The business of making money

During the Middle Ages, many European rulers rewarded faithful followers not with direct payments of cash or land, but with a royal charter—permission—to take up some sort of regulated business. This way, the monarch didn’t need to pay directly. Instead, the charter allowed its owner to skim fees, fines, and tolls directly from the economy. The most lucrative sort of charter was for minting coins. Kings gave as few of these charters as possible, trying to keep the power of coin minting close to their own capital of administration.

The coin minting business model was simple. A moneyer collected old coins to melt down. He weighed and cut new coins, stamping them with a new die to show when and where each was made. Part of his charter to authorize coins stated that he was allowed to keep some portion of the coin metal back. In collecting 100 old coins, he was not required to issue 100 new ones. Any time coins were re-issued, it was an opportunity to skim the hoard.

Minting coins also included enforcing coin weight standards, so the moneyer could require merchants to have their coins checked. Of course, he charged a fee for this service.

Most charters were issued to noblemen, but there were private moneyers as well. When mints decided how their coins would look, they were creating a competitive product; laws dictated only the value, not the appearance. Among their decisions, they chose what alphabet the coin would use. Overall, nearly all European coins used the Latin alphabet and expressed information about value and date in Latin itself. But sometimes moneyers created coins with Arabic or Greek, either with or in place of Latin. These coins were intended for international use. In some very rare cases, private Jewish moneyers in Poland made some coins with Hebrew lettering.

Corrupt moneyers could debase their currency by diluting pure gold, silver or copper with alloys or by cutting coins smaller. Kings were usually not involved in such actions, but instead tried to maintain a steady coin value. However, in a few cases, kings directly debased the currency on purpose. These experiments showed that royal power was limited in fact, if not in theory, because merchants were not required to take poor coins. Debasing currency sometimes led to riots, as in 14th century Paris.

Creating coins had a naive concreteness in the Middle Ages. When a nation discovered that it had a deposit of gold or silver, it could start creating coins. Silver had long been mined in the Mediterranean area, though it was mixed with lead and copper, so it needed to be refined. New deposits of silver were found in Germany and Bohemia during the medieval period. These regions were newly rich, and they also put a lot of resources into metal-refining technology, which led to the region’s early prominence in chemistry.

Gold came from overseas, as a general rule. Traders brought it from Africa, but most gold came through Constantinople’s trade with the east. Because it had to be brought from afar, gold was not much used for medieval coins. But in the 15th deposits of gold were discovered in Hungary, as well as in Germany and Bohemia. Hungary may have supplied most of Europe’s gold for later medieval coins.

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