posted 09-22-2005 04:43 PM            

Coins in particular were only of value to the extent of the gold/silver content Indeed when purchasing anything in England negotiation started with agreeing a price for the item, then establishing what value to give to the customer’s coins. Sometimes facevalue , but often less if the coins were clipped or worn. It actually simplified international trade in London , since the more sophisticated establishments knew the gold/silver content of virtually all foreign coins, especially Spanish, and would take them readily.

Gold and silver were seen as the only easily transferable and storable wealth for the average person. Banks were, before 1800, only for the rich, and were quite rightly, generally mistrusted. Government and private investment stock – very similar only more distrusted !

A man with surplus money would put it into land in the long term, into silver and gold articles in the short to medium term , or in coins under his bed in the short term.
When a man bought silver articles he fully expected to realise its value eventually by scrapping . He bought it from a shop by weight, usually at so much per ounce for the metal , plus so much for the fashion(ing) .
Eastern gold shops still work on the same system.

What is not often realised is that this applies to down to even quite poor people. Most artisans and even labourers had a box for their personal possessions, which would typically include their savings in silver. A few spoons, a pair of shoe buckles, a toothpick etc. They would use them, but would sell or pawn when times got tough.

It was only the rise of more sophisticated ecomonic systems during the Industrial Revolution when better (and usually safer) methods of storing wealth became available to an increasing middle class that silver articles became less savings and more status symbols and luxury items. . The noticeably less weighty silver in the late 18th century , typified by the Bateman firm’s products , shows this . People wanted to pay for the article for itself, not as savings. The proportion of metal value to fashioning value became less important – overall price was the criteria . The cheaper the better !

The relatively large quantity of, for example, George I silver which survives today, despite all efforts of the contemporary silver trade to persuade its original owners to replace it with new fashions reflects this. The owners could afford new plate and bought it, but still regarded the old material, however deeply out of style, as savings. Rather than part exchange they kept it for a rainy day, or the choice piece of land they’d been eyeing for years !

Today it is very difficult for us to understand the full status of silver in the past, and we have a total different mindset towards it. We treat a silver item as a luxury consumer durable and nothing else.

A man in 1700 would not recognise this attitude.

posted 09-22-2005 10:00 PM            

I don't think it is true that the value of coinnage and notes was negotiable as late as 1900. Britain did have centrally regulated banking and credit, which the U.S. did not have until after the great depression. As a result, the impact of the crash did not hit Britain nearly as hard as it did the U.S. The pound sterling was one of the most stable and reliable currencies, worth about $40 at the turn of the twentieth century.

Tom

posted 09-23-2005 11:36 AM            

The poor of course had no silver or much of anything by way of possessions. They contributed small amounts to "friendly societies" and "burial clubs" who would see to their needs in life and death respectively. Later unions served a similar purpose.

Tom

posted 09-23-2005 02:40 PM            

There are some interesting aspects of the law of companies that concern silver.

Perhaps one of the most obvious is the use of the word "Limited" or "Ltd" in the name of companies. Once can safely say that any item with such a maker's mark post-date 1855 for it was in that year that the Limited Liability Act, 1855 was passed for the UK. It is only after that date that one could expect to find a maker's mark with the word "Limited" or "Ltd" or a variation thereof (such as "L_d" - which is not a permissible legal abbreviation of the word limited and which could, under past and present Irish and English Company Law render the officers (directors) of such a company personally liable for any loss suffered by someone who deals with such a company where such an unacceptable abbreviation is used!!)

Prior to that there was the Joint Stock Companies Act, 1844. This Act permitted the incorporation, by governmental sponsored registration, of companies - but limited liability was still not a recognised by statute. Prior to that "companies" i.e. artificial legal persons were largelyt created only by Royal charter i.e. the King/Queen or parliament had to actually allow the incorporation of an entity! (for the lawyers, this was far from the Delaware model!!!)

Prior to that again, we have the joint stock companies one of which famously perished following the so-called South Sea Bubble. This was an amazing event when people went mad and started investing in circumstances where there was no regulation or control. In my book (2nd ed; 2002) I quote from a book I found on the internet called MacKay, "Extraordinary Popular Delusions and the Madness of Crowds", (1841) quotation reproduced with permission from the Litrix Reading Room (www.Litrix.com). This shows just how mad people became in investing in stocks.

I would guess that there might be a correlation between the South Sea Bubble and people investing in Silver and Gold - since for many their world was ruined, thereafter by investment in intangibles and only gold and silver existed as tangible investment commodities. (For an interesting, fictional, historial perspective of the fate of one cartographer, read Robert Godard's "Sea Change", (2000) (available on amazon.com).

Hope the foregoing is of interest.

Best wishes,

Tom

posted 09-23-2005 02:52 PM            

I think our posts, crossed as I bear out some of what you are saying.

Rgds,

Tom

posted 09-23-2005 02:52 PM            

You are certainly right about confidence and the South Sea bubble, which brought down the government. Banking did take a very long time to develop.

On a related note, some of the earliest bankers were from Northern Italy, hence the existence of Lombard Street in London today.
Jews were also forced into the business by Christian laws prohibiting lending at interest (usery) and royal laws preventing Jews from owning land. Add to the mix the need of a persecuted minority to keep its assets liquid and transportable and Jews became the "natural" bankers - a role for which they were then blamed and persecuted futher.

posted 09-23-2005 08:18 PM            

Do you know of a good article on the relationship between silver, banking, savings, credit, etc.?

posted 10-11-2005 11:11 PM            

The History of Bimetallism in the United States by J. Laurence Laughlin
D. Appleton and Co. New York, 1898 (Fourth edition). First edition: 1885.

It is completely on-line at: The History of Bimetallism in the United States