Florence and Florins, Lira and Pounds, and Francs an Introduction

In Italy, Lira Soldo and Denaro were the standard units of account, with one lira always equaling 20 soldi or 240 denari, corresponding to the Livre Sou and Denier in France, and the £ Libra-Pondo shillings and pence in England.

Click here for the history of money, silver and gold, in scripture.

** Now following Constantinople's decline in the east in the face of Islamic, Turkish and Venetian expansionism, new gold coins were issued from Florence, starting in 1252. Worth one Florentine Lira, or 240 Florentine Denari (that contained 35 grams of silver), this new gold coin (called a Florin) contained 3½ grams of gold an initial value of gold-to-silver of 10 to one. The florin weighed slightly less than the Arabic Dinar, and as an international currency it replaced the Spanish Maravedi (whose gold content had fallen to one gram).

** In the "Great Fire" of 1204, a large part of Constantinople was burned down. It was caused by a riot of Venetian soldiers and sailors, led by their unscrupulous doge Enrico Dandolo, on the so-called "Fourth Crusade".

A similar coin, a gold Franc, was issued in France in 1360 to pay a ransom for the French king, held prisoner by King Edward III in England.

A heavier coin, a gold Noble, was issued in England in 1344 with a weight of 9 grams and worth 80 pennies containing 80 grams of silver an initial value of gold-to-silver of 8.888 to one. As it overvalued silver relative to gold in England, compared to other European countries, British merchants thus sent these gold coins abroad in payments when they could while exports were generally paid for with silver.

As a standard, all three coins were used in Europe to settle international debts. But a rapid devaluation of silver/copper denari in Italy, and silver/copper deniers in France as more and more copper were added to those coins meant that by 1500 in Florence, a gold florin had become the equivalent (externally) for seven of their lire.
See the graph at the bottom showing this trend between those years 1260-1780.

Table of Contents

Austro-Hungarian Empire

Bitcoin

China

England

France

Germany

Greece

Israel

Italy

Japan

Netherlands and the Bank of Amsterdam

Russia

Spain

United States

France

In 1577 King Henry III issued the gold Ecu coin weighing 3.2 grams to replace the gold Florin or Franc. Similar to the Spanish escudo (shield) it was worth 3 livres, with a new silver Franc coin of about 14 grams remaining the value of one livre a value of gold-to-silver of about 13 to one.

In 1641 King Louis XIII issued the gold Pistole or "Louis d'Or" weighing 6.7 grams, the same as the Spanish Doubloon (double escudo) and worth 10 livres. Also a silver Ecu of 25 grams, roughly the same as the Spanish Peso or Austrian Thaler (Dollar) and worth 3 livres a value of gold-to-silver of about 12½ to one. In 1795 the silver Franc coin was reissued after the French Revolution, now with a weight of just 4½ grams.
This silver Franc continued as the currency of France through World Wars 1 and 2, though in the war years, it was heavily devalued. In 1960 it was replaced by the "new" franc at an exchange rate of 100 to 1. In 1999 France changed to the euro, at a conversion rate of 6.56 francs to the euro.

Greece (from 1832)

Following its wars of independence from the Turkish Ottoman Empire, and with assistance from other governments, in 1832 the Greek government issued the drachma as a paper note and a silver coin, similar to the French franc, with 4½ grams of silver.

After WW1, and following 3 years of an expensive war brought on by Greece's occupation of part of Western Turkey (but places where many Greeks lived), and with Greece's subsequent retreat, in 1922 the Greek government insisted every drachma note be cut in half. The left half became half-value, and the right half was replaced by a 20 year interest bearing bond from the government. When the government did this again in 1926, the popularity of drachma paper, already low, dropped again with many people refusing to accept notes unless they could be exchanged as quickly as possible.

With huge hyperinflation that followed the Nazi invasion 1941-1944, this paper drachma was replaced by a new drachma following Greece's liberation in November 1944, at a ratio of 50 billion old drachma to the new drachma. This occurred again in 1954, though at a lower level, with a ratio of 1000 of this second drachma to another new drachma. This third drachma was then, for a time, pegged to the US dollar at a ratio of thirty to one.

Finally in 2002, the drachma changed to the euro, using a conversion rate of 340.75 drachma to the euro.

Italy

In Sardinia Italy, the 4½ gram silver Lira coin was issued in 1816, corresponding to the silver weight of the coin France was using at that time. It continued to be the currency of Italy through World Wars 1 and 2, though, as happened to the franc in France, the lira was massively devalued. In 1999 Italy changed to the euro, using a conversion rate of 1936.27 lire to the euro.

Germany, the Austro-Hungarian Empire, and the Netherlands

In 1524, the Holy Roman Emperor Charles V declared the Cologne Mark of 8 Tower ounces (233.856 grams) to become the standard weight of all precious metals in the German states. It was ⅔ the weight of the Roman Tower Pound of 12 ounces, the weight in sterling silver of 240 English pennies (back when they contained 0.97 grams each of sterling silver), the value of King Henry VII's £1 gold sovereign in 1489. Accordingly in 1566, the Reichstaler coin was set at the Leipzig Convention for issue with one-ninth of a Cologne mark of fine silver (25.984 grams). Following the Bavarian Monetary convention of 1751, it was reduced to the Conventionsthaler of one-tenth of a Cologne mark of fine silver (23.39 grams). Its most famous example today is probably the Austrian coin the Maria Theresa Thaler (MTT), first minted in 1741 and still in circulation, weighing 28.0668 grams and with its silver content at 83.333%.

But firstly, the Netherlands and Amsterdam, the Royal city and since 1814, the Capital city

The origins of the Dutch split between The Hague as seat of government and Amsterdam as capital city lay in its peculiar constitutional history. From the middle-ages to the sixteenth century, The Hague had been the seat of government of the County of Holland, but Amsterdam was the more important city. When the Dutch provinces formed an independent republic during the Eighty Years War (1568-1648), Amsterdam actually remained loyal to the Spanish/Burgundian empire until relatively late in that war. This allowed the city a lot of trade opportunities, but made it unsuitable for the seat of government of an emerging 'rebel' state.

In 1602 in the newly opened Bank of Amsterdam, the Reichstaler could be exchanged for 2½ Dutch Guilders, a silver coin of 10.61 grams 91% fine, about two English shillings, or a small gold coin containing 605.61 milligrams fine, a value gold-to-silver of almost 16 to 1. The bank, with its banknotes issued for a small fee, was administered by a committee of city government officials that kept its affairs secret. It initially operated on a deposit-only basis, but soon it was allowing depositors to overdraw their accounts, lending large sums to the Municipality of Amsterdam and to the United East Indies Company (Dutch East India Company). All this, eventually, became public knowledge. In 1790, and the French Revolution, the fee (called an agio) on the bank's paper money had dropped from its premium at peak of around 6.25% to a discount of 2%. By the end of the year the bank had to declare itself insolvent, offering to sell its silver at 10% discount. The City of Amsterdam took over direct control in 1791, finally closing the bank in 1819.

Between 1810 and 1814, the Netherlands was annexed to France and the French franc circulated. After the Napoleonic wars, the Kingdom of the Netherlands readopted the Guilder. With increasing unrest in Europe in 1848, the gold coin was suspended. In 1875 the Netherlands reissued it at 604.8 milligrams fine, suspended it again between 1914 to 1925 and abandoned it in 1936.

In 1961 the silver guilder was revalued at 3.62 guilders to the US dollar, similar to the German Deutschmark. After 1967 guilders were made from nickel instead of silver. In 2002 the guilder was replaced by the euro at an exchange rate of 2.20371 guilders to the Euro.

The Austro-Hungarian Empire

In 1754 Austria issued the Gulden, a silver coin of 11.695 grams that was worth half a Conventionsthaler, called a Forint or Florin in Hungary and similar in weight to the Dutch Guilder. In 1857 it was reduced to 11.111 grams in preparation for a closer union with Germany, being worth two-thirds of their Vereinsthaler ("Union Thaler").

In 1892 it was replaced with the paper Krone (or Corona) at a ratio of 2 Kronen per Gulden. The government devalued it in terms of gold for it adopted a value of 3.28 Kronen per gram of gold, an exchange rate that took it to 83.33% of an English shilling and 85.05% of the German mark, not exchangeable 1:1.

Following the hyperinflation of WW1 and the breakup of the Empire, in 1923 the Austrian Schilling was issued at 10,000 Kronen to the Schilling. With the invasion by Germany in 1938, this Schilling was replaced by the Reichsmark at a ratio of 3 Schillings for 2 Reichsmarks.

In 1945, the paper schilling was reissued at a ratio to the Reichsmark of 1:1, though at a maximum of 150 schillings per person. This happened again in 1947 with a second issue of paper schillings, a maximum of 150 new schillings per person, but also an exchange of 3 old Austrian schillings (pre-1938) for 1 new schilling. In 2002 Austria changed to the euro, at a conversion rate of 13.7603 schillings to the euro.

Germany

In 1750 the German state of Prussia adopted the Reichsthaler of 16.704 grams, and replaced it in 1857 by the Vereinsthaler ("Union Thaler") of 16.666 grams, being worth exactly 1½ Austrian Gulden. Now with Germany's unification in 1871 under Prussian leadership, the German Mark was introduced as one third of a Vereinsthaler, or 5.555 grams of silver. Due to a shortage of gold and silver, a Papiermark issued during WW1 was replaced by a temporary Rentenmark in 1923 and by the Reichsmark in 1924 at a ratio of one trillion Papiermarks to the Reichsmark. After WW2, the Reichsmark was replaced in West Germany in 1948 by the Deutschmark at a ratio of ten Reichsmarks to the Deutschmark. In 1999 Germany changed to the euro, at a conversion rate of 1.95583 Deutschmarks to the euro.

Spain

About 1350 a small silver coin called a Reale was issued, weighing 3½ grams and valued at 3 Maravedis, their previous debased coinage.

In 1537 the gold Escudo (shield) was issued with about 3.43 grams of gold and valued at 16 reales, also the Doubloon (double Escudo) valued at 32 reales.

Next the Peso (Piece of Eight Reales) having 27.468 grams of silver was issued in Spain, also in the mints of Mexico and Peru, and corresponded to the German and Austrian "Thaler" above. It accordingly became known in the English language as the Dollar, a name that then spread worldwide, with the Chinese Yuan (in 1889) pegged to the Mexican Peso or Dollar.

In 1686 the Spanish Peso was devalued by 20% to 21.912 grams. In 1869 it was replaced by the Peseta with 4½ grams of silver. The silver disappeared in 1910. In 2002 Spain changed to the euro, at a conversion rate of 166.386 pesetas to the euro.

Russia and China

In 1704, Peter the Great issued the Russian Ruble coin with 28 grams of silver. By the mid-1800s it was down to 12 grams. After the revolutions in Russia (in 1917) and China (in 1949), and in unsettled times, the value of their paper currency was officially set to an unrealistic high value in relation to western currencies, specifically, the US dollar. Hyper-inflation coupled with a strong black market economy followed.
In the late 1980s and early 1990s, China worked to make their yuan more convertible. Currently the Russian ruble is valued at just under 2 US cents, and the Chinese yuan at about 14 US cents.

Japan

In 1871, Japan issued the Yen silver coin with 24.26 grams of fine silver, and pegged its value to the US Dollar in terms of silver and gold. In 1884, the Bank of Japan was granted a monopoly by its government in issuing paper banknotes, resulting in the Yen's devaluation to $US0.50 by 1897. The Yen remained fixed at this rate following Japan's annexation of Korea in 1910, in its war with Communist Russia 1918-1922, right up to its invasion of Manchuria in 1931. Following some upheaval, the Yen dropped in value to $US0.30 with no clear exchange rate issued after 1941 and Japan's entering WW2.

On April 25 1949 the US occupation government fixed the value of the yen at ¥360 per US$1. After the US government floated the dollar in 1971, the Japanese government did likewise with the yen, as it increased in value on the open market. Today the value of the yen is about ¥109 per US$1.

England

Over in England in 1489, King Henry VII issued a large gold coin, the English Sovereign, weighing 15.55 grams and minted in 23 carat i.e. 95.83% fine. It was valued at £1 sterling, 20 shillings of 12 heavy pennies of 1 gram of silver at 92.5% fine, 240 grams — a value gold-to-silver of 15½ to one. Over the following 115 years, the silver content in pennies and shillings then steadily decreased by government policy as England showed its preference when making trade payments for using gold, and its preference when it came to receiving payment, for silver.

Thus the heavy gold Sovereign became an international standard that increased in value to 30 shillings, until discontinued in 1604 in the reign of King James. In the reign of Queen Elizabeth the shilling coin was issued with just 6 grams of sterling silver, also a lighter 5 gold grams coin worth 10 shillings (called a "Royal" as opposed to a "Sovereign") , and a 10 gold grams coin worth £1, minted in 22 carat (91.67% fine). This latter coin was called a "Unite" after 1604, and continued until 1662, rising in value, when it was replaced with the 8 gram Guinea coin (7.32 grams fine). The Guinea's value started at 20 shillings, and again escalated to 30 shillings.

The Gold Standard: In 1717, the guinea's value was officially "fixed" at 21 silver shillings by Sir Isaac Newton, the "master" of the Royal Mint. A declaration of government guaranteed exchange, silver or gold, it increased the popularity of Bank of England banknotes, making the Bank of England a bankers' bank.

In 1817 after the wars with France, the Sovereign £1 gold coin was reissued, same weight as the Guinea coin but worth 20 shillings. Minting then ceased in London in 1917 during the 1st World War, followed by the branches: Bombay 1918, Ottawa 1919, Sydney 1926, Melbourne and Perth 1931, Pretoria 1932. Minting restarted in London in 1957, though mostly now for collectors.

Israel / Palestine (from 1688)

The Kurus was introduced to the Ottoman Empire in 1688. It was initially a large, silver coin, approximately equal to the French Ecu, or, from other sources, to the Spanish Dollar. However, during the 18th and early 19th centuries, debasement reduced the Kurus to a billon (i.e. mostly copper) coin weighing less than 3 grams.
In 1844 the Turkish gold Lira coin and banknote was introduced with 1 lira = 100 kurus. Between 1844 and 1881, the lira was on a bimetallic standard, with 1 lira = 6.61519 grams fine gold or 99.8292 grams fine silver. In 1881, the gold standard was adopted and continued until 1914. World War I saw Turkey effectively depart from the gold standard with its lira being worth about nine lira in paper money by the early 1920s.

In 1927, the Palestine pound was introduced by the British as a new currency, equal in value to the British pound sterling.

With the establishment of the State of Israel in 1948, printing of Palestine pound notes (now called Lira Eretz-Yisraelit) came under the control of the Anglo-Palestine Bank that had been established in 1902. In 1952 the bank changed its name to Bank Leumi Le-Yisrael (Israel National Bank) and the official currency name to Lira Yisraelit (Israeli pound) having the symbol I£.

In 1954 the pegging to the British pound note was dropped, and in 1955 Israel established the new Bank of Israel to issue these banknotes.

On 24 February 1980, the Israeli pound was replaced by the shekel at a ratio of 10 shekels to the pound.

After a period of hyper-inflation, on 1st January 1986 this shekel was replaced by the "New Shekel" at a ratio of 1000 Old Shekels to the New Shekel.

In 2017 the New Shekel held an exchange value of about 27 US cents.

Bitcoins (since 2009)

In 2009 the source code for the bitcoin technology was released on the Internet. Click here for an interview with the man who was probably its inventor, according to some of the earliest users.

In 2017 there were 6000 - 7000 "reachable" nodes, each with their own copy of the full Bitcoin master file, about 100 gigabytes in size, and valued at about $US 33 billion (about $2000 per bitcoin) as a result of supply and demand.

Bitcoin transactions are associated with four codes — 1) a public signature, generated automatically by 2) the old owner's private key and 3) a new public key, generated automatically by 4) the new owner's private key.

These private keys are 256 bit long encryption keys, formed using a random number generator inside the Bitcoin program. They are stored, either on paper or in a "wallet" file on your smartphone, on your computer, or at a trusted agency computer exchange. The length of the owner's private key provides for 1077 power in variations, and is designed to protect owners from a brute force attack by hackers. Click here for recent comments on its security. If that security is compromised, the complexity could be strengthened.

When transferring bitcoins, the transferor uses their private key to input a signature code — 568bits, 576bits or 584bits long — confirming the transferor's ownership of an earlier transaction by the code's ability to convert into the 264bit public key at that earlier transaction address. The transferee's private key outputs a new public key, and that is stored on the master file as a new record, together with the number of transferred bitcoins, at the next available address. The transferor creates a record for any balance. Click here to read more about this algorithm.

So, if the new owner's private key is stolen, so probably are the coins relating to that bitcoin transaction. If the private key is lost, so are the bitcoins.

"Mining" nodes publish new transaction records in blocks, with a successful miner being allowed to make a small commission in new bitcoins. Currently, the commission is 12½ bitcoins. "Success" is awarded by the computer first solving a difficult randomised mathematical problem then having the "longest" chain (i.e. the most combined difficulty) in the event of contention. Maximum size for a single block is currently one megabyte. The commission amount itself is gradually reducing, with users expecting the value of bitcoins to accordingly grow as a result of a growing shortage. Note, bitcoins themselves can be broken down to 8 decimal places.

Note too that once your bitcoins are spent, there's no way to "freeze" a transaction, or undo it, like you can with Paypal. All that can be seen is the transaction address of the new record they were sent to. It is this anonymity that is their greatest attraction (and danger). See a simple example of an input and an output Transaction here.

U.S.A.

Finally, the US. In 1792, the US Dollar coin was issued with a weight of 24.056 grams of fine silver. In 1837 the dollar was further valued as 1.505 grams of fine gold, setting a US value of gold-to-silver of 16 to one, and a gold standard at $US20.67 per troy ounce (31.103 grams). In 1900 the bimetallic standard was dropped, and the dollar was simply valued at 1.505 grams of gold. In 1933, President Franklin Roosevelt changed the gold standard to 0.888 grams, or $US35 per troy ounce. In 1971 the US dollar was let to freely float on currency markets.

 

 

1260 (35.3g) — 1270 (23.5g) — 1280 (21.4g) — 1300 (19.0g) — 1310 (16.2g) — 1320 (12.8g) — 1330 (14.4g) — 1340 (12.2g) — 1350 (11.5g) — 1360 (11.6g) — 1370 (11.1g) — 1380 (10.6g) — 1390 (9.3g) — 1400 (9.2g) — 1410 (8.8g) —1420 (8.7g) — 1430 (8.6g) — 1440 (7.7g) — 1460 (7.1g) — 1470 (6.9g) — 1480 (6.3g) — 1490 (5.9g) — 1500 (5.6g) — 1530 (5.2g) — 1540 (5.0g) — 1550 (4.5g) — 1710 (4.3g) — 1730 (4.2g) — 1740 (3.9g) — 1780 (3.8g)

Data: R. A. Goldthwaite, The building of Renaissance Florence (Baltimore/ London, 1980), pp. 429-30; M. Bernocchi, Le monete della Repubblica fiorentina (Firenze, 1974-78).

Extract from pierre-marteau.com/wiki/index.php?title=Italy:Money#Florence

** End of Report

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