Tamperers of Scales, Clippers of Coins

Tamperers of Scales, Clippers of Coins

In seventeenth-century Germany, the populace expressed their anger by hanging effigies of the lords who carried out debasement. During the early years of the Thirty Years' War, prices went haywire and trust collapsed. This era is known as the Kipper- und Wipperzeit, meaning "the time of the scale-tippers and coin-clippers."

To finance their war efforts, lords collected sound currency, clipped it, mixed it with copper, and reminted coins with reduced precious metal content. This is debasement. Since more coins could be made from the same amount of silver, the difference became the issuer's revenue. However, this practice, while certainly profitable in the short term, invariably raises prices in the long term.

How Sound Currency Speaks of Legitimacy

Minting sound currency could also be a statement of a ruler's legitimacy. In 260 AD, the Emperor Valerian was captured by the Persians, and Rome's Rhine frontier became unstable. At this time, the general Postumus was acclaimed emperor by his troops.

He established the Gallic Empire, which encompassed Gaul, Germania, Britannia, and Hispania. Seizing control of the mines in Hispania and Britannia, he minted currency of a better quality than that of the Roman Empire proper. On the face of these coins, rich in precious metals, he inscribed "Restorer of Gaul."

Signs of Debasement

Postumus's rule was not secure, however. By the end of 268 AD, signs of debasement began to appear in his coinage as well.

Eventually, his soldiers demanded the right to plunder. When Postumus refused, his own troops killed him. Thus, the ruler who had asserted his legitimacy by minting sound currency lost his throne as his coinage deteriorated.

The Conditions for an Avalanche

Why did the whole of Germany suddenly plunge into debasement in the seventeenth century? When the Thirty Years' War began in 1618, debasement became the most accessible source of revenue for the principalities struggling to cover war expenses.

It started with small-denomination coins. When one principality resorted to debasement, the bad money would flow into neighboring states. The recipients had no choice but to debase their own currency to protect themselves. Debased small change, an empire full of borders, and war—all the conditions for a chain reaction of debasement were in place.

Between 1620 and 1623, the price of major foodstuffs increased roughly eightfold. By 1621, the average small-denomination coin was worth only about one-fifth of its face value.