From the beginning of the fourteenth to the early years of the nineteenth century every European nation had a bimetallic currency, in which, however, silver played the largest part. Gold coins were introduced into western Europe by Italian traders as early as the thirteenth century, but they were not much used in commerce before the middle of the fourteenth, and their value was always estimated in terms of the current silver coins. They were not, however, subsidiary in the sense in which we have defined that term, but had full legal-tender power, and were minted in as large quantities as the supply of the metal and the demand for it for other purposes would permit.

The nature and functions of money were not understood in the Middle Ages, and in consequence many of the practices of that period must be attributed to ignorance rather than selfishness or malice, though there was no lack of these latter qualities. The idea most commonly entertained regarding money was that sovereigns possess absolute power over the value of coins, and are quite independent of market conditions. Accordingly, they did not consider it improper to debase the currency if they thought best, and kept the people informed regarding the purchasing and debt-paying power of coins by posting notices in public places, in which they stated the equivalence of the various coins in terms of each other and in those of purely ideal standards. Regarding these ideal standards it is interesting to note that they originated in the belief which we have just mentioned. In early times the precious metals passed in exchange by weight, and the unit of value in every European state was a pound weight of silver. However, when kings began to exercise their supposed power to regulate values, and debased the coinage, they retained the old names for the units, though their former significance had disappeared and a purely ideal conception had taken its place. Thus, in England up to the beginning of the fourteenth century a pound weight of silver was divided into twenty parts called shillings, and each of these again into twelve parts called pennies, but Edward I. divided the same pound of silver into forty parts and still called each a shilling, and twenty of these shillings a pound. Henceforth the word pound meant nothing definite, since the king frequently changed the weight and metallic content of the shilling, but always reckoned twenty shillings to the pound and twelve pence to the shilling. When, therefore, in the public notices of the Middle Ages we meet the statement that such a gold coin was worth so many shillings and so many pence, we know nothing about its real value until we have learned how much silver the coin at that time called a shilling really contained, and when we read that the price of an ounce of silver had risen from 3s. 9d. to 4s., it may mean simply that the weight of the shilling had changed.

In view of these peculiar ideas and practices, it is not surprising that currency conditions in the Middle Ages were much confused, and that they are very difficult to interpret. One fact, however, is clearly discernible, and that is that the attempt to maintain the concurrent circulation of gold and silver coins of full legal-tender power was a complete failure and responsible for the chief monetary difficulties of the times. The records regarding monetary matters relate chiefly to the disappearance now of gold and now of silver coins from circulation, and to attempts to prevent this by changing their equivalence or by recoinage. The cause was sometimes debasement or arbitrary changes in the equivalence of coins by means of royal decrees, and sometimes fluctuation in the value of the metals on the market. After the discovery of America the latter was the most common, since the conditions of production of the precious metals were revolutiorzed by that event. The exploitation of extraordinary rich mines in Mexico, Peru, and Bolivia increased the estnated value of the world's supply of minted metal from thiiy-four to two hundred and forty millions of pounds stering between 1492 and 1636, changed the market ratio of gld to silver from about 1 to 11 to about 1 to 15 1/2, and incrased the per capita circulation of Europe from sixteen to sixty-six shillings.* The stream of gold and silver whih flowed from these new mines into Spain and after-wars into every country of Europe was constant, but irreular, and the freedom of its movement was interfered wit by inadequate means of transportation and by the attempt of each nation to get all that was possible and to kee all that it got. The result was constant fluctuation in the purchasing power of each of the metals and in their relaion to each other, and frequently the greatest di-verence between the ratios ruling in the different markets at te same time. To keep both gold and silver coins in circlation at the same time under these circumstances wasimpossible. In spite of the severest penalties and the* not infrequent infliction, the money-changers were concantly shipping the coins of one nation into the tentory of another where their value was more highly estemed, and melting down undervalued coins for sale as Ullion. A few instances out of many which might be give must suffice.

The ratio between gold and silver changed consider-abl on the Continent about the year 1519, and almost immediately England began to suffer from the exporta-tioiof undervalued coins. After a futile attempt to rem-eduhe difficulty by means of a treaty with Charles V., it was decided to increase the nominal value of the gold coins, and accordingly on the 22d of August, 1526, crowns of the sun, as one species of gold coin was named, were tariffed at 4s. 6d. instead of 4s. 4d., and the ducat was raised from 4s. 6d. to 4s. 8d. Finding that this was not sufficient to check the exportation, on November 5 th of the same year all the gold coins were tariffed at a still higher rate, and in 1527 a new coinage was ordered, in which the weight of the silver coins was again changed. That the difficulty still remained is evident from a state paper of 1529, which describes a dispute between English, Italian, Flemish, and Spanish merchants over the effect of the last edict about gold on the exchanges, and in which the writer recommends an increase in the care exercised at the ports to prevent the exportation of gold. About 1539 the ratio between gold and silver had changed on the Continent to such an extent that silver began to leave England instead of gold, and in order to prevent this there was a general retariffing of coins in 1542 and 1544. During the next fifteen years the currency of England was brought into the greatest confusion by the debasements of Henry VIII. and Edward IV., but, after the recoinage ordered by Elizabeth in 1559, honest efforts were again made to maintain an adequate currency of gold and silver, but with the same results as before. Elizabeth issued proclamation after proclamation for this purpose, and in 1601 changed the ratio between gold and silver in the coinage, but unfortunately in the wrong direction. The monetary history of England during the seventeenth and eighteenth centuries is simply a dreary recurrence of complaints against the exportation of coins and of royal proclamations and recoinages for the purpose of preventing it or of turning the tide in the other direction.

* M.'s "Die geschichtliche Entwicklung des Geldwesens," p. 12.

In France, Germany, and the Netherlands the course of events was in all essentials the same as that in England. Constant changes in the ratio between gold and silver and in the rates at which coins were to be accepted was the rule in all these countries down to the nineteenth century. It is not, of course, possible to hold bimetallism responsible for all of this confusion. During the greater part of the period the coins of one nation were legal-tender in the others at rates fixed by royal proclamation, and, since these rates were far from uniform, it was usually possible to make a profit by shipping coins from the nation in which the valuation was low to that in which it was higher. But bimetallism increased these opportunities enormously and imposed upon the statesmen of the period an impossible task. A remedy for the under- or over-tariffing of foreign coins might have been found, but the task of keeping pace with the fluctuations in the market value of gold and silver by changes in the legal ratio through proclamation or recoinage was hopeless from the beginning.