I: England in the 1540s

In the introduction to my Handbook of Medieval Exchange, I presented the hypothesis that exchange rates by and large oscillated about the intrinsic metal contents of the coins underlying the moneys of account concerned. I still believe this to be true in normal times, when the intrinsic metal content of a coinage was basically equal to the price of the metal in it, minus the costs of coining, and with negligible profit or loss to the ruler. However, my hypothesis does not work when currencies were debased, for example in France at the end of Charles VII's reign, between 1417 and 1422. Numismatists, concerned with the coins themselves, have naturally concentrated on their weight and fineness. For normal times this is also what economic historians need to know. However, it is now apparent that in abnormal times, in debasement conditions, economic historians should be more interested in the prices offered by the mints for silver than with what the mints did with it afterwards. In periods of debasement there was quite frequently a deliberate official policy of secrecy to prevent the public from knowing the extent of debasement. If the public did not know how far the coin was being debased, they did know how much the mint was prepared to pay for silver, and adjusted their expectations to this, on the false assumption, that, as in normal times, debasement was in proportion to the rise in the price offered for silver.

In the Dauphin's parts of France a sequence of debasements meant that 46 times the value of coin was actually made from the marc of silver in 1422 than had been made in 1416. The public did not know this. What they did know was that at the same time the sum paid for the marc of silver had increased twelve-fold. If they thought that debasement was of this order they were hopelessly wrong.