At first
Roman silver coins were almost pure silver.
About 4 grams
Weight of one denarius silver coin
WORDS
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.
Pure Silver in 3 Minutes
1See it
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From 64 AD
Emperor Nero made the silver coins lighter. The percentage of silver kept going down.
215 AD
A new silver coin claimed to be worth two. But it only had 1.5 times the silver.
Face value: double denarius
In Gallienus's time
The silver almost disappeared. It was just bronze with a thin silver coating.
About 2 percent
Percentage of silver
Meanwhile
People saw what was inside and raised their prices. Trust in money was broken.
Good coins were hoarded.
Around 550 BC
The king of Lydia made separate coins of pure gold and pure silver.
They separated the natural mix of gold and silver by hand.
794
Charlemagne decided, 'We will strike pure silver and put my name on it.'
794
From 1 pound of pure silver, 240 silver coins were struck.
264 → 240 coins
Changed to a number divisible by both 12 and 20.
The real value of money is decided by its weight times its purity.
2In numbers
2percent
The approximate percentage of silver in a Roman silver coin in Gallienus's time. At first, they were almost pure silver.
7.8 → 6.5grams
The aureus gold coin also got lighter.
3What would you do?
You are selling goods in a Roman market. A customer tries to pay with a new silver coin called a 'double denarius.' What do you do?
Pick one
Accept it as a double denarius, just as it says.
The silver in that coin was only worth 1.5 denarii. There was a gap between its name and its contents.
Look at its contents and raise the price of your goods.
In reality, both sellers and buyers saw through the low quality and raised prices. What was broken was the trust everyone had in money.
No matter the face value, no matter the name, the value of a coin is determined by its weight times its purity.
4Read more
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).
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