Coins: Generating Coinage Systems

By Bryce Harrington, Ralph Giles, and Krishna E. Bera

WEALTH AND MONEY

"Money" fundamentally is nothing more than a token for reckoning and transferring wealth; it's a medium of exchange and measure of value. It can be anything used in this fashion, for instance ponies, sea shells, gold dust, written promises, stamped certificates, numerical values in a database, etc. Usually, it is based on something rare and hard for individuals to produce on their own, so that value doesn't fluctuate too rapidly. "Currency" is a particular kind of money which is also readily recirculable (as opposed to massive stones or barrels of oil), and reasonably persistent (rare flowers make poor currency). "Cash" is currency which is always redeemable and anonymous (as opposed to a credit card or debit wand which hold your ID). "Coins" are national cash (almost always of metal) which have been stamped and are backed by the authority of a government.

Roman soldiers were paid in cakes of salt, whence the the expression that someone is "worth his salt". No worries about the value of salt declining as with metals, because it could always be used directly and there are no substitutes. Shaving would not be an issue because the saltcakes are weighed upon exchange. It might be still be necessary to use tricks such as taste to check for fake salt, like the modern case where one bites to test for wooden nickels. Other creative currencies have included tulip bulbs, sea shells (aka "wampum"), livestock, and even giant immobile stones.

Now, except for some unusual cases, most countries base their monetary systems on rare metals. In the middle ages, most countries used a "silver standard". "Gold standard" was also common - at one time you could exchange a $1 bill for a specific quantity of gold. In fact, at one time in the US, coins were made out of particular quantities of copper, silver, and gold. Today, we don't really think of the metal basis for our monetary systems, because we have enough faith that the governments are not going to collapse that we can trust the national currencies.

But in the middle ages, this was not the case

In the middle ages, countries needed their own coinage systems (thereby providing independence from any economic instabilities caused by the monetary systems of other countries) but people needed a way to assure that if the country went away, or became untrustable, or if they travelled across the sea, their money would still be usable. Metal coinage met these requirements better than other forms of currency, because if nothing else, it could be melted down and reminted. So it was less important what the particular kind of coin was, and more important how much it weighed.

Note that largely, in the middle ages trade was conducted by barter, since coins were fairly rare. But that's another story. Traditionally, medieval-style fantasy worlds use the copper/silver/gold metals of our own medieval history. D&D type games tend to adhere to the gold standard, others (like Circe) tend towards the silver standard.

COIN PHYSICS

This email goes through some of the basics of coin physics, to give us some rudimentary realistic basis for Duralian coin systems.

METALS

First of all, few coins have 'pure' metals. If they were pure, then they'd be too soft, or too subject to corrosion, or too succeptable to wear and tear. They are usually 'alloys' of several different metals, one of which is typically the valuable metal. For example, zinc, nickel, and others. These mixives aren't really valuable in themselves, but add properties (hardness, corrosion-resistance) that keep the coin 'healthy'. The new US Dollar coin (which will portray Sacajawea) will be made of manganese brass metal allow (it'll have a golden color). Additionally, coins are often not pure through-and-through, but composed of several different layers. These layered coins are called 'clad'.

For instance, find a US penny dated prior to 1984, and toss it on a table, listening to it's "pure" ring sound. That's a copper penny. Now do the same with one dated after 1984. Sounds "flat" eh? That's because it has a zinc core - it's copper plated, or "clad". Cladding is nothing new - I read that old King Henry VIII switched to using silver plated copper, but the coin was cheaply made and the copper alloy soon showed up on the higher areas, and Henry gained the nickname "Old Copper-nose". Lucky for him, he killed enough ladies to be better known for his homicidal tendancies, eh?

In the US before 1964, dimes, quarters, and half-dollars were made of 90% silver (the remainder of the alloy being metals to help enhance the coin's quality. Silver availability became low in the 60's and so they switched to clad coinage (look at the side of a quarter some time.)

During WWII for a couple years there they made pennies out of steel - they needed the copper for the war effort. And yeah, those pennies rust if you aren't careful with them. ;-)

MAGICAL METALS

Now, of course any fantasy roleplayer worth her mana would be thinking at this point, "Well, what of magical metals?" And this is an excellent point. Gold, silver, and copper (oh and platinum) can be extended with new metals such as mithral or adamantium, but there are a couple things worth keeping in mind.

First let's consider magical alloys. Gold, silver, and copper are all elements. Through various processes (chemical or magical - it doesn't matter) they can be turned into alloys. Presumably, most magical metals are special alloys, rather than new elements, if we assume a periodic table identical to the real world. Does the 'alloyness' of a metal give it added value over its normal constintuents? Maybe, but I don't know of any examples of that; generally alloying makes an elemental metal less valuable, regardless of the process. We could "claim" that some real world elemental metal - like titanium or aluminum - are "magical metals" but the only thing magical would be their production method, so truthfully they're not really magic, per se.

Next consider that magical metals by definition require magic in order to exist. This, obviously, implies that there is a spellcaster to cast the requisite incantations to cause the metal to gain this 'magic' trait. It further implies that this aspect is noticeable or detectable in some fashion, else people won't be able to really "know" that it's magic. It also requires that there is a person or persons who know the spells to cast, and that the magic is controllable in some way. I.e., if to create magic metal you merely need to take a lump of copper and cast "copper2magicMetal" on it, then any backwoods mage with that spell could suddenly turn his penny collection into a fortune (assuming pre-1984 coinage). So one needs to make sure that any old "backwoods mage" isn't able to conjure up a pot of new coins.

Now even this said, the magic could add some value in the same way as, say, putting an official stamp by the government might. A slot of steel is worthless, but if pressed into the shame and look of a penny, and distributed by the US Mint, because it has the backing of the US Goverment, suddenly becomes worth something. Similarly, if a country said, "Only Magic Coins are valuable as currency here", then they'll be valuable - not because the alloy in use is magical necessarily, but because the government lends it legitamacy. I can imagine that a nation rich in magic might enhance their coinage using magic, in this way.

Or, if the metal wasn't an alloy, but a genuine new pure metal derived from magical means - call it "thaumatrium" - then it could have some unique intrinsic value.

WEIGHTS

For the sake of transportability, most coins are kept small. Imagine if you had to carry around 20 lbs of weight on a backpack in order to do your shopping? Obviously that's no good...

It's interesting to note that to buy a 300 gp crossbow in D&D, weighing 3 lbs, you'd have to carry 6 pounds of gold (50 coins per pound). Ugh... Well it was worse in 1st edition, where there were only 10 coins per pound.

In the 19th century of the US, in addition to the silver coins mentioned above, gold coins were also in circulation. $1 gold coins (which were quite small) could be used for large purchases (a dollar was worth a lot more than they're worth today), and $20 gold coins were also in circulation - although these were reserved mostly for bank use. (Banks don't want their vaults filled up with tons of small denomination coins either.)

Historically, most coins are in the 5-15 gram range. These sizes are most easily carried around - not too light to get lost easily, but not so heavy that your pocket feels like its full of lead. I personally subscribe to the notion that the most common of the valuable coins should be on the heavy side. No real reason other than the perception that bigger is better. US Quarters and British Pounds are both satisfactorily "heavy" coins, from this standpoint. Nice thing about gold is that it makes for "heavy". ;-)

Here are some representative densities of various real world metals:

Elemental Metals

(Prices come from http://www.bullion.org.za/../bulza/pgs/prica.htm. also see http://www.lme.co.uk/cgi-bin/php/Prices/Latest/prices.html) 

 Aluminum       2.70 g/cc     $3.17/lbm  Hard to manufacture 
Copper         8.89           3.66 
Gold          19.3       19,620.96 
Iridium       22.42      29,353.63      ?? 
Iron           7.87                     Rusts too easily 
Lead          11.34           0.93      Too soft in pure form 
Nickel         8.85          21.12      Too hard in pure form 
Palladium     12.00      41,378.01      ?? 
Platinum      21.37      33,809.73 
Rhodium                 120,243.80 
Silver        10.5          352.95 
Titanium       4.5                      Hard to manufacture 
Zinc           7.14           2.41      Too hard in pure form

Here are sizes and compositions of US coins. This is from http://www.usmint.gov/circulating/specifications.cfm

US Coin Shapes and Sizes
penny   US$0.01 19.05 x 1.55mm  2.500g  - 2.5% Cu/balance Zn (plated)
nickel  US$0.05 21.21 x 1.95mm  5.000g  - 25% Ni/balance Cu (alloy?)
dime    US$0.10 17.91 x 1.35mm  2.268g  - 8.33% Ni/balance Cu (clad)
quarter US$0.25 24.26 x 2.15mm  5.670g  - 8.33% Ni/balance Cu
half-dollar (rare):
        US$0.50 30.61 x 2.15mm  11.340g - same as quarter
"Susan B. Anthony dollar" released in 1979 and generally unpopular:
dollar  US$1.00 26.50 x 2.00mm  8.1 g   - 12.5% Ni/balanca Cu (clad) 
"Sacajawea dollar" brand new (2000):
        US$1.00 same dimensions and weight as the Susan B. Anthony
        but different metal: Manganese-Brass 88.5%Cu, 6%Zn, 3.5%Mn, 2%Ni

VALUE

Final physical bit before we get to the fun part - how to tie quantity of various coins to monetary value.

As explained previously, coin value does not necessarily have to be tied to its underlying metal content; it can actually represent nothing more than a government-backed "promise". However, in medieval practice, coins with real metal defining their value is "safer" so for simplicity let's make that assumption.

Once you tie value and metal weight, you can establish value relations within a coin-type based on mass. For instance, a 15 gram gold coin is worth 5 times a 3 gram coin, with this assumption.

For a coin-system, you need a wider than 5:1 value band, though. Today we have a 25:1 ratio just on coins, but considering bills we go up to 2000:1 or even 5000:1 depending on your ATM. In the olden days, the US achieved the 2000:1 ratio using copper, silver, and gold (nickels didn't exist right at first, at least not by material). It's also worth noting that for a while there was a half-cent, thus making the ratio 4000:1. The British used to have a very cool system: One pound sterling was equal to 1 lb silver, which was divided into 20 shillings, each worth 12 pence (or pennies); the penny was further divided into 4 farthings, providing a 960:1 ratio - not to bad for just copper and silver!

You might say that in the middle ages, the ratio could be much less because people were poorer, and thus 100 pennies would be worth more. However, note two things: First, a single penny is essentially valueless to us (I'd argue that a quarter is the smallest non-trivial value-unit we deal with). Second, in the middle ages people might deal with fractional value on a barter status - a dozen eggs might be one pence, but you might be able to trade two of them for a cup of milk. In fact, the 'halfpenny' in the middle ages was indeed split right in half.

Speaking of splitting coins, you've likely heard the expression "Two bits"? This derives from the old Spanish "Piece of Eight" - the standard coin of commerce used by the Spanish settlers of America. This coin was cast in a way that allowed it to easily be split into eight pie-shaped segments, thus allowing one minted coin to cover an 8:1 ratio of value-units. So two of these bits is a "quarter" of the coin, thus our nickname for our 25 cent piece. ;-)

In AD&D/2nd the ratio is 500:1 (platinum to copper) but effectively is 50:1 since copper coins in D&D are even more worthless than in our own world.

For a campaign I used to run, I used a coinage system as follows:

                Value      Weight Material       Size 
Full Crown     16 core      1/40 lb.    Gold    Little larger than US penny 
Core           1 core       1/50 lb.    Silver  Little smaller than US dime 
Quinn          5 penny      1/20 lb.    Copper  Kennedy half dollar 
Shilling       2 penny      1/50 lb.    Copper  Susan B. Anthony dollar 
Penny          1/100th core 1/100 lb.   Copper  US penny 
Bit            1/2 penny    1/200 lb.   Copper  US penny cut in half

Pardon to the non-US readers... a pound (lb) is 2.2 kg's. You're on your own figuring out the size conversions though! ;-)

The players ignored all of the coins except for the core, crown, and penny; these were the most useful coin types for them. The crown was good because it was a high-value and rare coin, which let them store large sums of money with just a few coins. The penny was useful from the fact that it made math simple and familiar. I also found that when dealing with coinage of different demonimations or nationalities, the players preferred to work in raw weights.

Anyway, I found that the above coinage system worked quite nicely. It had a 1600:1 ratio, or 3200:1 ratio if you counted the 'bit' (never ever used by the players). Copper was plentiful but still useful in buying equipment and such, silver was the mainstay and formed the large bulk of the transactions, and gold was rare and prized - lusted after in the way gold should be lusted after. ;-)

To wrap this up, let me point out the value ratio of the metals used above: 

     1 lb gold = 12.8 lb silver = 640 lb copper = 640 core

For comparison, using the information listed previously, in the real world as of May 2000 the ratios would be:

    1 lb gold = 56 lb silver = 5400 lb copper

The relative prices depend on both technology and availability. Aluminum is really cheap - but only if you have electricity to smelt it, for example. In the middle ages it would have been priceless. Availability is a function of the design you give your game world's geography. 'Tis a good idea to apportion your metals in quantities commensurate with what you'd like their relative values to be.

Counterfeiting

The real value of coinage is tied up in public trust for that currency. In the middle ages, where kingdoms came and went, making sure the money itself was of maximum portability was very important.

From my reading on community currencies, i would observe that counterfeiting is less of a problem when money doesn't circulate outside of a given region -- the money literally won't go far. Also, in a community of less than about 10K, many people will know when someone comes into a lot of money, and how they did it.

From an economic wellbeing point of view, the money stays in the area, so there is no drain of wealth and jobs. Getting back to the point about publc trust, another form of localized currency is simple 'writs of iou', promissory notes, or cheques. These have no value outside a given social circle or trust network.

Of course, below a certain size e.g. communal villages, coinage cannot be justifed at all. Coins cost a lot to make and maintain. Some entity has to monitor the quality and supply of them. I recall one report that it was costing 2 cents to mint a penny and 6 cents for a nickel, arguing for these coins to be dropped.

Imagine for a second that the US government suddenly tomorrow announced that the central bank would no longer mint nor accept dimes, and no part of the US government would accept them as real money. What would you do? What do you think McDonalds would do? Now imagine that the dime was made of silver, and was exactly 10 cents worth of silver; whether the government accepts it or not, you can always just melt a bunch of them down and sell them as pure silver.

Also think about if you are an ancient Greek lord printing up a bunch of coinage. You decide to make them out of copper, but worth 10 times the metal value. Your mint is really simple - just a stamp with your face on it. An enterprising individual copies your press and buys a bunch of copper and counterfeits your coins - suddenly he has made a tenfold profit for his labors! And meanwhile your monetary system is destabalized and probably turns inflationary. If you made your coins 1:1 valued with copper, then the counterfeiter gains nothing by counterfeitting.

Actually, the problem that arises with metal-tied coinage is not counterfeitting so much. Instead, you have to start worrying about "clipping"!! This is the practice of shaving slivers of metal off of a lot of coins, and thereby stealing valuable metal from the coin supply.

The method evolved to fight this is called "milling". This process puts a fine corragated edge on a coin, which will immediately reveal clipping. This edge condition also makes counterfeitting a tad harder. Since US coinage isn't based on metal anymore, it's not quite so necessary. But even so dimes and quarters are still milled.

In addition to milling, I've also seen coinages that engrave lettering into the edge of the coin, either with or without milling. I suspect this is done more for anti-counterfeitting than to stop clipping, but it serves both purposes.

References and Links

Some other national mints have good info on the web, for example:

There's also some circulation info for the UK at http://www.royalmint.com/mint-ukcc-main.html and French Francs at http://www.monnaiedeparis.com/cgi-bin/standard/make_frame.plx?page=/en/monnaie/fquantite.htm

An interesting story on the US Mint and creating money: http://www.urbanlegends.com/misc/money_making.html

WorldForge Sample Coinage Systems

The Hassan Magic Coin