Money and coins

1 februari 2010

In the seventeenth century, not only did each country have its own money, but there were also provinces, towns and organizations, such as the Dutch East India Company, that minted their own coins. All these coins circulated freely throughout Europe, sometimes long after the date of issue. After all, the value of the coins was mainly determined by the amount of precious metal that they contained. This also entailed that exchange rates were not fixed: they depended on the value of the metal and sometimes also on the degree of wear of an individual coin. People generally held on to their new, unblemished coins and paid as much as possible with old, worn and inferior money.

The proportion of precious metal in a given coin was also strongly dependent on the politics of the minter. If the crown was short of money, it might decide to mint coins with a lower percentage of gold or silver, thus effectively lowering the value of the coins. This meant that the value of money was strongly subject to fluctuation. In the Dutch Republic, the authorities tried to keep the value of the coins as stable as possible. In contrast, in Louis XIV’s France it was monetary chaos.

To make some sense of all the different coins and values, certain values were also applied as units of calculation. The value of the physical coins was then expressed in these units. Ideally, the value of the monetary unit approximated the value of the dominant coin; however, this was not always the case.

The monetary unit in the Netherlands was the pond Hollands (Dutch pound). A Dutch pound consisted of twenty stuivers (pennies). Each penny was divided again into sixteen penningen (farthings). The Dutch pound was equivalent to the guilder, a silver coin worth twenty pennies introduced by Charles V in the sixteenth century. The name guilder stuck for the unit of twenty pennies (thus a Dutch pound), even after guilder coins were no longer minted. It was not until the end of the seventeenth century that silver coins would again be minted in the Dutch Republic with the name guilder and the value of twenty pennies. There was no central mint in the Dutch Republic. The issuing of coins was the responsibility of provincial, and in some cases town authorities. However, agreements on minting were made centrally.

The monetary unit in France was the Tournois pound (livre tournois). A Tournois pound was divided into twenty sous. Three Tournois pounds made an écu (equivalent to an English crown). As mentioned earlier, the real value of the French coins could fluctuate strongly in relation to this standard. Nevertheless, these monetary units were used during the entire seventeenth century.

A unit that was occasionally used in the Netherlands was the Flemish pound, also known as the pond groten. A Flemish pound equalled 120 pennies and was thus equivalent to six Dutch pounds.

There was no fixed exchange rate between the Dutch pound and the Tournois pound. This rate was dependent simply on the difference in valuation of the Dutch and French currencies, determined by international price ratios and other economic factors. On average, the French pound was worth slightly less than the Dutch. Around 1670, one écu (three livres tournois) was worth approximately two and a half Dutch pounds on the international market.

The conversion of the old monetary units to modern prices is a fairly pointless exercise. The purchasing power of modern money cannot be compared with earlier times and the price ratios of all kinds of goods and services are sometimes very different too. Moreover, the purchasing power of the old money is very difficult to determine. Prices, particularly of the primary necessities, could vary considerably. For example, the price of 25 litres of grain on the seventeenth-century Paris market was typically between five and seven sous tournois. Occasionally the price fell below three sous, while in bad years it could rise far above fifteen. It is important to realize that the numbers mentioned are averages for a whole year. In reality, the prices fluctuated even more. Moreover, outside Paris the prices could deviate even more again.