The Florentine florin
Medieval Florence’s financial keystone
Originally from the Republic of Florence, this gold bullion coin was used commercially across Europe. The first Florin was issued from the Republic of Florence in 1252, it weighed 3.52 grams or 72 grains of fine investment gold.
The Florentine government were exceptionally clever in the way they managed the rise of the florin, overtaking silver bars, as an international currency. Government law decreed that gold bullion was only to be used in large transactions by international merchants of the Calimala Guild, cloth and silk manufacturers, money changers and grocers. Smaller transactions seen in retail trade and wage payments were to be settled using silver coins. The growing success of the Florentine economy attributed to its emergence as a monetary standard.
Whilst the Florin was in circulation there was also a separate silver standard in evolution, despite government efforts to set an official exchange rate between the two coins market-forces overrode this and the two operated on a flexible exchange rate.
The presence of silver coins alongside the Florin did not come without issues. The archbishop of Florence, San Antonio (1389-1459) complained of silver coin debasement by the government. Silver bullion coins were primarily used by the lower classes, it was believed that the government were debasing the silver coins used to pay wages, whilst the purity of the gold currency was maintained which priced wholesale goods.
Florentine banks were like the HSBCs or Barclays of today – international giants, with branches across Europe. This allowed the Florentine coin to flourish as an international coin in Western Europe. It was so successful that by the fourteenth century 150 European states had issued their own copies of the gold bullion coin.
In order to prevent the coins being clipped, the coins were circulated in leather bags which were sealed by the mint. This acted as a deterrent to clippers and counterfeiters as in order to counterfeit they would have to be able imitate the seal.
The original florin, in 1252, was minted to equal the value of one lira. Because it operated alongside other states’ coins, value of monies continually moved against one another which allowed the florin to be used as a common measure between currencies. As time went on the investment gold content of the coin did not change, but by 1500 the money of account had been inflated and the coin was now worth 7 lira.