D. Principles of Coinage

45. INVENTION OF COINAGE

BY HENRY V. POOR

Coinage is of comparatively recent origin. No traces of it have been found among the remains of Assyrian or Egyptian art; and Egyptian civilization, running through periods far greater than those which measure the life of subsequent nations, had begun to decline before coinage was used. Among all the ancient nations, including the Hebrews and Phoenicians, as well as the Assyrians and Egyptians, the precious metals passed by weight. When Abraham weighed out at Ephron the silver which he had named in the audience of the sons of Heth-"four hundred shekels of silver, current money with the merchant"-he undoubtedly used scales and denominations of weight common to the whole East. The language indicates as thorough a familiarity with the use of money as does that used in financial newspaper articles of the present day. So Joseph gave to Benjamin “three hundred pieces of silver." These pieces were undoubtedly of very nearly equal weight-consequently of equal value. The word piece had a significance precisely similar to that which we attach to the word dollar.

The invention of coinage has been ascribed to Pheidon, who reigned about 750 B.C., in the island of Aegina, a dependency of Argos, and at that time one of the greatest commercial emporiums of Greece. Previous to its invention, the form in which the precious metals were used was that of pins, or wires, silver being the metal chiefly employed. Of these, a certain number made a conventional handful, or drachma. This form was gradually exchanged for that of solid pieces, or wedges, which may be considered as a step toward coinage.

Jevons says: "The mode in which the invention happened is sufficiently evident. Seals were familiarly employed in very early times, as we learn from the Egyptian paintings or the stamped bricks of Nineveh. Being employed to signify possession, or to ratify contracts, they came to indicate authority. When a ruler first undertook to certify the weights of pieces of metal, he naturally employed his seal to make the fact known, just as, at Goldsmith's Hall, a small punch was used to certify the fineness of plate. In the earliest forms of coinage there were no attempts at so fashioning the metal that its Adapted from Money, Its Laws and History, p. 11. (H. V. and H. W. Poor, 1877.)

weight could not be altered without destroying the stamp or design. The earliest coins struck, both in Lydia and in the Peloponnesus, were stamped on one side only."

46. FORM, DESIGN, AND SIZE OF COINS2

By W. STANLEY JEVONS

From time to time coins have been manufactured in very many forms, although circular coins vastly predominate in number. Among the innumerable issues of the German states may be found octagonal and hexagonal coins. A singular square coin, with a circular impress in the centre, was issued from Salzburg by Rudbert in 1513. Siegepieces have been issued in England and elsewhere in the form of squares, lozenges, etc. Some of the most extraordinary specimens of money ever used are the large plates of pure copper which circulated in Sweden in the eighteenth century. These were about three-eighths of an inch in thickness, and varied in size, the half-daler being 3 inches square, and the two-daler piece as much as 7 inches square and 3 pounds in weight. As the whole surface could not be covered with a design, a circular impress was struck near to each corner, and one in the centre, so as to render alteration as difficult as possible.

Among Oriental nations the shapes of coins are still more curious. In Japan, the principal part of the circulation consists of silver itzibus, which are oblong, flat pieces of silver, covered on both sides with designs and legends, the characters being partly in relief and partly incised. The smaller silver coins have a similar form. Among the minor Japanese coins are found large, oval, moulded pieces of copper or mixed metal, each with a square hole in the centre. The Chinese cash are well known to be round discs of a kind of brass, with a square hole in the centre to allow of their being strung together. The present circulation of China is composed of the so-called Sycee silver, which consists of small shoe-shaped ingots, assayed and stamped, according to some accounts, by the government. The coins of Formosa are similar, except that they are much larger and thicker. All the copper and base metal coins of China, Japan, and Formosa are distinguished by a broad, flat rim, and they have characters in relief upon a sunk This paragraph is taken from Money and the Mechanism of Exchange, p. 55, 1875. (D. Appleton & Co.)

2

Adapted from Money and the Mechanism of Exchange (1875), pp. 55-62. (D. Appleton & Co.)

ground, somewhat in the manner of Boulton and Watt's copper pence. They are manufactured by moulding the metal, and then filing the protuberant parts smooth. Such coins stand wear and preserve their design better than European coins, but they are easily counterfeited. The most singular of all coins are the scimiter-shaped pieces formerly circulated in Persia.

It is a matter of considerable importance to devise the best possible form for coins, and the best mode of striking them. The use of money creates, as it were, an artificial crime of false coining, and so great is the temptation to engage in this illicit art that no penalty is sufficient to repress it, as the experience of two thousand years sufficiently proves. Thousands of persons have suffered death, and all the penalties of treason have been enforced without effect. Ruding is then unquestionably right in saying that our efforts should be directed, not so much to the punishment of the crime, as to its prevention by improvements in the art of coining. We must strike our coins so perfectly that successful imitation or alteration shall be out of the question.

There are four principal objects at which we should aim in deciding upon the exact design for a coin:

i. To prevent counterfeiting.

2. To prevent the fraudulent removal of metal from the coin. 3. To reduce the loss by legitimate wear and tear.

4. To make the coin an artistic and historical monument of the state issuing it and of the people using it.

For the prevention of counterfeiting, our principal resource is to render the mechanical execution of the piece as perfect as possible, and to strike it in a way which can only be accomplished with the aid of elaborate machinery. When all coins were made by casting, the false coiner could work almost as skilfully as the moneyer. Hence, in the Roman Empire, it was difficult to distinguish between true and false coin. Hammered money was a great improvement on moulded money and milled money on hammered money. The introduction of the steam coining-press by Boulton and Watt was the next great improvement, and the knee-joint press of Ulhorn and Thonnelier, now used in nearly all mints, except that on Tower Hill, forms the last advance in the mechanism for striking coin.

The utmost attention ought to be paid to the perfect execution of the milling, legend, or other design impressed upon the edge of modern coins. This serves at once to prevent clipping or tampering

with the coin, and to baffle the skill of the counterfeiter. The coins of ancient nations were issued with rough, unstamped edges, and the first coin marked with a legend on the edge was a silver coin of Charles IX of France, issued in the year 1573.

All the larger coins now issued from the English, and indeed from most other mints, bear a milled or serrated edge, produced by ridges on the internal surface of the collar which holds the coin when being struck between the two dies. These collars are difficult to make, and useless when made except in the coining press, and the counterfeiter cannot imitate the milling by handwork, it being almost impossible to use a file with sufficient regularity.

The French five-franc pieces bear a legend on the edge in raised letters, the words being "Dieu protège la France." Such raised letters are quite beyond the art of the counterfeiter.

Some states have utilized their coins as monuments of important events, such as conquests, jubilees, the accession of monarchs, etc. The German states, especially Prussia, have struck a long series of beautiful coins down to the Krönung's Thaler of 1861, and the Sieges Thaler of 1871. Some of these coins are at once treasured up in cabinets in the manner of medals. If it is possible to conceive literature destroyed, and modern cities and their monuments in ruins and decay, such medallic coins would become the most durable memorials, and the history of the kings of Prussia would be traced out by future numismatists as that of the great dynasties of Bactria has lately been recovered.

47. COINAGE, A GOVERNMENT FUNCTION'

BY W. STANLEY JEVONS

Every civilized community requires a supply of well-executed coins, so there arises the question, How shall this money be provided? The coins of each denomination must contain exactly equal weights of fine metal, and must bear the impress proving that they do so. Can we trust to the ordinary competition of manufacturers and traders to keep up a sufficient supply of such coins, just as they supply buttons or pins or needles? Or must we establish a permanent department, under strict legislative control, to secure good coinage?

As almost every opinion finds some advocates, there are not wanting a few who believe that coinage should be left to the free Adapted from Money and the Mechanism of Exchange, pp. 62-64. (D. Appleton & Co., 1875.)

action of competition. Mr. Herbert Spencer advanced the doctrine that, as we trust the grocer to furnish us with pounds of tea, and the baker to send us loaves of bread, so we might trust Heaton and Sons, or some of the other enterprising firms of Birmingham, to supply us with sovereigns and shillings at their own risk and profit. He held that just as people go by preference to the grocer who sells good tea, and to the baker whose loaves are sound and of full weight, so the honest and successful coiner would gain possession of the market, and his money would drive out inferior productions.

Mr. Spencer has, however, overlooked the important law of Gresham, that better money cannot drive out worse. In matters of currency, self-interest acts in the opposite direction to what it does in other affairs, and if coining were left free, those who sold light coins at reduced prices would drive the best trade.

In

This conclusion is amply confirmed by experience; for at many times and places coins have been issued by private manufacturers, and always with the result of debasing the currency. For a long time the copper currency of England consisted mainly of tradesmen's tokens, which were issued very light in weight and excessive in number. Mr. Smiles' Lives of Boulton and Watt the lower class of manufacturers purchased copper coins to the nominal value of thirty-six shillings for twenty shillings in silver and distributed it to their work-people in wages, so as to make a considerable profit. The multitude of these depreciated pieces in circulation was so great that the magistrates and inhabitants of Stockport held a public meeting, and resolved to take no halfpence in future but those of the Anglesey Company, which were of full weight. This shows, if proof were needed, that the separate action of self-interest was inoperative in keeping bad coin out of circulation, and it is not to be supposed that the public meeting could have had any sufficient effect.

The experience of the United States has also shown that the coining of money cannot safely be left to private enterprises. Private coinage was not forbidden in the United States until 1864, and between 1850 and this date there were numerous private gold manufactories located in the gold-producing regions. As many as sixty specimens of such coins have been preserved by the mint at Philadelphia. These coins were guaranteed to be of the same weight and fineness as government coins, though in fact the five-dollar pieces ranged in value from $4.36 to $5.00. They were of course not counterfeits, and hence they should have passed for their actual worth. They would have