Authors: JAUME MONCLUS I BORI
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1. Justification
Throughout history, money has been the main human creation to promote and facilitate commerce and the existence and development of public and state infrastructures and services. The historical study of money brings us closer to the past, unearthing us to the structure and organisation of societies, uncovering new historical facts and facilitating the comprehension of who our ancestors were, and how they lived and perceived the world.
Originally, money consisted exclusively of coins: precious metal pieces with intrinsic value that were stamped with symbols to ensure their authenticity. It is said that money itself was a government creation that facilitated paying taxes. In fact, we can find the first traces of coins around the seventh century before Christ. During Ancient History, coins were thick and heavy. However, in the European Middle Ages, due to a shortage of precious metals, people began making thinner coins.
Coin alterations were very common: Kings from various reigns often engaged in the falsification of neighbouring coins. It was also typical to subtract parts of the coin to keep a little piece of noble metal.
In Castile there was a state imposition to accept royal currency, regardless of its quality. In contrast, in other regions like Catalonia, currency circulated freely without state enforcement. In Western regions, money was typically valued at approximately 10% above its intrinsic worth, with the aim to cover its emissary costs and benefits.
Intrinsic valuable coins were generally in use in the western until the creation of fiduciary money, around the nineteenth century. During this era, the generalization of a single currency by the state began. Until then, there existed a variety of currencies by region.
NOTE: Each mentioned king is numbered according to the Catalan Principality numeration. After 1714, the numeration shifts to the Castilian one.
2. Origins (V c. BC – VIII c. AD)
The first coins made in what we now know as ’Catalonia’ were created by Greek colons. Initially, they were produced in the mid-fifth century Before Christ in Emporion, a name established by the Greeks that literally means ’market,’ and later, in the third century BC, also in Rhode. The development of its own coin represented the golden commercial age for each city.
This new creation, the coin, had contact with the Iberian tribes via commerce. The discovery motivated the Iberians tribes to create their own coins. During the second and first centuries BC, Emporion was inhabited by Greeks, Iberians, and Romans, resulting in the coexistence of a wide variety of currencies until the end of the period. The most significant currencies were Greek silver Drachmas and Roman silver Denarius. Although there also circulated fractions of this coins and Iberian bronze pieces. By the end of the first century BC, Romans imposed their will, particularly during the Julius Caesar and Augustus Empire. During this period, new roman coins were introduced: Bronze As and Golden Aureus. This was also used as a tool to unify the empire and demonstrate Roman power.
Visigoths also had an impact on the monetary history of Catalonia. This Germanic people took control of the Iberian Peninsula in the fifth century AD during the disintegration of the Western Roman Empire. By that time, the romans had tried to stabilize their monetary system by the generalization of Siliqua coins, some made from silver and others made from bronze. But the relevant development was the creation of the Triens, a golden coin based on roman measures but created by Visigoths.
In 711, Muslims entered the Iberian Peninsula, defeating the decomposing Visigothic regime and conquering territories that extended into the south of the old Gallia. For nearly a century, a substantial part of what we now recognize as Catalan Lands remained under Islamic rule. And, as the saying goes, “The King is dead, long live the king”. New rulers took imposed new rules, and old coins were substituted with silver Dirhams.
3. The Marca Hispanica (VIII c. – XI c.)
After the consolidation of the Marca Hispanica by Charlemagne, towards the end of the eighth century, several counties were established in the region, either replacing the existing Muslim territories or altering fidelities and alliances.
Note that the Carolingian empire based its numerical notation in late Roman monetary units of measure. The Pound (Lliura) was the highest value unit, which was divided into 20 Shillings (Sous). Each Shilling was worth 12 Pennies (Diners), and each Penny was worth two Obols. However, the Pound and the Shillings were exclusively theoretical and used for accounting porpouses, since the highest valuable coin was worth a Penny. Silver was the main noble metal used by the empire.
Until the mid-ninth century, all currencies retained the nomenclature of the Carolingian kings. However, when Charles the Bald proclaimed that Catalan counts could transmit their titles to their descendants, together with the continued loss of influence of the Carolingians, independence stratagems emerged. These desalinations challenged their loyalty and fidelity to the Carolingians.
Between the tenth and eleventh centuries, bishops in the principal Catalan settlements gained partial authority in the creation of currency. This was the first moment in history when coins wore the names of Catalan sovereigns. Historians perceive this as a strategic political tactic to gain influence and legitimize their “de facto” independence. Catalan count’s autonomy was practically complete, and currency was a key testament to this fact.
During those centuries, a gradual decrease in the availability of silver affected the quality and credibility of currency all along Europe. The initial impact was a reduction in coin weight, eventually prompting the introduction of the ’billó’ coin, crafted from a blend of copper and silver. The incorporation of less valuable materials leads to a decrease in the new coin value. This “billó” depreciated over time since the authorities gradually decreased the quantity of silver by adding more copper.
The arrival of Muslim tributes from other regions of the peninsula facilitated Catalan count’s acquisition of golden currencies. This led them to start making their own gold coins. In fact, this rapidly differentiated the region: in the rest of Europe there was a general depreciation of currencies due to the lack of silver and gold. It created a duality in its currency market, with the coexistence of the “billó” and the “mancús”.
4. Catalan Counties (XI c. – XV c.)
During the reign of Ramon Berenguer I “the Old” (1035-1076), a significant part of what we now know as Catalonia was under Barcelona’s count direct or indirect control. The Count of Barcelona was perceived as the authority in the region (use of “Princeps” title), and for this reason the rest of counties adopted its currency as the official one.
The influence of Barcelona’s counts was such that they formed matrimonial alliances throughout Languedoc provinces, later referred to as Occitane. Additionally, they acquired the counties of Carcassonne and Ras ́es by purchasing them through Muslim gold tributes, which were paid by Muslim factions with the intention of conserving their integrity. These taxes are known in Catalan as “paries”. The expansion of the Catalan influence over these lands took place over a century and a half, until the Battle of Muret in 1213. French and Catalans engaged in a battle for hegemonic control of the region, framed by a religious “causus belli”. The French aimed to eliminate Cathar heresy, while the Catalans tried to defend their Lenguadoc and Provence friends and vassals. As a result Pere I “the Catholic” died, and after a couple of decades Catalans lost fully their political influence in the Occitan region.
It is important to note that the true political interest of the French lay in establishing complete sovereignty over the prosperous lands of Llenguadoc and Provence. These regions had witnessed significant commercial growth, driven by the rise of urban settlements.
As a direct lesson learned from their ventures in Occitan lands, Catalans understood the importance of a stable, valuable, and reliable coin as a key tool for commerce uprising, exemplified by the future production of the Groschen (or Gros) in the north-Catalan lands, a silver coin worth one shilling.
The next step in the stair was Jaume I “the Conqueror”. Son of Pere I and Maria from Montpelier, he was educated by Templars after the dead of his father. His reign was vital for the existence of what we nowadays know as the Catalan Countries. His conquest of Majorca (in 1229) and Valencia (in 1238) are fundamental pillars of it.
Jaume I’s reign was also important for the creation of essential Catalan public institutions, such as the “Consell de Barcelona” or the “Consolat del Mar”, which characterized Catalonia until its eventual loss of sovereignty. In fact, the “Consolat del Mar” was a fundamental institution for the Catalan expansion along the Mediterranean. He also contributed to the establishment of a unique and definitive monetary unit across his territories: the “Diner de Tern”, made out of 25% of silver and 75% of bronze. In contrast to his father, he did not finance wars and public spending through monetary manipulation but stipulated clear game rules. Through pactism, Jaume I agreed to unalter the value of the currency. However, as compensation, citizens would have to pay a tribute to guarantee fiscal revenues. The benefits of monetary unification that Europeans can enjoy in our times, were about to be experienced by those men. The elimination of transaction costs and the stabilisation of coin worth were key for reinforcing Catalan commerce along the Mediterranean, in contrast with French and Castilian money, which continuously depreciated.
By that time, golden coin tributes from Muslims kingdoms had disappeared. That represented an issue when large transactions were required. For this reason, in 1285 the “croat de Barcelona”, a coin made entirely of silver, was introduced during the Pere II “the Great” (son of Jaume I).
Pere II led the Catalan expansion along the Mediterranean in search of new territories with commodities to exploit and new markets to explore. Employing diplomatic means, ranging from matrimonial alliances to warfare, a variety of strategies were used to expand their borders. Additionally, the commercial relationship with the Middle East played a crucial role in facilitating reexports.
The economic growth had an important impact on the seaside territories and their periphery, while in some interior places such as Aragon, its influence was limited. Military power played a crucial role both in conquest and the protection of territories, being specially valuable in safeguarding commercial monopoly throughout the “Mare Nostrum” and indirectly contributing to the establishment of the “Llibre del Consolat del Mar” as Mediterranean commercial law.
A Sudden stop occurred when the Black Death impacted Catalan lands. ’Lo mal any primer,’ dated in 1333, had drastic repercussions on demography and consequently on economic growth. It also generated social tensions that finally manifested in a Civil War. Catalans could only reach a similar level of prosperity towards the third half of the eighteenth century, when they escaped the Malthusian Trap.
Each new conquest brought new challenges, and the monetary system presented a complex puzzle. With the aim of facilitating exchanges while considering each region’s money traditions, new types of currencies were adapted with a similar construction to those in Barcelona.
Due to extensive economic growth, there were various attempts to create an own new golden coin along the different states of the Aragonese Kingdom. However, as the House of Barcelona was divided into factions, and on the other hand Genovese, Venetian and Florentine money had really a reputation, the project ultimately lost significance. Golden Florins became the main currency for big commerce purposes.
The Aragonese Kingdom’s monetary system wasn’t unitary but decentralised. Duality persisted throughout the Middle Ages, with lower denomination “billió” coins for villagers and standard golden currencies for commerce and nobility. Naples, however, never conformed to this decentralized system, maintaining its own currency independence.
The death of the last king from the House of Barcelona, Mart ́ı I “the Human”, in 1410 led to a change in the government power that definitely ended with the Catalan dynasty. The Trastamara dynasty, originary from Castile, assumed control. Experts argue that during their rule, from the fifteenth to the sixteenth century, there were several clashes between Catalan pactism mentality and Castilian absolute power thinking. Currency wasn’t a minor topic of discussion.
The Castilian monetary system model was based on the Muslim ones, characterized by high monarchic arbitrariness, resulting in significant worth volatility. Additionally, it lacked an accurate parity with the main European currencies commonly used in commerce. Despite each territorial unit maintained its currency, the new monarchic context weakened the decentralized control of money even further.
5. Municipal currency (XIII c. – XVIII c.)
It is worth showing how, along the Late Middle Ages and until Modern Ages, many municipalities across Catalan territories created their own currency. This event is so unusual that we can only find similar cases in territories which we can name nowadays as Germany, the Netherlands, and Italy. Nevertheless, the Catalan case is even more impressive because this coin creation wasn’t a substitute but a complement to the state’s currency. So, in this sense, it is a unique case in its geographical context.
Some municipalities created low-value currency for citizen’s use due to the overvalued silver currency. The shortage of production of Barcelona’s small coins was affecting inhabitant’s daily situations. Also, it benefited local deputies and mayors since, through the creation of a new monetary base, they could finance their own deficits.
This currency development was done through village privileges, royal concessions, or, in a decentralized and unofficial way, during wartime. Those coins were made of copper and brass, and the emission was regulated by a currency board to guarantee mandatory exchangeability. Usually, they had only validity within the municipality.
It is worth dedicating a significant section to this topic in the essay, as it may represent a potential origin of an approach to fiduciary money in the Western world.
- 1299-1460: During this period, some villages in North-western Catalonia, specifically in Lleida and the Pyrenees, received licenses from Jaume I to emit lower-value coins called “Pugesas”. These were worth a quarter of a Penny or half an Obol.
- 1460-1472: This period was marked by war emissions along Catalonia. The Catalan Civil War, also known as the War against Joan II, took place in the Principality of Catalonia. The conflict saw one of the first generalized uses of firearms in a military conflict in Western Europe. Local coins worth were about one or two Pennies, depending on the emission.
- 1472-1640: Generalization of municipal emissions all along Aragon crown. Main evolution of municipal money, from a necessary to a political tool.
- 1640-1652: This period was again marked by war emissions. The Reaper’s War, also known as the Catalan Revolt, affected a large part of Catalonia between the years 1640 and 1652. Silver coins allowed by French, with exclusive validity within Catalonia. Gradual depreciation of coins due to commodity’s shortage.
The natural disappearance of this practice was driven by economic growth and the absence of noble metals in these coins. However, some places, with Reus being the last city, continued creating their own small coins until 1718 when Felip V banned definitively this practice.
6. Habsburgs and the Catalan Secession (XV c. XVIII c.)
From this time period, some notable developments should be highlighted. Firstly,the gradual disintegration of the brotherhood between Aragonese crown territories, as a natural result of ruler’s decisions on governance. This is particularly evident in the decisions regarding Mediterranean possessions. Secondly, the growing dependence on viceroys, given that the Kings were often absent from the country. Thirdly, the consequences of the America’s encounter in the monetary system.
Since the ”discovery” of America in 1492, the massive imports of gold and silver changed the entire parity through the simple market process of supply and demand. This had a significant impact on the European context, especially in Castile. Historians refer to this process as the Price Revolution.
Over time, rulers modified currencies, and coins drastically changed their intrinsic value, containing even eight times their original weight to reach equilibrium and stabilize prices. Coins shifted from “Florins” and “Croats” to “Unces” and “Duros”, with the aim of balancing these changes in Catalan money, to keep parity with Castilian currency. The Castilian “billó” was easily devaluated through massive monetary emissions.
The main economic features in Castilian policy during these times were the monopolistic centralization of commerce in Seville (and later in Cádiz) and the strict prohibition to export noble metals, which can be compared to modern-day capital controls. This prohibition, which was based on mercantilist (or bullionist) economic thought about money, prices, and economic growth, resulted in concentrated inflation in Castile while neighbouring kingdoms experienced less inflation due to the absence of such restrictions. The zero-sum game conception of the economy denoted by the prohibition led to a “Dutch disease” situation in which merchants purchased Castilian commodities (such as leather, raw wool, honey, fruits, salt and olive oil) to export as a legal way of avoiding regulation. This situation not only destroyed the valuable manufacturing industry that existed in Castile, which was centred on the textile production of Merino wool exported to Flanders and to the Bretagne, but also condemned the region to remain a low-value creation economy for centuries.
But, as Earl J. Hamilton argues in his book ”American Treasure and the Price Revolution in Spain,” there were some other reasons for the increase in prices. First of all, we have to consider the ”Edictum Maximum” policies (which, since the Roman Empire, were demonstrated as a mistake and are, in fact, considered one of the reasons for the fall of the Western Roman Empire), together with other kinds of production and selling controls that took place during the entire period. Also, the exporting and importing restrictions were very common in this Mercantilist context. The massive ”billó” emissions, which, at the end of the day, depreciated the currency even more.
In Castile, economic policies were going in the direction of avoiding the massive entrance of products into the market with the aim of preventing speculation, while in Valencia, economic policies aimed at flooding the market with products. The politicians and economists of those centuries never considered the massive imports of noble metals as the main problem, since their mercantilist philosophy probably didn’t allow them to think outside the box.
As mentioned in the last chapter, the Catalan Secession War or Reaper’s War (1640-1652) against Castilian centralization had direct monetary consequences, including the adoption of Catalan exclusive currencies that depended directly on the Generalitat and the Consell de Cent. Nevertheless, there was a constant French aim to legislate about Catalonia’s monetary system. Like all wars, it was a period of impoverishment and devaluation.
We can observe a significant gradual change in prices since the beginning of the sixteenth century, with the most crucial period occurring between 1663 and 1679 when people lost confidence in the Castilian Billó due to more than a century of constant royal arbitrage and notable inflation.
Figure 1: Hamilton’s price indices adjusted for missing observations and base changes. 1501=100. Villanueva & Cendejas.
7. From Hispanic Succession to the Spanish Civil War (XVIII c. – XX c.)
At the death of Carles II, as the Habsburg dynasty lacked a clear descendant, Felip V from the Bourbon family took power. Approximately five years later, from 1705 to 1715, Carles III of Austria (along with Dutch and English allies) fought against the Bourbons to claim the Hispanic Kingdoms. However, when
Carles III of Austria obtained in 1711 the title of Emperor from the Holy Roman Empire, his alliances collapsed due to geopolitical strategies. Contrary to expectations, Catalans and the rest of the Aragonese Crown territories continued the war until defeat, as their motivation was the defense of their rights and liberties. While remaining in power, Carles III officialised a silver coin named “Peça de dos rals” (or peceta) with the intention of a future monetary unification within Hispanic territories. It had future implications in the Spanish monetary history.
When Felip V took control, Catalan money was banned, while foreign money was imposed. The “Croat” production, which was the main Catalan coin from 1285 to 1706, ended. However, accounting system traditions based on Carolingian methods didn’t change, as people continued using Pounds (Lliures), Shillings (Sous), and Pennies (Diners). These methods were used until the 19th century. Felip V also eliminated the internal customs that existed between the Aragonese Crown territories and Castile, unifying markets as well.
In the second half of the XVIII century, Spain experienced a slow growth in salaries compared to the rise in prices. This led to significant capital accumulation by the bourgeoisie, which had a profound impact on industrialization and subsequent economic growth. The abolition of guilds and unions towards the
end of the century further contributed to this trend. The working class in Spain suffered to achieve this extraordinary economic growth. Earl J. Hamilton, in his book ”War and Prices in Spain 1651-1800,” highlights that during this period, prices surged by 100%, while wages increased by less than 20%.
During the Peninsular War (in Catalonia: War of the French, in Spain: Independence War), which occurred between 1808 and 1814, there was an exception: monetary emission remained decentralized. On one hand, from the Napoleon side, the annexation of Catalonia to France meant an opportunity to impose
the French monetary system, while on the other hand rebels loyal to Ferran VII ”the Desired” also used Spanish coins. Nevertheless, it only was a brief parenthesis in the Hispanic monetary history. Even though Spain was unified in the first quarter of the eighteenth century, we can’t consider there exists a Spanish national identity until at least the end of this historical period. When Ferran VII died, a dispute for the Spanish throne divided the society between liberals and traditionalists. From a numismatic perspective, Carlist traditionalist wars contributed to the mythification of old laws and rights through the production of different coins with royal Aragonese symbols and the Catalan shield.
In 1848, Isabel II, the daughter of Ferran VII, brought a definitive end to the Carolingian accounting system and introduced the decimal numeral system. This reform aimed to modernize the Spanish currency system and reduce foreign influence. An interesting fact is that in 1864 there existed 84 different legal kinds of currencies in circulation in Spain, as new coins were introduced without eliminating the old ones. There was also a substantial period during which both Spanish and French coins coexisted. In 1841, half of the money in circulation in Spain was of French origin.
On October 19 in 1868, the provisional government established during the initial phase of the liberal ”Sexenni Democr`atic,” reformed the Spanish monetary system and introduced a unified coin called the Pesseta (literally: little piece). This initiative, based in a Jacobin conception of the state, aimed to eliminate all previous currencies that represented the diverse identities coexisting in Spain, while modernizing the currency to align with European standards. Following periods of political instability, including the fall of provisional governments, the establishment of a new Kingdom, and the undesired arrival of the First Spanish Republic, the conservative ”Restauraci ́o” solidified the Pesseta as the official currency, eliminating other currencies from the Spanish common market.
Notice that, as Pierre Vilar argues in his book ”Oro y Moneda en la Historia 1450-1920,” the origin of the Pesseta comes from the Spanish Succession War, specifically from the ”Peça de dos rals” that was issued by the Austrian Archduke Carles in Barcelona. At the same time, this ”Peça de dos rals” was based on the same gram weight law as the pesetas that were minted in 1674 in the countryside of Catalonia, and which were especially appreciated since their intrinsic value was almost the same as their face value. This coin definitively stabilized the Catalan monetary system after the disaster caused by the Reaper’s War, the consequences of which persisted for a couple of decades. Also, note that Catalonia maintained a healthy monetary system until the Reaper’s War.
Therefore, we can deduce that the establishment of the Pesseta, instead of the introduction of the Castilian traditional Real, the Escudo, or the Maravedí, wasn’t just a fortuity: it was the perfect opportunity to turn the tables and establish, as the official currency, a reputable silver coin. This choice could be viewed favorably by investors and members of the Latin Monetary Union. It was part of a broader economic strategy of modernization, crucial for demonstrating a strong economy, promoting business, and ensuring a stable financial environment.
The proclamation of the Second Spanish Republic on April 14 in 1931, ended with the long Alfons XIII reign, characterized by a deep political and economic crisis. The new monetary policies implemented by the republic focused on bills, which had gained significance since their first emission in 1783. It was in 1933 when the Second Republic started minting new coin designs.
The military coup d’ ́etat initiated in July 1936, mainly by Sanjurjo and Mola, divided the Spanish territory in half. In 1937, less than a year after the military uprising, the insurgent side started minting differentiated currency, further dividing the Spanish monetary system.
The last important emission of Catalan money was done during the Spanish Civil War. Central state’s confiscations, combined with the needs of providing resources to the war, left the Catalan territory with not enough currency. Towards the end of 1936, the Generalitat assumed control of the funds held by the Spanish Central Bank in Barcelona and issued Catalan bills. The Generalitat also allowed municipalities to reintroduce lower-value currency. The initiative was adopted by other regions in Spain. Although the Catalan government lacked the authority to issue money or control borders, the central government turned a blind eye, recognizing that certain measures were necessary for the country to function. This exceptional period is popularly known as the War Autonomy period. However, it came to an end in 1938 when the Second Republic government disallowed it, reclaiming its complete monopoly over monetary matters.
8. From Franco to Democracy (XX c. – XXI c.)
The first of April 1939 marked the end of the Spanish Civil War with the triumph of the military coup d’état. The autarkic Francoist policies guaranteed a prolonged period of stagflation. From 1939 to 1941, the old pesetas were phased out of the market while new ones were introduced, featuring a redesigned
look as part of national-catholic propaganda. One notable difference in fascist monetary emissions was that Franco was the only dictator to feature his bust on the coin. The Spanish Central Bank lost its limited independence and evolved into a key component of the falangist state. Due to the shortage of gold in their bank reserves, the peseta ultimately became entirely fiat money.
When the tyrannical regime began to open up to the global economy around 1960, there was a significant shift in the economic landscape. Until 1973, there was a prolonged period of economic development marked by a baby boom and the establishment of a middle class. This era came to be known as the Spanish Miracle.
After Franco’s death on the 20th of November 1975, Juan Carlos I (grandson of Alfons XIII) was proclaimed King. The regime itself decomposed, leading to the Spanish transition to democracy. Successive governments broke with decades of isolationism. Ultimately, Spain entered the European Economic Community in 1986, committing to converge its economy with European standards, aiming to establish itself on the right side of history once again.
In January of 1999, Spain adopted the use of the Euro has the official currency. Nevertheless, it was in January 2002 when Euro banknotes and coins started being used.
References
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Hamilton, E. J. (1969). War and prices in Spain, 1651-1800. Rusell & Rusell.
De Crusafont, M. (2023). La moneda de les terres catalanes. Brau Edicions S L.
Campo, M., Estrada, A. & Clua, M. (2004). Gu ́ıa Numism ́atica. MNAC.
Goig, E. (1973). La ≪peseta≫ antes de 1869. Acta numismàtica, 3, 261-268.
Pierre, V. (1969). Oro y moneda en la historia, 1450-1920. Barcelona, Ediciones Ariel. 204-339.
Font de Villanueva, C., & Cendejas Bueno, J. L. (2011). Análisis del ciclo y la convergencia de inflación en la España de los siglos XVI a XVIII a partir de las series de Hamilton. Instituto de Investigaciones Económicas y Sociales Francisco de Vitoria, 2.