The History of Currency, 1252 to 1896 Part 28

The monetary situation which the advent of the Catholic kings, Ferdinand and Isabella (1475-1506), was to alleviate and reform was the most deplorable that Spain has ever seen. Not less than eleven ordinances of reform were issued before the close of the century. For practical purposes only the first and last of these require notice. By the Mint indenture, issued on the 26th June 1475 to the Mint master of Seville, the gold coinage was ordered on the following basis:--

Excellentes (at a tale of 25 to a mark, 23-3/4 quilates fine, in value = to 2 castellanos).

And silver on the following basis:--

Silver Reals (at a tale of 67 to a mark, 11 din. 4 grs. fine, in value equal to 30 maravedis).

First and chiefest importance, however, attaches to the ordinance of 1497, issued at Medino del Campo, and so named. By this ordinance all the previous existing systems and monies were abrogated, and a new system inst.i.tuted which forms the starting-point for the monetary history of that Spain which was to be the receiver and distributor of the gold and silver of the New World.

The standard of gold was fixed at 23-3/4 quilates. The basis of the gold coins was to be the _excellente de la Granada_, issued at an equivalence of two of the antecedent excellentes, and at a tale of 65-1/3 to the mark.

The system of the silver real was as in 1475, but it was issued at an equivalence of 34 maravedis, at which it ever after remained.

The billon money was to consist of _blancas_ (7 grs. fine, and at a tale of 192 to a mark).

One excellente = 11 reals 1 maravedi = 375 maravedis.

1 real " 34 maravedis.

The changes subsequently effected in this system may be presented in skeleton form (see also accompanying Tables).

In 1523 the Cortes of Valladolid presented a pet.i.tion referring to the changed relation of the two metals, and asking for a recoining on a different ratio. Its proposals were incorporated in the ordinance of 1537, when the scheme was as follows:--

Gold Standard, 22 quilates.

" Tale, 68 to a mark.

Value, 350 maravedis.

Silver Left untouched.

Billon Standard increased to 7-1/2 granos.

Under Philip II., by the ordinance of 23rd November 1566, the equivalence of the gold coins was increased a seventh, the silver monies being again left untouched. The increase was partly arbitrary and unprincipled, partly due to the normally prevailing depreciation of silver.

Under Philip III. the intrinsic value or content of the gold monies was decreased 1/10, silver being again left intact.

The innumerable calamities which overtook Spain under Philip IV.

(1621-65) and Charles II. (1665-1750) led to an immense introduction of billon money, to so great an extent, indeed, that it fell to one-eighth its previous value, thereby only complicating and increasing the evils.

The result was an increasing premium on good monies, coupled with the usual disappearance of them. By the proclamation of 8th March 1625 it was prohibited, on severest penalties, to carry such premium above 10 per cent.; by the succeeding proclamations of 30th April 1636 and 7th September 1641 this limit was raised respectively to 25 per cent, and 50 per cent.

Philip IV. also inst.i.tuted the first change in the silver system which it underwent since the great reform of 1497.

The tale was increased from 67 to 83-3/4 per mark, the _real of eight_ being henceforth issued at an equivalence of 10 reals.

This change was equivalent to a reduction of 25 per cent. in the silver monies.

Under Charles II. this corruption proceeded in an ascending scale until 1680, when the gold _doblon_ had arrived at an equivalence of 110 reals of billon, and the _real of eight_ to 29 reals of billon.

By the law of 14th October 1686 an attempt was made to re-create and reform the tottering system. The mark of silver (11 din. 4 grs. fine) was to be coined at a tale of 84 pieces. The real of eight received a new name, _Escudo de plata_, and was to issue at an equivalence of 10 reals of the new silver.

The effect of this apparent reform was to lower the weight of the silver money 25 per cent., to incorporate the premium of 50 per cent. on the billon money, and to inst.i.tute or sanction a matter of four separate monetary units:--

1. The real of old silver = 1/67 mark.

2. The real of new silver = 1/84 mark.

3. The real of billon = 1/126 mark.

4. The real of billon = 1/38 of the double escudo.

At the close of the reign the monetary system was as follows:--

Silver Reals.

Mark of fine gold, 1408.94 Of intrinsic value of 1363.15 The seigniorage being 45.79

Mark of fine silver, 90.32 Of intrinsic value of 88.11 The seigniorage being 2.21

Maravedis.

Mark of copper, 76 Of intrinsic value of 68 The seigniorage being 8

Philip V. was for many years prevented by the enormous expenditure caused by the revolt of Don Carlos from reform of this system, which he ultimately undertook and carried out. In 1707 he reduced the standard of silver to 10 dineros, of a tale of 75 reals to the mark, creating the money which is distinguished thenceforward by the name of _Plata provincial_.

By the regulation of 9th June 1728 the series of _Plata nacional_ was lowered to 11 dineros fine (= .917) and a tale of 68 reals.

Of more importance was the Mint regulation of 16th July 1730, by which--

Reales de Plata Provincial.

Mark of gold of 22 quilates fine was coined into 1360 Delivered to the importer 1280 ---- Seigniorage 80 = 5.88 per cent.

Mark of silver of 11 dineros fine coined into 85 Delivered to the importer 80 ---- Seigniorage 5 = 5.88 per cent.

This ideal system could not be retained, as the billon money fell within a short time a matter of 5-1/2 per cent. in relation to it. The latter change was incorporated by the proclamation of 16th May 1737, which fixed the silver _escudo_ of 10 reals (the old piece of 8 reals) at 170 cuartos, equivalent to the 20 reals of billon at which it continued to be valued. By the subsequent Mint order of 22nd June 1742 the attempt was made to bring the billon money into exact relations.h.i.+p with the gold by the coining of gold pieces equal to 20 reals billon (_veintenes_) struck at a tale of 128 per mark, and fineness of 21-3/4 quilates, in place of the previously existing standard of 22 quilates.

These veintenes correspond to the escudos of 21-1/4 reals still to be found in circulation.

No change of any importance was effected under the short reign of Ferdinand VI. (1746-59), under whom the custom inaugurated by Philip V.

of expressing values in reals of billon rather than of silver (_plata provincial_) still continued.

His successor, however, Charles III. (1759-88) effected profound reforms. By the ordinance of 29th May 1772 he accomplished a complete recoinage of the Spanish money. The standards he established were--

Quilates. Granos.

Of gold Escudos (oro nacional) 21 2-1/2 " Veintenes (oro provincial) 21 1-1/2

Dineros. Granos.

Of silver (plata nacional or gruesa) 10 20 " (plata provincial or menuda) 9 18

being a lowering per cent, of standard as follows:--

Oro nacional 1.31 " provincial 2.84 Plata nacional 1.59 " provincial 2.49

The bearing of this change on the question of the ratio at large in Europe has been already referred to. It was again and still further for the protection of gold that the seigniorage was increased to 7.48 per cent. by the law of 17th July 1779. The later system established in 1786 (see Tables _postea_) has a similar bearing.

His son, Charles IV. (1789-1808), made no alteration in this latter system of Charles III.

Under Ferdinand VII. (1808-32) currency was given (1813-1823) to French gold and silver monies on a certain footing, and the seigniorage on the coins was reduced. Both under Ferdinand, however, and under his successor, Isabella II. (1832-61), this latter regulation proved ineffectual in attracting merchants to bring the metals to the Mint to be coined; and under the circ.u.mstances the circulation of French Napoleons was considered a benefit. A profound alteration was projected by the two laws of 1834; the first of which proposed to lower the equivalence of the _real_ to 32 from 34 maravedis, and the standard of silver to 10 dineros 12 granos (=.875), and the second, to prevent the circulation of French money. This scheme was intentionally bimetallic.