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.
Following Constantinople's **decline in the face of Islamic, Turkish and Venetian expansionism, new gold coins were issued from Florence, starting in 1252. They were worth one Florentine Lira, 240 Florentine Denari or two English shillings (that contained 35 grams of silver). This "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 (in the west), whose gold content had fallen to one gram, in fact it was about to be reissued in silver as a result of their wars, click here for an account.
** In the east, 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".
Another 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 early in 1344 with a weight of 9 grams. The Noble was valued at three florins (six shillings). The silver penny now contained about 1.3 grams and a value of gold-to-silver of about 10.4 to one.
But gold was now seen as being undervalued, and a second issue that year increased the Noble to 6s 8d — then a third issue in 1346 reduced the gold to 8.3 grams — and finally a fourth issue in 1351 stabilized its weight (for over 100 years) at 7.8 grams, and a value of gold-to-silver of about 13.33 to one. In 1412, the level of silver in the penny dropped to just 1 gram and the value of gold-to-silver dropped to about 10.25 to one. In 1464, during the Wars of the Roses, this was rectified with a new issue — the
Shortly after, the Royal was discontinued, and in 1489 the Sovereign worth 20 shillings and weighing 15.55 grams was issued.
So as a standard, all these gold 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.
India and Indonesia
Israel and Turkey
Netherlands and the Bank of Amsterdam
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.
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.
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.
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.
In 1524, the Holy Roman Emperor Charles V declared the Cologne Mark at ⅔ of the weight of the 12 ounces Roman Tower Pound, 8 Tower ounces (233.856 grams) to become the standard weight of all precious metals in the German states. It was 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
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 that was worth half a Conventionsthaler, a silver coin of 11.695 grams, 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.
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.
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 or two Spanish Pesos, 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 throughout Africa and Asia, as governments and trade in Indian Rupees, Russian Rubles, Chinese Yuan and Japanese Yen all started pegging their currencies to this Peso, this 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.
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 15 US cents.
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 ¥110 per US$1.
The Indian rupee historically contained about 11½ grams of silver (and was worth about two English shillings). However, it was pegged at parity with the US Dollar for purchasing in the east until WW1 (i.e. at about four English shillings and tuppence).
Early in 1942, the Japanese invaded the Dutch East Indies, taking control of the whole country by March. On their invasion ships, they brought their own issue of the local money, the Dutch gulden. Massive overprinting of this paper resulted in hyperinflation. The Japanese money continued to circulate after the war, as Indonesia prepared for independence, also with many towns printing their own currency.
In November 1949, Indonesia was granted independence from the Netherlands. Inflation involving their new currency, the rupiah, continued.
In 1965, the "new" rupiah was introduced at a rate of 1000 of the "old" rupiyah.
Inflation has continued to skyrocket. Currently, the rupiah is valued at 13,500 to the US dollar.
Go top to read about England's earlier coins.
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 by about 1550, until discontinued in 1604 in the reign of King James. The 5.2 grams gold English coin called an
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, in 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 down to 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 for collectors.
While in 1933, the position of being the world's largest "bankers' bank" gradually shifted to the USA, with their opening of Fort Knox.
In 1949, the British government devalued the £1 note by 30% to $US2.80, previously it had been valued at $US4.03 (and before 1940, at about $US5.00). After 1967 it was devalued again to $US2.40, then after the US floated the dollar in 1971, the £1 also floated up and down on international exchange markets (click here for a graph) at around the $US1.50 mark. Currently in 2017 it is valued at about $US1.30, or about 1.10 Euro.
Turkey: The Kurus was introduced to the Ottoman Empire in 1688. It was initially a large silver coin, approximately equal to the French Ecu or the Spanish Dollar. During the 18th and early 19th centuries, debasement reduced it to a billon (i.e. mostly copper) coin weighing less than 3 grams. Referred to as a "piastre" in Cyprus, having a value little more than an English penny.
In 1844 the Ottoman gold Lira coin and banknote were introduced, worth 100 kurus, similar to the English pound with 1 Lira = 6.61519 grams fine gold or 99.8292 grams fine silver. Following World War I, Turkey's gold Lira coin, still pegged to the English pound, took on the value of about nine Lira in paper banknotes. With a new Turkish republic in 1923 and a gradual formation of a new central bank, there were numerous bankruptcies as much of the previous government's high foreign debt was frozen, apparently, until after WW2. Click here for more details. In 1946, the lira was officially devalued (by about 10:1) to be valued at 2.80 to the US dollar. In 1960, it was devalued to 9 to $, 1980 to 90 to $, 1988 to 1300 to $, 1995 to 45,000 to $, 2005 (under Mr Erdogan's government) to 1,290,000 to $. In 2005 the new lira was introduced, worth one million of the old. In 2017, this lira is valued at about 3.84 to the US dollar.
Palestine and Israel: Over in Palestine, following the institution of the British Mandate in 1917, the Egyptian pound note, pegged to 97½% of the British pound sterling, circulated alongside that devalued Turkish Lira. In 1927 the Palestine pound, worth 1000 mils, was introduced by the British as a new currency equivalent to the British pound sterling.
With the establishment of the State of Israel in 1948, printing of these pound notes (Lira Eretz-Yisraelit) came from the Anglo-Palestine Bank, a bank that had been established in 1902. In 1952 the bank changed its name to the Israel National Bank (Bank Leumi Le-Yisrael) and the official currency became the Israeli pound (Lira Yisraelit) having as a symbol I£.
In 1954 the pegging to the British pound note was dropped, and in 1955 Israel established the Bank of Israel to issue 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 28 US cents.
Click here for further statistics and notes on using Bitcoin. For stability it is restricted to about one block of "confirmation" transactions added to the blockchain every 10 minutes, averaging about three transactions per second. The maximum size for a block is about one megabyte, with an eventual "miner" being allowed to make an extra commission in new bitcoins. So technically it is more like a specialist peer-to-peer Internet bank than a serious currency, as sellers have to "outbid" other users (by offering additional bitcoin commissions to miners) in order to take precedence in its transaction "mempool" queue. In August 2017, a new currency, based on Bitcoin but with a larger block size (called "Bitcoin Cash") was launched.
But here is some of Bitcoin's background. Note, bitcoins themselves can be broken down to 8 decimal places.
In 2009 the source code for the bitcoin technology was released on the Internet. There are now over 16 million bitcoins on issue. Click here for an interview with the man who was probably its inventor, according to its earliest users.
In 2017 there are 11000 - 12000 "reachable" nodes each with their own copy of the full Bitcoin master file, about 150 gigabytes in size and valued at over $US 300 billion (about $18,000 per bitcoin) as a result of supply and demand.
Bitcoin transactions are associated with four codes — 1) an old public key and signature, both 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.
Currently there are 12½ bitcoins in a commission every 10 minutes. It had started as 50 bitcoins in Jan 2009. In Nov 2012 at 210,000 blocks and 10½ million bitcoins it halved to 25. In Jul 2016 at 420,000 blocks and 15¾ million bitcoins it halved again.
Mining pools seek to earn the reward by publishing a block. Each block contains a timestamp and hash pointer linking to the previous block, forming a "blockchain". "Success" is awarded by the mining pool first solving a difficult randomised mathematical problem, then having the longest chain i.e. the most combined difficulty in the event of two miners arriving at two valid solutions for the same block on different nodes. One block will thus be "accepted", the other is "orphaned". Once a block is accepted by 51% of the nodes, it is inherently secure.
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.
Finally, the US. In 1792, the US Dollar coin was issued with a weight of 24.056 grams of fine silver, and valued at 8 bits that corresponded to the Spanish Peso and its Pieces of 8 Reales. As well as one cent copper coins, other silver coins issued were the dime (10 cents) and the quarter (25 cents or 2 bits). 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).
The wars in Europe and the US's civil war in 1860 led to a growing reliance on paper money everywhere, and was a major factor in the worldwide collapse in the value of silver. In 1870, due to a perceived oversupply in the marketplace, the price of silver bullion halved in relation to gold. In 1900 the previous US bimetallic standard was dropped, and the dollar was simply valued at $US20.67 per troy ounce of gold.
In 1933, President Franklin Roosevelt ordered that all holdings of gold certificates, gold coins and gold bullion in excess of 160 grams per individual had to be deposited with the US Federal Reserve at Fort Knox, accepting US dollar banknotes (like deposit slips) in their place. Only rare and unusual coin collections were exempt, along with special needs businesses e.g. dentists, artists, jewellers.
Subsequently the US government devalued the US dollar to 0.888 grams of gold internationally, or $US35 per troy ounce. It resulted in the Federal Reserve becoming the world's largest central bank or "bankers' bank" as it now held greater stocks of gold than any other country. During World War 2, Fort Knox's vaults stored in excess of 20,000 tons. Today, it holds just 4,500 tons. Click here for more details.
As gold stocks at Fort Knox diminished after the war, in 1971 the US Government stepped in to prevent it from "emptying", taking the dollar off the gold standard, thus causing it to freely float on currency markets. In 1974 the 160 grams limit on gold holdings by private individuals in the US was revoked.
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