The Mystery of the Mint:

a new look at the origin of coinage

by Michael E. Marotta

(This article originally appeared in the August 1995 issue of The Numismatist. The American Numismatic Association granted it a George M. Heath Literary Award.  The presentation has been updated for this format.)

We don't know why coins were invented. It is true that we find them very useful today. Coinage was invented around 650 BC and within a century or so achieved most of its modern attributes. (Coins weren't stackable until about 650 AD.) However, today, we have no clear idea of the intentions or reasoning of the first coin maker. The motivations for the founding of the first mint remain a mystery.

TOKENS AND INDIRECT BARTER

We do, indeed, understand the origins of money. Money is anything which you accept in lieu of something else, with the intent to trade it later for what you do want. Money is indirect barter. In different times and places, salt, cowerie shells, tea, and nails have been money. The Austrian economist, Carl Menger, writing in The Economic Journal (June 1892), examined the reasons why silver and gold became commonly accepted. In his essay on the origin of money, Menger laid great weight on tradition and necessity. People are conservative and self-interested, he said. Therefore, if they see something useful, they copy it. Metals are the most useful form of money, so metal money became widely accepted.

In the Bible, Genesis 23 tells of Abraham weighing out 400 shekels of silver to buy a burial site for Sarah. The shekel was about 10 grams or about 1/60 of a pound, roughly the amount of silver in an old U.S. half dollar. Rings, bracelets, and brooches were made to this standard and were used as money 2000 years before coins were invented. In Genesis 24, Abraham's servant gives to Rebekha "a golden earring of half a shekel weight, and two bracelets for her hands of ten shekels weight of gold." Egyptian tombs contained rings that were cut into pieces. The rings themselves have a segmented design that made it easy to divide them into known fractions.

From our vantage point, we see a natural progression from bullion to coins to money of account. In fact, warehouse receipts actually preceded coinage by several thousand years. In ancient Mesopotamia, from about 8000 BC to 4000 BC, clay tokens were used to represent the capital and production of farms. These tokens eventually led to the conceptualization of abstract numbers and to the invention of writing. In other words, numeracy and literacy derived from accountancy.

Dr. Denise Schmandt-Besserat is an art historian at the University of Texas at Austin. Twenty years ago, she decided to investigate the origins of clay as a plastic medium. She visited museums to see their oldest clay artifacts. "I expected to find a lot of bricks and pottery," she said. What she found were very many small objects, unattributed, unidentified, and uncatalogued. Surveying these small objects from all over Mesopotamia, she realized that they were tokens. The tokens allowed a one-to-one mapping of animals, grains, etc., for inventory control, planning and taxation. In order to count your sheep, you counted the sheep tokens. Over time, the tokens became more complex, with marks to differentiate items in the same class. This led to writing.

 Tokens from households were often stored in spherical clay "envelopes." The outsides of the envelopes were impressed with the shapes stored inside and the ball was baked shut. By 3500 BC, people in Mesopotamia figured out that it wasn't necessary to store tokens or envelopes. They made marks in clay tablets that represented tokens which in turn represented commodities. Dr. Schmandt-Besserat has identified the process by which token shapes became cuniform symbols. Eventually, someone understood that one cow and one sheep and one bottle of beer have something in common. The abstraction we call "number" also came from tokenized accounting. Finally, the tokens were always intended to be temporary. Clay counters for seasonal crops are often found in the same stratas as the seasonal refuse of those items. Like cancelled checks, tokens were discarded once they were no longer needed.

Visiting excavations on the island of Thera, Jacques Cousteau (working on land), was shown a Minoan warehouse. The warehouse faced a street and had a window whose function was unmistakable. Inside the warehouse were remains of amphoras from which goods were issued. We know that the Minoans were literate. We know that their civilization disappeared before 1200 BC. We believe them to have been originally Semitic. It seems reasonable to assume that in this instance, goods were stored and delivered by means of some written medium. Though we have no actual records to confirm this, neither do we have coins or bullion to contradict it. In fact, the earliest coins don't appear until 600 years after the Minoans were eclipsed.

PECUNIARY HIDES

One form of metal that has been discovered among Minoan ruins are tin and copper ingots, in the shape and size of cowhides. The molds for these "hides" even imparted the texture of hair. In the late 19th century, the British numismatist, Sir William Ridgeway, wrote The Origins Of Currency And Weight Standards. His thesis was that the ox was the basic unit of trade. Coinage was struck in sizes that allowed silver and gold to substitute for cows. The discovery of these metal "hides" certainly lends support to this theory. Moreover, other words we use for money point in this direction. "Pecuniary" comes from the Latin word for "cattle" (or "sheep", i.e., for any head or herd of livestock). The German word for cattle is "das Vieh" which we write in English as "fee." While bars of silver bullion are no longer shaped like cowhides, we still call a dollar a "buck" from the (very near) time when a deerskin could be exchanged for a dollar's worth of trade goods.

If coinage really had evolved gradually out of bullion, then it seems reasonable that either ring-shapes or hide- shapes would dominate today. In time, perhaps, the rings would be cast in different sizes to avoid the need to cut them for change. Similarly, in time, "hides" might have become convenient little wafers of silver and gold. But this is not what happened. Coins were a radical invention that gave a new direction to the storage and transmission of wealth.

Four theories have been suggested for the origin of coinage: Religious; Commercial; Administrative; and Tyrannic. The religious theory says that coins were first stamped in temples. Another theory is that since money facilitates commerce, it seems likely that merchants were the first to strike coins. An alternate theory is that coins were created by kings to enable taxation. Historians know that coins came at the same time that tyrants replaced hereditary kings, therefore it seems possible that coins were invented as a tool of these ambitious men.

GODS AND NYMPHS

Ernst Curtius, an authority in Greek history, put forward the religious theory of coinage in 1869. Writing in the Monatsbericht of the Royal Prussian Academy, Curtius placed the origin of money in the temples. After all, coins were often found when the sites of ancient temples were excavated. In fact, forty years after Curtius's conjecture, the earliest known coins were discovered at the base of the temple of Artemis in Ephesus by researchers from the British Museum.

In Curtius's time, it was well-known that the Romans issued coins from the temple of Juno Moneta. There is a body of supporting evidence. Coins, of course, featured gods, nymphs and other mythological characters. As the objects of votive offerings, temples amassed surplus wealth. This abundance could have given rise to coinage. The coins could also be used to buy what the temple needed and could also be issued as rewards for proper behavior by supplicants. In those cases where the image on a coin is of a real animal, the religious theory would find a connection to a patron deity.

The earliest known recognizable coin says: FANES EMI SEMA phanes emi sema – I am the sign of Phanes. This legend is over a stag. If "Phanes" is taken to mean "the Bright One" then the stag would be the sign of Artemis, goddess of the hunt, and the patron of the temple where the coin was found. There are two main problems with this theory. First, in order to explain the plethora of coinages with their many devices, we would have to find a dense population of temples, each rich enough to warrant coinage. Who was the patron god of the lion? The earliest coins show several varieties of lions. Was each issued by a different temple? And who was the patron of the rooster and where was their temple? The second objection is that there is no tradition of coinage by temples. While the Romans stand out as an exception, if coins were indeed invented for religious reasons, the impetus was lost almost immediately. This is not credible on sociologic grounds. Religion is an extremely important force in human society. There is no way to explain how the priests lost this perogative and never regained it.

TRADE AND COMMERCE

The Encyclopedia Britannica claims that the first coins bore a primitive punchmark, "certifying to either weight or fineness, or both." Writing in 1933, the British numismatist, Charles Seltman, suggested this scenario: "When a merchant received a dump [a nugget-shaped ingot] he regularly weighed it until one day some Ionian hit upon a time-saving device. Why not mark every dump as it passed through his till? Then, if in the course of circulation -- money was scarce in those days and handled by the few -- it returned to him, he would know it again and need not trouble to weigh it afresh." [Note: Seltman wrote that earlier entry for the Britannica. It has since been edited and updated.]

This view is commonly shared by other writers. In Money: From Cowerie Shells To Credit Cards, the trustees of the British Museum concur by claiming that "Lydians saw the advantage of stamping such pieces guaranteeing their value when used as money." This theory is probably the most compelling to us today. However, Colin Kraay, in his book, Archaic And Classical Greek Coins, says "the natural assumption that coins were used in remote antiquity much as they are used today is frequently falsified by the absence of those small denominations which alone make such a use possible." In other words, the first coins were worth far more than anything you could buy with them.

The first coins were electrum, a naturally-occurring alloy of gold and silver. An electrum coin was the marketplace equivalent of today's $1000 bill. Silver coins were not minted until about 50 to 100 years later than electrum issues. Bronze coins appeared first about 450 BC, long after coinage was established. Another problem with the commercial theory is that no one has ever suggested a meaning to the punch marks which appear on the earliest coins. There is no known way to see in the impressions the name of a merchant or the weight of the ingot [dump] or its fineness. The punchmarks ("windmill", "swastika", etc.) are there, to be sure. What they mean is not clear at all. If these were supposed to be marks of authenticity, they did not live up to their intention. Furthermore, those unsurpassed traffickers, the Phoenicians, were among the very last, not first, ancient people to mint coins. If coinage were invented to facilitate trade, it didn't impress the greatest traders of the day. More support for this line of questioning comes from the fact that the earliest coins are never found far from home. If coins were invented to facilitate trade and commerce, they would have travelled overseas, along the same paths as grain, lumber, and hides. They did not. As yet, no known hoards of the earliest coins have been found in Egypt, Tyre, or other centers of commerce. The historical evidence is that the first coins were overvaluable and they never travelled far from home. Therefore, as useful as coins later proved to be in commerce, they cannot have been invented specifically to support trade.

MERCENARIES AND TAXES

In his book, The Origins Of Money, Philip Grierson suggests that the first coins were struck to pay mercenaries. Silver and gold were used by weight from the dawn of civilization. Coinage would have made it easy to pay a large body of individuals the same amount of money all at the same time. Grierson offers this theory after pointing out some of the problems with the Commercial theory. Were coins invented by a king to make taxation easier? After all, coins are divisible and uniform while cows and chickens are not. However, the same sorts of problems that plague the Religious and Commercial theories apply to this one. In addition, the theory puts the cart before the horse. A great leap of logic is required if we are to believe that a hereditary ruler in an agricultural society ordered the minting and distribution of coins in order that they be turned in later so that the royal household could then spend them. Direct taxation is much easier. The king takes a cow: the royal family drinks milk.

TYRANNOS AND BASILEOS

In 1920, P. N. Ure suggested that the 7th century BC saw the birth of both a "new form of government and a new form of wealth." His book, The Origin Of Tyranny, makes several key points. Most likely, "tyrant" means "prince" in the root sense of "first citizen." However, the origin of the word "tyrant" is not clear, but it is probably not an Indo-European word. It is certainly not a Greek word. The Greek word for king is "basileos." Therefore the concept of "tyranny" was new to the Greek world. Also, tyrants were not necessarily oppressors. That is a modern view. To the people of the time, tyrants were merely rulers who did not have hereditary authority. They were self- made men. The word tyrant only became negative when tyrannies were replaced later by democracies.

One problem with the Commercial theory is that there is no known meaning to the incuse punch marks on the earliest coins. The Tyrant theory would explain these first coins as anonymous badges of conspiracy. Melting and casting electrum would create natural-looking lumps that mimicked the nuggets found in local streams. Stamping a rude mark would identify the ingot to the select few and yet would be meaningless to the authorities. The earliest coins could have had a purely local use in buying loyalty. Trade and commerce are as old as humanity. Silver and gold were long esteemed as valuable. But coinage first appeared only when self-appointed leaders appeared: Walwates (or "Gyges") in Lydia; Pisistratos in Athens; Phaidron in Aegina.

Once coins were created and distributed, their utility took them into new routes of commerce. Certainly, once the tyrant became the new king, civic issues of bullion, stamped with the badge of the town or tribe, would appear. And this idea would be copied almost at once by others. Within three generations, coins would be commonplace. One problem with this theory is that tyrants didn't invent anything else. They didn't even create any new weapons. Suggesting that tyrants invented coinage to buy loyalty is like suggesting that they invented the alphabet to enable propaganda.

MONEY TALKS

To understand the origin of coined money, it is necessary to fall back on first principles. If people see something useful, they copy it. Often they copy slavishly with no regard for the original purposes of an object or the process that led to it. We make progress because we profit from the discoveries of individuals. Someone learned how to make a fire and someone invented coinage. Coins did and do serve the secular needs of religious bodies. Coins facilitate commerce. Coins advertise their origins. Coins are symbols of autonomy and authority. Clearly, once coins were invented, they quickly were put to many uses. All of the contradictory evidence can be resolved by assuming that the first coins were the result of one person's work. About 700 BC someone decided to put a seal on ingots of metal. It took them many years. They must have tried casting first, since this is the simplest way to achieve the result. They realized that forcing the metal into the mold would create a better image. So, they experimented with punches and dies. The reasonable assumption is that coinage as "signed bullion" was always the goal of the inventor. Whether this person was a merchant or a politician or a priest or something entirely different remains unknown. When thinking about ancient times, it is important to remember that 90% or more of the documents that existed were lost when the Library of Alexandria was destroyed. Modern habits are too easy to accept uncritically. The modern habit most foreign to the person who invented money is our reliance on authority. Unfortunately, we can't travel back in time. We can only reconstruct some of the pieces. The big picture is hidden from us. We can't know why coins were invented. We can only be grateful that they were.

Additional Sources

Historia Numorum by Barclay V. Head, (Oxford: Clarendon Press, Oxford, 1911).

Greek Coins by Charles Seltman (London: Methuen & Co. Ltd., 1933 and 1955).

History Of Ancient Coinage by Percy Gardner (Oxford: Clarendon Press, 1918).

The Coin Makers by Thomas W. Becker (New York: Doubleday & Co., 1969).

Before Writing by Denise Schmandt-Besserat (Austin: University of Texas Press, 1992).

The Early Ionians by G. L. Huxley (London: Faber & Faber, 1966).

Austrian Economics, edited by Stephen Littlechild (Brookfield, Vermont: Edward Elgar, 1990).