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George Fetherling

Whenever Grandmother meant to suggest that someone was not very bright, she would say of that person, "The poor dear is only nine pence to the shilling." There were, you see, 12 pennies in a shilling, which was one-twentieth of a pound. One day when I was little she taught me her fool-proof method of measuring the amount of dry spaghetti suitable for a two-person meal. You take the pasta and make a circle of it until the circumference is "bigger than a shilling and smaller than a florin." The formula works. I know because I still recite it, though silently, lest anyone overhear and think that I am (another of her expressions) daft.

A shilling, I should point out for the majority of the planet that is younger than I am, was a British coin approximately the size of a Canadian quarter; there were 20 of them to the pound (or perhaps 18 if you were a bit thick). They ceased being used during Britain's switch to decimalization in 1969-71. The florin, by contrast, was a two-shilling coin, slightly smaller than our old 50-cent piece, which stopped being struck somewhat earlier, after only a century in circulation. The florin too was a silver (or, after 1947, silver-looking) coin, not to be confused with the gold florin, issued for several hundred years beginning in the 13th century, and so named because it was first minted in Florence.

Britain's monetary system was neither wholly decimal, nor totally duodecimal (that is, divided into units of 12), for there were such strange everyday anomalies as the half crown, worth two shillings and six pence, or two-and-six, written out as "2/6". And the pound was only called that when spoken of as a banknote. The minted version of the pound, which is still struck for collectors but hasn't circulated since the 1920s, was the gold sovereign. Yet luxury items, such as fine leather goods or bespoke clothing, were never priced in pounds but rather in guineas. The guinea was a gold coin equal to one pound plus one shilling. It was so called because originally the metal used is said to have been mined in Guinea.

Like Catholicism, the system made sense to those reared within its confines and also to the large part of the globe that had it imposed on them in the age of European colonialism. Some understanding of this fact is the prerequisite readers need for appreciating a new book, Sterling: The History of a Currency (Penguin Canada) by Nicholas Mayhew, who is curator of the numismatic collection at the Ashmolean Museum at Oxford but who approaches the subject as much like an economist as a coin expert. And with good reason.

The debate Britain is now undergoing about its currency is wrenching the national psyche. Just as decimalization at the end of the Swinging Sixties seemed to many a signal that Britain was giving in to what was then called Americanism, so the idea that Britain should adopt the common European currency called the euro is viewed by many as sacrificing heritage on the alter of globalization. To date, Austria, Belgium, Finland, France, Germany, Greece, Italy, Ireland, Luxembourg, the Netherlands, Portugal and Spain have signed up to use the euro (which at the moment is still a hypothetical denomination of account¨the actual coins and notes won't appear until next January). That adds up to nearly 300 million consumers and investors who suddenly will be freed of fluctuations from one currency to another. The emergence of the euro will also offer a challenge to the other truly international currency, the American dollar, whose $100 banknote (the new design with the enlarged portrait of Benjamin Franklin) is, whether we like or not, the lingua franca of world commerce, both above-board and criminal.

Denmark, Sweden and Britain have so far opted out of the euro. But there is enormous internal and external pressure on the last of these especially to fall into line, just as it did on the metric system. This is where Mayhew comes in. He writes as a historian but is informed by the fact that he is also a citizen and, what's more, one whose knowledge of the history of coinage and currencies has given him uncommon insight into economics. He confesses early on that the astute reader will detect his prejudices in the great euro debate, but I guess I'm not up to his standards of astuteness. What I take away from his book is cautious ambivalence, which a cynical person could almost interpret as a desire not to offend whichever side prevails.

In my view, what he should have said, given the breadth of his historical knowledge, is, first, that no paper money has ever held its value for very long and that, second, there has always been one brand of money, whether specie or paper, that has dominated world commerce at any given time. The British system (which was so omnipresent for so long that American pilots during the Vietnam War carried gold sovereigns in their survival kits to buy their lives if necessary) was itself the replacement for the Roman system, on which it was closely based, just as the American one is rooted in the Spanish.

Beginning in the 16th century, when Spain set up the first mint in the Americas and began shipping home tonnes and tonnes of silver from the mines at Potosf in Bolivia, the Spanish coin called the eight reales became the world standard. Other countries copied it with silver coins of the same weight and size, such as the British and Austrian crowns and, later, the American silver dollar. In fact, the eight reales, the piece-of-eight of nautical fiction, was especially influential in the Americas. It was a literal piece of eight in that it could be divided into one-real units called "bits." Hence the American slang "two bits", "four bits" and "six bits" for 25 cents, 50 cents and 75 cents respectively. The very dollar sign¨$¨comes from the image of the Spanish empire's eight-reales, which after 1732 showed a ribbon wound back and forth across the Pillars of Hercules.

Spanish coins were actually legal tender in the U.S. until 1849 and passed current in British North America until Confederation. The last trace of North American infatuation with this currency divisible by eight was the fact that stock market quotations were listed in units of 12 1/2 ("Dominion Widget is up an eighth in heavy trading") even though the equities were purchased and sold in decimalized dollars. The New York and Toronto stock exchanges ended the practice only last January. The clout of the dollar-sized Spanish colonial eight-reales was so great in East Asia that the phrase "dollar Mex"¨meaning a silver dollar of whatever nationality¨was one of the few cognates to enter the Chinese language from a European tongue.

What of the future? Mayhew, one of major scholars in his field, refrains from prognostication. Certainly electronics will continue to take the place of actual paper money and coinage. Also, a rivalry will develop between the American dollar and the euro. Argentina has already introduced legislation to peg its peso to both, for maximum stability (and no doubt reduced economic sovereignty as well). The question is what will be the currency of the third great trading block, Chinese or Japanese? Or might there possibly arise some pan-Asian monetary unit? Frankly, the idea seems pretty remote at this stage.- ˛

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