The origin of electrum coinage

Explanations for the introduction of electrum coinage are of two main types: arguments of practical convenience, based on the premise that the standardized weights of coins eliminated the need for weighing bullion at each transaction; and metallurgical arguments that the manufacture of coins only from electrum, with its variable gold content, was a means either for the state to deceive the public and make a profit, or for private issuers to guarantee the value they placed on particular coins. Recently, it has also been proposed that early coins were bonus payments to employees at the end of service. None of these explanations for the origin of coinage proves satisfactory, and current theories that coinage had some political or ideological purpose pertain only to the diffusion of coinage in Greece. The explanation put forth here proceeds from the variable alloy (and susceptibility to dilution) of natural electrum, and the difficulty of determining that alloy in any given case. Since the inconsistent and largely indeterminable gold content of electrum made its value uncertain, that metal must have been difficult to use as a means of exchange; presumably its market value would also have fallen. By contrast, the carefully regularized weights of early coins imply that, regardless of metallic content, each electrum coin of similar size was to have had a particular value. Thus it can be shown that coinage served to fix and to stabilize the value of electrum. Valuations must have been set by the issuers-at least in most cases states or rulers-and effected by the guarantee of redeemability. In the final section, questions of the "inventor" of coinage, the political or intellectual consequences of coins, and the introduction of silver coinages are briefly considered.