Great Britain:Money

From Marteau

1 History
2 English Money
3 Scots Money
4 Irish Money
5 Literature

Half Guinea, George I., 1719.

History

Several major changes were made to England's currency system shortly after Charles II returned to the throne. During the Civil War almost no gold had been coined at the Mint in London. In a bid to correct this, in 1661 the government raised the official value of all of English gold coins to £43 14s 8d per lb troy of "crown" (i.e. 22-carat) gold -- an increase of about 6.7%. But gold production didn't really begin to pick up until 1663, after a further increase in the Mint rate for gold to £44 10s. That year also saw the introduction of a new gold coin, assigned an official value of 20 shillings and soon to be known, unofficially, as the "guinea" (for its close connection with the gold supplies being brought to London by the Royal African Company). This was England's first machine-manufactured or "milled" coin, more regular in size and weight than the old hand-manufactured or "hammered" coin, and marked with a serrated and inscribed edge designed to protect it from clipping. The official price of gold received a further implicit increase in 1666 when the Mint's charge of 15s per lb for coining gold was abolished. Sometime during this decade, however, officials abandoned attempts to maintain an official price of gold. The market price of the guinea, by now England's principal gold coin, was left to find its own level. It settled around 21s 6d for much of the rest of the century. The Mint rate on silver coins was also raised slightly in 1666 to 5s 2d per ounce troy of "sterling" (i.e. 92.5% pure) silver, from the 5s. 0d. at which had been officially valued ever since 1551. In the early 1660s England also began mechanized production of silver coins, in this case too adding serrated and inscribed edges. Much of this new silver coin, however, quickly disappeared into hoard; England's silver circulation was dominated for several decades more by the hammered silver coin left over from previous reigns.

England suffered through a monetary crisis in the 1690s. Under an onslaught of clipping induced by the Nine Years' War with France (1689-97), the nation's hammered silver coin rapidly dwindled in size, by 1695 falling on average to about 50% of its normal weight (from about 89% in 1686). At some point during that year, the general public lost confidence in hammered silver money. One result was a sharp rise in the price of the gold guinea to 30s. This attracted large quantities of gold from the continent and made it very attractive to melt down any remaining full-weight silver coin and export it to Europe to buy more gold for import into England. Uncertainty about the future value of guineas and hammered silver coin almost paralyzed England's fiscal system, which until then had relied very heavily upon these two types of coin. After a long and very tortured public debate, it was finally decided in 1696 to melt down all the remaining hammered silver and recoin it into new, full-weight milled specie. Though many had pressed for the official value of silver coin simultaneously to be raised (perhaps to as much as 8s or 9s per ounce), the government of William III opted to retain the existing rate. The actual recoinage operation that commenced in May 1696 resulted in a severe shortage of monies of all kinds, touching off a financial crisis that played a major role in inducing England the next year to sue for peace with France.

In 1698, with the decision to fix the official value of the guinea at 21s 6d (lowered to 21s in 1717 – the rate at which it remained for the rest of the century), England's currency system was effectively, though not yet explicitly, converted to a gold standard.

The early 18th century saw the Union with Scottland. The pound Scots was officially abolished in 1707 (and remained a currency of account right into the 18th century), the English pound sterling became the official currency of England, Wales, Ireland and Scotland – with Ireland remaining rather a colony ruled and exploited from London, the capital where all international transactions had to be performed.

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English Money

The basic unit of account was the pound sterling defined as the equivalent of 240 pennies sterling silver (containing 92.5% Silver, 7.5% copper). The value of the pound fell with the silver weight of the penny being decreased in the following historical steps:

year	weight in grains	weight in g	Remark
8th century to c. 991	24	1.5552	traditional weight
c. 991 to c. 1275	22.5	1.458	traditional weight
c. 1275	22	1.4256
1343	20.3	1.31544
1345	20.15	1.30572
1346	20	1.296
1351	18	1.1664
1412	15	0.972
1464	12	0.7776
1526	10.7	0.69336
1544	10	0.648
1552	8	0.5184	11 oz 1 dwt fineness
1560	8	0.5184	sterling fineness
1601	7.8	0.50544
1816	7.27	0.471096

Source: Feavearyear, Appendix 3-2, p. 439

Accounts were held in pounds sterling, the pound of 20 shillings, the shilling of 12 pence. Coins were issued (from 1660 to 1715) in the following denominations – (use our special page if you have to calculate with English pre-decimal money).

Coin	Value	Metal	Remark
5 Guinea	112s 6d in 1700	gold	1668-1753
Two Guinea	43s in 1700	gold	1664-1753
Guinea	21s 6d in 1700	gold	1663-1813
Laurel*	20s	gold	discontinued in 1662
Half Guinea	10s 6d	gold	1669-1813
Half Laurel**	10s	gold	discontinued in 1662
Crown	5s	silver***	continuous production
Half crown	2s 6d	silver	continuous production
Shilling	1s = 12d	silver	continuous production
Sixpence	6d	silver	continuous production
Groat	4d	silver	continuous production
Threepence	3d	silver	continuous production
Twopence	2d	silver	continuous production
Penny	1d	silver	continuous production
Halfpenny	1/2 d	copper****	original silver coin, the production of larger copper half pennies started 1672
Farthing	1/4 d	copper
* Unite Laurel Pound, also called the Sovereign or the Double Ryal, Half Laurel, also Half-Sovereign or Double Crown * some gold up to 1662 **** silver for hammered versions

Mintmarks identified the places of production: B: Bristol (September 1696 - September 1698), C: Chester (October 1696 - June 1698), E: Exeter (August 1696 - July 1698), N: Norwich (September 1696 - April 1698), Y: York (September 1696 - April 1698), and E: Edinburgh (1707-1709).

A second system of marks specified the origin of Bullion used:

Mark	Origin of Bullion	Period
Elephant or elephant and castle	Africa	1663-1726
Plumes	Wales	1698-1705
Roses	West of England Mines	1699-1739 (not continuously)
VIGO	Captured from the Spanish Fleet at Vigo Bay 1702	1703
Roses & plumes	"Pitcoale & Seacole Company"	1705-1743
SSC	South Seas Company	1723
EIC	East India Company	1729-1739
LIMA	Silver captured by Admiral Anson	1745-1746

Throughout the period it remained difficult to stabilise the gold/silver ratio. Isaac Newton's Mint Reports give a vivid picture of the efforts undertaken to stabilize the ratio threatened by different attitudes towards the proper evaluation of both metals on the international rivalling markets.

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Scots Money

The first indigenous currency in Scotland had been the silver penny, coined by David I. In theory each pound weight of silver yielded 240 pennies (1 pound equalled 20 shillings, and 1 shilling 12 pennies). The crown coined, however, 252 pennies to the pound to make a profit. From the fourteenth century until the end of the sixteenth century debasement of the coinage resulted in the divergence of the Scottish and English currencies. In the reign of James III (1460-1488) the pound sterling was worth 4 pounds Scots. In 1560, 5 pounds Scots equalled 1 pound sterling. When James VI succeeded to the throne of England (in 1603) the exchange rate for Scots pounds to sterling was fixed at 12:1, yet prior to the Union the accepted par of exchange was £1,300 Scottish to £100 sterling, although Newton argued in 1710 that "at their just value" it took £1,321 2s 0d Scottish to equal £100 sterling.[1]

To quote John J. McCusker (1978), p.33 on the preceding development: The pound Scots was "showing a devaluation over the century on terms of par, but we know little about the course of the exchange. Apparently, late in the 17th century, it was usually 10 to 12 percent below par, suggesting a rate of exchange in the range of £1,450 Scottish to £100 sterling. In the midst of the English monetary crisis in 1696, the exchange reversed significantly, and the rate swung to a 15 percent premium, or something like £1,125 Scottish per £100 sterling."

After 1707 Scotland's real money and its money of account were by law uniform with those of England. Practice in this instance was slow to follow the law. "Old Scots money [...] remained a money of account, especially in the countryside, and it was not until the near the close of the eighteenth century that rents, prices of agricultural produce, and wages ceased to be expressed in Scots money." [Henry Hamilton (1963), p.294.]

Overseas transactions were after 1707 effected through London. Prior to 1707 Edinburgh had its own exchange rates on French, Spanish, Dutch, Polish and Swedish money. At least Paris seems to have kept its own exchange rate with Edinburgh right into the 1760s. [John J. McCusker (1978), p.34.]

Scotland's pre-Union money had – with merks still minted under Charles II. – its own traditions. The first merks issued after the revolution were fixed at 13s. 4d. In 1681 the rate was raised to 14s — pounds (à 20 shillings à 12 pence) were the money of account. Gold pistoles were minted in 1701. Shillings circulated in coins of 5s., 10s., 20s., 40s., and 60s.

The pistole was divided into 12 pounds, the half pistole into 6 pounds accordingly. The pound (£) had 20 shillings, the merk 14 shillings, the half merk 7 shillings, the quarter merk 3 shillings, 6 pence. A shilling had 12 pence, a bawbee 6 pence, a turner or bodle 2 pence.

Our conversion tools allow operations with changing rates, modify the entries at the bottom of each page.

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Irish Money

Good information is avaliable on the web at http://www.irishcoinage.com/MILLED.HTM.

Ireland's economy was everything but independent, coinage and regulations of the foreign exchange was decided over on London. John J. McCusker gives the details for pressure exerted on the exchange rates [John J. McCusker (1978), p.34]: "England tried to limit the exchange on Ireland by legislating the par of exchange. This was accomplished through regulations, proclamations, and laws that set the value in Ireland of English and foreign coin. As early as 1487 the English shilling was valued at 16d Irish currency, for a par of £ Irish currency per £100 sterling. The same par is applied early in the seventeenth century, with a commercial bill rate of £140 quoted for 1613. A proclamation of 6 April 1637 sought to abolish the difference, but it is clear that within five years, and probably much sooner, coin in Ireland was again valued in excess of its sterling value. A proclamation of 20 January 1660/61 recognized an effective par of £105.56. This rate was reinforced twenty-two years later by another proclamation (6 June 1683) and stood as par until the important attempt to revalue Irish money, again by proclamation, on 25 March 1689. The value of the shilling in 1689 was set at 13d Irish; par, therefore, was £108.33 Irish per £100 sterling. It was moved still higher on 29 May 1695 to £116.67 and returned again to the 1689 level of £108.33 on 2 June 1701. Par was then to stay at this level until 1826, when subsequent to the union of Ireland and Great Britain, a separate Irish money ceased to exist.

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Literature

Challis, C. E. "A new history of the Royal Mint" (Cambridge University Press, 1992)

Elks, Ken, "Coinage of Great Britain. Celtic to Decimalisation, Part 8: Milled 1662 - 1816" (2003). e-text

Elks, Ken, "Coinage of Great Britain. Celtic to Decimalisation, Part 9: Provincial Token Coinage" (2003). e-text

Elks, Ken, "Coinage of Great Britain. Celtic to Decimalisation, Part 12: Scottish Coins" (2003). e-text

Feavearyear, Albert, "The Pound Sterling: A History of English Money, Second Edition" (Oxford: University Press/ London: Clarendon Press, 1963).

Hamilton, Henry, "An Economic History of Scotland in the Eighteenth Century" (Oxford, 1963).

Holmes, Nicholas, "Scottish Coins: a history of small change in Scotland" (Edinburgh, 1998).

Kelly, Patrick Hyde. "General Introduction" to "Locke on Money", 2 vols. (Clarendon Press, 1991), Volume 1, pp. 1-121.

Kleer, Richard, "The 1696 Recoinage", "The Literary Encyclopedia, an online reference work for university students and scholars" e-text

Kleer, Richard. "'The ruine of their Diana': Lowndes, Locke and the bankers", History of Political Economy 36 (Fall 2004):533-56.

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).