Money! (or understanding the economic currents that shaped history)

One of the most difficult things for the amateur genealogist or historian to comprehend is the value of money in the 18th and 19th Centuries. Indeed, it is only WHEN you begin to understand the cost of living that you really understand the economic pressures that ‘encouraged’ people to emigrate to new shores. It is hoped that some understanding of this may be outlined here in these few paragraphs.

Let’s begin with the basis of British and Irish money.. silver. What started out as a coin issued by King Offa of Mercia (one of the kingdoms that merged to form England) sometime between A.D. 757 – 796, was a copy of the continental Frankish deniers and other similar silver coins. These were in turn copies of the Roman ‘Denarius’.. this is where the ‘d’ comes from in the old term ‘LSD’.. Librum, Solidus, Denari.. (and, no, nothing to do with drugs!). The penny coin weighed 22½ grains, which meant there could be 240 pennies struck from of a Pound of silver, which was why (before decimilisation) there were 240 old pennies in a pound!. This was the case up to 1971 (although silver stopped being used in penny coins after 1797 (except for Maundy coinage) and silver from the higher denomination coins had been removed from currency in 1946 to help repay the United States for the ‘lend / lease’ loan during World War II).

 

Fast forward almost a thousand years and the next major introduction in our story was the Gold Guinea first issued in 1663. The Guinea pound was a coin struck in 22 carat gold from the Guinea coast of Africa (hence the popular name) and was originally valued at £1 (i.e. 20 Shillings). Coins were minted in denominations of ½ Guinea, 1 Guinea, 2 Guineas and 5 Guineas. But the fact you need to be aware of was that the relative relationship between silver and gold was not fixed in the modern sense. Just as is happening today, the value of gold can rise.. and that’s exactly what it did! Perhaps it might be worthwhile to mention that in general, whenever there was the clouds of war on the horizon, the price of gold increased. The wars in Ireland (1689 – 1691), then the French attack in 1693 on the huge English merchant fleet (containing a full years produce from England) bound for the Ottoman Empire (modern Turkey) saw not only war with France  and the creation of the Bank of England, it also saw the value of the Guinea rise to 30 shillings in silver! However, by 1717 the value of the Guinea had fallen back to 21 Shillings where it was fixed against silver. However, despite the efforts of Sir Isaac Newton, Master of the Mint, to reduce the guinea’s value (relative to silver), the Guinea was effectively overvalued relative to silver when compared to the valuations in other European countries. British merchants sent silver abroad in payments whilst goods for import into the British Isles were paid for with gold. As a consequence, silver flowed out of the country and gold flowed in, leading to a situation where a chronic shortage of silver coins developed because European Merchants demanded payments in silver, but in turn they paid for British goods with gold.

You may think that a Guinea was a considerable amount of money and it was. For the average farm labourer it would have represented almost a month’s wages. But for the farmer, they were probably a familiar (if occasional) sight.. in 1813 a milk cow would have cost you between 8 and 11 Guineas! It should also be noted that In 1774 almost 20 million worn guineas of William III and Queen Anne were recalled, melted down and recoined as guineas and half-guineas. To put this in context, William III began to reign solely after the death of his wife Mary II in 1693. William died in 1701 and Mary’s Sister Anne then reigned until 1714. So 60 years after the combined reigns of these two monarchs, the WORN coins were melted (this obviously does NOT include coins that were still in reasonable condition) and recoined. That does not account for the Guineas minted between 1715 and 1774!!! So you can see the Guinea was widely circulated in England, Scotland and Ireland.

 

The following newspaper article taken from the Belfast Newsletter of 7th of March 1788 highlights how gold coinage was still viewed according to it’s intrinsic value (the value of the metal in the coin) rather than the notionl ‘face value’:

“The circulation of the gold of this kingdom being at this time much impeded by the too great nicety generally observed in the weight of it, by which many guineas and half guineas are rendered doubtful, which ought to pass, it may not be improper to publish the following clause from his Majesty’s late proclamation on that subject, which points out clearly what coin ought to be received and paid.- ‘All guineas and half guineas, equal in ‘weight with their respective lawful Tower-stamped weights, or what are called even and even when weighed against such weights, are required to pass in payment.’”

 

So, as may be seen from this newspaper article, gold coinage in particular was subject to ‘grey areas’ and some coins were refused, which all added to the shortage of coinage. Of course merchants would weigh the gold coins to ensure that the coin matched the weight of the official government weights for that coin. Foreign gold coins could be found in circulation as well, and there were official weights to weigh the most common ones too (e.g. the Portuguese ‘Moidor’ or ‘Joe’), after all, the merchant was interested in the gold, not necessarily which country issued the coin, as long as the weight was right.

 

Gold coinage was supplemented by the ‘regular’ coinage of the silver Crown (5 shillings), Half Crown (2 Shillings & six pence), Shilling, 6 Pence, 4 Pence, 3 Pence, 2 Pence and silver Penny, plus the Copper Half Penny and Farthing, but as I said earlier, in England after 1763 silver coinage issue was erraticly at best. In 1796 and 1804 the Bank of England tried to alleviate the situation by either counter marking or overstriking Spanish 8 Reals coins (coins that may be more familiar as the Pirates ‘Pieces of Eight’). The 1796 coins had a round or octagonal punch pie mark with the head of George III struck into them which gave them the value of 5 Shillings. The 1804 coins were completely restruck and were known as Bank of England Dollars valued at 5½ Shillings.

 

So, from this usage of foreign coins, particularly in the late 1790s to 1820s period it is quite apparent that there was a distinct lack of small change, due principally to the French Revolution and the subsequent French Revolutionary Wars / later Napoleonic Wars. During this period, gold began to become scarce and rise in value as the Wars were draining the gold reserves and people hoarded higher value coinage, consequently increasing the values of gold and silver. Parliament passed a law making banknotes legal tender in any amount, and in 1799 the production of guineas was halted, although half and third-guineas continued to be struck for small change purposes. Indeed, the wars caused basic food stuffs (particularly meat) to increase in value because the Military was purchasing to feed & supply the Navy and Army at this time. But it wasn’t only the people who suffered at the rise in gold. In 1813, during the Napoleonic wars, when the British army under the Duke of Wellington entered France, the French people would only accept gold in payment for food and supplies that Wellington’s army needed. This prompted a hurried minting of guinea & half guinea coins in 1813 (the so called ‘Military’ guinea) to alleviate the problem. However, the gold in a guinea was trading at 27 Shillings on the open market.. but a guinea only had the face value of 21 Shillings, leaving the government out of pocket!

 

Many merchants minted their own Farthing, Half Penny and Penny tokens (some larger towns issued silver tokens of 6 Pence and 1 Shilling) to alleviate the change shortage.

However, in Ireland the situation was even worse! The Irish pound was worth less than the British pound (£1 1 Shilling and 8 Pence Irish was equal to £1 British. Put another way, £13 Irish = £12 British). In Ireland, the only official coinage minted were the copper Farthings and Half Pennies, so like the American Colonies, Irish coppers and English or foreign gold & silver coins would have been used in trade (although the government frowned on Gold and silver going to ‘the colonies’). The Government had established the Bank of Ireland in 1786, and from 1804/5 it issued silver tokens of 5 Pence, 10 Pence, 30 Pence and 6 Shillings Irish to relieve the small change issues. The Bank of Ireland also issued £1 Banknotes, but banknotes were never popular, especially from private banks as they had a tendency to go bankrupt, leaving the note worthless.

 

In 1816, Britain had replaced the 21 Shilling Guinea with the Sovereign (20 Shillings) and also reduced the amount of silver in the silver coinage, meaning that where before you could mint 62 Shillings from a pound of silver, they now minted 66 shillings (making it effectively a token coinage, because it no longer contained its face value in intrinsic metal).

 

In 1825 the Irish pound was replaced by the Sterling pound (i.e. British Pound).

 

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