● Next Meeting Status:

Cancelled

● Host Society for the

 BANS 2011 Congress

held in Southport

Truly Worthless, Or, The Nature Of Money

There is a general belief that coinage started somewhere in Asia Minor or the eastern Mediterranean around 700BC, give or take fifty years, based on the fact that objects which we recognise as coins apparently first appeared, near there, around then. As coin collectors, it suits us to ignore the likelihood that other objects used as money might have been around for a lot longer and, as we are coin collectors, we can continue to ignore non-coins! Gongs and hoes, wheels and zappozats (decorated axes) will not concern us. The clay receipts for goods found in Babylon, and which passed from hand to hand, were definitely not an early form of banknote, were they?

We think that the first coins were lumps of a naturally occurring gold and silver alloy, which we call electrum, and which were stamped by the bureaucrats of Lydia, to guarantee their fineness, though who stamped the bureaucrats to guarantee their fineness remains an unanswered question. Gradually, as metallurgy improved, the metals became separated, and small lumps of gold, and larger lumps of silver, came into being, and went their own separate ways. The difficulty then, and ever since, was working out just how big a lump of silver was equal to a standard lump of gold, or vice versa. Two and a half thousand years have failed to produce a solution to that question.

Today, we can reveal the answer. It’s whatever you want it to be. And at the end of the day, gold and silver are only worth what people are prepared to pay for them. In a post-meltdown world, which would be more use: a gold sovereign, or a case of tinned mushy peas? Perhaps the real winner would be the chap who rented out his tin opener. Not only could he eat, but he has the basis of a new business!

However, for centuries past and only just now passing out of living memory, gold and silver were regarded as the standards, the “A” Levels if you like, the store of wealth. Great, if you are wealthy, but a trifle inconvenient for buying an egg or a bowl of gruel. All this precious metal didn’t meet the demands of the day. What was really needed was pocket money, the stuff we have today. But although the Romans, and the Chinese, and to a degree the Greeks, eventually mastered the practice of small change, it was a concept that only re-emerged in the West in the seventeenth and eighteenth centuries, and then, frequently, to opposition, largely because no-one could work out just exactly what small change should be and how it should work.

In the end, more by default and exhaustion than anything else, it was generally agreed that this third tier of money would be provided by copper, and that it would be, well, more of a token or a promise of something, rather than a store of value. Not really money at all. But nonetheless we now had gold, silver, and copper. It was a monetary system which worked pretty well, until The Accountant came on the scene.

Accountants have this terrible view of the world: they need to justify everything. Why spend zillions on providing beautiful gold coinage, only to see it worn away and lost forever on the insides of trouser pockets, or purses? We can have neatly folding paper money, which won’t last as long, but will be a lot more practical. And cheaper. Why spend vast amounts on providing solid silver coins, when alloy or, even better, base coins will do just as well, and will be a lot more practical? And cheaper. And why spend that bit more on copper, when there are more durable, long lasting alternatives? Practical. And cheaper!

So now we have agreed, haven’t we, that coins don’t have to be gold, silver or copper any more? Good. If they aren’t themselves stores of value, it doesn’t actually really matter what they are made of, does it? The search was on for other materials.

Tin was an early substitute, probably because it looks a bit like silver and was considered to be, at least, semi-precious but, although white and shiny, tin is unstable in a world full of nasty chemicals, and it doesn’t last very long in circulation. The English tin coppers of the late 17th Century, and Thailand’s 19th and 20th century coins, are about the only examples. But hang on a mo. If we mix a bit of our tin in with the copper we used to have, it looks quite good, wears much more slowly, and is generally more satisfactory than either on their own. Very practical, and cheaper, too, in the long run. Fine, put bronze on the list.

Nickel is another element that looks a bit like silver, is much more hard wearing, keeps clean in use, so it should be ideal. The Canadians and South Africans thought so, but then, they would. Between them they produce most of the world’s nickel. Unfortunately it has two major disadvantages. Firstly, about 10% of the population is allergic to nickel, and secondly, much more important, it is quite expensive. So nickel is out. But hang on a mo. Suppose we mix it with something else, like copper? That reduces allergic reactions and, guess what, it's cheaper. Fine, put cupro-nickel on the list.

So now we have paper, cupro-nickel and bronze, and we have given up on tin and nickel. Everything is alright now? Well, no, not quite. Sometimes, such as when we are fighting each other, some metals become much more useful as weapons than as money. So, copper and nickel and tin have to disappear from small change. In their places, we can use something cheaper! And so we have coins made from iron, and zinc and aluminium. Iron goes rusty, zinc oxidises, and aluminium turns gritty and grey. Not very practical but, what the heck, they’re cheap.

But hang on a mo. Victory’s round the corner, and we can spare a bit of our really valuable metal, like chromium, nickel or copper, so why don’t we take a leaf out of the tin can business, and start plating our coins? Nice one, Bruce. This gives us an interesting range of alternatives. The Canadians liked the Chrome plated steel look for their nickels, while in 1943 the Americans tried zinc plated steel for their coppers. Possibly the nasty grey colour of the plated coins confused them, because in 1944 all the surplus blanks were turned into 2 franc pieces, and sent to Belgium as liberation money. After years of Nazis and zinc occupation money, no-one complained. That year, the Americans made their cents out of recycled shell cases, and there were plenty of these, so that was all good and green, or in this case, good and brown.

But just occasionally imagination and illogic wins. Faced with a wartime shortage of nickel for their cupro-nickel five cent pieces the Americans added silver and manganese instead. The Italians, lacking most essential ingredients, produced their wartime coinage in stainless steel, and accidentally introduced a handsome coinage material which lasted until the introduction of the Euro.

Ah yes, the Euro. How political, how correct. The brass coinage isn’t actually brass at all, of course. Oh dear me, no! It’s Nordic Gold. We would actually call it Aluminium Bronze, but Nordic Gold sounds so much more valuable. It’s nickel-free, too. But at least it’s solid. Well, as solid as a mixture of copper, aluminium, zinc and tin (only 1%, though) can be. Reassuring, especially when compared to our friends across the Atlantic, who go in for copper plated zinc, and cupro-nickel clad copper.

So where do we stand now? I have to tell you that all around the world, the Accountants have triumphed. Copper plated steel, brass plated steel, nickel plated steel are the stuff of numismatic nightmares – just imagine a Petition Crown stuck in silver plated steel or a Una and the Lion in Nordic Gold plated steel - but they are around 25-30% cheaper than solid coins. It’s difficult to see how much further the process can go. Maybe one day, there will be a steel shortage?

But in the ultimate analysis, it doesn’t really matter. We have achieved the goal – truly worthless money.

Chris Leather

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