During the central Middle Ages the amount of bullion increased exponentially, as gold and silver were dis-hoarded and new mines Rosener, Peasants, 22-3.
Were opened.34 In the late tenth century small-scale exchange had to be by barter, for coin was scarce and was used mainly for large transactions. The early phases of the European economic revival were accomplished without a sound coinage, but a stagnation that threatened in the late twelfth century was averted by new supplies of metal, the expansion of the native silver coinages of Europe, and the development of gold coinages that were suitable for large-scale and international transactions.
Beginning in the late tenth century new silver mines were opened in Germany, notably in the Harz mountains. The new supply of money facilitated trade between Germany and other parts of Europe and made it briefly the commercial centre of the north. The expansion of the Germans into the Slavic East and the growth of trade in Scandinavia were accompanied by a spread of German coin in both regions. But the Harz mines produced little after the mid-eleventh century, and trade became more difficult. The English, for example, minted about twenty million pennies c. iooo, with the number rapidly rising in the early eleventh century despite payments of vast tributes to Danish invaders, but outputs declined to ten million by 1158.
Just as the agrarian expansion took a new and more capitalintensive form in the late twelfth century, new silver mines were opened after 1160 that fuelled the urban expansion. This was a more broadly based development than its predecessor, for large quantities of silver were produced not only in Germany, but also in Bohemia, Tuscany, and Sardinia. By 1180 ‘silver worth hundreds of millions of pfennigs’ had entered the commercial and political economies.35
The consequences were profound. Heightened demand for goods and services will naturally create some monetary inflation, but this is fuelled immeasurably by an abundant supply of coin. Inflation thus became severe in the late twelfth century. With increased bullion in the economy came the growth of public demand and the transfer of assets from towns and villages to territorial governments and regional economies, since taxation was much easier in money than in kind. As small market transactions could now be paid for in silver pennies that were worth intrinsically less, larger silver coins, and eventually gold coins, became necessary. In 1172 Genoa issued a silver coin worth 4 pennies, and the other north Italian cities (Pisa, Florence, Venice) soon issued grossi (groats). The silver tournois of Louis IX in 1266 was the equivalent of 12 pennies (1 sou).
Peter Spufford has argued that the ‘need for a larger denomination of coin was only reached when and where there was sufficient urban growth for there to be a large enough number of people living primarily on money-wages, and when those money-wages, in terms of the existing denari or deniers, required an inconveniently large number of coins to be paid on each of a large number of occasions’. This meant that the larger coins came into general use in the first half of the thirteenth century in Italy, in the second half in the Low Countries, and in the fourteenth century in most other places. Small coins were still used for individual purchases, such as loaves of bread, while the larger ones were used for bulk purchases.36
Most gold came to the West through trade with the Byzantine Empire and Egypt. The Muslims paid in gold; they sold cotton, spices, and luxury cloth to the westerners, receiving silver in exchange. The Muslim rulers of Spain, who also controlled much of North Africa, and some Italian princes were minting gold coins even in the tenth and eleventh centuries, and some Byzantine and Muslim gold coins circulated in Italy in the twelfth. But by the late twelfth century the West was exporting industrial goods and considerable grain to the Levant and Africa. A further source of payment in gold was the carrying trade, which the Venetians controlled in the eastern and the Genoese in the western Mediterranean.
In the West, the first gold coin that was used outside Italy since the Merovingian period, reflecting the newly favourable balance of trade, was the emperor Frederick II’s gold augustalis of 1231, using gold obtained as tribute from Tunis and from Sicilian grain shipments to North Africa. It was followed by the Venetian ducat in 1248 and in 1252 by the Genoese januino and the florin of Florence, the most influential, which was worth 20 Florentine shillings or 1 pound. Louis IX of France (1226-70) and Henry III of England (1216-72) then issued gold coins, although the latter did not achieve wide circulation and was discontinued. The success of gold coinages suggests that western Europe had a positive balance of trade with the East in the early thirteenth century, probably attributable to the production of exportable manufactured goods. The Mongol conquests changed this, for they cut the Middle East off from its normal supplies of gold, through the Sahara and Morocco, and the Mongols dealt only in silver. Thus the Muslims came to need western silver, and by the midthirteenth century gold was overvalued in the West and silver in the East. Silver thus moved eastward, hurting the western economy by depleting stocks of silver in the West and leading to coinage debasement and inflation and the eventual ‘bullion famine’ of the late Middle Ages.
World History
