How Inheritance Tax Prevented the Rise of Zaibatsu — 1905, 1945, 1950
A tax created to fund the Russo-Japanese War became, forty-five years later, a tax with a top rate of 90 percent. In between lies the dissolution of the headquarters of four zaibatsu. We will examine this through three key years.
A Silver Coin Claiming Double Value
The Roman silver denarius was initially almost pure silver, weighing about four grams. However, after Emperor Nero reduced its weight in 64 AD, the silver purity steadily declined. The gold aureus also shrank, from 7.8 grams under Augustus to 6.5 grams under Caracalla.
In 215 AD, Emperor Caracalla introduced a new silver coin called the antoninianus. Its face value was set at two denarii, but it contained only 1.5 denarii worth of silver. The emperor depicted on the coin wore a radiate crown, signifying its double value.
With each new issue, the silver content decreased, and by the reign of Gallienus, the proportion of silver had fallen to about two percent. It eventually became a bronze core with only a thin silver wash. Good coins were hoarded, and both sellers and buyers, seeing through the low content, raised their prices. What was destroyed was not the wealth of any one person, but the wealth of all who held the currency: faith in the currency itself.
The Art of Separating a Natural Alloy
Going back in time to Lydia, King Croesus stopped using the previous electrum coins and, for the first time, created separate coins of pure gold and pure silver. This was around 550 BC. Lydian artisans had developed a refining technique to separate the natural alloy of electrum into gold and silver by human hand.
These are counted among the first gold coins to have their purity guaranteed by the state. And so, the world's first bimetallic system, using gold and silver coins side by side, was born. The name of Croesus became a synonym for wealth, and his riches are said to have been piled high as golden offerings as far away as the temple at Delphi.
The Edict to Strike in Pure Silver
Charlemagne, who defeated the Lombard Kingdom in 774, proclaimed the use of a new denarius at the Synod of Frankfurt in 794. It came with two rules: that it be struck from pure silver, and that it bear the name of Charles.
A new accounting system was established: 240 denari were to be struck from one pound of pure silver, with 12 denari counted as one solidus, and 20 solidi as one libra. This replaced the previous system which counted 264 denari to a pound, changing it to 240, a number divisible by both 12 and 20.
The Multiplication of Weight and Fineness
Libra, solidus, denarius. This three-tiered system of accounting would dominate European ledgers for the next 1,200 years, and the British system of pounds, shillings, and pence shares the same framework.
The foundation of this system was one pound of pure silver, weighing approximately 408 grams. The true value of a coin, whatever its face value or name, is determined by the multiplication of its weight and its fineness (purity).
More in The origin of words
The Currency and Men Bearing the Name Frank
An inscription meaning 'King of the Franks' became the name of a currency. A great king established a silver system that lasted a thousand years, and a printer in a distant land supported the credit of paper money.
The Accounts of a Kingdom Facing South and Beyond the Sea
In the second half of the twelfth century, Castile struck gold coins with inscriptions entirely in Arabic. From this south-facing kingdom would later emerge the tax system imposed on the silver of the New World.
The Unit of Weight Called the Grain
The American silver dollar was defined as three hundred seventy-one and one-quarter grains. The Indian rupee is also described in grains. This is the story of a unit of weight that connects two coins from different countries and eras.
If you would like to read on
Everything in these pieces comes from the material itself.