Coins of the month - november 2014

German thalers from the Renaissance to the Münzverein and the German mark

The growing demand for money and the increased supply of silver during the early Renaissance led to the creation of new larger types of silver coins. Among those, the thaler emerged between the end of the fifteenth century and the beginning of the sixteenth and continued its dominant role in most of Germany and elsewhere for more than three centuries.
The weight of the thaler changed through states, time, debasements and reforms and international agreements, but overall it remained a large piece of silver between 17 and 31 grams, with multiples which could reach 450 grams for prestige purposes, rather than for circulation's sake.

The thaler became the central element of the monetary systems of northern German states, particularly of Prussia. For a certain time it was also one of the types of coins in circulation in other countries such as Austria, Denmark, and the Netherlands, even if with different weights and values.

The thaler's name evolved into the Dutch daalder, which was used in the colony of New Netherland (that later included New York). The name "dollar" was then given to silver Spanish coins of 8 reales circulating in North America (whose weight and value were different from the thaler) and then finally the United States adopted the name "dollar" for its currency in the late eighteenth century.

We have here illustrated a thaler dated 1624 and minted in Dresden by the Duke of Saxony John George (who ruled between 1615 and 1656), splendidly portrayed in full armour, next to his helmet, with his sword drawn, carefully cropped hair, moustache and beard. His baroque crest is crowned by six different helmets and subdivided into twenty separate sub-sections, by generations of dynastic alliances between the ruling families of Europe, mixing heraldic lions, eagles, flowers, swords, etc.

The very limited average size of German states made the necessity of monetary agreements self evident, so that monetary unions were common in the German speaking world from the middle ages onwards. In 1789 there were still around two hundred independent states in Germany, seventy of which survived the Napoleonic storm and the Treaty of Vienna in 1815. Most of those states joined the Münzverein, the Germanic monetary union, in 1838, complementing the free trade agreement signed the previous year (Zollverein) which anticipated economic integration towards  national unification. The Münzverein was not based on a single currency but on a system of multiple common currencies with a simplified exchange rate between the thaler area of the north and the florin area of southern Germany at a rate of 1 thaler to 1.75 florins. The coin of 2 thalers=3.5 florins was the common piece materially linking the two systems, without any common design and with full responsibility remaining with each separate issuer. It was a heavy and impractical silver piece of 37 grams (equivalent to the weight of four of today's cumbersome nickel-brass one pound coins). The double thaler's value was equal to a bottle of champagne and therefore it was nicknamed the "champagne thaler".

The double thaler here illustrated is the last piece minted by the Free City of Frankfurt in 1866. In the same year Frankfurt joined other southern German States and Austria in a war against Prussian expansionism and militarism. The Prussians, however, won at the battle of Sadowa, expelled Austria from German political affairs and from the Münzverein, then annexed Frankfurt and several other states (including Hannover). The Frankfurt champagne thaler shows a female impersonation of the city with a crown of oak leaves and dressed in richly embroidered clothes. On the other side the Frankfurt eagle is surrounded by the words "Zwei Vereinsthaler – XV ein pfund fein", "two thalers of the Union, fifteen of which are contained in a pound of pure silver".

After the completion of German unification with the creation of the German Empire at Versailles on 18 January 1871, the currency was unified as well. The dualism between thalers and florins was replaced with a new currency, the German mark. Its value was unrelated to the effort of the Latin Monetary Union for a European wide currency, and an ironic proposal on the floor of the German parliament to call the double mark a "bis-marck" reflected its authorship: the new mark was simply a third of the Prussian thaler. Three-marks silver coins were minted, keeping the thaler alive in the new system, while the old thalers continued to be accepted until 1908. The new currency however was based on the gold standard and silver was relegated to a secondary role. The latter's partial demonetization caused much trouble around the world by initiating a depreciation of world silver prices and disrupting bimetallism on both sides of the Atlantic. Twenty six states entered the German Reich in 1871, keeping the right to mint gold and silver coins as remaining symbols of their limited sovereignty (including Prussia, Bavaria, Baden, Wurttemberg, Saxony and Hesse), just as Euro area member states today mint their own coins with common rules and a common image on one side of the coin.

The common side represented the crest of the Empire, an eagle with open wings, surmounted by a crown and the words "Deutsches Reich", the date and the value. On the other side the symbols of the various states composing the empire were displayed, either the portraits of kings (Prussia, Bavaria, etc.), princes, dukes, and the crests of a few free cities (Bremen, Lubeck, Hamburg). In this case we have a coin of the Free and Hanseatic city of Hamburg, here represented in a gold 20-marks coin of 1900, with two lions supporting a shield carrying a castle with three towers, symbol of the city since at least the thirteenth century.