to 2 mark 6 schillingen 10 pfennige of account. The course of depreciation of the mark of account may be indicated by the following table showing the number of mark of account commanded by a mark weight of fine silver:2 Date 1226 1255 1293 1305 1325 1353 1375 1398 Mark 2 2 2 2 3 3 4 4 Schillingen 2 9 9 15 0 10 3 15 Pfennige 0 5 8 5 9 11 0 2 THE MIDDLE AGES Date 1403 1411 1430 1450 1461 1506 Mark 5 5 8 9 11 12 Schillingen 1 12 8 12 8 8 b Pfennige 11 5 0 2 10 0 It is frequently assumed that England was comparatively free from this constant and universal practice of money alteration.