Chapter 11

How Rome Devalued their Money

by Montesquieu Icon

Our 2 successive ministers exerted much authority over our French coin. But this was vastly exceeded by the Romans after they conquered Italy and had war with the Carthaginians when they raised their coin:

  • In the first Punic war their 12 ounces of copper weighed only 2 ounces.
  • In the second Punic war, it was no more than 1 ounce.

A modern example is to take half the silver from a crown of 5 livres, in order to:

  • make two crowns, or
  • raise it to the value of 12 livres.

They mentioned this in the second Punic war, as a proof of the most consummate wisdom.

The republic could not pay her debts.

  • The as weighed 2 ounces of copper.
  • The denarius was 10 ases (20 ounces).

The republic was willing to gain half on her creditors so it made an as of 1 ounce of copper and paid the value of a denarius with 10 ounces. They had in view the deliverance of the republic and not of the citizens.

To soften the injustice, they made a denarius contain 16 ases. This made the republic’s creditors lose 50% [as], while the creditors of individuals only lost 20% [denarius].

  • The price of merchandize was increased only by 20%
  • The real change of the money was only 20%.

The Romans then conducted themselves with greater prudence than us.

Chapter 12: The Situation of Rome when they Devalued their Money

Italy had few mines of gold or silver and so they had few of those metals. When Rome was taken by the Gauls, they found only 1,000 weight of gold. And yet the Romans had sacked many powerful cities, and brought home their wealth.

For a long time, they used only copper money. They only had enough silver enough to coin money after the peace with Pyrhus.

They pegged 1 silver denarii to the value of 10 ases or 10 pounds of copper. Back then, the proportion of silver to copper was 1:960 so that it a denarius was worth 121 ounces of copper. The same denarius was valued only at 1/8 of an ounce of silver, thus produced the above proportion.

Rome found herself between two rich nations, the Greeks and the Carthaginians. Silver increased at Rome and the proportion of 1:960 between silver and copper could be no longer supported. At the start of the second Punic war, the Roman denarius was worth no more than 20 ounces of copper.

Thus, the proportion between silver and copper was no longer but as 1 to 960.

The reduction was very considerable, since the republic gained 5/6 upon all copper money.

But she did only what was necessary in the nature of things, by establishing the proportion between the metals made use of as money.

After the first Punic war, the Romans became masters of Sicily. They soon entered Sardinia and then Spain. Thus the quantity of silver increased at Rome.

They reduced the denarius from 20 ounces to 16, which reduced the distance between silver and copper. The ratio of 1:160 was now 1:128.


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