The Marteau Currency Converter:FAQ

From Marteau

(Difference between revisions)
Revision as of 14:41, 12 April 2006
Olaf Simons (Talk | contribs)
I have got quite different currencies to handle – can you help?
← Previous diff
Revision as of 07:31, 13 April 2006
Olaf Simons (Talk | contribs)
Can one mix currency units and coins the way your tools do it?
Next diff →
Line 21: Line 21:
==Can one mix currency units and coins the way your tools do it?== ==Can one mix currency units and coins the way your tools do it?==
-Yes, that is what was done. Major currency units like the [[pound sterling]] or the international [[Reichsthaler]] were not minted. The authorities declared what amounts of coins were to match them. One would hence analyse coins minted and thereby determine the actual value of the arithmetical unit under which they circulated: 20 shillings made a pound. The amount of fine silver of these 20 shillings (111.18g) would be the actual value of the pound sterling. (If one calculated with gold, the guinea was fixed against the pound, 7.6542g fine gold made a poiund) The pound would therefore remain a stable currency as long as shillings and guineas were continued to be minted with the same quality and the same rating against the virtual pound.+Yes, that is what was done. Major currency units like the [[pound sterling]] or the international [[Reichsthaler]] were not minted. The authorities declared what amounts of coins were to match them. One would hence analyse coins minted and thereby determine the actual value of the arithmetical unit under which they circulated: 20 shillings made a pound. The amount of fine silver of these 20 shillings (111.18g) would be the actual value of the pound sterling.
Local authorities commissioned their mints to analyse coins of other nations. One could thereby determine the present conversion rates. We still have the [http://www.pierre-marteau.com/editions/1701-25-mint-reports.html assessments Isaac Newton gave as Master of the Mint in London] when being asked at what rate Britain’s government should perform international transactions; and we have contemporary assessments by other authorities such as [http://www.pierre-marteau.com/editions/1709-specification.html those at Nuremberg] issued to inform the merchants of their region at what rates they might accept the most frequent international coins circulating in the area. Local authorities commissioned their mints to analyse coins of other nations. One could thereby determine the present conversion rates. We still have the [http://www.pierre-marteau.com/editions/1701-25-mint-reports.html assessments Isaac Newton gave as Master of the Mint in London] when being asked at what rate Britain’s government should perform international transactions; and we have contemporary assessments by other authorities such as [http://www.pierre-marteau.com/editions/1709-specification.html those at Nuremberg] issued to inform the merchants of their region at what rates they might accept the most frequent international coins circulating in the area.

Revision as of 07:31, 13 April 2006

utrecht-1715-small.jpg

Louis XIV has bribed London's Tory politicians to promote a peace treaty favouring France, they count the money whilst British Secrets are on their way to Utrecht. Frontispiece to Das auffgeschlossene Cabinet derer Groß-Brittannischen Geheimnisse (1715).

This is a SubPage of the Marteau Early 18th-Century Currency Converter supposed to answer the most frequently asked questions concerning these tools.

Contents

How reliable are your exchange rates?

They give the momentary situation around 1700, due to a relative stability of Europe’s currencies at the time they are - for the central currencies involved - quite reliable for the period 1690-1720. With some of the currencies covered the phase of stability reaches far into the 18th century. We specified on the tables where devaluations threaten the picture.

How does one establish early 18th century conversion rates?

Practically with a look at contemporary tables offering these rates. Our tools are designed according to the instructions Gerhard Heinrich Paritius gave (in 1707, 1709 and 1717) in the editions of his book on the mathematical equations involved - he again had based his instructions on circulating Dutch tables. See also our note on the default rates we used where we could not follow Paritius.

Ultimately an assesment of the quality of the circulating coinage lay behind these rates - in theory 17th and 18th-century coins basically had the value of the gold and silver they contained (plus minting costs). Different coins of the same metal value had to be of same value. Practically one had to acknowledge that certain coins like those of the Dutch Republic passed slightly above their value due to the fact that their value was well accepted and the government behind them trustworthy: The Netherlands would continue to issue new coins under the same quality standards, one could be sure one would get rid of the good coin any time.

Can one mix currency units and coins the way your tools do it?

Yes, that is what was done. Major currency units like the pound sterling or the international Reichsthaler were not minted. The authorities declared what amounts of coins were to match them. One would hence analyse coins minted and thereby determine the actual value of the arithmetical unit under which they circulated: 20 shillings made a pound. The amount of fine silver of these 20 shillings (111.18g) would be the actual value of the pound sterling.

Local authorities commissioned their mints to analyse coins of other nations. One could thereby determine the present conversion rates. We still have the assessments Isaac Newton gave as Master of the Mint in London when being asked at what rate Britain’s government should perform international transactions; and we have contemporary assessments by other authorities such as those at Nuremberg issued to inform the merchants of their region at what rates they might accept the most frequent international coins circulating in the area.

In practice conversion rates between currency systems remained stable and yet they created a continuous matter of debate. Estimates crept into field of metal values: Britains government had decided how much silver or gold was to make a pound, yet would the coins be of the promised quality?

The Dutch gulden had an arithmetical silver value (of 9.6g) but denominations minted could lie slightly above or bellow that value. Merchants loved Leuwendaalers (of two gulden) for their good fine-metal content, others species of Dutch coins offered less silver for the gulden, yet they were exchanged under a given rate. Here one would get different pound/gulden rates depending on what coins one would compare: 9 pounds sterling made 100 Dutch gulden so the rate merchants accepted. Newton did however advise his government rather to demand 103.25 gulden for 9 pounds sterling when paying the troops abroad with Dutch money. The 9/100 ratio was acceptable with some coins yet not with the average to be expected.

Coins deteriorated. The Reichsthaler was an international standard yet it was not said that those coins actually circulating could match the standard. Coins wore off. They would still be accepted at a certain standard value if new coins of the same nominal value were issued by the authorities with the original value. If new coins were, however, no longer minted as before, one would have to give a new pattern: 80 albus made a Reichsthaler in the 1680s, soon that would be 100 albus and more. Merchants as well as governments could thus ask for compensations of losses they made, and the public would finally accept a new ratio between the major currency units in order to acknowledge local realities.

Currency rates did definitely change if governments decided to debase their money (generally in an attempt to make money of the circulating coinage). These debasements happened in steps rather than a continuous process and they affected individual currencies like the Swedish and subdivisions like the silver daler rather likely than the relatively stable central units of accounting (the Riksdaler remained an international standard, Sweden could bnot change).

Our conversion tools work with the rates international merchants used at the beginning of the 18th century. If you come across different rates they can reflect

  • the value and quality of old and new coins actually changed,
  • a negotiation behind the deal (the partner who wants to strike the deal makes it more attractive by granting an interesting conversion rate),
  • an estimate of the acceptability of a currency and its coins (making Dutch coins go slightly above their value),
  • a debasement of one of the currencies you are dealing with – here we have probably not covered all the debasements to be noted

You will finally come across different and quickly changing exchange-rates as soon as you go into the business of bills of exchange: All the major trading places determined on weekly if not daily observations at which additional costs one could perform a cashless transfer of money. Merchants offered this service in a complex system in which the international trade had to balance the cashless flow of money. Supply and demand of such transactions came to determine the transaction fee on a market which had to be watched with greatest attention if one did not want to loose ones money in ill timed transactions. The rates to be observed here must not be confused with the rates our conversion tools offer – they are rates of additional transaction fees and not the rates between currency systems.

If I have to calculate with other rates than those you give, can I do that with your tools?

Yes, you can change the conversion rates our tools are using at the bottom of each page to make them fit the computations you have to perform according to your document sources. The most interesting modifications will be perhaps those done on the basis of fine metal contents of individual coins involved. Our tools can calculate with fine metal contents provided you feed the data into them. See our special page on silver coins and their fine metal contents for further instruction link

How stable were these rates?

No general answer can be given on that question: The ratio of one Reichsthaler making 2.5 Dutch gulden remained stable until the introduction of the Euro in 2002. Other rates changed in moments of crisis or due to government decisions.

It would be challenging to construct a system of conversion tools reflecting the changes between the individual currencies. Our tools offer some changes where individual currencies changed within the system. We should like to offer the set of tools for the whole period 1600-1800 yet it would need a group of economic historians to do this work properly. Initiative is welcome here.

But do you want to imply one could actually change Japanese mommes silver into guilders of Geneva?

Yes, though not directly. Japan was, to make this evident, a country of closed borders. No one got out, and no one got in without risking his life. All trade was under strict surveillance – and yet Japan lost the best part of its silver money by trading with China and Korea buying silk and ginseng from abroad without selling anything notable in the exchange. (See the history at Money (Japan). There was, the authorities had to note, no such thing like an isolated economy. West Africans used cowrie shells as money – difficult to counterfeit, rare enough to serve as money, transportable – and risked an inflation when Europeans discovered that they could get these shells for very little money at India's coast. Silver and gold remained the essence of money circulating on the wider scale, an asset Europe's powers brought from Copenhagen, London and Paris to India's coasts in order to strike money as needed in India – silver rupees bearing Arabian inscriptions, minted by European specialists on India's soil. (See the more detailed history at Money (India)). One can well say that artisans in Shanghai and Calcutta were ultimately paid with the very same silver circulating on the world’s market since this was what authorities in London and Edo actually observed, eager to prevent an outflow of money, and helpless if this outflow took place as it happened to Japan, or lucky if they effectively reversed affairs as London's specialists did in the 1690s. It does, hence, make sense to give the equivalents in monies. 32 Florins à Geneve were essentially 37 momme Japanese silver of 80% purity – this is not even a contradiction in terms as the momme was and still is nothing but a unit of weight: the amount of 3.75 g silver in this case.

Isaac Newton observed that different gold/silver ratios created a world wide flow of coins of both metals on the planet – different nations would balance their gold coins differently against their silver coins and this produced a flow of metals following different national estimates of their respective value. Newton's considerations went as far as China and Japan (see his note to the government on the problem).

Our conversion tools will most of all be useful where you have to compare prices - and here they will be the more useful the more exotic the currencies involved are. They give equivalents for small and big sums and tell you how accounts were held.

Can't you produce tools for conversions into modern currencies?

Technically this would be simple. Practically it would be a misleading step. Take a book: In London you got a decent novel for a shilling six pence and an expensive one for three shillings and six pence. If you bought your lunch at a street vendor – meat in paper, spiced with mustard, bread and wine with that – nothing special, you would pay as much as you paid for your little novel. Books were cheap then, as cheap as they are today – and yet they were expensive for a day labourer who made 14 pence a day. If you happen to live in an industrialized country today you can be a cleaning woman and earn your book in less than an hour.

Think of the 18th century as a world in which our modern London was surrounded by our modern Bangladesh. People of the surrounding third world country do mean jobs in the city, and those in the country get next to nothing for what they produce. You will then have to deal with at least two price levels of comparable goods. Does this mean: farmers could not buy books? No it does not – just as even people in third world countries buy cars and tv-sets if they can. Even if you know the price you cannot tell whether people are ready to pay it or not.

The sensible thing to be done here is hence: look at lists of prices and wages – and even that will be a problematic thing to do: Modern families are two income families with a kid and no servants. Early 18th century incomes could be household incomes, the incomes of a family plus all the servants it employed. Try to think of economies quite unlike our modern economies (which are – if you live in the western hemisphere you might concede this – based on an exploitation of countries abroad rather than on an exploitation of the lower classes within your country).

If you still feel you'd like to know how much something in early 18th-century money would be today:

Our tools will give you the exchange for the first decade of the 18th century.

Do I have to be on-line to use your tools?

No. The pages on which you perform calculations at our site use simple java scripts to communicate with your browser's calculating functions. We do not see what computations you perform. You can hence use all our tools off-line. Save any page you especially need on your lap top if you have work to do at an archive or library (or contact us for a CD-version of the whole site to be used off-line).

Do your tools also accept decimnalised sums?

Yes they do. If you find such sums in modern books, you can put them into our calculators. Yet be careful if you are a central European user – your browser will require the dot instead of a colon! It is £4.54 and not £4,45.

Why don't your conversion tools work on my computer

I put a sum into the form, pressed return and nothing happened

Our tools work in both directions – you have to press the buttons on the screen indicating into which direction you want to change your amount of money.

I am using an Opera browser and get the letters "NaN" instead of sums

This is the "No natural number" notice normal browsers give if you do not feed the form with numbers but with letters for instance. We cannot tell why Opera browsers have this problem, and hope the Opera-people will fix the bug soon.

I have got quite different currencies to handle – can you help?

It will be a pleasure to create the tools you need – if they belong to the 17th and 18th-century world we are interested in. Yet the following tool might be of use to you for whatever unlikely purpose you need it. If you want to, you can use it to change apples into pears on the rate you have found only this very morning on Brussels's fruit market. You might also use it to change money of ancient Syria into money of ancient Rome at a rate valid in 117 A.D. – something like a universal currency converter do be modified on the screen. link




Subpage of the Marteau Platform of Research in Economic History