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 of their currencies. Silver was prescribed as the money substance. The establishment of the empire led to the definite concentration of the right of coining in the sovereign; though concessions were made in various localities, where the smaller coinages were allowed to continue. But the principal interest of the money of the Roman Empire is due to the remarkable way in which it illustrates the tendency of despotic and bureaucratic rule to lower the condition of good administration. A long course of debasement is the characteristic aspect of the currency system. “Under the empire,” we are told, “the history of the silver coinage is one of melancholy debasement. The most extensive frauds in connexion with money were perpetrated by the Romans.” The gold aureus, which in the time of Augustus was one forty-fifth of a pound, was under Constantine only one seventy-second of a pound. The alloy in the silver coins gradually rose to three-fourths of the weight. Plated coins came into extensive use. The practice of debasement was in accordance with the theories of the jurists, who seem to have regarded money as simply the creature of the state, i.e. the personal ruler.

Medieval Money.—After the overthrow of the Western Empire, though the invaders were in the condition of what has been called “natural economy,” the state in which money has not come into being, they soon were disposed to carry on the Roman tradition, and their rulers adopted some form of silver currency. With the temporary revival of the empire under Charlemagne there comes the effort to found a general standard money on the basis of the silver pound. From this new starting-point it is possible to trace the course of some of the leading currency systems of Europe. For purposes of illustration it will be sufficient to sketch the movements in England and France, which are typical of the general course of monetary development. The systems of these countries are moreover remarkable (1) in the contrasts that they present to each other, and (2) in the widespread influence that they have exercised on the monetary arrangements of other nations.

English Monetary History.—The English currency begins with the pound of silver (troy weight) as the standard unit, subdivided into 20 shillings, each containing 12 pennies. The only coin at first in use was the silver penny. This system, in force before the Conquest, is the direct descendant of the Carlovingian system, and it continued without change until about 1276, when a slight depreciation was introduced by coining the pound into 243 pennies, instead of the original 240. This was the first of a series of changes, generally in the direction of lowering the weight of the coin. Two periods are remarkable for the operation of this tendency, viz. (1) the reign of Edward I., when the silver was debased by 20% in the period 1344–1351; and (2)the close of the reign of Henry VIII. and that of Edward VI., 1543–1552. In this short space of ten years the expedient of degrading the quality of the coinage by bringing the alloy up to three-fourths of the mass was practised for the only time in English history. The substitution of the pound troy for the Tower pound in 1527 was accompanied by a lowering in weight which far exceeded the gain from the higher weight of the new pound (5760 instead of 5400 grains). The reformation of the silver coinage under Elizabeth (1560), and its definite settlement in 1601 on the basis of coining 62 shillings from the pound troy also deserve mention. Turning to the gold currency, we find some gold pennies issued in 1257, probably in imitation of the issue of the Italian cities, which were due to the opening of eastern trade and the example of the Greek Empire, which had always retained its gold currency. The regular series of English gold coins begins in 1343, when Edward III. ordered the coinage of florins—the title is significant—at 50 to the Tower pound. The “noble” soon followed. The “sovereign” was first issued in 1489. But gold was treated as a commercial money, to be used as subsidiary to the standard silver. Its value was therefore varied from time to time to meet the difficulty that local bimetallism is certain to cause, in consequence of the undervaluing of one or other metal. During the 17th century the most noticeable monetary events are: the proposals for depreciation, of which the most remarkable was that of W. Lowndes (1652–1724), for lowering the standard by some 25%; the introduction of the guinea as the leading gold coin, and the frequent readjustment of the values of the two metals by proclamation. The great recoinage of 1696, carried out on the principles advocated by Locke, reformed the silver currency. In the 18th century the establishment of the guinea at 21s. by Newton’s advice made the adoption of gold as the standard inevitable, since it was overvalued in an appreciable degree. The position of gold as the practical standard is clearly recognized by Adam Smith (1776) and is regarded as settled by Ricardo (1809). The full legal establishment of the present metallic currency took place in 1816, when the guinea made way for the present pound or “sovereign,” and silver was formally reduced to the level of a token coinage, being slightly lowered by the coinage of the pound of silver into 66 shillings. Thus, by a course of development extending over 700 years, the English currency has been transformed from a crude silver standard system into one resting on gold, but employing both silver and representative money for the greater part of the actual work.

French Money: its Development.—Though the monetary system of Charlemagne soon disappeared in Germany and Italy, it continued in the part of his empire that became France. The extreme confusion of the time of his successors enabled the feudal lords to claim the right of coinage. No less than 150 seigneurs are said to have exercised this power at the accession of the first Capet. With the growth of the royal authority the freedom of private coining was restricted, in order to reserve to the Crown the profitable right of seigniorage. Unfortunately the legitimate profit from this source was not sufficient to satisfy the wants of the royal treasury. Therefore French monetary history is marked by a long series of debasements, extending from the time of Philip I. to that of Louis XV. (1060–1774). In sharp contrast to English policy the tampering with the currency was persistent, so that Louis IX., was looked on as quite exceptional. “In later days his management of the royal mint was always appealed to as the equitable standard for the observance of his successors.” Yet in his time the livre had been debased to less than one-fourth of its primitive level. The Hundred Years' War presented the occasion for still further degradation. At the accession of Louis XI. (1461) the livre had been brought down to one-fifteenth of its original value. The 16th century is equally an age of depreciation, no less than nineteen occurring between 1497 and 1602. Again, in contrast to the English system, the absolute monarchy continued the process of debasing the standard under Louis XIV., and the livre was only one-half what it had been under Henri IV. At the Revolution the decline had proceeded so far that the livre had been reduced to one seventy-eighth of its primitive value. The new spirit of reform produced an entire change. The franc was substituted for the livre at the equation: 80 francs, 81 livres. In fact, until the establishment of constitutional government the French people had to depend on popular violence to procure any temporary reform in their currency. Since the Revolution the course of development has been essentially orderly and regular. All through the time of the ancien régime silver was the principal money and the standard, as the use of the word “argent” as a synonym for money shows. Just as England got a gold currency by overvaluing gold, so did France get a silver one by overvaluing silver. Indeed, it may be said that the different ratios chosen by the two countries necessarily caused a reciprocal drain, affording a good example of the action of local bimetallic systems with different ratios between the two metals. A further result from the comparison of the systems of England and France is the greater maturity of the former. England gained an honest currency before France; she led the way in the adoption of the gold standard, while in her treatment of representative money she has held as decided a priority. The difference in economic conditions in the nations in part explains the contrast. There is no doubt that in both cases a high degree of development has been reached. Finally, it should be remarked, that as England has worked out in practice the system of “composite legal tender,” so has France, with its monetary allies, been the first to show effectively the operation of the “limping standard” (étalon boiteux). Each nation has thus supplied a type, which recent monetary changes give evidence of having been used as the pattern for other less advanced countries.

9. Some General Questions respecting the Constitution of Money.—The consideration of the history of currency systems naturally suggests the general problems that the more advanced countries have had to encounter. Of these, some may be described as formal, i.e. they relate to the arrangement and the definition of coinage and standards. Others are in essence issues of principle involving the most complicated theoretical doctrines, on which there is even yet sharp differences of opinion between competent students of economics. In some instances an intermediate class may be found, e.g. the question of subdivision of the coins does raise some difficult matters of application; though it clearly belongs of right to the group of formal questions. But the distinction is a valid one. Whether a country should adopt the “gold standard” or prefer a “bimetallic” standard is obviously very different from the elementary points about units and the different classes of coins. We will therefore begin by noticing some of the characteristics that are found in all modern currencies and some of which are implied in the idea of money. Thus it is true that every currency system must be based on a standard unit of value which consists of a “fixed quantity of some concrete substance defined by reference to the units of weight or space.” The English unit, for example, is the pound, which consists of a definite quantity of gold (123·27447 grs. standard fineness) while the French unit is the franc (composed of 5 grammes of silver nine-tenths fine). It is not necessary, though it is usually the case, that there shall be a coin corresponding to the standard unit, all that is needed is that the current coins shall be multiples or submultiples of the unit, or at the least easily reducible to it. The Portuguese rei is too small to be coined, and the pound of silver that formed the unit of the 