Even before the Defenestration of Prague in 1618, coinage in the Holy Roman Empire was in a state of crisis, despite the imperial coinage regulations of 1559 and 1566. There were several reasons, one of them being the structure of the Empire, in which the production of coins lay in the hands of numerous constituent states of varying sizes. With the possible exception of those states that had their own silver mines such as Saxony, these states regarded the production of coins as primarily an instrument for gaining income. To be sure, in 1566 special "probation days" had been instituted by the imperial districts to monitor and authorize the minting of specific coins. But in several imperial districts their effectiveness had waned over the years, partly because of a lack of political will and understanding on the part of the member states. Because the circulation of coins was not limited to their respective countries of origin, but rather was mixed and spread across borders, individual states were unable to halt this trend. Bad money drove out good money, partly because minted silver constituted a significant proportion of the mints' raw material. Good coins were traded in, melted down, and minted into poorer coins. The imperial regulations concerning the thaler and its constituent coins were still being obeyed, with few exceptions, in 1618, but most mints had shifted their emphasis onto smaller coins. For these smaller coins there were no homogeneous imperial regulations, and so the respective percentages of precious metals were gradually diminished. In northwestern Germany, the coins primarily affected were the Apfelgroschen or "apple groschen", named after the imperial orb or Reichsapfel, which were equated in value to the three-kreutzer coins of southern Germany. A large percentage of the production was exported to the east, primarily into the kingdom of Poland. Moreover, the good thalers were coveted in international trade and therefore some of them were exported to Scandinavia and Russia, there to pay customs duties or purchase goods. [1] Most mints were leased to private entrepreneurs ("masters of the mint"), who paid a high rent (Schlagschatz or minting fee) but had a relatively free hand in the fashioning of the coins. So as to be able to mint as many coins as possible, the mints competed with one another in buying silver, which inevitably led to increases in the price of silver. These increases, in turn, could be compensated for only by reducing the proportion of precious metal in the coins or the weight of the coins. [2] In spite of the crisis, or perhaps because of it, the number of mints increased continually; in Lower Saxony, for example, it increased from six in 1566 to more than thirty in 1617. Typical of the masters of the mint who were involved in this process was a strong fluctuation in their areas of operation and, in most cases, merely short-term and speculative ventures. It was not unusual for these ventures to end in a quarrel with the ruler of the respective state and the absence of a precise settlement of accounts. [3]

As early as 1617, the country bailiffs of Duke Ulrich von Braunschweig-Lüneburg caused a drastic debasement of the coinage. Instead of minting between 110 and 130 coins from a mark's weight of fine silver, or between 160 and 170 coins, as had become the custom between 1610 and 1617, they produced 210 coins. This set a precedent, and the outbreak of war in 1618 increased the financial needs of the states of northwestern Germany, most of which were already in debt. Thus rivalry broke out between the masters of the mints, who in many cases heaped blame upon one another. In the meantime, the value of the groschen, which in theory were supposed to be worth 1/24 of an imperial thaler, declined. In January 1618 in Leipzig they were worth only 1/33 of a thaler. Their value had to be adjusted everywhere to the lowest level, since otherwise the coins would have been brought by the ton to those places where the most advantageous rate of exchange prevailed. In order to open up new markets where groschen could be used, after 1618 the mints in northwestern Germany would often change the imprint on their coins: instead of the imperial orb and a 24, they would substitute the imperial eagle and a 3. Thus they were adjusted to the three-kreutzer coins of southern Germany, which scarcely circulated in the northwest. These groschen were successfully introduced into the south. [4] The accelerating debasement overtook the lengthy negotiations of the imperial districts. Soon the debasement expanded to include larger coins. In addition to pennies, an increasing number of so-called Schrekenberger , or Dreibätzner in the southern dialect, were produced. These were marked with a 12 to denote a value of 12 kreutzers. The variety of different coins, which chronically decreased in value, permitted those in the know to make considerable profits by taking advantage of different rates of exchange. [5]

The outbreak of the war ended the probation days of the imperial districts, which had not halted the debasement of coinage altogether but had at least slowed it down. Because of the dangers of travel, most emissaries excused themselves from their monitoring duties, and eventually the probation days ceased. Thus, contrary to the imperial coinage regulations, the masters of the mints were no longer sworn in by oath and coinage was no longer monitored. [6] Soon, mints proliferated like mushrooms, many of them in out-of-the-way locations. In June 1620, Friedrich Ulrich von Braunschweig-Lüneburg had his coins minted in no fewer than 16 different mints. A large proportion of coins were designed, in terms of their image and text, in such a way that their place of origin was not evident. In some cases the name of the state's ruler and his title were abbreviated to the point of unrecognizability; in others, it was replaced by pious slogans. Instead of the familiar coats of arms, those of constituent districts were used in many cases. As a result, the point of origin of some of these coins remains unknown today. Because it was important to coin the silver as soon as possible, the technical quality of the coins produced in the north of the Empire deteriorated to a minimum. Moreover, the explosive proliferation of mints made it inevitable that people were employed who had insufficient experience with the technology of coinage.

Early on, the crisis expanded from Westphalia and Lower Saxony to other districts, for example Upper Saxony and Bavaria, where even the thaler, which was more or less taboo in the north, was affected. Two types of thaler appeared simultaneously: the Rechnungstaler or "accounting thaler", which continued to be worth 24 groschen and thus inevitably became debased; and the genuine imperial thaler, whose worth varied according to the daily rates of exchange. Kippermünzen or kipper coins were exported from Silesia to Poland, where they led to currency disturbances in 1620/21. [7] For several reasons, it is very difficult to gain a comprehensive overview of the rapidly developing coinage crisis of the years from 1618 to 1623. Conditions varied greatly from one region to another; for obvious reasons, few records were kept in the mints; and finally, the minting and circulation of coins in many regions have not yet been investigated. In some regions, e.g. Switzerland and Alsace-Lorraine, debasement took place even though the coins did not fundementally differ in appearance from the ones that had previously been minted.

A large proportion of the silver kipper coins were spent through connections between merchants far from the mints. The large trading cities were favoured destinations for this purpose. For example, four-shilling coins from Mecklenburg were brought by a silk merchant from Güstrow to a member of the city council in Leipzig. Another part of this production run was exported to Nürnberg. The coins were designed in such a way that they could be mistaken for the coins already familiar in the areas where they were put into circulation. [8] Lippe coins from Detmold were delivered to Leipzig in 1619, where they were confiscated by the city council. In 1620 the products of this mint, packed in boxes and empty winebarrels, were discovered in Frankfurt. [9] Most mints probably operated in similar fashion, or at least tried to do so. In March 1620 the trading metropolises conferred in Augsburg on how to keep "bad" money out of circulation; Frankfurt, Strasbourg, Ulm, Regensburg, and Nürberg participated in this meeting. Nonetheless, their deliberations had practically no positive results. [10] Only in the very few cases where confiscations took place is it possible to determine by means of written sources the circulation routes of the debased coins. Although the imperial coinage regulations obliged the mints on principle to print the actual year of origin on their coins, there were cases of back-dating. The duty of the master of the mint to sign the coins he produced with his characteristic mark was also forgotten.

Yet another phenomenon first occurred about 1619: the dissemination of the copper coin. By contrast to the coins made of precious metals, the inherent value, i.e. metallic value, of the copper coin was significantly lower than its nominal value. It was credit money, which could bestow a considerable profit on those who produced and circulated it. Copper coins established themselves as the lowest-valued currency in the southern Netherlands during the first half of the sixteenth century. From 1559 on, such coins were minted in small numbers in cities of western Westphalia and in individual cities of northern Germany as well. In Westphalia, the numbers of these coins noticeably increased about 1600; an increasing number of coins of larger denominations were also produced. After the introduction of mechanical minting procedures which permitted the cheaper and more efficient production of larger numbers of coins, there arose about 1610 the first problems regarding the public's acceptance of these coins, because the proportion of copper money circulating in comparison to gold and silver coins had increased rapidly. However, in other parts of the Empire copper coins were unknown before 1618. This changed at the start of the Thirty Years' War. Parallel to the debasement of silver money, such coins were now also produced in areas outside the previous copper-coin regions. They displaced from circulation the silver coins of low denominations made of low-percentage silver alloys that had previously existed in eastern Westphalia, Lower Saxony, Brandenburg, Thuringia, and southern Germany. In Brandenburg, it was the cities that initially permitted tin-plated copper money to be produced. In western Westphalia, which had already minted copper coins previously, these amounts were drastically increased. For example, from 1620 onward the city of Soest produced large amounts of copper shillings and double shillings thanks to the introduction of mechanical minting processes. By the end of 1623 these coins had lost public acceptance. In 1624 the city council was forced to reduce their official value by half. Finally, only a short time later they were rejected altogether, and some merchants suffered very great losses as a result. [11] One difference between copper money and bad silver money was that the former remained in the region and was scarcely exported.

In the Habsburg territories, the devaluation began in 1619, after the responsibility for monitoring the mints in Bohemia and Moravia had been transferred to the local authorities. Friedrich von der Pfalz, who had been proclaimed King of Bohemia, continued this trend. Because the good coinage only served to subsidize the melting-pots of the kipper-coin production centres, even in the southern parts of the Empire, the royal mints in Austria and Silesia were forced from 1620 on to apply similar standards to their own production. A significant change took place on 22 January 1622. After negotiations between the imperial court cabinet and the Prague-based Dutch merchant Hans de Witte, from this date onward the responsibility for coinage was transferred to a consortium. It was headed by the Governor of Bohemia, Prince Karl von Liechtenstein, Albrecht Wallenstein, and Hans de Witte. Contemporaries regarded Liechtenstein as the true leader of this group. The contract granted de Witte and his business associates a monopoly over the coinage in Bohemia, Moravia, and Lower Austria and over the purchase of old silver and older coins at a fixed price. At the same time, the consortium had the sole right to the entire output of the Bohemian silver mines, for which a set price per mark's weight was fixed. The removal of coins from local circulation and their export abroad was forbidden, as was the circulation of foreign coinage. The Emperor, who at the outbreak of the war had already foreseen a hopeless accumulation of debts, gained from the contract a guaranteed rent of sixty million gulden for one year, payable in weekly installments. [12]

Two mints were established in Prague and one each in Kuttenberg, Joachimsthal, Brünn, Olmütz, and Vienna. Later on another one, pertaining to the Bishop of Breslau, was added in Neiße. In addition, a "Spanish" mint operated sporadically in Vienna in 1622. Here, silver coins sent from Spain were re-minted into imperial coins for the purpose of paying the troops. In contrast to the northern parts of the Empire, the devaluation of coins in the south also greatly affected the coins of higher denominations. In the contract, the minting of precious-metal double guldens worth 150 kreutzers, guldens worth 75 kreutzers, and half guldens was planned. However, from 1621 to 1622 the production of kipper coins involved increasingly higher denominations, up to coins whose face value was 150 kreutzers, although the percentage of precious metal continued to decrease. This development took place in the earldoms of the Tirol, Steiermark, and Kärnten and the Archbishopric of Salzburg (from 1621 on). [13]

This consortium, like the others, did not succeed in preventing the hoarding of the preferred types of coins and their secret and lucrative export, because even the Imperial Master of the Penny was accused of such practices. However, it did receive an imperial escort for the purchase of silver in the entire Empire and in Europe. This made it possible for Wallenstein to pay the Emperor as well as his own troops punctually. [14]

The results of this were the same as in the other parts of the Empire. The sinking proportion of precious metal in the coinage proceeded in tandem with continually increasing prices. In mid-1622 at the latest, the public's acceptance of the kipper money in the Habsburg territories became problematic. Nonetheless, Wallenstein and his business associates were able to profit from the situation. They purchased extensive landed properties that were paid for with inferior "stretched" coins. The contract ended in 1623. An extension could no longer be achieved, since the kipper coinage had already been abolished in the northern parts of the Empire in 1622 and the Duke of Bavaria, as the Austrian Master of the Exchequer ob der Enns, had announced shortly before Christmas of the same year a 50 per cent decrease in the value of the coinage. A return to the norms set by the imperial coinage regulations was inevitable. Coinage was once again taken over by the imperial apparatus. Finally, in December 1623 "stretched money" was devalued to one-eighth of its nominal value. Investigations of those responsible for the profiteering were begun after the death of Emperor Ferdinand II in 1637, but by that time most of those involved had already died. Damages amounting to thirty-one million gulden were demanded from the heirs of Prince Liechtenstein, and after a full thirty years of wrangling 275,000 gulden were actually repaid. [15]

Some mints outside the crisis area contributed to the circulation of bad money by supplying coins of inferior quality. These were located primarily in small states in northern Italy, the Ardennes, and those parts of the Netherlands that border Germany. Even in those periods when there were no crises, their speciality was the production of coins containing little precious metal which could easily be mistaken for coins of good value. These coins were put into circulation at locations far from their places of origin. [16]

One region that was far less affected by the coinage crisis was the Rhineland, where initially the war also made a smaller impact. Because the import of bad money from neighbouring lands could not really be prevented, despite all prohibitions, here too the rate of exchange of the imperial thaler increased in comparison to coins of lower denominations. For example, in Trier the value of the imperial thaler increased from 28 Batzen or batz in January 1620 to 72 in May 1622. [17] Not until 1622 did the Trier mint, which was located in Koblenz, itself start to produce the poorer coinage, but then only for a very short time. [18] The Electorate of Cologne, Jülich-Berg, and the city of Cologne were scarcely affected by the crisis. [19]

The effects of the debasement of the coinage were as varied in the different parts of the Empire as were the production and politics of coinage. In the Bay of Westphalia, the effects of the debasement of silver coins were limited. A trove of coins that had been buried in 1620/21 near Soest included 156 smaller silver coins but only eight kipper coins. Thanks to devaluations, such as the devaluation of the newer "apple groschen" by 25 per cent in 1620, the increase of coins in circulation was kept within limits. In Soest, the exchange value of the thaler increased only from 45 shillings in 1617 to 52 shillings in 1621. [20] The decline in value was more drastic in the Braunschweig and Hildesheim regions, where it sank from 48 Mariengroschen ("Mary groschen") in 1618 to 224 at Michaelmas 1621. [21] In the Brandenburg Marches there was a similar increase, from 31 groschen in 1618 to 120 groschen in 1622. [22] In Frankfurt the value of the imperial thaler increased to a maximum of five to seven "accounting gulden" in the summer of 1622. In neighbouring Hesse-Kassel, which itself operated a number of kipper-coin mints, the value of the imperial thaler increased from 48 Albus in 1618 to 896 by the end of 1622. [23] In Bavaria, the imperial thaler experienced an increase in exchange value from from 90 to 600 kreutzers in 1622. [24] In Hagenau and Strasbourg it increased from 100 kreutzers in August 1619 to 360 kreutzers in July 1622. [25] Switzerland, whose currency was in some regions closely connected to those of Italy and France, also experienced a severe monetary crisis from 1620 to 1623, which caused the imperial thaler to rise in exchange value from two gulden and four kreutzers in February 1620 to ten gulden in February 1622 in Solothurn. In Bern, the official value of the golden ecu soleil compared to the silver batz, whose value was decreasing, rose from 42 2 in May 1620 to 75 in February 1622. [26] Increases of the exchange value were also experienced in the French-speaking part of Switzerland, e.g. in Neuchâtel, where the Spanish-Dutch Philipp thaler rose in value from 6 4/5 livres in 1618 to 13 2 livres in 1622. [27]

Because of the sluggishness of the Lower Saxony district, the city of Lübeck, a member of the Hanseatic League, itself took the initiative against the devaluation of money that was setting in. In May 1618 it signed a contract with Hamburg for the purpose of preventing the circulation of bad money and securing a stable currency. Measures were taken against mints that produced bad money imprinted with the Lübeck insignia. Finally, in 1619, the Council of the Hanseatic League, which was then meeting in Lübeck, turned its attention to the devastated condition of the coinage. [28] The Hanseatic cities of northern Germany succeeded in keeping at a minimum the effects of the kipper-coin crisis which was raging in the coastal areas. [29] Nonetheless, in spite of good coinage or a halting of coinage altogether, and in spite of the establishment of a bank in Hamburg in 1619, foreign coins were imported, which here as elsewhere slightly raised the exchange value of the imperial thaler. [30] Finally, from 1621 onward the Lower Saxony district also began to deal with the question of stabilising the currency. In the Upper Saxony district the situation was similar. On 3 December 1621 the Saxon Elector Johann Georg gave notice to the mints' leaseholders, whom he held to be solely responsible for the "coins of small denominations that are worth nothing". [31] Finally, it was decided in the Lower Saxony district that as of June 1622 there would be a return to the pre-war rates of exchange and a new coinage corresponding to these values, and this decision was carried out. An attempt by the Duke of Bavaria to effect such a renewal of the currency in September 1622 was unsuccessful [32], probably in part because the situation in the neighbouring Habsburg territories had continued to deteriorate. The districts of southern Germany followed the example somewhat later, those in Franconia about November 1622, and those in Bavaria and Swabia on 31 October and 10 April 1623 respectively. After lengthy negotiations, Frankfurt signed a contract in July 1623 with The Electorate of Mainz, Nassau-Saarbrücken, and Hessen-Darmstadt to prevent a new devaluation of the coinage by jointly coining good money. Several years later, this agreement disintegrated. But in the short term the four states had successfully slowed down the devaluation of the currency in 1622. [33] Attempts were also made in places to control the devaluation of coins by canceling certain types of coins, but this was not uniformly successful. [34]

The rapid decline in the value of coins resulted, from 1622 onward, in the general refusal of a large portion of the public to accept payment in coin. For example, about 1622 a stamp-carver in Solms-Lich left untouched the cash payment that had just been given him, because he could not buy anything with it. [35] The devaluation of coins also had serious effects on the state exchequers, which were now receiving only bad money. Goods were withheld by merchants who expected to get higher payment at a later date, and debts could be quickly repaid with bad money to creditors. Interest, if it was not expressly demanded in hard money, decreased in value. [36] On the other hand, wages did not increase in tandem with the increases in the exchange value of the currency, so as prices increased [37] the working people had less and less real income. In some places this led to social unrest. [38] Only the soldiers could enforce their expectations of good pay. [39]

In general, coinage was stabilized in the Empire during the period between 1622 and 1624. However, this did not prevent individual small states such as the earldoms of Sayn-Wittgenstein-Berleburg and Leiningen-Westerburg from continuing to produce coins of small denominations or even gold coins of poor quality, a practice which verged on counterfeiting. [40] Because of the war, measures could be taken against this practice only if it was possible for those responsible to be arrested outside of their own territory. Copper money disappeared from circulation everywhere except in Westphalia (both eastern and western), which was strongly influenced by the Netherlands, and in scattered cities in northern Germany. The silver standard was re-introduced for all coins, even those of the smallest denominations, and it was generally retained until the 18th century.

The late phase of the currency crisis of 1618-1623 gave rise to an extensive contemporary folk literature. To this literature we owe the summary terms "Kipper und Wipper" (kipper and wipper coins) [41], which were not known at that time in all of the affected territories. The numerous polemical pamphlets that were printed from 1621 onward appeared almost exclusively in the districts of Lower Saxony and Upper Saxony, and only in Lutheran circles. The exceptions are five pamphlets from Augsburg, which are rather juridical in their approach, and one from Hagenau. The reasons for these exceptions are not yet known. These writings, some of which are graphically illustrated, either did not indicate their authors or where they had been printed, or they bore the names of fantastic authors and locations. Between 80 and 85 such pamphlets were published, some written in educated prose and others in popular verse. Many of them have an anti-Semitic cast, since the blame was placed solely on the Jewish merchants of precious metals who supplied the mints. The local officials who shared the responsibility were not blamed. The dissemination of these pamphlets must have been very extensive, because some of them were published in several editions. [42] The actual economic relationships were not dealt with by these popular pamphlets. [43]

After the devaluation of the kipper coins to values that lay practically below the value of the metal they were made of, they were exchanged and melted down by the mints. This became the foundation of the large-scale minting of thalers, which had hardly been minted between 1618 and 1621 outside the territories that had mines, and the smaller coins decreed by the regulations in 1622-23. When this material became scarcer and silver became available only at higher prices, many mints closed down. These measures were so effective that the "crisis coins", despite their great volume, disappeared from circulation almost completely. Now it became possible to proceed against specific substandard coins by means of prohibition or devaluation. In some cases, legal action was taken against the leaseholders of mints and masters of the mints that produced kipper coins, but most of these trials petered out without any penalties being handed down. [44] The local sovereigns, who had tried to extract profit from the kipper coins during the crisis, washed their hands in innocence after their schemes had failed.

In some regions (e.g. the middle and upper parts of the Rhineland), political occurrences led in the mid-1630s to renewed disturbances - which, however, did not have the same consequences as those at the beginning of the war. [45] It is notable that, except for the years of crisis from 1618 to 1621, during the Thirty Years' War a relatively large number of thalers were minted, even by states that had no silver mines. This is remarkable for several reasons, including the fact that the minting of thalers created deficits rather than profits. For example, in 1639 the mint in Strasbourg produced 60,000 thalers at a loss of 3,624 gulden (=ca. 2,265 thalers) - in contrast to the minting of small coins at a profit. [46] If thalers were minted in the territories without mines, this was done in order to meet the financial demands of the war. This connection is especially well-documented for Münster. The simultaneous attacks by the Swedes and the Hessians on the sovereign bishopric brought the social classes together for deliberations. The suggestion that emergency coins with corners should be minted was rejected, but the cathedral chapter and the city decided to mint a reserve quantity of copper money. Because of the lack of silver, some of the state silver and of the prince's table silver was sacrificed. The minting of coins was meant to fill the empty state coffers and compensate for the shortfalls in taxes, so as to meet the defense budget and attract foreign currency that would be appropriate for recruiting soldiers. [47]

For reasons of space, it is impossible to deal in detail here with the other territories that were involved in the war. In summary, Sweden financed its military efforts in part through the transition to a copper-based currency. The currencies in France and Spain suffered from the flow of precious metals out of these countries, whereas in the Netherlands the years between 1618 and 1648 were generally characterized by stability. [48]

FOOTNOTES