Christine Desan's Making Money: Coin, Currency, and the Coming of Capitalism Footnote ¹ provides an authoritative answer to a fundamental question about medieval English money that has puzzled a few scholars, but that has been largely ignored by most: were medieval payments normally weighed or counted? The same question can be expressed differently as: were payments made by weight or by tale at face value; or again, was the value of money determined by its intrinsic content or by royal decree? But why might this curious distinction between counting payments and weighing them matter?

Weighing payments implies that the value of coin is determined by its intrinsic content, but counting coin relies on the face value of each piece as fixed by government. It is demonstrating this central role of government in the control and management of money that makes Desan's work relevant beyond England and beyond the Middle Ages. She describes how the English crown successfully asserted its right to alter money throughout the Middle Ages and into modern times. However, the contrary view that the value of money is determined by its intrinsic content has been deeply rooted for centuries, and lingers to this day. These two concepts of money clashed when government debased, or even issued money without any precious metal content, and resort to these expedients was more likely, either when money became scarce, or in time of war. Indeed the demands of war-time finance promoted paper money, banking, and government debt, which remain essential elements of financial architecture around the world today. Ultimately, Desan's book is really about the nature of money itself.

Looking at the Middle Ages, historians and numismatists have found a number of contradictory indications about weighing and counting. The royal practice of weighing, and even refining, payments made to the Exchequer is well and fully documented in the twelfth-century The Course of the Exchequer,Footnote ² which might be thought to provide the definitive answer to this question. Until, that is, it is recognized that even within the Exchequer, this practice was not employed for all payments equally. Moreover, it needs to be understood that what the crown thought appropriate for its own receipts was not necessarily required or even permitted as general practice for ordinary payments in the economy at large. Very occasionally, the government authorized the public to weigh coins,Footnote ³ but more often this was discouraged, not least because allowing weighing of the coinage by the public would encourage clipping of any heavier pieces.Footnote ⁴ Clipping a penny might yield only a very marginal profit, but clipping a pound's worth of pennies (240) would yield a significant amount of silver that could be melted and either sold as bullion or re-coined.Footnote ⁵ Some individuals are known to have weighed payments made to them, because a pound's worth of pennies might typically weigh 5 or 10% less than its nominal value, and, if the coins had been in circulation for some decades, legitimate wear would reduce the intrinsic value still more.Footnote ⁶

Numismatists have pondered these confusing snippets of information for decades, without hitherto achieving a definitive explanation. Some have sought resolution by rational questioning. It has been asked: why might anyone spend time clipping pennies unless they were confident of passing on the clipped pence at full face value? The same question has been applied to one of the unanswered puzzles about Anglo-Saxon numismatics. Eleventh-century Anglo-Saxon pennies were deliberately struck at the mints on two different weight standards, but they are found mixed indifferently in coin hoards and the coins themselves are of identical appearance. They would have been impossible to differentiate without individual weighing. One explanation for this dual weight standard has been advanced by D.M. Metcalf, who suggested that perhaps foreign merchants might have been able to sell their silver to the mints at an enhanced rate—although receiving coin of slightly lighter weight—which would pass legitimately in ordinary commerce within England at face value.Footnote ⁷ Others have asked whether perhaps the crown struck silver for its own use at the slightly lower weight. Although numismatists have not yet united upon a single explanation, the fact of different weight standards is beyond dispute. No explanation at all seems plausible, unless all coins passed in ordinary commerce within England at face value.Footnote ⁸

Nevertheless, historians have sometimes found it hard to decide whether medieval transactions involved counting coins or weighing them. Indeed, there is a good deal of evidence to suggest that some coins were weighed in payments. It is known that the practice of the Mint was to weigh coins brought into the Mint for re-coinage, and to pay out new coins after re-coinage, yet even here there is evidence of occasional payment by number.Footnote ⁹ The great price historian, Thorold Rogers, for whom I have great respect, mistakenly explained the failure of prices to respond to moderate debasements by assuming that payments were ordinarily made by weight. He was aware of Adam Smith's explanation for the failure of prices to respond to the reduction in the intrinsic content of the silver coinage. Smith's argument was that the value of silver was rising, but Rogers discounted this explanation.Footnote ¹⁰ However, Rogers did accept that payments were taken by number from the mid-Tudor debasements onwards, although he gives no explanation for this change in practice. Had it in fact taken place, it is hard to think that it would have left no trace.

The real explanation is that offered by Desan and David Fox: payments were made and received in England in ordinary transactions at face value by number throughout the Middle Ages. H.A. Miskimin and J.H.A. Munro, studying medieval prices, shared Desan's views on nominalism.Footnote ¹¹ But where historians are uncertain, Desan's unequivocal statement of the English legal position brings invaluable clarity. In this task, Desan has found an ally in the work of David Fox.Footnote ¹²

Desan demonstrates that English legal practice “early and consistently favoured money by the count.”Footnote ¹³ Early English jurists wrote on the basis of Justinian's Corpus, assuming circulation by tale before the later medieval continental glosses were added recognizing the importance of intrinsic weight; Desan cites the early definition of common law action of debt (by count) temp. Henry I, and Glanvill's Treatise on the Laws and Customs of England, c.1180, together with Bracton's thirteenth-century Laws and Customs of England, Footnote ¹⁴ which all confirmed that coined money passed by the count. By the 1260s, writs for money debt (debet et iniuste detinet) are distinguished from debt for other chattels (iniuste detinet), which were nevertheless valued in money. Pleading notes in 1310 and 1321 distinguish numbered money from weighed goods.Footnote ¹⁵

However, the weight of the English coinage was subject to successive reductions through the later Middle Ages, which makes Desan's demonstration of the primacy of payment by tale, or number, rather than weight, so important. Despite successive medieval reductions in the silver content of the English coinage, Desan shows that legally, a penny remained a penny, and had to be accepted as such. The clarity and uniformity of legal judgements in the courts resolves this question and numismatists’ uncertainties once and for all.

Nevertheless, difficulties inevitably arose about the status of “old money,” when the crown introduced new money. Desan drew attention to the case of Paveley v Basset (1250). Paveley concerned the attempted repayment of debt in 1248 in old money after the introduction of the new type in November 1247.Footnote ¹⁶ Old money was inevitably somewhat worn after decades of ordinary usage, whereas new money would have been slightly heavier. Paying debts incurred before the recoinage in the old money of the type in which the original loan would have been made was resisted by the creditor (Paveley) because such pennies would have weighed slightly less. More importantly, accepting old money as settlement of the debt would have imposed the eventual cost of re-coining on the creditor. The court found for Paveley in a clear demonstration of the nominalist principle that current coin was defined by the crown. If metallism had prevailed, Basset would have won, repaying the quantity of metal in the original contract.Footnote ¹⁷

Edward I's re-coinage of 1279 was very similar to Henry III's in 1247. In both cases, the weight of the coinage was unaltered, and the costs of re-coinage fell on the holders of the old coin. The profits of the 1279 re-coinage—which were significant without being fraudulent—accrued to the crown and helped to finance Edward I's Welsh war. Both these re-coinages were justified on the grounds that the old money in circulation had become significantly worn; therefore, re-coinage was deemed necessary to preserve the ancient standard. In addition, in 1299 Edward decreed that foreign pennies known as “crockards and pollards,” which had been tolerated in the early 1290s, were to pass only at a halfpenny before being compulsorily re-coined at their metal value less costs.Footnote ¹⁸

However, five separate re-coinages in the period 1343–1542 were significantly different in that the weight of the coinage was successively reduced. The later fourteenth and fifteenth centuries saw a marked reduction in the quantity of silver struck in Europe compared with the plentiful issues characteristic from approximately 1170–1320. This reduction in supply raised the value of silver. Therefore, it could be argued that the reduction in the silver weight of the penny merely reflected the new rising value of the metal. There were also practical advantages for the crown. Withdrawing the old heavier coins and replacing them with new lighter ones yielded a profit, which fell mainly to the crown but that also provided a sweetener for the owners of silver, encouraging them to bring their old heavier coins to the mint. In the thirteenth century re-coinages, the appearance of the coins was altered, forcing coin owners to change them for the new legal type. In contrast, during the fourteenth and fifteenth centuries, the types of the new coinages were unaltered; therefore, there was no compulsion to re-coin old coins that circulated together with the new issues. The new lighter coins weighed about as much as the old worn ones.Footnote ¹⁹

The five weight reductions of the period 1343–1542 had the cumulative effect of halving the weight of the penny from 22.22 grains to 11.38 grains.Footnote ²⁰ Despite these reductions in intrinsic content, the face values of the silver coinage were unaltered. By royal decree enforced in the courts, a penny was still a penny; a 4d groat remained a groat. David Fox has catalogued the legal milestones on the march of English monetary nominalism during this period.Footnote ²¹ He notes how the Tractatus Nove Monete of c.1286–87, although without legal status, asserted that the king's money must “not be refused by any of the public without penalty.” More formally, the 1351 mint indenture that reduced the weights of English silver and gold coins confirmed that the new coins could not be refused at their declared legal values. The 12–13% weight reductions of silver coinage in 1346–51 were followed by similar reductions of 20% in 1412, and of 25% in 1464. Fox expressed surprise that these changes did not trigger more litigation, but from the 1450s onwards, common law judges in reported cases followed the coinage values defined in the mint indenture. In Copley v. Danvers (1470), Copley wanted a £40 debt to be repaid in gold at the pre 1464–65 values, because £40 after the new valuations would have represented less gold.Footnote ²² The court rejected the attempt to recover the original intrinsic value of the debt, instead indorsing the nominal values. In 1503–4, Henry VII's Statute of Coin confirmed that gold and silver coins passed at their nominal values defined in the mint indenture. The re-coinage of 1526 further reduced the intrinsic content of the coins while enforcing their nominal values by ordinance and proclamation.

Desan also cites Copley v. Danvers (1470) confirming nominalist rules, despite a specialty attempting to require repayment in groats and nobles of the value of 1462–63.Footnote ²³ This sort of attempt to qualify nominalist rules by detailing the specific types of coins lent and required in repayment enjoyed more success in France.Footnote ²⁴ Debasing kings and princes in France and the Burgundian Netherlands strongly asserted nominalism, as the crown's control of the coinage was a fundamental regalian right. More practically, the acceptance of intrinsic values would have reduced the effectiveness and profitability of their debasements.Footnote ²⁵ However, continental courts were more liable to recognize claims based on intrinsic values. Europe as a whole, including England, shared the common heritage of Roman law, in which a “commitment to the count was clear in principle”; therefore, the emergence of differing national medieval practice is a matter of some interest.Footnote ²⁶ Desan finds that Justinian's Corpus Iuris Civilis assumed that money circulated by tale, but medieval glosses by civilian and canon lawyers on the Continent argued that the time at which the value of money changed its intrinsic content should determine legal obligations in money.Footnote ²⁷ In England, common law court practice and precedent combined with established regalian rights over the coinage, and the English common law position remained clearly nominalist. Dyer in 1585 on Pong v Lindsay observed “…if twenty pounds are to be paid, they cannot be paid but as they are at the time, for money is its own measure, otherwise it is corn.”Footnote ²⁸ In the Middle Ages, the English nominalist line may have been easier to hold, because such intrinsic reductions as did occur in England were much less extensive than those common on the Continent. Yet, the survival of the nominalist principle throughout the mid-Tudor debasements of the sixteenth century and thereafter suggests that monetary control was recognized as a fundamental aspect of government.

Desan contrasts English hard money with continental depreciations, suggesting that English Parliaments secured stronger money than elsewhere by granting the crown heavier levels of taxation.Footnote ²⁹ However, this political choice of strong money left England with an inadequate supply of smaller denominations.Footnote ³⁰ Referencing Kowaleski's Exeter in which approximately 80% of the population were artisans, laborers, or servants, Desan suggests that this sizeable majority of the population were singularly ill served by the denominational structure of the English coinage and its bias in favor of gold and the larger silver issues.Footnote ³¹ She continues by stating, “it is overwhelmingly clear that government posed people a serious predicament because of the kind of money it made. The Crown minted money that was unwieldy for many uses and it underproduced the penny along with small change for much of the 14th and 15th centuries. People operated in a world where money came in packages larger than much of daily life and all too often unavailable anyway.”Footnote ³² Contemporary political songs lamented: “There is so much scarcity of money among people…The people is not joyful, when money is so scarce.”Footnote ³³ The scarcity of coin promoted barter, the use of foreign coin, and heavy reliance on credit. In her important Chapter 5, Desan not only approvingly reviews the work of leading specialists on medieval credit—Briggs, Kowaleski, Schofield, Nightingale, Clark, and Spufford—but also develops her own further point: “Medieval English were massaging liquidity out of their limited system by using credit;” they “improvised credit to get more mileage out of an ill-designed medium” of exchange; “…they were trading around the monetary obstacles that impeded everyday life.”Footnote ³⁴ The strength of sterling not only contributed to England's chronic shortage of small change, but may also have made the English mints uncompetitive when bidding to buy silver on the open market. A favorable balance of trade ensured that merchants brought bullion to England to buy, above all, English wool. However, it was usually to their advantage to pay with gold. As a result, the shortage of small change extended to a shortage of any silver coins. A bi-metallic system in which gold predominated, without billon or copper small change, was not well constructed to meet the needs of the English economy.Footnote ³⁵

However, this state of affairs was not improved by the debasements of Henry VIII and Edward VI. Although later medieval English sterling was too strong, mid-Tudor monetary policy was not designed to alleviate the shortage of small change, but rather to yield rapid profits for the crown. I have elsewhere, perhaps contentiously, described these debasements as the “single greatest fraud deliberately carried out by any English government on its own people. The profits probably amounted to about ten per cent of GDP.”Footnote ³⁶ Fox estimates that the nominal value of the silver coinage rose by 196% between 1542 and 1551. Elizabeth restored the currency to the old pre-debasement level of fineness in 1560–61, but her restored issue was still almost a third lighter than before 1542.Footnote ³⁷ Moreover both Edward VI's and Elizabeth's restorations required cutting the nominal value of the circulating base issues by as much as a quarter overnight. Interestingly, Fox finds no trace of the disruption that this would have caused in the Year Books. The common law courts enforced the prerogative right to set the nominal values of the coinage.

But Fox does find cases in Dyer's Reports arising from Edward VI's proclamations for disparaging and withdrawing the silver coinage in 1551. On April 30, 1551, it was proclaimed that from August 31, the shillings and groats were to be devalued by 25%. This devaluation was in fact made instantly effective by a second proclamation on July 8, followed by another proclamation on August 16 cutting the shilling again, making it worth 6d, and the other silver denominations pro rata. Sheldon v. Horton (1555) shows the courts wrestling with the complexities created by these precipitate reductions in the nominal value of the earlier base issues. In this case, the application of this nominal value was complicated further by the time lag between a proclamation made in Greenwich and the news reaching Gloucestershire. But the essential principle that coinage was worth whatever the crown proclaimed survived. Benger v. Pert 1553 confirmed the nominal value of gold coins at their proclaimed rates, observing “since it is money and its value is known.”Footnote ³⁸

Monoxe v. Shepparde (1551)Footnote ³⁹ concerns £12 “of Currante money” owing for white cloth, bought by Shepparde in January 1551. Payment was due in July 1551, right in the middle of the successive government proclamations of April, July, and August in that year. When Shepparde tried to pay in the current money, Moxone refused payment on the grounds “that the kynges maiesties coyne was lyke very Shortly to be abacyd,” which indeed occurred. Significantly, Moxone's suit did not seek to adjust the price of the cloth—£12 in current money—but rather sought additional compensation from Shepparde for “the whole charge and losse” arising from the devaluation. Any challenge to the £12 valuation is unlikely to have been admitted, because it would have challenged the royal prerogative. In tandem, the refusal of legal payment when offered would also have contravened the universal obligation to accept the king's money at the values he set on it.

These cases do not challenge the right, or even the wisdom of the crown's actions. Rather they discuss where the profit or loss arising from monetary changes should fall. Desan has shown how, in addition to the long centuries of royal prerogative, the process of pleading precluded debate about debasement itself. Yet, despite the firmness and clarity of the legal position, Jennifer Bishop also shows how widespread and damaging mid-Tudor monetary disruption was. It would be a mistake to think that the mid Tudor debasements were accepted easily in the country at large.Footnote ⁴⁰ Furthermore, undoing the damage of debasement was not straightforward. Shillings in circulation in 1560 varied in fineness, and had to be countermarked to help the public distinguish the better coins from the baser.Footnote ⁴¹ Moreover, the de-monetization of the base silver reduced the size of the currency, while the restoration of sterling's exchange rate abroad made English exports dearer, leading to a recession and unemployment in the English cloth industry. Elizabeth knew that reforming the coinage would be “bitter medicine,”Footnote ⁴² but her readiness to grasp the nettle of the coinage early in her reign reveals the levels of distress and confusion caused by the debasements. Equally she was keen to explain the case for a return to sound money.Footnote ⁴³ Fortunately, the restoration of the coinage was much eased by the arrival of New World silver in ever more substantial quantities from the 1560s onwards, as revealed by the mint accounts.

Plentiful supplies of silver in Europe, combined with Elizabeth's pride in restoring sound money in England, might make her 1601 debasement of the coinage issued in Ireland seem at first sight surprising. It was triggered by the rebellion of the Earl of Tyrone. Military expenses have often been deemed a sufficient excuse for debasement, but, in addition, English governments had long been accustomed to sending base money to Ireland.

In the Middle Ages, despite England's hard money policy at home, the Anglo-Irish had argued the case for a weaker currency in the colony in the second half of the fifteenth century to address a severe chronic cash shortage. The English government granted Ireland a devaluation on condition that Irish money was readily distinguishable from English money. Consequently, Irish coin could be excluded from circulation in England, or at least tariffed at an appropriately reduced rate. On the other hand, English groats enjoyed an enhanced valuation in Ireland of 6d Irish and subsequently of 8d Irish.Footnote ⁴⁴ Later, in January 1552, the Council of Ireland wrote to the Privy Council vividly describing the damage in Ireland caused by the English debasements of Henry VIII and Edward VI.Footnote ⁴⁵ However, the 1601 Irish debasement did raise legal issues when Irish money was tendered in Ireland as settlement for a sterling debt. The case of Gilbert v. Brett (1605) is celebrated not so much for the result of the lawsuit as for its place in the legal history of nominalism. As David Fox describes: ‘By accepting that the primary value of money was established by law and that money debts had to be discharged at their nominal value, the Case helped to distinguish the value of money in payment transactions from its intrinsic metallic value. It marked an important step towards the development of the token and fiat currencies that we now use.”Footnote ⁴⁶

Desan has described The Case of Mixt Monies and of The Bankers as the seventeenth century bookends of the British financial settlement. In the matter of the money, the crown's absolute rights were confirmed in 1605 despite the traumas of the Tudor debasement resulting from the exercise of such rights. Whether the endorsement of Elizabeth's 1601 and 1603 debasements would have been made quite so readily if it had applied to England rather than to Ireland is another matter. Ireland probably needed a weaker currency than England, and there had been a long history of such a distinction, although the striking of weaker coin to pay the troops in Ireland in 1601 and 1603 was clearly a military expedient, rather than considered monetary policy.Footnote ⁴⁷ Nevertheless, confirmation of the royal prerogative in the management of the currency was comprehensive, and reflects an even longer history of the recognition that money was fundamentally—indeed essentially—the business of the state.

In contrast, the Bankers’ judgement confirmed the right of citizens to sue the crown for the enforcement of contracts. Paradoxically, such a judgement was as much in the interests of the state as in the interests of its citizens. It paved the way for the development of the national debt: loans from the public to the government and repayable with interest. After the Stop of the Exchequer (1672), which led to the case of the Bankers, no other judgement would have given the public confidence to lend to the government or allowed the government to access its citizens’ wealth. Whether such an arrangement would have been possible with Stuarts still on the throne, or before the emergence of the concept of sovereignty vested in the king-in-Parliament, is another matter.

In both Mixt Monies and Bankers, extensive rights were granted, although exercising such rights in practice remained problematic. Centuries of adherence to a Sterling standard of 92.5%, and the memory of the disruption occasioned by the mid-Tudor debasements, made the Stuarts very doubtful about the wisdom of debasing the silver coinage.Footnote ⁴⁸ The Bankers won a much debated legal case, but securing payment depended on the actual availability of funds in the Treasury. Final payment of these sums occurred only in 1726.Footnote ⁴⁹ Nevertheless, both cases helped to lay the foundations of the emerging monetary and financial system.

Increasing acceptance of banks’ paper money was facilitated by the recognition that money did not have to consist of silver and gold. Indeed, paper had advantages: it did not wear, and it increased liquidity. Government's ability to borrow from the public, and the public willingness to lend, both depended on the right to hold the government to its contractual obligations in the courts. The foundation of the Bank of England to manage the national debt simultaneously promoted the circulation of bank paper (bills and notes), and in due course lent some stability to private banks. Many of these developments were more organic than planned; government's acceptance of bank paper in tax helped guarantee paper money and banking more widely.

Above all, throughout her book, Desan demonstrates that money is a governmental project in the management of production, control of circulation, and enforcement in the courts and in the market at its published value. Government's acceptance of money in taxation promotes its use, and further guarantees its ready acceptance. Nevertheless, the obvious attractions of precious metals led many to assume that it was this intrinsic value that made money acceptable. Nor was this assumption found only among an ill-informed public. The distinguished Whig philosopher, John Locke, argued that money was an immutable measure of value just as a foot was a fixed measure of length. The learned civil servant William Lowndes attempted to correct this erroneous opinion, but Parliament believed Locke, and resisted any adjustment to the mint price for silver. It was a decision that starved the English mint of silver for over a century.

This metallist fallacy has similarly infected many historians. The International Scientific Committee on Price History in the 1930s sought to compare prices and the cost of living among countries on the basis of weight of silver or gold.Footnote ⁵⁰ Even in our own day, distinguished historians still operate on the basis of comparative silver weight without appreciating that the value of silver varied from place to place.Footnote ⁵¹ The same mistaken ideas still have great influence, despite the widespread acceptance of paper money over the last two centuries. Investors still buy gold or bitcoin, which are not legal tender and are subject to wide fluctuation in price.

Desan places money at the heart of government. People accept government in exchange for security and justice, but the essential functions of government cannot be funded without taxation, itself requiring liquidity, trade, and markets. Taxation itself promotes the acceptance of money, because government accepts its own money for tax payment. Parliamentary consent to taxation could be conditional on sound monetary policy, and conversely, debasement might provide an alternative funding stream if parliamentary consent were withheld. Warfare, as one of governments’ most expensive functions, increased the need for taxation, debasement, or both. The British government generally eschewed debasement, but raised loans from its citizens. The management of this national debt was entrusted to the central bank. The Napoleonic Wars, and the World Wars of the twentieth century saw the currency progressively cut loose from its precious metal chains, powerfully demonstrating that government makes money.