In the fifteenth century, Florence was on a double standard: one based on gold and the other on silver. The first was pegged onto the florin, a gold coin so called because it bore on one side the emblem of the fleur-de-lis. The silver currency (moneta di piccioli) was made up of small pennies (piccioli) and later quattrini, pieces of four deniers di piccioli. Complications arose from the fact that there was no fixed relation between the two systems because the rate of the florin was allowed to fluctuate up and down in accordance with market conditions. In general, the trend was upward so that the florin, first issued at one pound di piccioli in 1252, was worth £7 di piccioli by 1500. This rise was chiefly due to the steady deterioration of the silver currency whereas the florin remained relatively stable in gold content.

According to law, only the international merchants of the Calimala Gild, the money-changers, the cloth and silk manufacturers, the grocers, and the furriers were allowed to transact their business and to keep their books in florins. All others, retailers and artificers, were expected to deal and to reckon in petty silver currency (moneta di piccioli). Wages were paid in the same money: since employers controlled the government, it happened from time to time that they exerted pressure on the monetary authorities to debase the silver currency in order to lower real wages without touching nominal wages, a practice condemned by San Antonino, archbishop of Florence (1389-1459). The existence of two rival currencies, of course, created a steady demand for the services of the money-changers, who, for a commission, exchanged florins for piccioli or vice versa. With the exception of Venice, this monetary system was without analogy in Europe.

When first issued in 1252, the florin weighed 3.53 grams or 72 grains, since 96 florins were coined out of a Florentine pound of 339 grams or 6,912 grains. The florin was 24 carats fine, although this fineness was never achieved in practice due to technical difficulties in completely removing impurities.

In order to prevent clipping and abrasion, it became customary to circulate the gold florins in small leather bags sealed by the mint, whence the name of fiorini di suggello. This practice is already mentioned in a regulation made in the year 1299 by the Money-changers Gild which threatened with heavy penalties any member who would fraudulently utter sealed bags containing light or counterfeit florins. Despite these precautions, it proved impossible to maintain the standard set in 1252, presumably because the authorities failed to prevent the circulation of base florins issued by foreign mints. As a result, the fiorino di suggello ceased after 1321, if not earlier, to have its full weight of 72 grains. Not until 1433 did the Florentine government readopt the old standard by issuing the fiorino largo (large florin), which was 10 percent better than the current fiorini di suggello. Within a few years, this premium rose to 20 percent, so that five fiorini larghi were equal to six fiorini di suggello.

On December 12, 1464, this exchange ratio was legalized, and it was decreed that all payments connected with dowries, real estate, bills of exchange, and bank deposits were to be made in fiorini larghi of just weight and fineness. A subsequent law of October 22, 1471, abolished the fiorino di suggello altogether and prescribed henceforth the exclusive use of the fiorino largo as the monetary unit for all mercantile transactions customarily settled in gold and not in moneta di piccioli.

In Florence, during the fourteenth century, a popular money of account was the pound affiorino or a fiorini. Like all moneys of account, this pound was not represented in circulation by any real coin, but was reckoned at twenty twenty-ninths of a florin. The pound affiorino, like the English pound, was divided into 20 soldi, shillings, or sous affiorino of 12 deniers affiorino each. The florin was consequently divided into 29 soldi affiorino or 348 deniers affiorino. This is the monetary system found in the libri segreti of the Medici Bank which extend from 1397 to 1450. Sometimes the florin was also divided into 20 soldi a oro or sous subdivided into 12 deniers a oro. This division became more and more popular after the introduction of the fiorino largo around 1450. The gold florin, of course, was a real coin, but its fractions, the sous and the deniers, were moneys of account, not existing in actual circulation. To put the matter even more succinctly, the Florentine monetary system can be reduced to the following set of equations:







As already pointed out, the two standards, gold and silver, were independent of each other and, as a result, gave rise to two different price systems. In general, wholesale prices were quoted in florins and fractions of the florin, but wages and retail prices were set in piccioli. Bankers, like the Medici, reckoned and kept their books in florins. They rarely used piccioli except in small transactions. In contrast to the bimetallic standard in use during the nineteenth century, there was in medieval and Renaissance Florence no fixed legal ratio between gold and silver. A florin was not always worth the same number of piccioli, because the rate went up and down - mostly up - and varied sometimes from month to month or from day to day.













The excerpt in this article is taken from pages 31-33 of The Rise and Decline of the Medici Bank by Raymond de Roover. It was part of a section entitled "Monetary Systems Used In The Medici Records".

Full details:
Book: The Rise and Decline of the Medici Bank 1397-1494
Author: Raymond de Roover
Published By: W. W. Norton and Company INC, New York
Year of Publication: 1966
Published Simultaneously in Canada by: George J. McLeod Limited, Toronto
Library of Congress Catalogue Card No: 66-15310


Notes:
- Original spelling is American.
- A hard copy of the book has been used as the authoritative version.
- I have made minor changes to punctuation.