treasury

国庫　—　Institutions

The strongroom and the office through which a state's money passes.

Écu blanc (silver écu of Louis XIV)1690 3 Rubles, Platinum1828 1000 réis commemorative silver coin1898 (400 years of the India route)

When war begins, a state's treasury is cornered by the arithmetic of rising expenditures and falling revenues. The options at hand are to raise taxes or to borrow, and there is a third path — to tamper with the currency. By reducing the precious metal content of silver coins while keeping their face value, the difference can be paid into the treasury. It is an undeclared war tax.

After the defeat at Cannae, Rome reduced the weight of its bronze coins. During the American War of Independence, the Continental Congress had an army but no treasury and no power to tax. In 1557, Philip II of Spain declared the treasury bankrupt — a suspension of payments.

⚠ The profit temporarily enters the treasury, but the bill is later passed on to everyone holding the currency in the form of higher prices.