Around the founding of America
Officials who secretly lowered the silver content in money were sentenced to death.
WORDS
The Crime of Debasement, and the Punishment of Death
The United States Coinage Act stipulated that if a mint official fraudulently debased the coinage, the punishment was death. Why did "fineness"—the proportion of precious metal in an alloy—carry such grave significance?
Fineness (the proportion of silver in money) in 3 minutes
1See it
Swipe to see more
Before that
The country had just seen trust in paper money collapse.
What is fineness?
The proportion of gold or silver in a metal. It's expressed based on weight.
0.925
This means 92.5 percent is silver.
How to tell
You can't tell the fineness just by its appearance or weight.
Long ago
People would cut off pieces of silver, put them on a scale, and pay by weight.
Back then
The time it took to check the fineness for every payment was a transaction cost.
In the year 267
Athens was sacked, and the city shrank to a small corner.
Around that time
The fineness of silver coins dropped, and the era of cities minting their own money came to an end.
2In numbers
13.5grams
Silver in a 27-gram coin with 0.500 fineness
3What would you do?
You have two coins that both weigh 27 grams. They look identical. Do they have the same amount of silver inside?
Pick one
Yes. Because they weigh the same.
Not necessarily. If the fineness is 0.925, it has about 25.0 grams of silver. If the fineness is 0.500, it only has 13.5 grams.
You can't know without checking.
That's right. Weighing a coin and checking its fineness are two completely different things.
Because the contents could be reduced without being seen, the young nation imposed the harshest penalty for this crime.
4Read more
The Penalty Was Death
The United States Coinage Act contains a chilling line. It stipulated that if a mint official committed fraud and secretly debased the coinage, the crime was punishable by death. The fledgling republic imposed the ultimate penalty for crimes related to its money. The background to this severe punishment was the nation's recent experience of witnessing the collapse of faith in money due to the Continental currency.
Value Not Discernible by Appearance
The fineness of a metal indicates the proportion of gold or silver it contains, based on weight. For example, a silver fineness of 0.925 means that 92.5 percent of the total weight is silver. The remainder is an alloy metal, such as copper.
Fineness cannot be determined by appearance or weight alone. If only the fineness is lowered while the weight remains the same, the amount of gold or silver it contains decreases. For instance, a coin weighing 27 grams with a silver fineness of 0.925 contains approximately 25.0 grams of silver. However, if the fineness is reduced to 0.500 at the same weight, it contains only 13.5 grams of silver. Checking the weight and analyzing the fineness are two completely different examinations.
Scales and the Time for Verification
More than a thousand years before the advent of coinage, value was weight itself. In Babylonia, the word "shekel" existed, but it was originally a unit of weight based on the weight of barley. When silver began to be used for weighing, people would cut off a piece of silver for each transaction and weigh it on a scale. This is known as hacksilver.
In a world where payment was by weight, the fineness had to be verified with every transaction. The time taken for this verification itself became a transaction cost.
The End of Civic Coinage
In 267 AD, the Heruli, coming from the north, sacked Athens and plundered Corinth and Sparta. The historian Dexippus is said to have led the resistance in Athens.
After the destruction, the city was reduced to a small quarter. Around this time, against a backdrop of debasement of the imperial silver coinage and rising prices, civic coinage came to an end. In the era of Emperor Gallienus and his successors, coinage was centralized in the hands of the empire, and the long-standing practice of cities striking their own coins almost completely ceased.
Confidence in currency, once lost, is difficult to regain. That is why the most severe punishment was reserved for those who betrayed that trust from within. The death penalty clause is irrefutable testimony to how seriously the young nation regarded the integrity of its currency.
MORE
More in The origin of words
Those Who Stand Before the Strongbox of the State
They had an army, but no reserves of gold and silver to support the soldiers. There was once a government that began a war—the enterprise that most voraciously consumes money—with empty hands.
Mitsuru Hayama
The Trading Companies That Moved Nations with Invisible Strings
In the 19th century, certain trading companies financed wars and were involved in establishing banks in emerging nations. Born from a system of shared losses, these companies sometimes became powerful enough to move nations, wielding more influence than kings.
Mitsuru Hayama
Gulden, the Name of a Coin That Was Once an Adjective
Originally an adjective meaning 'golden,' the name Gulden detached from its metallic origin, eventually becoming a unit of account in ledgers and shaping the history of a currency.
Mitsuru Hayama
If you would like to read on
The rest of the story is in the material of NOMISMA.
Read next
Paper Printed Beyond Its Promise →Price
After purchase, the full courses, the illustrated books, every country’s story and the numismatics examination are open to you.
See the price →