The Origin of Coinage -- Evolution of a Theory
by Michael E. Marotta
The invention of coinage was a special event in the history of money. People accepted silver (and gold, etc.) as money for thousands of years before coinage was invented. Only in our time have we been presented with a complete picture of how this came about.
In ancient times, very little concern was invested in discovering where coins first came from. Herodotus (484-430 BC) is the common source of our belief that the Lydians first struck coins of silver and gold, in Book I paragraph 93 of The Histories. However, it wasn't until about 330 BC that Aristotle suggested a theory for the invention. In his Politics (I,iii, 13-14), Aristotle asserted that trade necessitated a convenient medium for barter:
“For when they had come to supply themselves more from abroad by importing things in which they were deficient and exporting those things of which they had a surplus, the employment of money necessarily came to be devised. For the natural necessities are not in every case readily portable; hence for the purpose of barter men made a mutual compact to give and accept some substance of such a sort as being itself a useful commodity was easy to handle in use for general life, iron for instance, silver, and other metals, at the first stage defined merely by size and weight, but finally also by impressing on it a stamp in order that this might relieve them of having to measure it; for the stamp was put on as a token of the amount.”
The next attempt at a consistent theory for the origins of coinage came in the early 1800s. Ernst Curtius, an authority in Greek history, put forward the Religious Theory of coinage in 1869. Writing in the Monatsbericht of the Royal Prussian Academy, Curtius placed the origin of money in the temples.
Coins, of course, feature gods, nymphs and other mythological characters. As the objects of votive offerings, temples amassed surplus wealth. This abundance could have given rise to coinage. The coins could also be used to buy what the temple needed and could also be issued as rewards for proper behavior by supplicants.
In Curtius's time, it was well-known that the Romans issued coins from the temple of Juno Moneta. Coins were often found when the sites of ancient temples were excavated. In fact, forty years after Curtius's conjecture, the earliest known coins were discovered at the base of the temple of Artemis in Ephesus by researchers from Oxford working under the aegis of the British Museum.
The Religious Theory soon lost favor. The Commercial Theory and its variants were reasserted. In Origins of Currency and Weight-Standards, Ridgeway theorized that a coin depicting a cow was worth one cow, a coin with a tuna was worth one tuna, and so on. Barclay V. Head, in the introduction to Historia Numorum goes into great detail on the theories current in the early 20th century. Writing in 1933, the British numismatist, Charles Seltman, suggested this scenario in his book, Greek Coins:
"When a merchant received a dump [a nugget-shaped ingot] he regularly weighed it until one day some Ionian hit upon a time-saving device. Why not mark every dump as it passed through his till? Then, if in the course of circulation -- money was scarce in those days and handled by the few -- it returned to him, he would know it again and need not trouble to weigh it afresh."
Philip Grierson asserted the Theory of State Necessity in his book, The Origins of Money. The State Theory says that a wise ruler saw the utility of coinage and invented it to make taxation easier.
"... since coins were issued by governments... it was administrative needs rather than economic that they were intended to serve. Such needs would have included the payment of mercenaries... and in some states, ... the distribution of the produce of publicly owned mines among the citizens.... Coins would have facilitated expenditure on public works and the the payment of state salaries, to say nothing of tributes, taxes, fines, and harbor fees."
In 1920, P. N. Ure published The Origins of Tyranny. In this book Ure suggested that the emergence of a mercantile class along the Ionian coast led to conflicts with the agrarian class which ruled from Lydia. Tyrants were empirical political scientists of the time. They were self-made men. This idea was also offered in 1958 by the classicist Robert M. Cook in an essay, "Speculations on the Origins of Coinage" published by the Wiesbaden journal, Historia. According to Cook:
"... it may be reasonably inferred that coinage was invented to make a large number of uniform payments of considerable value in a portable and durable form, and that the person making the payments was the king of Lydia. One solution suggests itself, that the purpose of coinage was the payment of mercenaries."
In 1986, Martin J. Price claimed that the first coinage was not payment per se, but a bonus. "... it is clear that the theory proposed by R. M. Cook and now widely accepted, that coinage was to provide payments for mercenaries does not fit the facts... At this stage in the economy payments in metals for service was not normal. We can gain some idea of the practice of employment from [the Iliad and the Odyssey], and it would seem that employees were normally given board and lodging in return for service, and 'payment' was received at the end of service by way of a bonus, which could presumably, but not necessarily be given in metals... [As] bonus payments, the coins are more akin to gifts (or medals) than to coins as we know them."
This compelling hypothesis was announced in an essay, "Thoughts on the beginning of coinage," in an anthology, Studies in Numismatic Method Presented to Philip Grierson.
In 1994, I suggested that the first coins could have been anonymous badges of conspiracy. The theory was published in the Classical Numismatic Review. The oldest electrum coins are little more than bullets with punchmarks. Melting and casting electrum would have created natural-looking lumps that mimicked the nuggets found in local streams. Stamping a rude mark would identify the ingot to the select few and yet would be meaningless to the authorities. The earliest coins would then have had a purely local use in buying loyalty.
Another variant has been suggested by Melville Taylor, a private numismatist, in Livingston, Michigan. He believes that coinage was invented as a matter of ego. It was not enough to weigh electrum and mark it with a punch. The metal was not a coin until someone put their sign on it. The utility of metal was long established when someone decided to personalize their bullion, solely to please themselves.
The Religious Theory is still compelling today, despite -- or perhaps because of -- its arcanity. One serious drawback is that melting and stamping metal is not an activity associated with temples. The temple was a house for a diety: the building sheltered the statue. There was no room for a forge; and a metalshop would have been a disturbance to a setting that was purposely sanctified and isolated. Also, metalwork is basically a "boys-and-their-toys" activity, while temples were generally if not overwhelmingly administered by women.
It is easy to see that the Commercial Theory has problems of internal consistency. The historical evidence is that the first coins were worth more than anything you could buy with them. They were anonymous. They never traveled far from their place of issue. The idea that a merchant would mark a lump of electrum in order to know it again ignores the antecedent fact that the purpose of trade is exchange: once passed to another hand, valuables seldom return home. Therefore, as useful as coins later proved to be in commerce, they cannot have been invented specifically to support trade.
The Theory of State Necessity puts the cart before the horse. The process whereby a king or tyrant would strike coins and then distribute them just so that others can return them in duties and fines is too circuitous to be plausible. Neither is it credible that a local ruler subservient to a greater king would invent coinage in order to deliver tribute struck with his own sign.
The Tyrant Theory for the invention of coinage appears internally consistent and it has led to further theories that are based on the the known record. Whether this theory holds up over time remains to be seen.