Meditata - translation
[Olsztyn] 15 August 1517
Coinage is imprinted gold or silver, by which the prices of things bought and sold are reckoned according to the regulations of any State or its ruler. It is therefore a measure of values. A measure, however, must always preserve a fixed and constant standard. Otherwise, public order is necessarily disturbed, with buyers and sellers being cheated in many ways, just as if the yard, bushel, or pound did not maintain an invariable magnitude. Hence this measure is in my opinion the coin's face value. Although this is based on the metal's purity, nevertheless intrinsic value must be distinguished from face value. For, the denomination of a coin may exceed its metallic content, and the other way around.
Coinage was introduced for a necessary reason. Things could have been exchanged for gold and silver by weight alone, because mankind's common judgment prizes gold and silver. But to carry weights around all the time was very inconvenient. The purity of the gold and silver, moreover, was not instantly recognizable. Accordingly people ordained that a coin should be marked with a universally recognized symbol to indicate that it contained the proper proportion of gold or silver, and to add legal authority to confidence [in it].
The face value of a coin is just and proper when the coin contains very little less gold or silver than may be bought with it, since only the expenses of the minters should be deduced. For, the symbol should add some value to the metal.
This [face-value] may be corrupted in three ways. First, the metal, alone may be defective, when for the same weight of coin more than the right amount of copper is alloyed with the silver. Secondly, the weight may be defective, even though the proportion of copper and silver is correct. Thirdly, and this is worse, both defects may be present at the same time.
Money can lose its value also through excessive abundance, if so much silver is coined as to heighten people's desire for silver bullion. For in this way the coinage's market value vanishes when with it I cannot buy as much silver as the money itself contains, and then I find greater advantage in destroying the coin by melting the silver. The solution is to mint no more coinage until it recovers its par value.
The value of a coin deteriorates also by itself as the coin is worn down through long use. Only for this reason should it be renewed or replaced. This is indicated if somewhat less silver is found in the coin than is bought with it.
Hence, whenever a new coinage should be minted, the use of the old coinage must be completely prohibited. People bringing it to the mint must receive new coinage wherein the amount of silver matches precisely what is in the old coinage. But if this is not done, the old coinage will taint the value of the new coinage, for two reasons. For, the mixture [of the old coinage with the new coinage] will reduce the aggregate below the proper weight, and perhaps make it excessively abundant, with the consequences mentioned above. However, the worst mistake, which is absolutely unbearable, is [committed] if the ruler, or whoever governs the State, seeks a profit from the minting of the coinage, to wit, by adding to the money in existence a new coinage which, although defective in metallic content or weight, pretends to have the value of the old coinage. For the ruler cheats not only his subjects but also himself by enjoying a merely temporary and quite modest profit, like a stingy farmer sowing bad seeds to save good seeds: he will reap exactly what he sowed. This evil damages the coinage's worth, just as blight [ruins] grain. After this disease has taken hold and been discovered too late, the ruler will not easily get rid of it without burdening his subjects again and with his reputation unstained, since he himself caused the harm.
I shall now give as an example the Prussian coinage, which has heretofore been subject to many defects. It circulates under the names mark, skoter, and the like, which are also names of weights. As a weight, a mark is 1/2 pound, and 3 skoters make 1 ounce. As a coin, however, a mark consists of 60 shillings. But lest ambiguity give rise to misunderstanding, in what I shall say hereafter, wherever "mark" is used, I want the coin to be understood. On the other hand, where weight is involved, I shall speak of a pound, for instance, 2 marks make a pound.
Now the money which we use at the present time consists of shillings, groats, and pence. I find, however, that the coins now called "groats" were once shillings, and that 8 marks contained 1 pound of pure silver, as is learned also from their content. For they consist half of copper and half of silver, and 8 of these marks, at 60 shillings to the mark, weigh almost 2 pounds. These were called "new shillings" and the corresponding marks "new marks" or "good marks".
For there were also the other "old shillings" ant the corresponding "old mark" or "light mark." These were equal to the new coins in weight, but had 1/2 their value. For only 1/4 of their content was silver, and 16 marks contained 1 pound of silver, while weighing 4 times as much.
Later, when the country's status changed, cities were granted the right to mint coins. As they exercised their new privilege, currency increased in quantity, though not in quality. Four parts of copper began to be alloyed with a fifth part of silver, until 1 pound of fine silver cost 20 marks. Since part of the old coinage still circulated, however, those new shillings became skoters, reckoned at 24 to 1 light mark. For 1 [60-]shilling mark was at that time not much better than those 24 [skoters].
Afterwards, however, those new shillings, having become skoters, disappeared because they were accepted also throughout the Mark [of Brandenburg] and Pomerania. It was decided to recover them by evaluating them at 1 groat, that is, 3 shillings. This was a very bad miscalculation, quite unworthy of so distinguished a body of notables [as the Estates of West Prussia. It was] as though they rejoiced at their own misfortunes, because forsooth Prussia could not get along without those [groats], even though they were worth no more than 15 pence and without them there was more than enough currency.
The groat therefore differed from 3 shillings, being worth 1/5 or 1/6 less. Yet because it was mistakenly evaluated as their equal, it dragged down the value of the shillings while attaching their good quality to itself. It brought about a confusion of the mixed coinage's market value and intrinsic value. Consequently the money's market value fell lower and lower day after day. Nevertheless it was decided not to interrupt the coining of money at all. The costs did not cover the minting of coins equal in value to the previous coinage. What was minted, therefore, always fell somewhat short of the steadily declining market value. The later coinage, always inferior to the earlier coinage, as it was introduced depressed the market value of the previous coinage, and drove it out. [This continued] until the shilling's market value equaled the groat's intrinsic value, and 1 pound of silver cost 24 light mark. This has not stopped yet, up to the present time. Indeed, even after the approximate equalization [of the shilling's market value] with the groat, this is now followed by ever new groats, which are deficient at least in weight. For, 26 marks weighing 2 pounds contain 1 pound of silver. What is to be expected except that soon 1 pound of silver will cost 26 marks, unless help is forthcoming in the meantime?
Such grave evils, then, beset Prussian money and because of it, the whole country. Its calamities benefit only the goldsmiths, who know the purity of metal by experience. For from the mixed coinage they collect the old pieces, from which they melt down the silver and sell it. From the inexperienced public they constantly receive more silver with the coinage. After these old shillings disappeared completely, those following next [in intrinsic value] are selected, like wheat being winnowed from chaff. Would that these [distortions] were reformed, while there is time, before a greater disaster! At least let 1 pound of silver be brought back again to 20 marks, and held there for the future by the method described above.
I shall accordingly add an example of this reform. First, only one place should be designated for the minting of money, not for a single city or under its emblem, but for the entire country. In the absence of a decision by the country's nobility and cities, no new money should be minted henceforth. There should be no exception, moreover, to the rule that not more than 20 marks should be struck from 1 pound of fine silver.
The procedure should be as follows. For the shillings, take 3 pounds of copper and 1 pound of fine silver, minus 1/2 ounce or only as much as must be deduced for expenses. From the molten mass strike 20 marks, which in purchasing power will be worth 1 pound of silver. Furthermore, mint the skoters from 2 pounds of copper and 11 3/4 ounces of silver, making 20 marks, with 24 [skoters to the mark]. But perhaps it would be better if instead of shillings, half-shillings were minted in accordance with the above reckoning. Five half-shillings would be exchanged for 1 skoter, and 1 half-shilling for 4, of the present pennies.
When this minting has begun, however, the use of the old coinage should be prohibited. In the mint, for 13 old marks, 10 new ones should be exchanged, either in shillings or groats. For, this less will have to be suffered once, in order that it may be followed by many benefits and a lasting advantage, and that a single currency reform in 25 or more years may be enough.
Let these remarks about money suffice. I leave them to be analyzed by anybody who has better understanding, as new situations constantly present themselves in the course of time.
N. C. Meditata. 15 August 1517
