Toby Birch

Articles:

Coin Clipping & Castration

By Toby Birch October 2004 Shields Property Magasine

In the centuries before the invasion by William the Conqueror, Anglo-Saxon England had one of the best economies in Europe thanks to the stability of the nation’s coinage. Her prosperity was the envy of the civilized world and this was no doubt a factor in William’s desire to take control.

By the time that his descendant Henry II had reached the throne the value of the currency was fading fast. The various Mints across the country were substituting the Silver in the coin with Tin. The base metal was being removed hence the term of the coins being de-based came into being. This is a phrase that is still used for today’s money during a currency crisis. In those days, coins had a value in their own right thanks to their precious metal content whereas nowadays we simply have promissory notes.

Another method of making money illicitly was to clip off the edges of many coins in order to use the silver to produce new ones, hence creating money out of thin air. The inevitable happened and during Henry’s reign a period of inflation set in as the coins’ value dwindled and hence prices rose. In other words, in order to get the same quantity of silver in exchange for your goods, you needed to receive more coins and charge higher prices.

By 1124 Henry had had enough of this abuse and summoned the various Mints to Winchester (then the capital of England) in what was called the Assize of Moneyers. Two thirds of them were found guilty of debasing the currency and either had their right hands cut off or were castrated (history does not record as to whether they were given a choice between the two options). Even this was not enough to prevent further abuses but later that century all coins were recalled and replaced by the Short Cross penny which lasted nearly 70 years in its true form.

There were effectively two elements to this debasing over the 12th Century. The first was straightforward greed of the coin makers while the second was the fact that there was a shortage of precious metals. Numerous Crusades had weakened the country while the ransom for Richard the Lionheart alone amounted to two years of England’s total tax receipts. Although his younger brother King John was later seen as a bad ruler, it was his loss of lands in Normandy 800 years ago which crystallized the decision of our very own Channel Islands to give their loyalty to the English Crown rather than the French.

Moving on to today’s world it is clear that our behaviour towards money has not changed a great deal. It has taken yet another conflict in the Middle East to remind investors that a modern currency debasement is occurring, this time for the US Dollar. Just as the Pope called Christendom to arms Page: 1, 2