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Zacour, N. P.; Hazard, H. W. (ed.) / Volume VI: The impact of the Crusades on Europe

XI: Crusader coinage with Arabic inscriptions,   pp. 421-473 PDF (5.7 MB)

Page 422

422 A HISTORY OF THE CRUSADES VI 2. For a fuller discussion of monetary theory
relating to pre-modern mints see Gilles P. 
economies, precious metal coins were struck from bullion or non-current coins
that were brought to the mint by the government or by private persons. Charges
for materials and labor were levied proportionately on the coins struck from
the material brought in by the customer. Private persons had to pay a government
seigneurage (mint tax) in addition. As a result, the amount of bullion in
the coins received by the customer was less than the amount of bullion brought
in. In other words, coins were a manufactured product with a value (buying
power) greater than an equivalent amount of the raw material from which they
were made. The difference in value between coins and the bullion in them
was fundamentally a result of the mint charges, but was also affected by
such factors as inconvenience of minting, transport charges to the mint,
reluctance of individuals to reveal holdings of precious metals, and many
other intangible factors which can be summed up as the result of supply and
demand in a given place at a given time. As legal tender, only current coins
could be used for payments to the government and in most transactions between
private parties, and this legal constraint was sufficient to keep their money
value above their intrinsic (metal) value. If a coin issue was demonetized
(abolished as legal tender), its value would drop to the value of the bullion
in each coin, causing a loss to the possessors at the time of demonetization.
 In a minting regime such as that described, coins can be exchanged by count
only if the proportional variation in weight of individual coins is less
than the difference between the value of the raw metal in them and their
value as coins. If coins circulate by count, and some coins vary from the
normal weight by more than total mint costs, it may become profitable to
withdraw these heavier coins from circulation to melt and return to the mint,
obtaining more coins with a higher money value from the same amount of bullion.
There may be a tendency to set aside heavier coins, with a higher intrinsic
value, for savings, while returning lighter coins to circulation, and it
may become profitable to clip the edges of coins, retaining the same money
value while profiting from the bullion value of the clippings. These practices,
if they become common, will result in a general lowering of the average weight
of the issue in circulation and thereby force weighing of payments in self-defense.
 For a government to force its coins to circulate by count, it must either
set minting charges high, creating a large difference between their bullion
value and their money value, or control the weight of its coins very precisely.2
Some Moslem coinages are known to have circulated 

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