Coins and Coin Collecting

I

Introduction

Coins and Coin Collecting, metallic disks or small ingots, usually round, that are used as a medium of exchange and also acquired and saved as a hobby. Coins have been in use for more than 2,600 years, and people have collected them for nearly as long. The technical name for the practice of collecting coins is numismatics, a term derived from the Greek word nomisma, meaning “coin” or “currency.” Numismatics includes the study of coins, banknotes, medals, tokens, and primitive forms of money. Governments and other official agencies issue billions of coins annually, and collecting coins is a popular hobby around the world.

II

History of Coinage

People have sold and traded goods and services for thousands of years. An early obstacle was finding a common medium of exchange. Metal coins were developed to fill this need and eventually caught on worldwide. Coins continue to serve this purpose today.

A

Origins

Ancient Babylonians negotiated commercial transactions using gold and silver as a means of exchange as far back as 2000 bc, but the metals were not cast in a form suitable for easy circulation. Lack of standardization meant the weight and purity of the metal had to be tested every time a piece changed hands.

Between 620 and 600 bc, the people of Lydia in Asia Minor came upon the idea of shaping electrum, a natural alloy of gold and silver, into bean-shaped lumps of fixed weight and purity and stamping them with official symbols. These early coins soon became popular because of the way they facilitated trade. By 550 bc the practice of striking coins was established in all of the primary trading cities throughout the known world.

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The first major improvement in coinage was to phase out the use of electrum. Because it is an unrefined alloy, electrum’s ratio of gold to silver can vary considerably. To achieve a higher degree of consistency, coin makers realized they would have to separate the gold from the silver and produce coins primarily of gold, primarily of silver, or of a controlled mixture of the two. Despite its unpopularity, natural electrum was still used sporadically into the Middle Ages.

Over the centuries, coin designs varied considerably in beauty and complexity. The first coins had a crude design on one side and nothing more than a simple punch mark on the other. Within a few hundred years, coins of great artistic beauty were being struck in Greece and then in Rome. As the Roman Empire declined in the 3rd and 4th centuries, so did the quality of its coins. In the Early Middle Ages, most coins struck throughout the Western world were crude and ugly. But by the 15th century, Europe had begun to produce beautiful coins and medals of outstanding workmanship and artistic design.

B

Coinage Problems

Some rulers compromised the integrity of the circulating coinage, issuing debased coins as a way to inflict a “hidden” tax on their subjects. Henry VIII, the king of England from 1509 to 1547, was often guilty of this practice. He caused great harm to his nation’s economy by reducing the purity of English gold and silver coins.

Prior to the 16th century, most coin makers produced coins by placing a round disk of metal between two dies and hitting it with a hammer. Hammered coins, as they were known, could be very beautiful—including some of the earliest that came from ancient Greece and Rome—but they tended to be somewhat crude and lacked well-formed edges. Because the edges were irregular, it was fairly simple to cut off thin slivers of gold or silver and then to spend the coins as if they were of full weight. Some coins were clipped so many times that the actual value of the metal they contained decreased considerably.