Gold coins and silver coins were a vital part of commerce
as far back as the early civilizations of Sumer and Egypt.
A French historian saw gold coins as the "lifeblood of Mediterranean trade in the 2nd millennium
BC". Initially gold coins were traded simply by weight which could
then be cut up into small chunks or drawn into wire. And gold coins, were
seen more as a standard of accounting or for taxes to rulers or temples,
rather than for general circulation among the common folk. The first real
gold coins were not made until the 6th century BC in Lydia (Western Turkey).
They were made from electrum, natural alloy of gold and silver found in
the rivers of the region. They usually had a lion or a bull on the gold
coins face and a punch mark or seal on the gold coins other side, and weighed
from 17.2 grams (0.55 troy oz) to as little as 0.2 grams (.006 troy oz).
The gold coins introduction is attributed to the Lydian king Croesus (561-547
BC). Progress in refining soon led to the distinct minting of silver and
gold coins.
Gold coins were quickly taken up in the blossoming Greek city states just
across the Aegean sea, though it was predominantly of silver until Philip
II of Macedon (359-336 BC) acquired gold and silver mines in Thrace (now
Bulgaria). His son, Alexander the Great (336-323 BC) then consolidated the
Greek Empire with his defeat of the Persian empire, securing an immense treasure
of gold coins built up by the Persians from gold sources on the river Oxus
in northern Afghanistan. Alexander is reputed to have taken over 22 metric
tonnes (700,000 troy ounces) of gold coins in loot from the Persians. For
both Philip II and Alexander, gold coins became an ideal way of paying their
armies and meeting other military costs. Under the Greek empire, the gold
coins were stamped with the head of the king instead of lions, bulls and
rams that had previously adorned gold coins elsewhere.
The Romans, for whom gold coins became the critical way of paying their
legions, also adopted the custom of striking the emperor's head on their
aureus gold coins. The aureus gold coins were usually 950 fine (22 carat)
and weighed 7.3 grams (0.23 troy oz); 45 aurei gold coins weighed one roman
pound (libra). Even though these gold coins were too valuable for most daily
transactions, they were used by administrators, traders and for army pay
(a legionnaire was paid one aureus gold coin each month). In Britain, one
aureus gold coin bought 400 litres (28.57 gallons) of cheap wine or 91 kilos
(200 pounds) of flour. Smaller gold coins, solidus’, weighing 4.4 grams (0.14
troy oz) were introduced after 300 AD, as supplies of gold coins from Spain
and Eastern Europe decreased.
The Romans minted gold coins on a scale not seen before and not equaled
until modern times. Between 200 and 400 AD hundreds of millions of gold coins
were struck and distributed throughout the empire. The extent of circulation
is showed by the hoards of roman gold coins that have turned up all over
Europe, particularly in Britain, which can be seen in many museums, notably
the British Museum in London. The British Museum's HSBC Money Gallery provides
a unique display of the evolution of early gold coins. The Roman empire
brought a remarkable unity to much of western Europe through coherent public
institutions and gold coins. When that empire fell apart soon after 400 AD,
it was almost one thousand years before widespread gold coins returned. Solidus
gold coins survived as the main gold coins of the Mediterranean world, being
minted by the Byzantine emperors in Constantinople as the nomisma or bezant.
The bezant personified gold coins from the fall of the Roman empire until
the rise of Venice with its famous silver and gold coins. "It is admired
by all men and in all kingdoms, because no kingdom has a currency that can
be compared to it," noted a 6th century observer. But due to a shortage
of new gold supplies, minting was very scarce and the gold coins were growingly
debased. By 1081 the gold coins content was only 250 fine (six carats). The
Emperor Comenus restored some credibility in 1092 with new gold coins of
4.4 grams (0.14 troy oz) called the hyperpyron, which many still nicknamed
bezant and the Venetians called perpero. These gold coins never attained
much prestige, however, as gold supplies were still limited.
Indeed, much of the gold that was available from Africa after 700 AD
went into dinar gold coins made by the rulers of the
growing Islamic empire that extended through the Middle
East and along the north African coast. These gold coins,
created initially in Damascus, Baghdad and Tripoli, were
beautifully decorated by calligraphers in Arabic script,
since Islam forbade the depiction of humans. By 1200
the increasing power of Venice brought more trade between
the Islamic world and Europe. That prosperity sucked
in gold that had long been coming across the Sahara desert
by camel caravans from West Africa to North Africa. Gold
coins were minted in Sicily, just across the Mediterranean,
in 1231 using African gold and then in Florence and Genoa
in 1252. Venice soon became the main market for ...
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gold, opening its gold mint in 1284. The next year the first ducat gold
coins of 3.55 grams (0.114 troy oz) was struck; they were a symbol of wealth
and power for the next five hundred years, becoming the most widely accepted
gold coins since the Romans' aureus and solidus gold coins.
The supply of gold was enhanced soon after 1300 by new mines in Hungary.
Suddenly all of Europe was making gold coins. In France
the king's mints produced nearly 10 tonnes (350,000 troy oz) of gold coins
in 1338-39. In 1344 the mints of Florence, Genoa, Venice, Bruges (Flanders)
and London coined over five tonnes (170,000 troy oz) between them. The
variety of gold coins can be seen in a single display case at the British
Museum in London which houses 25 types of gold coins from European nations
and city states minted during the 13th and 14th centuries. As the pattern
of gold supplies changed by 1500, first with more gold moving directly
from West Africa to Europe by sea and then with the new sources in the
Americas, so did the production of gold coins. In 1457, Portugal issued
new cruzado gold coins made of African gold. In England in 1489 Henry VII
minted the first sovereign gold coins of 15.55 grams (0.5 troy oz) at 958
fine (23 carats), valued at £1.00. By 1503 the mint in Seville was handling
gold from the Americas.
Thereafter much of that gold was turned into Spanish crowns which were
exported to England, the Netherlands (under Spanish rule), Genoa and Venice,
where they were often recast into local gold coins. But the supply of South
American gold was relatively limited compared to the flood of silver so that,
during the 16th and 17th centuries, silver coinage was more widespread in
Europe than gold coins. In England, Queen Elizabeth I did launch new gold
coins (angels) and crowns in 1558 to restore the prestige of gold coins which
had been much debased by her father Henry VIII, but gold coins were usually
under 300 kilos (10,000 troy oz) annually. Gold coins made their comeback
only after gold discoveries in Brazil in the 1690s gave a new dimension to
world production and Britain moved onto an unofficial gold standard with
gold coins replacing silver as the main circulating currency (see Millennium
in Gold - 17th & 18th centuries). Brazil's gold coins, moedas de ouro,
were minted in Rio de Janeiro and Lisbon (Brazil being a Portuguese colony),
but many of these gold coins came on to England where they were recoined
into guineas, which had first been struck in 1663. The guinea gold coins,
named after Africa's 'gold coast', weighed 0.27 troy oz (8.7 grams) at 916.6
fine with a nominal value of £1. The mint in London coined over 31 tonnes
(one million troy oz) of gold into guineas gold coins between 1713-16.
The new flow of gold coincided with a slight over-valuation of gold coins,
versus silver, at the mint, which had followed a major recoinage program
a few years earlier. Thus, traders found it profitable to send gold to be
minted, while selling silver for shipment to India and China where it was
valued more highly. The premium for gold coins was confirmed in 1717, when
Sir Isaac Newton, as Master of the Mint, set the historic gold price of £4.4.11½d
(£4.35) which went on for two hundred years. His decision confirmed the preference
for gold coins and accidentally put Britain on a gold standard, with gold
coins being the major coin circulation until 1914, when World War I broke
out. Throughout the 18th century; huge quantities of guineas gold coins were
put into circulation, with the mint often striking three to four million
gold coins annually; virtually no silver was coined. Not since Roman times
have gold coins been so widely used and accepted both in Britain and abroad,
although most other nations stayed with silver coinage.
The sovereign gold coins, which replaced the guinea gold coins under the
Coinage Act of 1816, made the gold standard official. The sovereign gold
coins, of 0.25 troy oz (7.77 grams) at 916 fine, were the sole standard of
value and had unlimited legal tender. The final triumph for gold coins followed
the gold rushes in the United States and Australia after 1848, as gold production
rose five-fold. The minting of gold coins soared in France and the United
States in the 1850s and ultimately most nations switched from silver to gold
coins by 1900, when the United States finally switched to the single gold
standard from a bimetallic gold and silver policy. Virtually all gold mined
during the 19th Century was turned into gold coins. Sovereign gold coins
in Britain and Australia, Eagle gold coins in the United States, Mark gold
coins in Germany, Rouble gold coins in Russia, Crown gold coins in Austria,
Florin gold coins in Hungary and Napoleon gold coins in France accounted
for over 13,000 tonnes (418 million troy oz) in the classic period of the
gold standard prior to World War I. But when the world went to war in 1914,
governments started to husband their gold, the minting of gold coins largely
stopped and gold coins were often called in. In 1933 during the Great Depression,
the U.S. recalled all gold and gold coins from their citizens. After that,
the era of almost universal gold coins was over. This is the history of
gold coins.
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