Exchange rates

From Marteau

Exchange rates are by no means a twentieth-century invention – yet currencies traded at the international stock markets producing these rates, did not exist around 1700. Three practical problems afforded their own concepts of exchange: Gold and silver coins served as international money – if you were offered payment in a foreign coin, you would refer to tables published by your local authorities to see at which equivalent of local money you might accept the foreign coin in question, the value was in this case determined by the coin itself being an amount of gold or silver transported with the coin, it was not backed by a national bank anywhere. The second level: One had to deal with sums in different currencies, when reading the newspapers or when travelling abroad. One shilling, six pence, the price of a book in London – if you were a German tourist, and if you wanted to know how much that was in your own money you needed a conversion rate and information about how sums were being made: 3 pounds sterling were about 40 Reichs-Gulden, so the rule at the beginning of the 18th century. The pound sterling was divided into 20 shillings and the shilling divided into 12 pence each; the Reichs-Gulden was divided into 60 Kreutzer, each Kreutzer into 4 Pfennige, an unpleasant calculation between a system of 20 and 12 and a system of 60 and 4 followed unless you knew some more of these useful little equations like: one English shilling matched 20 Kreutzer, a third Gulden. Our conversion tools should make life easier.

For a contemporary perspective see: Gerhard Heinrich Paritius, Cambio Mercatorio, oder Neu erfundene Reductiones derer vornehmsten Europäischen Müntzen (Regensburg, 1709) – a manual teaching computations between sums in different European monies.

Special knowledge was afforded if you wanted to transfer money from one place to another. You would send 100 Reichsthaler from Leipzig to Amsterdam and you would need to know something about "agios" and "usances" – additional costs of the transfer and modalities under which the bill might be more or less expensive. You could eventually pay 110 or 115 Reichsthaler to send 100 Reichsthaler to Amsterdam, depending on rates which changed every month – which does, however, not mean that 115 Reichtsthaler in Leipzig's money were 100 in Amsterdam's. The sum was the same – the transfer caused additional costs.

Our conversion tools give "parities" – equivalents in early 18th century monies. They do not tell you how much you paid for the transfer of a sum from Hamburg to London, nor do they tell you at what rate money you brought with you could be changed at the place of your destination. Our tools are based on a system without losses. You can change your sum through all the currencies, it will eventually still be the same sum – you do not actually "change" with our tools, you only learn how much that would have been in the currency you ask for. The rates are mostly contemporary market rates – rates people knew when referring to sums in different monies, rates ultimately referring to the value of coins, though you would finally negotiate what coins to accept as an equivalent of a certain sum of money. The following article will touch the three levels of monetary exchange in order to give a clearer understanding of how they related to each other.


Living with foreign coins

Payment with seventeenth- and eighteenth-century money was basically payment with metal – gold, silver or copper – only brought into the convenient form of coins. The value of the coin one held in ones hand could be clearly determined as the value of the metal minted plus the cost of the minting itself. It depended thirdly on the market value the coin developed under the assumption that one could bring it back into circulation at a certain price.

If Turkish and Venetian traders met in the Mediterranean they would change goods against Venetian gold coins or Dutch Leeuwendaalders, the latter being accepted as the best silver coin circulating in the Turkish trade. One had a certain awareness of the weight of the coin and its fineness. A coin would be minted of an alloy to make it durable, the amount of pure silver or gold within the alloy would be the valuable part of the coin.

If you changed gold or silver you would regularly fix the price in either coin. The rates between gold and silver differed from place to place. British and Spanish merchants were ready to pay about 15 ounces of silver for one ounce of gold. Asian traders would accept a rate of 13 to 1 and most Europeans would not share the English appreciation of gold. If one paid in gold one would regularly think of the weight of gold exchanged. Scales were used to get an idea of the quantities. Tables were useful: Traders in Nuremberg would take the table produced by the local authorities to see how much money an English guinea was at the moment in silver Reich's currency: 9 Reichs-Gulden, 30 Kreutzer so the table said. The rate depended on the value gold had in silver money in Nuremberg in 1709 – and it was as unstable in Nuremberg as it was in London: The guinea had been fixed at 20 shillings when it was first issued in London 1662/63, it had moved to 30 shillings when England's silver money lost its value in the early 1690s, it was fixed at 21 shillings six pence in 1698 and at 21 shillings in 1717 when the value of England's silver coinage was restored again.

The value of gold and silver coins could not be fixed without a decision to ignore the market. Gold and silver were not produced at a fixed rate and the appreciation of these metals changed according to supply and demand. Any fixing of the rate ultimately created a flow of these metals on the international markets: gold went to countries where it found the higher appreciation, and so did silver vice versa – a dangerous phenomenon since money was a value stored in coins. A sell out of silver could impoverish a national economy if the gold it received in this exchange was not seen as so extraordinarily valuable by any of the trading partners. Another problem was the rate of small cash against bigger coins. Coins circulating in the international trade such as Leeuwendaalders, Speciesthaler, English guineas were produced with relatively stable metal values. Small cash could on the other hand be hardly produced at any comparable quality and price: the smaller the coin the bigger the relative costs of the minting. Many countries stopped minting small cash – it was more profitable to sell silver and gold in big coins. Private entrepreneurs received privileges to mint small coins and made their own profits with a production they issued at a reduced value: the production costs had to be subtracted from their coins. The result was a constant loss of value of small money and at times an inflation eating up the savings of the common people who had stored their savings in small coins. The biggest catastrophe of that kind happened at the beginning of the Thirty Years War in Germany when the minting of small coins run out of all central control. The Kreutzer rose against the Thaler, so the perception. One could hardly afford a Thaler any longer with the Kreutzer coins one got as everyday payment. Goods, however, were imported and exported in the stable coins of Thalers and Gulden – an inflation of prices and wages was the result and impoverished the population.

In everyday life and in times of monetary stability one accepted small coins at their supposed nominal value and relied on the fact that one was not alone with this trust in all the others who would have to accept these coins at their face value. One Reichs-Gulden was 240 Pfennige by definition. One paid ones bread with these small coins, yet one demanded proper payment or an "agio", an additional fee, if one had to accept more of the worthless money at the given rate than really useful.

The ratio of gold and silver was unstable, the ratio of small cash and big coins was unstable and the value of individual coins was unstable: An old coin could be more valuable then a new one of the same denomination: Some countries minted their coins according to standards they would rather improve than betray – the Dutch were famous for this adherence to their own standards. Other countries made extra money on the coinage in circulation: Thus Sweden took its silver dalers from the market and issued war emergency money from 1715 to 1719 – copper coins bearing the inscriptions of silver coins, promising the state mints would ultimately accept the worthless money at the same rate at which it was brought into circulation once the war was over. At the end of the war the responsible minister was decapitated and the state refused to change the worthless coins into money of the original value. Sweden's coin lost a third of its value in five years.


1 Daler SM - silvermynt - 1718, Görtz Daler Nödmynt (war emergency coinage), Sweden, Charles XII (1697-1718), Phoebus, Copper (size: 24 mm; weight: 4.5 g) KM 359.

Other territories were more careful and reduced the value of their coins in small steps – French money thus lost its value little by little. The most severe debasement was probably risked by Japan's shogunate government in 1695 under the assumption that the country was a closed system hardly in need of any foreign exchange: The authorities who had issued 80% silver money before 1695 (which had tended to be spent on Chinese and Korean goods and thus left the country at enormous rates) began to issue silver of 50% and then of 20% fineness and made profits with the silver and gold they won to be reinvested in more cheap money. The result was felt as a rise in prices: if more money circulated goods could become more expensive. The big problem was the price of all foreign goods imported from China and Korea. Traders from abroad hardly accepted the worthless money now minted. Prices for foreign goods quadrupled, so the perception of Japanese customers, within the 15 years from 1695 to 1710 – the central government had taken the good money from the market and issued bad money at a price far too high. The real catastrophe followed, however, only after 1714 when money of the original quality was reintroduced – to be bought now at rates no one could afford: prices and wages plummeted and a wave of bankruptcies followed. There was no such thing as an isolated economy able to determine the value of its coins, so the lesson to be learned in a world where the value of money was basically its intrinsic value stored in amounts of gold and silver circulating in the form of coins.

In every day life one accepted international coins as international payment if the value of these coins was commonly accepted. Knowledge about coins and their intrinsic metal weights was afforded, knowledge about devaluations certain national coins had suffered over the past decades was needed. One finally took a look at the coin itself: was it still intact? was it "worn" and "clipped" – that is: did others manipulate the coin to make extra money on the metal they stole? Coins could finally be forged – a certain expertise was needed in any trade involving international coins.

What sounds difficult was less difficult in every day life: certain standards developed. The Spanish piece of eight reales, the Flemish Pattacon or Albertusthaler, the Dutch Rijksdaalder, the German Speciesthaler and the French Ècu or Louis blanc were minted by different nations yet of about the same value. One new the slight differences in value and used small cash as compensation. The German name for the smallest sort of cash "Scheidemünze" reflects this greater European unity: A "piece of eight" was slightly more than a Reichsthaler Species. You gave a few of these small coins into the bargain to avoid conflicts – "Scheidemünze" meant: a coin minted to allow traders to part in peace.


1 Pfennig Scheidemünze, Braunschweig-Lüneburg-Calenberg, 1703

Europe's coinage developed a pattern of different international categories. The size of the coins and their design signalled into what category the respective coin wanted to fit. Certain gold coins fulfilled international standards of alloy and fineness so that they could be exchanged on the basis of their weight. Local authorities finally issued tables to give the value of international coins. One did not need a concept of the currencies behind these coins to evaluate coins. One much rather thought of different coins and their individual intrinsic value.

For a contemporary perspective see: Renewed Specification of the greater coins as established at the convention which met in Nuremberg, February 22nd 1709 to determine the value of these coins based on the rate of the Ducat at 4 Imperial guilders and the Imperial thaler matching 2 Imperial Guilders, as to be accepted or refused in all commerce and exchange.

Of currency units and parities

To give sums one usually referred to currency units and coins subdividing them. The individual currency units did not necessarily have any coined equivalents – more often they had not. The pound sterling was by definition 240 pence minted at a certain quality, yet the pound was not minted. People paid in gold guineas, crowns, shillings and pence. The far bigger monetary concept was the Reichsthaler: an equivalent of money referred to in Antwerp, Amsterdam, Copenhagen, Stockholm or Vienna – not necessarily minted anywhere. The value of the Reichsthaler was given with its definition of coins minted from one Mark silver of Cologne, an international standard of silver weight. What coins one got for one Reichsthaler, Rigsdaler, Rijksdaalder, Riksdaler of Rix-Dollar depended on the place one was thinking of. The "Rijks" matched 50 stuivers in Amsterdam or 48 Patard in Antwerp. In the 1680s Cologne's citizens divided the Reichsthaler into 80 Albus, from 1690 to 1727 they divided the Reichsthaler into 100 Albus, from 1728-1731 into 104 Albus – inflation was a local problem. International merchants preferred the strict value of the pure monetary unit. Wages were given in Reichsthaler per year and one would see how much that was in Groningen or in Leipzig where one became a professor with 600 Reichsthaler income per year. The international currency unit Reichsthaler made it easy to transfer money from Hamburg to Antwerp or from Antwerp to Stockholm. One transferred 100 Reichsthaler without caring about the local coinage matching this amount.

The result of the system involving coins and strict currency units was one of relatively stable conversion rates between several of the currencies. One Reichsthaler was 2.5 Dutch guilders – by definition rather than anything else. The rate remained intact till the introduction of the Euro, though the international concept had been lost on the way. Other conversion rates needed to be reconsidered every now and then, and this would be done with a look at leading coins of the currencies in question. In 1712 Isaac Newton was asked by the treasury at which rate the British troops stationed in Dunkirk should receive their salary – of English pounds sterling to be paid out in Dutch guilders.

See: Isaac Newton's Advice to the Treasury at which rate it should pay the British troops stationed at Dunkirk in the Netherlands in 1712.

The regular conversion rate (our conversion tools use) was one of 9 pounds sterling matching 100 Dutch guilders. Isaac Newton, master of the mint in London, reminded the treasury of his assay of July 17th 1702 in which he had taken a look at Europe's major and international coins in order to determine their actual value. Here Newton had taken a look at the three-Guilder piece of Holland or piece of 60 styvers and determined its value in English pence: 62.46 d. The "Ducaton of Holland or piece of 63 styvers" had a coin value of 65.59 d. The "Pattagon or Rix doller of Holland or piece of 50 styvers" had a value of 52.28 d. The "10-schelling piece of Zeland, or piece of 60 styvers" was worth 62.21 d, though it proclaimed the same value as the three guilder piece mentioned above, the "Lyon Doller of Holland counting 40 stuivers" was worth 43.7 d – all giving the picture one had to expect: some coins gave better value for the money then others, yet none offered the value one could have expected under the 9/100 rate. Newton concluded that one should actually change 9 pounds sterling into 103 1/4 Dutch guilders to get an equivalent of Dutch coins. Dutch money was over-valued by 3.25% to be precise.

See: Isaac Newton's Assay of European coins of 1702.

To construct our conversion tools we used the "regular" rates – we made 9 pounds sterling match 100 Dutch guilders even if Newton criticised this rate. You can, however, do what Newton did and modify our rates with a look on coins of your choice. The following link will lead you to a table in which you will find different European coins listed with their weights and respective fineness. Both data allow you to get to the fine metal content. Our table translates this evaluation into an evaluation of the currency unit you want to define. The English shilling had a coin weight of 6.01 g, the fineness of sterling silver is 0.925. Multiply the coin weight and the fineness and you get the fine silver content: its 5.56 g. It takes 20 shillings to make a pound. If a pound were to be minted with the quality of the shilling tested, it should have a fine silver content of 111.18 g. Take different Dutch coins to compute the value of a regular Dutch guilder and you will see that can vary from 10.23 g (if the Leeuwendaalder is taken into account) down to 9.56 g (if you calculate with silver guilders). Our conversion tools can be modified accordingly: insert the value given for the Dutch guilder into the field defining the English pound (for it is this amount of English silver you will demand for one Dutch guilder), put the silver amount of the English pound sterling into the Dutch field. The new rate might now be one of 9.56 English pounds sterling matching 111.18 Dutch guilders or one of 10.23 English pounds sterling matching the same 111.18 Dutch guilders, the one is slightly above the second slightly bellow our default rate of 9:100.

The gold versus silver problem

The tremendous problem of all international exchange rates remains the gold-silver equation. Gold was imported from Brazil and African Guinea (and won in naval battles – English coins would note this origin), silver was brought onto the market by silver mines all around the world. The value of both metals remained relative and subjected to changes and negotiations. Most currencies were silver based – that is: gold coins were supposed to circulate at a fixed silver price. Some countries had gold based currencies and several countries had simply two or, adding copper, three currencies traded independently. In practical life one calculated prices in gold or silver. Our tools tell you the value of gold coins within a currency – yet do not think of changing gold coins with the same tools. Change gold against gold on a basis of weight and fineness. Our tools give sums in different monies, you can use them to see how much gold and silver that would have been in another currency. What amount of coins one needed to match a certain amount of money was one thing. How one changed a certain amount of money in different coins was quite another thing as the previous chapter should have made evident.

See: Isaac Newton's analysis of the proportional value of gold and silver in different nations and the effects the imbalance had on the international markets in 1717.

The exchange rates used within this project

A few words might be added on the exchange rates we followed with our conversion tools. You will find a short look at our source and considerations on the seperate page we have also linked to all the conversion tools we provide.

Cambium per litteras: exchange via bills of exchange

The last twenty years saw a number of publications offering now the exchange rates for the most important European and international trading places. The tables usually give each for each year a row of 13 entries, 12 for the individual months and one for the year's average. The headlines can read "Rate of Exchange: Amsterdam on London, 1609-1699 (Schellingen Banco per £1 Sterling)." They can be more complex and promise rates respecting an [uso]], of 14 days or one month. The numbers given do not need to show any long term tendencies, they will often only show short term ups and downs. These rates do not show fundamental changes unless one currency debased its major coins. The regular fluctuations reflect simply or not so simply the rates at which the transactions, the actual transfers of money, could be bought and sold – transfers of money being balanced by trade relations between the market places mentioned.

To understand this one will have to understand the nature of the so called bill of exchange and the different modalities under which bills of exchange came to be traded at the major centers of commerce such as London, Amsterdam and Hamburg.

The bill of exchange worked in many ways like a modern check, only that it did not involve a bank to perform the actual transaction. Basically it involved four parties: the drawer, the drawee, the payer, and the payee. A caring father in Frankfurt (the payer) might want to transfer money from there to Leipzig, to provide his son (the payee) studying in Leipzig with the next rate of 100 Reichsthaler he needed to pay his debts. To perform the transaction the payer needed a Frankfurt based merchant (the drawer) with a business partner in Leipzig (the drawee) whom the drawer could advise to pay out the requested sum to payee who would produce the bill.

The transaction would not be free. The payer would pay the money to be transacted plus a fee, the agio, a percentage of the whole transaction. The whole bill might thus cost 110 Reichsthaler. The bill would be issued in several copies, a "set", to insure against loss in the mails. The payer (the father) would send the bill to the payee (his son, the student in Leipzig), who would show it to the drawee (the Leipzig based merchant advised in the bill to pay out the requested sum) and receive the 100 Reichsthaler mentioned.

Large scale transactions could be made cheaper if the payer conceded an "usance" or "uso": time of a week, a fortnight or a month the drawee would be granted by the payee before he had to produce the sum. The bill of exchange thus turned into a credit given by the payer and the payee to the profit of the drawer and the drawee: The business man in Leipzig could receive goods from Frankfurt. Thanks to the trading of bills of exchange he would not pay in Frankfurt but in Leipzig where he resided with a profitable time gap, produced by the bill taking its time on its journey with the regular mail and secondly by the additional usance granted.

Things got once more complicated with bigger sums sent through Europe, since all bigger transactions afforded international trading places to be conducted properly and safely. London, Amsterdam, Hamburg, and, during the fairs, cities like Leipzig developed markets on which one bought the transactions one needed, paying market prices for the services one demanded. Things were simple so far with the involvement of just the four parties of the payer, the payee, the drawer and the drawee – they got complicated with parties stepping into this commerce in order to finance large scale transactions. Bills of exchange could be traded like any other commodity. A bill with an usance of one month could find the interest of a fifth party offering to cash it at sight – the creditor intervening would ask for a few percentage points to be paid for his readiness to become a creditor in this transaction. His intervention brought additional flexibility into the system and stability with risks being now shared. This site should most certainly offer special entries for the individual trading places and their measures to organise trade and commerce. We would enjoy to offer tables of the exchange rates for individual trading places with such information. Bellow a list of the most prominent books giving the rates and more detailed information at the moment.


  • Denzel, Markus A., (ed.), Währungen der Welt XI: Nordwestdeutsche und dänische Wechselkurse vom ausgehenden 17. Jahrhundert bis 1914 [=Währungen der Welt, 11, Beiträge zur Wirtschafts- und Sozialgeschichte, 62] (Stuttgart: Steiner, 1999), 157 p.
  • Denzel, Markus A. (ed.), Geld- und Wechselkurse der deutschen Messeplätze Leipzig und Braunschweig. 18. Jahrhundert bis 1823 [=Währungen der Welt, 10, Beiträge zur Wirtschafts- und Sozialgeschichte, 61] (Stuttgart: Steiner, 1994), XI, 135 p., ills.
  • Schneider, Jürgen/ Schwarzer, Oskar/ Denzel, Markus A., Europäische Wechselkurse im 17. Jahrhundert [=Währungen der Welt, 3] (Stuttgart: Steiner, 1994).
  • McCusker, John, Money and Exchange in Europe and America, 1600-1775: A Handbook (Chapel Hill: University of North Carolina [for the Institute of Early American History and Culture, Williamsburg, Virginia], 1978, reissued with corrections, 1992).
  • Schneider, Jürgen/ Schwarzer, Oskar/ Zellfelder, Friedrich/ Denzel, Markus A., Geld und Währungen in Europa im 18. Jahrhundert [=Währungen der Welt, 6] (Stuttgart: Steiner, 1992).
  • Paritius, Georg Heinrich, Cambio Mercatorio oder Neu erfundene Reductiones derer vornehmsten Europäischen Müntzen (Regensburg, 1709). e-text
  • Newton, Isaac, Mint-Reports (1701-1725). e-text

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