The devaluation of silver money

[sixgun]

During the 73 years between the end of Marcus Aurelius' reign in 180 AD and the beginning of the reign of Emperor Gallienus, the denarius silver coin was periodically debased – by mixing in a cheaper base metal, like lead – from 75% silver to only 5%.

Over the past 73 years, the US Dollar also lost over 91% purchasing power through persistent debasement. Déjà vu. Currency devaluation is hardly a new phenomenon.

[ZRPMs]

In the words of someone else, may be Mark Twain, he's having the credit, "History may not repeat it's self but it rhyme"

[Roy]

So, silver is not an ideal metal to use as money because it can be easily debased by mixing in a cheaper base metal, like lead?

You'd have to carry a sigma around with you to check your change!

[ZRPMs]

6 minutes ago, Roy said:

So, silver is not an ideal metal to use as money because it can be easily debased by mixing in a cheaper base metal, like lead?

You'd have to carry a sigma around with you to check your change!

All metals can be alloyed with other metals. I think the thread was pointing out that the powers that be start with a standard for currency. Then when they need more money than they have or can openly tax. The next tool they use is debasement. In the case of coins. reduce the amount of metal the currency is based on. i.e. less silver, more lead. The silver you have then can be used to mint more coins than before. (most recent example is the 1p and 2p, They are no longer made of copper). In the case of our fiat currency. more currency is either just printed and created through debt. resulting in reduced spending power of the currency. (inflation)

[Roy]

Interesting.

I'm curious at why they chose 1948, as opposed to 1944, or 1913?

[Bigmarc]

2 hours ago, Roy said:

Interesting.

I'm curious at why they chose 1948, as opposed to 1944, or 1913?

To pay for a period of government over spending, that one being a war, this one to pay for giving everyone a few months at home drinking endless amounts of booze and clapping on the doorstep. Bet they don't put that in the history books. 

I think most debasement is to do with the aftermath of wars and seem to remember reading somewhere that sterling was introduced because soldiers refused to fight for a coin that had fe*k all silver in it.

[SidS]

On 09/01/2023 at 04:53, ZRPMs said:

The silver you have then can be used to mint more coins than before. (most recent example is the 1p and 2p, They are no longer made of copper).

I don't know which paints the bleaker picture, the debasement of the pound through history, the shilling or the penny?

Pound sterling is in a unique position amongst currencies as it can trace the debasement directly through the coinage over hundreds of years - as, decimalisation not withstanding, it is the exact same currency.

The penny is harder to track as the pre-decimal penny and the modern penny are totally different denominations - although they can be pegged to each other at 2.4 (old) to 1 (new).

The shilling though is a cracking example of currency debasement at work.

The key debasement points are:

1. Henry VII - a new coin called the 'Testoon' was introduced - it was large and silver, but not very successful.

(We'll ignore the Henry VIII and Edward VI base issues blip as these were later reversed).

2. The coin was reduced in weight in Edward VI's reign and renamed as a shilling - A fine issue in .925 silver (as the Henry VII) was issued in 1551. This standard then persisted through to Charles II.

2. 1663 - Arrival of the smaller, but chunkier machine made shilling. Slightly lighter in weight than the hammered, about 6g. This standard lasted until 1816.

3. 1816 - Great Recoinage. Shilling reduced in weight to 5.66g.

4. 1920 - Reduced to 50% silver.

5. 1947 - Reduced to cupro-nickel.

Decimalisation occured 1971 - 5p issue same size, composition and value as old shilling.

6. 1990 - 5p reduced in size to 3.25g - alloy unchanged.

7. 2011 - 5p alloy changed to nickel plated steel.

Edited January 10, 2023 by SidS

[HerefordBullyun]

On 09/01/2023 at 05:03, Roy said:

Interesting.

I'm curious at why they chose 1948, as opposed to 1944, or 1913?

I think it took them a while to tally up all the war debt bonds in WW2. As there was a lot money pished up the wall then. 

[ZRPMs]

Thank You @SidSI'm sure if any of us serves attempted any thing of the sort. It'd be "off to the tower with them". Very informative but sad to think its all done it plain sight, And us, as the proverbial boiling frog don't notice until it's to Uhhrrrg.

 

Edited January 10, 2023 by ZRPMs

[SidS]

8 minutes ago, ZRPMs said:

Thank You @SidSI'm sure if any of us serves attempted any thing of the sort. It'd be "off to the tower with them". Very informative but sad to think its all done it plain sight, And us, as the proverbial boiling frog don't notice until it's to Uhhrrrg.

 

They get away with it when they do it slowly over a long period. Slight 're-adjustments' or 'modernisation' as it is commonly referred.

Of course some of these debasements occur due to external factors.

It doesn't work out so well for the authorities when they go all in and fast. See the thread about old copper-nose, when Henry VIII debased super quick.

More food for thought. The penny started out as a silver coin - which degraded to become a tiny silver coin - then it downgraded to a very large copper coin before switched to a much lighter and smaller bronze coin, which itself was replaced by a small bronze coin of the same name but worth 2.4x more in face. This latter coin then fell into the basement when it switched to copper plated steel.

It should be noted there have been three attempts by politicians between 2011 and 2020 to cease minting pennies at all.

Edited January 10, 2023 by SidS