The Gold Coin That Didn't Change for 500 Years
The Italian city-state of Venice did not change the standard of one of its gold coins for over five hundred years. In a period during which multiple dynasties rose and fell, why did this gold coin remain unchanged and see such widespread use?
A Standard Set by the Council
On October 31, 1284, a Venetian council known as the Council of Forty decided to strike the gold ducat. This was to compete with the gold coin of Florence, which had appeared thirty-two years earlier. The standard was a weight of 3.545 grams and a purity of 24 carats, or 99.7%.
This standard was maintained for over five hundred years, until the fall of the Republic of Venice in 1797. For a period long enough for multiple dynasties to rise and fall, the specifications of a single gold coin remained unchanged.
A Credibility Worthy of Imitation
This single principle of "not changing" had an impact far greater than the nation's size. The ducat, which consistently maintained its purity, circulated widely as the common currency of the Mediterranean world. It was the dollar of the late Middle Ages, succeeding the solidus.
Venice had expanded its trade network into the Aegean Sea with the partition of the Byzantine Empire in 1204, and the ducat also penetrated the former Byzantine sphere. By the mid-fourteenth century, imitations were being produced in a region stretching from the Eastern Mediterranean to India. To be imitated is proof that a currency serves as a standard.
Ceasing to Borrow the Credibility of Others
Relying on the gold coins of other countries for trade carries risks. If the issuing country were to debase the fineness, one's own transactions would also be destabilized. To have one's own gold coin meant to stop borrowing the credibility of others.
In 1457, Portugal struck its own gold coin, the cruzado, with gold that arrived from Africa. Behind this coinage was a plan for a crusade following the fall of Constantinople in 1453. A contemporary account boasts that this gold was "finer than any ducat in Christendom." The standard of comparison was, after all, the ducat.
The Power of Will
The power of a state is not merely its military. The Venetian ducat built immense credibility by not changing its standard over a long period.
What this city proved was that the very will to maintain credibility is, in itself, a form of power.
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