The contest between good and bad currencies defines the divide between the North and the South
Dr Massimo Sbarbaro Everything starts from the mintage of:
1252: Florence - florin … and, 32 years later …
1284 Venice - ducat
Dr Massimo Sbarbaro 1250 Holy Roman Empire
Dr. Massimo Sbarbaro Frederick II, House of Hohenstaufen (Jesi, 26 December 1194 – Fiorentino di Puglia, 13 December 1250) 1198 King of Sicily 1212 Duke of Swabia 1212 King of the Romans 1220 Holy Roman Emperor 1225 King of Jerusalem King of Germany, Italy, and Burgundy.
5 June 1224: Frederick II founded the Univesity of Naples (first state and non-clerical university of the World, in contrast to the University of Bologna which was a private students’ and professors’ association)
1231 Constitutions of Melfi and Augustalis mintage 1239 Excommunication
Dr Massimo Sbarbaro The „reversion to gold“ in Western Europe: the Augustalis
The coin weighed about 5.24 grams, which is ¼ of a Sicilian gold ounce.
The obverse contains a classical (not medieval) bust of the emperor wearing a laureate wreath with the legend CESAR AVG IMP ROM (Caesar Augustus, Emperor of the Romans); the reverse shows an eagle, the imperial symbol, with the name FRIDE RICVS (Frederick).
Dr Massimo Sbarbaro Augustalis Tarì
Coin Weight Value augustalis 1/5 of tarì’s ounce = 6 tarì ¼ of tarì’s ounce= 7.5 tarì ounce 26.4 g or 30 tarì tarì 26.4 /30 = 0.88 g
Dr Massimo Sbarbaro After December 1250
In December 1250, following the death of the Emperor, his son Manfred sent a heartfelt letter where he wrote: “The sun of the world that shone over the people has gone down”.
In Rome Pope Innocent IV ordered the churches’ bells to ring out joyous peals to announce to the world the death of the Antichrist.
The obsequies took place without any pomp or ceremony, according to the wish of the departed. The funeral procession passed for the last time through the beloved Apulian land. Afterwards, the corpse was embarked in Taranto and returned to Palermo (Sicily).
Dr Massimo Sbarbaro The legacy od Frederick II between the bankers of Florence and the power of the Pope
Dr Massimo Sbarbaro Florence and Tuscany before the House of Medici
The design of the original Florentine florins was the distinctive fleur-de-lis badge of the city and a standing and facing figure of St. John the Baptist wearing a hair shirt.
It was 3.52 g of pure gold (24 carats).
Money Weight 1 florin 3.52 g 3.52 g 0.88 g x 4 1 florin 4 tarì
Dr Massimo Sbarbaro The Gresham’s Law in practice: the Florentine florin as a weapon against Sicily
In economics, Gresham's law is a monetary principle stating that "bad money drives out the good one".
For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will disappear from circulation.
Money Weight 1 florin 3.52g 3.52 g 0.88 g x 4 Money Weight Value 1 florin 4 tarì 1 augustalis 1 florin + ¼ augustalis 6 tarì 7,5 tarì 1 florin + 0.88 g 1 florin + 1 tarì 4 tarì + 1 tarì 5 tarì
Dr Massimo Sbarbaro Florence and the florin
Benefits for Florence:
1. the augustalis is used as raw; 2. the gold needed to mint the new money is found; 3. it is necessary to pay duty on the gold imported to Florence – incomes for Florence; 4. seigniorage; 5. increased Florence’s economic power.
Dr Massimo Sbarbaro 1284: Venice and the ducat
The Venetian ducat: Made of 24-carat pure gold and weighed 3.52 gr
The obverse: the Doge of Venice kneeling before St. Mark; the patron of Venice presents a oriflamme with a cross. The reverse: Christ stands and holds the Gospel in the left hand and blesses with the right.
The mintage of the Venetian ducat in 1284 happened when:
1. the inflation was becoming steady after the market euphoria started in 1252; 2. the silver reference currency for Eastern markets was the Venetian grosso.
Dr Massimo Sbarbaro Values, changes and relations among the currencies
Dr Massimo Sbarbaro Grosso of Venice
The Venetian grosso was a silver coin first introduced in 1199 under the doge Enrico Dandolo.
It originally weighed 2.18 g, was composed of 98.5% pure silver and was valued at 26 denari.
Dr Massimo Sbarbaro The Gresham’s Law in practice: the Venetian ducat as a reaction against the Orient
• 1 grosso of Constantinople (Andronicus II Palaeologus basilikòn ) = 1 Venetian grosso • 1 grosso of Constantinople = 70% silver • 1 Venetian grosso = 98.5% silver • The grosso of Constantinople as a bad currency that would destroy the Venetian grosso according to the Gresham’s law.
• 1 ducat = 32 Venetian grossi was the defence against the bad currency
Dr Massimo Sbarbaro 1284: Venice and the ducat
1. First indications of the inflation becoming steady after the market euphoria started in 1252.
2. Protection of the grosso on the Eastern markets.
Dr Massimo Sbarbaro In conclusion: 1252 Florence - florin
1284 Venice - ducat
32 years later - why?
Dr Massimo Sbarbaro 1284 Venice – ducat financial point of view
32 years before 1252 Florence – florin political point of view
Dr Massimo Sbarbaro