For Part One go here

For Part Two go here

For Part Three go here

This penultimate installment will concern a topic which is the source of many debates in the academic community and many myths among laymen: monetary developments.

It has often been written Byzantine coinage was remarkably stable throughout most of the Empire’s history. This is incorrect.

Byzantium followed originally the old Diocletianic pattern of coinage: gold and silver coins were struck in Constantinople and the prefectures of Thessalonika, Rome (later Ravenna) and Carthage, bronze coins in the same places as well as the diocesan capitals (Antioch, Kyzikos, Nikomedia and Alexandria). These were supplemented by a few other for regions deemed important for various reasons (Catania and Syracuse for Sicily, Constantia for Cyprus and Cherson) and by temporary mints which issued coins for military purposes (examples are Isaura, Alexandretta and Seleukia).

This scheme was disrupted by the disasters of the VII century: the Persians and then the Arabs ravaged the Eastern regions and North Africa, the Slavs took the Balkans and the Lombard overrun Italy while the Popes in Rome began to assert their complete independence. In the meantime the plague raged throughout the whole Mediterranean and the Middle East, hitting highly urbanized Byzantium and Persia, already weakened by a decades long war, the hardest.

Between 627 and 695 Thessalonika, Nikomedia, Kyzikos, Cherson and Constantia all stopped striking new coinage. Minting for the Eastern regions was centralized in Constantinople, while the Western mints which had survived the onslaught diverged more and more from the Imperial standards until they disappeared (the last to cease operation was Reggio, which had replaced Catania and Syracuse, in 912).

The Sicilian coins have been well studied and show a debasement from 97% purity in 695 to 80% in 710. In 720 Leo III the Isaurian (r. 717-741) instituted a number of reforms which stabilized gold content in the Sicilian coins at 82% for over a century. Under Theophilos (r. 829-842) and Michael III the Drunkard (r. 842-867) gold content dropped to a mere 40%, and then at a pathetic 10% under Basil I (r. 867-886).

By contrast the gold coins struck in Constantinople in the same period remained remarkably stable. Except for a brief debasement in the 680’s, the nomisma [1] remained stable at 97% purity. This doesn’t mean there wasn’t a debasement of another kind. Under the old Diocletianic system, there were three gold coins: the full solidus and its fractions, ½ and 1/3. While the full solidus remained in place, its fractions disappeared. Also during the aforementioned “debasement crisis” the silver denarius and its fractions, which had constituted the basis of the Roman monetary system, completely vanished by 695. The copper coinage, used by ordinary people in their everyday transactions, underwent a drastic decline in weight and value, its badly and hastily struck pieces showing the inflationary nature of this period.

Under Leo III and his Isaurian successors (r. 717-802) drastic monetary reforms were undertaken which stabilized the coinage and reeled inflation in. The nomisma was stabilized at 97% gold content. A new silver coin, which replaced both the old solidus fractions and the denarius, was introduced. Called the milaresion, it was obviously influenced by the Arabian dirhem, being a large and thin coin of irregular fineness (between 98 and 83%). A new copper coin, called the follis, was introduced, of stable content and much better struck than the previous pieces. The exchange rate was 12 miliaresia for a nomisma and 24 follides for a milaresion.

Both findings of hoards and various analysis hint at the fact during this period Byzantium (very much like Persia) became a much less monetized economy. New coinage seems to be restricted to the largest cities like Constantinople and Amorion, while rural areas and cities such as Athens and Nicaea had to do with a constantly reduced (due to increased taxation) quantity of old, worn coins.

Coin hoards and what contemporary documentation is available hint in the final years of Isaurian rule Byzantine economy became increasingly well monetized, as could be expected in an Empire which was seeing its economical conditions quickly improve. For two centuries the Isaurian coinage remained remarkably stable, and was one of the basis which made economic and political recovery possible.

Starting with the 920’s, however, the nomisma began to experience a phenomenon known as “creeping debasement”. Between 920 and 969 gold content fell from 97% to 95%. Between 970 and 976 from 95% to 94%. And between 977 and 1001 it fell to just 92,1%.

Much has been written about this phenomenon. Some authors attribute this to the will of providing increased monetization to the economy with a reduced availability of gold, but the problem with this theory is, after the Isaurian reform, Byzantium never had any serious currency shortage and, moreover, by the early X century Byzantium had recovered most of her old gold and silver mines from the Slavs and the Arabs and was constantly adding more as her territory expanded. One view that’s becoming more and more commonplace is that during this period Byzantium was at the apogee of her military might, and hence Imperial needs were growing faster than ever before.The expedition led by Nikephoros Phocas which led to the capture of Crete in 961 was an incredibly expensive venture, requiring tens of thousands of nomismata just to build the specialized ships needed to carry to the island the large numbers of horses used by the army. This expedition, which met with complete success, was only one of the many military campaigns undertook in this period. And each campaign, crowned by victory or defeat, required enormous sums of money. [2]

Once Nikephoros ascended to the throne, he concocted a scheme to increase revenues through monetary means. He issued a lightweight gold coin, called tetarteron, weighing 22 carats instead of the 24 carats of the nomisma and issued a law ordering it to be preferred to the old and much more valuable coins in transactions. He expected to profit from this measure through two means.

The first is he had ordered taxes to be still paid in the old nomismata: that way the Treasury would have been able to smelt the old coins, strike tetartera and pocket the difference.

The second is he expected all commercial transaction to be carried out with the new coins, and hence he would have profited from the resulting seigniorage (the difference between the “face value” of money and the costs to produce and distribute it).

However, as much as he was immensely skilled on the battlefield, he understood little of market forces and monetary laws. Where his edicts were enforced, Gresham’s Law struck back with a vengeance: the old nomismata quickly disappeared from circulation and tax collectors were soon forced to accept tetartera instead. Inflation started to quickly creep up, as merchants passed the costs on to consumers. Where State power was at its weakest, the old nomismata remained in widespread circulation, often supplemented by sundry Islamic coins.

The whole operation was such a dismal failure Nikephoros’ successor, John Tzimisces (r. 969-976), quickly abolished his predecessor’s decrees but kept the tetarteron in circulation (with the “old” nomisma now called nomisma histamenon). It appears this beautifully minted but not well accepted coin was struck until 1092: the reasons are still debated but modern consensus is the Empire struck it to pay its own expenses.

The aforementioned “creeping debasement” continued until the reign of Michael IV the Paphlagonian (r. 1034-1041), with the nomisma now having a 90% gold content. Things really started to heat up during the reign of Constantine IX Monomachos (r. 1042-1055). Not only the gold content of the nomisma started to fall much more rapidly, but it was further debased in another fashion.

Previously gold coins were kept under 100% purity by adding to the alloy unrefined gold. This practice was now discontinued and silver started to be employed instead. This led to the very peculiar nomismata of the second half of the XI century: to keep the weight of the coin stable, its diameter was increased (silver has about half the density of gold) and coin makers, to keep the striking to two hammer blows, decreased the diameter of the figures’ imprint on the blank. This gave birth to the most striking characteristic of the XI century nomismata: their broad, thin blank. In Ancient Times this meant the coin had an overall concave shape but it appears Byzantine coin makers quickly mastered the art and eliminated the concave shape, a feat not even the masterly Islamic coin makers of the period could rival.

Under the reign of Michael VII Doukas (r. 1071-1078), debasement reached incredible heights. Nomismata were now made with an alloy containing 71% silver, 18% copper and just 10% gold, giving rise to the peculiar whitish coins of the 1070’s and 1080’s. Since access to most of the silver mines had been lost to the Turks, the Bulgarians and sundry rebel groups, Michael VII ordered the old Isaurian milaresia to be withdrawn from circulation and smelted to provide the silver.

Contemporary sources put the blame for the booming inflation on three figures: Empress Zoe, her second husband Constantine IX and Michael VII. The former two were blamed for their outrageous spending at a moment when Byzantium was at war with the Pechenegs, had to deal with two dangerous rebellions (one in Sicily and another in Bulgaria) and had to fend off a massive Rus naval attack. The latter was well known for being somewhat of a modern economist transplanted in the Middle Ages. Chronicler Michael Psellos wrote of him (in his typical sarcastic tone which sometimes reminds of Voltaire) “He understood every detail of finance exactly” as his experiment in Raidestos proves.

Michael VII became one of the most hated Emperors in Byzantium’s history for a variety of reasons, yet the nickname with which he is known to this day is strictly tied to his inflationary policies: Parapinakes. It meant that due to his monetary policies a nomisma bought one modios of wheat minus a pinakion (¼ of modios) instead of a full modios as before. [3]

The monetary situation remained chaotic up to 1091. In that year Alexios I Komnenos (r. 1081-1118) put hand to his long delayed monetary reform. In Alexios’ defense it must be said the first ten years of his reign hardly allowed him time for such a time consuming undertaking: he had to face an extremely dangerous Norman invasion which was halted only when a plague outbreak decimated the Normans (including their skilled and warlike leader, Robert the Guiscard), he had to consolidate the remaining Byzantine holdings (which he did with remarkable success and very small resources, also recovering the Aegean islands and parts of the Asian coastline) and finally he had to beat off a massive Pecheneg military expedition. In the wake of this last victory, Alexios initiated his momentous monetary reform.

The new monetary system was on a tetrametallic standard. At the top was the new gold coin, the hyperpyron (fire-refined) nomisma, with an 87% gold content. Worth 1/3 of an hyperpyron was the trachy aspron, an electrum coin containing 30% gold and 69% silver. Worth 1/48 of the hyperpyron was another coin officially called trachy aspron but unofficially known as stamenon, a billon (copper-silver alloy) coin. Finally there were two copper coins, the tetarteron and the half tetarteron, whose values have been estimated at 1/864 and 1/1728 of an hyperpyron respectively, though they were most likely worth considerably more .

This was by far the most advanced and sophisticated monetary system of the Middle Ages: recent historians have appreciated the fact it was not only designed to facilitate tax collection, but also to provide effective coinage for the real economy, which had suffered terribly in the debasement crisis of the XI century. Even the highly advanced Islamic monetary systems could not compete with its sophistication and the European crusaders, used to much simpler monetary systems aimed at maximizing taxation, had serious problems grasping it, to the point special treaties had to be implemented to facilitate transactions when Crusading hosts passed through Byzantium, treaties which as Cécile Morrisson wrote “are a welcome source of information for the modern historian”.

This was an astonishing monetary reform, especially considering by this point Byzantium had lost most of her gold and silver mines and was “making do” with a highly debased currency. The Komnenian coinage was one of the so called “dollars of the Middle Age” and the only Christian currency to be not only widely accepted but highly sought after. Together with the Fatimid dinar and the Almoravid morabitino (also called maravedì) the hyperpyron nomisma constituted the backbone of the Mediterranean, Middle East and, to a lesser extent, European and Indian Ocean trade.

The Komnenian monetary reform remained in place for a very long time, helped by a very strong economy which allowed for increased tax revenues without having to resort to debasement. Even the fragmentation of the Empire which followed the Fourth Crusade didn’t affect it.

The hyperpyron nomisma only started to be debased in 1254, by Theodore II Laskaris (r. 1254-1258), Emperor of Nicaea. [4] It suffered a further debasement after the Byzantine retaking of Constantinople under Michael VIII Palaiologos (r. 1259-1282). In this period, nomismata start to become known by their Venetian names: for example Michael VIII’s coins (with a 75% gold content) are known as paglialoccati.

It’s worth noting here the Latin Empire (1204-1261) coinage is one of the least known currencies in Mediterranean history and has been defined as “elusive” even by Cécile Morrisson, the maximum modern authority on Byzantine coinage. From what little we know it appears it was imitative of old Komnenian coinage (we are informed Latin rulers feared people would not accept coins with Western elements) and issues were mostly limited to stamena of very poor quality, being made of copper instead of billon.

Under the Palaiologoi, the Komnenian system collapsed one bit at a time in the space of one century. The first coin to disappear was the electrum trachy aspron, replaced by a silver coin which imitated the Venetian ducato grosso (and tellingly called doukaton) [5]. Then it was the turn of the billon stamenon, replaced by a poorer base silver coin patterned after the Frankish denier tournois. In the meantime the gold content of the nomisma kept on falling lower and lower until in 1353 gold coins stopped being struck altogether and Byzantium (or what little remained of it) went on a full silver standard.

However, the Komnenian hyperpyron remained highly popular and in widespread circulation until the 1320’s and was still being accepted in the first years of the XV century: it was so highly regarded even Frederick II of Hohenstaufen (r. 1220-1250) patterned his augustal on the original hyperpyron of Alexios I. Komnenian coinage was progressively replaced in long distance trade by Venetian coinage: in the 1270’s their silver grosso was enjoying widespread circulation in the Balkans and Greece, having replaced the English esterlins and the Frankish deniers tournois, and became more and more popular as the Byzantines retreated and the Turks advanced: the former’s coinage was becoming too unreliable, while the latter’s currency, being mostly made of very small silver coins (the akçe or aspers), was ill suited to trade.

The fitting end to the Byzantine monetary system is the fate which befell most hyperpyra nomismata. Starting in the late XIII century/early XIV century Venice began to aggressively rake in all the old Komnenian coins she could find. These were smelted and used to mint the new golden Ducato, which became the backbone of Mediterranean trade until Spanish silver started flooding in the late XVI century.

[1] The original nomisma was nothing more than the old Late Roman gold solidus with a Greek name. Latin had never been a popular language in the Eastern Empire and its use declined rapidly even in official documents after the V century, being replaced by a peculiar version of the old Greek koiné (“common language”) to the point even Latin inscriptions on coins were often misspelled.

[2] How much a military campaign cost can be deducted by the fact Byzantine military instructions of the X century considered a maximum of 504 kataphraktoi (shock heavy cavalry similar to the old Persian elite Savaran) could be fielded in battle. The cost of equipping and training a single kataphraktos was staggering and much higher than those, already considered very heavy, of equipping an European knight in the same period.

[3] The modios (or to be more precise the thalassios modios) was the official Byzantine dry goods measure. It equals 17 liters. It had two fractions, the monasterikos modios (4/5 of th. modios, or 13,6 liters) and the annonikos modios (2/3 of th. modios, or 12,8 liters).

[4] After the Fourth Crusade (1204), those Byzantine noblemen who refused to submit to the Latins organized themselves in a number of States. There were two States which both claimed the Imperial title: Nicaea and Trebizon (which outlived Byzantium herself, only falling to the Ottoman Turks in 1461). Both Serbia and Bulgaria took the occasion to shake off the last remains of Byzantine domination in the period though both had become de facto independent in the 1180’s.

[5] The ducato grosso or simply grosso, was the first Venetian silver coin to enjoy widespread circulation. First coined in 1202 under Enrico Dandolo, it was also called matapan, from the Arab mautapan, the silver coin which apparently spurred its creation.