Gold Content Revisited

brogine

I have some questions, but this is what I know now: (in the unlikely event anyone is interested who doesn't already know.) (All of this has to do with coins of the early 19th century up to the 1930s.)

A standard in some European countries - later formalized as the Latin Monetary Union - valued 1 unit of currency (French or Swiss franc, lire, etc.) at 4.5 grams of silver. (At least for the 5 unit coins. Smaller denominations had a bit less silver.) Also, gold was valued at 15.5 times silver. So the familiar 20 franc coins have 20 x 4.5 / 15.5 grams of gold, or a little less than .1867 oz.

A similar history in Scandinavia, with 2.48 kn (kroner or kronor) valued at 1 gram of gold.

By accident or design (that's my first question), this comes down to the neat exchange rate of .72 kn = 1 fr.

Also suggestive are the (apparent) ratios of gold content in:
the rubles - the 10 seems to have 1/3 more gold than the 20 fr.
the Hungarian 20 korona seems to have 5% more gold than the 20 fr.
the Argentine 5 peso seems to have 25% more gold than the 20 fr.

I used the words 'apparent' and 'seems' because the figures for the fraction of an ounce run to many decimal places and the seeming relationships may just be coincidence, although I tend to doubt it.

Other countries use these really odd amounts that have no obvious relationship to fractions of an ounce, numbers of grains, etc. Actually, the British sovereign, at about .2354 oz. (a weight also used by Colombia, Iran and Peru) is close to 113 grains.

If anyone can shed any light on all or any of this for a hapless newcomer, he would be grateful eternally, or at least until dinnertime rolls around again.

SYRACUSIAN

Regarding the Latin Monetary Union countries and the ones that followed their standards later: the system was bimetallic, based on a constant ratio of 15.5 (parts of silver) per one part of gold. One franc, lira or drachma was equal to 5 grams of .900 silver, (or 0.29 grams of pure gold), but this was only found in the the silver 5 francs (l.,d., etc) and the gold coins. The minor silver coins had a 0.835 fineness and therefore their nominal value was higher than their intrinsic one, to avoid the export and melting down of these coins,but they were nevertheless legal tender in the LMU countries and payments with minors could be made upto the amount of 100 francs,liras or drs. The payments in silver 5 frs or gold coins had no limit imposed. There was also a limit of the number of silver minor and copper coins minted that was directly proportional to each country's population.

edited to add charts:

gold coins
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100 frs 32.25806 grams 0.900 fineness 35 mm, 0.002 tolerance
50 frs 16.12903 grams 0.900 fineness 28 mm, >>
20 frs 6.45161 grams 0.900 fineness 21mm, >>
10 frs 3.22580 grams 0.900 fineness 19mm, >>
5 frs 1.61290 grams,0.900 fineness 17mm, >>

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silver 5 frs coins no mintage limit till 1870
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5 frs 25 grams 0.900 fineness, 37mm, 0.003 tolerance

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silver minor coins, total mintage limited to 6 frs per person
payments upto 100 frs
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2 frs 10 grams 0.835 fineness 28mm ,0.003 tolerance
1 fr 5 grams 0.835 fineness 23 mm >>
0.50 fr 2.5 grams 0.835 fineness 18 mm >>
0.20 fr 1 gram 0.835 fineness 16 mm >>




The 1870 numismatic crisis caused by to the fall of the price of silver ,created lots of problems forcing the LMU to impose a limit in the mintages of the large silver coins, at 8 frs per inhabitant, that wasn't really followed by all of its members.

Even though the LMU did not specify standards on copper coinage, most of its members minted coins of the same specifications

copper coins, total mintage 2 frs per person
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10 centime 10 grams 30mm ,95% copper alloy, 0.018 tolerance
5 centimes 5 grams 25mm ,95% copper alloy, >>
2 centimes 2 grams 20mm ,95% copper alloy, >>
1 centime 1 gram 15mm, 95% copper alloy, >>


The LMU became one of the most important efforts to unite currencies in the 19th century, and attracted several other countries later, that followed their standards even if they did not officially join the Union. It lasted from 1865 to the first World War, and even though it was originally conceived to serve France since other countries adopted its standards, it became a very successfull and profitable union to all. Other successfull partnerships were done by the many German states or the Scandinavian countries. The abolishment of the golden rule and the bimetallic system in the early 20th century brought these unions to an early end.

Stork

Cool post and one to reference in the future. Thank you guys!


Cathy

GDJMSP

<< <i>So the familiar 20 franc coins have 20 x 4.5 / 15.5 grams of gold, or a little less than .1867 oz. >>



Bit of an oooops there - the 20 franc weighed 6.4516 grams with an AGW of .1867 oz.

Now, I would like to ask you, what exactly is your basic question ? It seems as if you are asking if all nations produced their currency and operated under a universal monetary value system - is this correct ?

brogine

<< <i>

<< <i>So the familiar 20 franc coins have 20 x 4.5 / 15.5 grams of gold, or a little less than .1867 oz. >>



Bit of an oooops there - the 20 franc weighed 6.4516 grams with an AGW of .1867 oz.

No, I think that does give the AGW, 0.9 x 6.4516.

What I'm after is the rationale behind all the different standards used. Maybe one or two were just based on the weight of the king's favorite stuffed fluffy bunny. But I think finding relationships among seemingly unrelated quantities (or events or ideas) is always interesting and possibly useful.

GDJMSP

<< <i>

What I'm after is the rationale behind all the different standards used. Maybe one or two were just based on the weight of the king's favorite stuffed fluffy bunny. But I think finding relationships among seemingly unrelated quantities (or events or ideas) is always interesting and possibly useful. >>




There was no rationale, the individual nations did not set out to make sure that their coinage was different from everyone else's - they didn't care at all if it was different or not. Back then they didn't need to make it different or the same. They just made it whatever they wanted it to be.

You have to remember that back then there was no international gold or silver market that set the price for the world over. Gold and silver were priced differently in almost every nation on earth. And that, perhaps more than anything else, is why each nation made their own currency in whatever way they wished to make it. Their currency was intended to be used in their country only. That's why trade coinage was invented, it solved those problems of different fineness and coin weights.

brogine

<< <i>

<< <i>

What I'm after is the rationale behind all the different standards used. Maybe one or two were just based on the weight of the king's favorite stuffed fluffy bunny. But I think finding relationships among seemingly unrelated quantities (or events or ideas) is always interesting and possibly useful. >>




There was no rationale, the individual nations did not set out to make sure that their coinage was different from everyone else's - they didn't care at all if it was different or not. Back then they didn't need to make it different or the same. They just made it whatever they wanted it to be.

You have to remember that back then there was no international gold or silver market that set the price for the world over. Gold and silver were priced differently in almost every nation on earth. And that, perhaps more than anything else, is why each nation made their own currency in whatever way they wished to make it. Their currency was intended to be used in their country only. That's why trade coinage was invented, it solved those problems of different fineness and coin weights. >>



That's very helpful, but do you think any of those suggestive possible relationships were based on intent? And is there any way to get at the initial bases - other than the easy ones even I could find out about?

josemartins

For Portuguese gold, the "standard" in the 1855-1889 period (strike years, these gold coins circulated until WW1, even during the republican era, that's why UNC coins are scarce) was that the British sovereign worth 4500 Reis, 90% of the 5000 Reis coin, there is a very small difference but that was because the Portuguese coins were struck in a Gold/Silver alloy. The change in the gold coin wheight in the Pedro V reign was not only an "approach" to the British sovereign but also to the Brazilian real (Plural: reis), so it would be valued at about half the Portuguese real, e.g.: 10000 Brazilian reis = 5000 Portuguese reis, there is also a small difference in in that 1/2 relation but i think is due to taxation or other money exchange issues, i'm not sure.
This "peg" of the Portuguese real to foreign currencies was also a way to fight inflation, as the "peça" was devalued from 6400 reis to 7500 reis in the 1820's and the gold/real ratio changed again during decimalization (Maria II reign).
Since 1855 until 1908, Portuguese silver coins adopted the wheight of the LMU coins but with a 0.9166 alloy (BTW, the Krause is wrong, Manuel II coins were already 0.835 silver, the change in the alloy didn't came with the republic), but there was a law published in 1887 ordering that French 1 franc coins could/should be accepted as 200 Reis, but it was only enforced for a couple of years.

...back to work (and sorry about my English grammar...)

Jose

GDJMSP

<< <i>

That's very helpful, but do you think any of those suggestive possible relationships were based on intent? And is there any way to get at the initial bases - other than the easy ones even I could find out about? >>




The initial bases of what ?

As for realtionships, yes there were some. But they were usually to be between parent country and colony, and sometimes there were cases where a country would try to peg their currecny to a patron nation ( for lack of a better word ), like Jose was describing. But it seldom lasted long, nations changed the values of their currencies too often.

brogine

<< <i>



The initial bases of what ?
>>


Just looking for whatever got the Turks to come up with .2126+ oz., or Germany to settle on .2304+ oz. etc. I find the understanding of the numerical basis (even if I don't know the reasoning behind it) of the LMU and SMU systems much more satisfying than the idea of some holy rock or whatever else being the origin of a monetary value system.
My Chilean 20 peso has 1/2 the gold of a British sovereign. Knowing that adds a little something to my enjoyment of the coin, like knowing about the coat of arms, other devices, and the meaning of the inscriptions.

brogine

Here's something new - to me, possibly the last one to know - in the early 20th century, a very straightforward scheme in use in Mexico: the peso valued at ¾ gram of gold. For example, the 20 peso coin contains 15 grams of gold, as it says right on the coin.
15 Gr. ORO PURO

There are still quite a few unexplained numbers out there, and I think at least some of them have an interesting , understandable story, rather than being just old, traditional - and almost random - amounts.

bosox

Canada provides an interesting case study of how problematic the varying silver to gold ratios became. The currency in Canada during the late 18th centruy and early 19th century was legally tied to Great Britain, but practically tied the United States through the large volume of trade with America.

......................United States
..............Year.........Silver.........Gold
.............1792.......15.00.........1.00
.............1834.......15.00.........15/16......(or 16 to 1)
.............1853.......13.95.........15/16......(or 14.882 to 1)



.......................Great Britain
..............Year..........Silver..........Gold
..Before 1816.........15.00..........1.00
.....After 1816.........14.29..........1.00 was the official rate in the GB
............................................................token silver coinage, but the
...........................................................market rate used to value non-GB
............................................................silver coins was 15.75 to 1.00



Silver coinage generally was only legal tender for debts less than 10 pounds sterling. Imagine the problem Canadian merchants had making change, in that Canada had no coinage of its own and merchants had to exchange coinage of many other countries. I have a discussion of this in some detail in my book "The 1858 Cents of Provincial Canada"

Rob

Sapyx

A few points to note here:

Many of the weights of gold and silver coins aren't going to have any specific reason for their weights being what they are - they'll simply be a combination of tradition and the fluctuation of precious metal prices and availability with time. For example, why does a sovereign contain 0.2354 oz of gold? Answer: that's what 1 pound's worth of gold weighed in 1817 when the sovereign was instituted.

Many of the apparent relationships you can find are just coincidence. For example, a guinea weighs 8.3500 grams. Such a nice round number might indicate a relationship, but it's a coincidence - the guinea predates the invention of the gram, and the French revolutionaries certainly didn't have British gold coins in mind when they set the gram standard.

Which leads me to a third point: the ounce and gram aren't the only units of weight the world has used. Prior to the metric age launched and spread by the French revolutionaries, each country had their own peculiar weight standard. The Germans, for instance, had the mark, the weight of which varied from place to place; most popular was the Cologne mark, weighing 233.856 grams. German "thalers" were pegged to this weight - the reichsthaler 1/9th of a mark, the conventionsthaler 1/10th of a mark, the Prussia thaler 1/14th of a mark. The vereinsthaler, which was launched in 1857 as a unified German currency to compete with the French(and later the LMU) franc, was pseudo-metric, pegged at 16 2/3 grams of silver.

Imperial Russian coinage (in all four metals - copper, silver, gold and platinum) was struck to match the Russian weight standard, based on a zolotnik of 4.2657 grams. Even then, the numbers weren't always "nice and round": The pre-1832 silver roubles proudly proclaimed they contain "4 zolotnik 21 dolya" of fine silver, a number which equates to almost, but not quite, 18 grams.

goldboy

Interesting thread! Sapyx you make some very good points on this!

brogine

Excellent - I agree! But I will keep digging, in hopes of finding other 'even numbers'. I have written to a few national mints, thinking they might have helpful historical departments, but I suppose everyone is busy designing ugly bullion issues. Thanks very much to all.