Gold coins and silver coins were a vital part of commerce as far back as the early civilizations of Sumer and Egypt. A French historian saw gold coins as the "lifeblood of Mediterranean trade in the 2nd millennium BC". Initially gold coins were traded simply by weight which could then be cut up into small chunks or drawn into wire. And gold coins, were seen more as a standard of accounting or for taxes to rulers or temples, rather than for general circulation among the common folk. The first real gold coins were not made until the 6th century BC in Lydia (Western Turkey). They were made from electrum, natural alloy of gold and silver found in the rivers of the region. They usually had a lion or a bull on the gold coins face and a punch mark or seal on the gold coins other side, and weighed from 17.2 grams (0.55 troy oz) to as little as 0.2 grams (.006 troy oz). The gold coins introduction is attributed to the Lydian king Croesus (561-547 BC). Progress in refining soon led to the distinct minting of silver and gold coins.
Gold coins were quickly taken up in the blossoming Greek city states just across the Aegean sea, though it was predominantly of silver until Philip II of Macedon (359-336 BC) acquired gold and silver mines in Thrace (now Bulgaria). His son, Alexander the Great (336-323 BC) then consolidated the Greek Empire with his defeat of the Persian empire, securing an immense treasure of gold coins built up by the Persians from gold sources on the river Oxus in northern Afghanistan. Alexander is reputed to have taken over 22 metric tonnes (700,000 troy ounces) of gold coins in loot from the Persians. For both Philip II and Alexander, gold coins became an ideal way of paying their armies and meeting other military costs. Under the Greek empire, the gold coins were stamped with the head of the king instead of lions, bulls and rams that had previously adorned gold coins elsewhere.
The Romans, for whom gold coins became the critical way of paying their legions, also adopted the custom of striking the emperor's head on their aureus gold coins. The aureus gold coins were usually 950 fine (22 carat) and weighed 7.3 grams (0.23 troy oz); 45 aurei gold coins weighed one roman pound (libra). Even though these gold coins were too valuable for most daily transactions, they were used by administrators, traders and for army pay (a legionnaire was paid one aureus gold coin each month). In Britain, one aureus gold coin bought 400 litres (28.57 gallons) of cheap wine or 91 kilos (200 pounds) of flour. Smaller gold coins, solidus’, weighing 4.4 grams (0.14 troy oz) were introduced after 300 AD, as supplies of gold coins from Spain and Eastern Europe decreased.
The Romans minted gold coins on a scale not seen before and not equaled until modern times. Between 200 and 400 AD hundreds of millions of gold coins were struck and distributed throughout the empire. The extent of circulation is showed by the hoards of roman gold coins that have turned up all over Europe, particularly in Britain, which can be seen in many museums, notably the British Museum in London. The British Museum's HSBC Money Gallery provides a unique display of the evolution of early gold coins. The Roman empire brought a remarkable unity to much of western Europe through coherent public institutions and gold coins. When that empire fell apart soon after 400 AD, it was almost one thousand years before widespread gold coins returned. Solidus gold coins survived as the main gold coins of the Mediterranean world, being minted by the Byzantine emperors in Constantinople as the nomisma or bezant.
The bezant personified gold coins from the fall of the Roman empire until the rise of Venice with its famous silver and gold coins. "It is admired by all men and in all kingdoms, because no kingdom has a currency that can be compared to it," noted a 6th century observer. But due to a shortage of new gold supplies, minting was very scarce and the gold coins were growingly debased. By 1081 the gold coins content was only 250 fine (six carats). The Emperor Comenus restored some credibility in 1092 with new gold coins of 4.4 grams (0.14 troy oz) called the hyperpyron, which many still nicknamed bezant and the Venetians called perpero. These gold coins never attained much prestige, however, as gold supplies were still limited.
Indeed, much of the gold that was available from Africa after 700 AD went into dinar gold coins made by the rulers of the growing Islamic empire that extended through the Middle East and along the north African coast. These gold coins, created initially in Damascus, Baghdad and Tripoli, were beautifully decorated by calligraphers in Arabic script, since Islam forbade the depiction of humans. By 1200 the increasing power of Venice brought more trade between the Islamic world and Europe. That prosperity sucked in gold that had long been coming across the Sahara desert by camel caravans from West Africa to North Africa. Gold coins were minted in Sicily, just across the Mediterranean, in 1231 using African gold and then in Florence and Genoa in 1252. Venice soon became the main market for gold, opening its gold mint in 1284. The next year the first ducat gold coins of 3.55 grams (0.114 troy oz) was struck; they were a symbol of wealth and power for the next five hundred years, becoming the most widely accepted gold coins since the Romans' aureus and solidus gold coins.
The supply of gold was enhanced soon after 1300 by new mines in Hungary. Suddenly all of Europe was making gold coins. In France the king's mints produced nearly 10 tonnes (350,000 troy oz) of gold coins in 1338-39. In 1344 the mints of Florence, Genoa, Venice, Bruges (Flanders) and London coined over five tonnes (170,000 troy oz) between them. The variety of gold coins can be seen in a single display case at the British Museum in London which houses 25 types of gold coins from European nations and city states minted during the 13th and 14th centuries. As the pattern of gold supplies changed by 1500, first with more gold moving directly from West Africa to Europe by sea and then with the new sources in the Americas, so did the production of gold coins. In 1457, Portugal issued new cruzado gold coins made of African gold. In England in 1489 Henry VII minted the first sovereign gold coins of 15.55 grams (0.5 troy oz) at 958 fine (23 carats), valued at £1.00. By 1503 the mint in Seville was handling gold from the Americas.
Thereafter much of that gold was turned into Spanish crowns which were exported to England, the Netherlands (under Spanish rule), Genoa and Venice, where they were often recast into local gold coins. But the supply of South American gold was relatively limited compared to the flood of silver so that, during the 16th and 17th centuries, silver coinage was more widespread in Europe than gold coins. In England, Queen Elizabeth I did launch new gold coins (angels) and crowns in 1558 to restore the prestige of gold coins which had been much debased by her father Henry VIII, but gold coins were usually under 300 kilos (10,000 troy oz) annually. Gold coins made their comeback only after gold discoveries in Brazil in the 1690s gave a new dimension to world production and Britain moved onto an unofficial gold standard with gold coins replacing silver as the main circulating currency (see Millennium in Gold - 17th & 18th centuries). Brazil's gold coins, moedas de ouro, were minted in Rio de Janeiro and Lisbon (Brazil being a Portuguese colony), but many of these gold coins came on to England where they were recoined into guineas, which had first been struck in 1663. The guinea gold coins, named after Africa's 'gold coast', weighed 0.27 troy oz (8.7 grams) at 916.6 fine with a nominal value of £1. The mint in London coined over 31 tonnes (one million troy oz) of gold into guineas gold coins between 1713-16.
The new flow of gold coincided with a slight over-valuation of gold coins, versus silver, at the mint, which had followed a major recoinage program a few years earlier. Thus, traders found it profitable to send gold to be minted, while selling silver for shipment to India and China where it was valued more highly. The premium for gold coins was confirmed in 1717, when Sir Isaac Newton, as Master of the Mint, set the historic gold price of £4.4.11½d (£4.35) which went on for two hundred years. His decision confirmed the preference for gold coins and accidentally put Britain on a gold standard, with gold coins being the major coin circulation until 1914, when World War I broke out. Throughout the 18th century; huge quantities of guineas gold coins were put into circulation, with the mint often striking three to four million gold coins annually; virtually no silver was coined. Not since Roman times have gold coins been so widely used and accepted both in Britain and abroad, although most other nations stayed with silver coinage.
The sovereign gold coins, which replaced the guinea gold coins under the Coinage Act of 1816, made the gold standard official. The sovereign gold coins, of 0.25 troy oz (7.77 grams) at 916 fine, were the sole standard of value and had unlimited legal tender. The final triumph for gold coins followed the gold rushes in the United States and Australia after 1848, as gold production rose five-fold. The minting of gold coins soared in France and the United States in the 1850s and ultimately most nations switched from silver to gold coins by 1900, when the United States finally switched to the single gold standard from a bimetallic gold and silver policy. Virtually all gold mined during the 19th Century was turned into gold coins. Sovereign gold coins in Britain and Australia, Eagle gold coins in the United States, Mark gold coins in Germany, Rouble gold coins in Russia, Crown gold coins in Austria, Florin gold coins in Hungary and Napoleon gold coins in France accounted for over 13,000 tonnes (418 million troy oz) in the classic period of the gold standard prior to World War I. But when the world went to war in 1914, governments started to husband their gold, the minting of gold coins largely stopped and gold coins were often called in. In 1933 during the Great Depression, the U.S. recalled all gold and gold coins from their citizens. After that, the era of almost universal gold coins was over. This is the history of gold coins.
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