The Napoleonic Wars (mid 1790s until 1815) caused a great monetary upheaval in England. During the war, much of the regular coinage was hoarded, and many varieties of tokens took their place. At the end of the war period, the British overhauled their coinage system, which was long overdue. In 1816 the weight of the silver coinage was reduced to the point where it was “token coinage.” By that, it met that all of the coins melted for less than their face value. That move kept coins in circulation. In the past, coins were systematically removed from circulation whenever the price of silver rose to the point where melting them was profitable. In 1817, the British introduced the gold sovereign, which had an official value of 20 shillings. It replaced the guinea which had had a value of 21 shillings. Sovereign became a widely used, popular gold coin that continues to be produced to the present day. Here is a recent acquisition, an 1817, George III sovereign. This is a popular and scarce collectors coin. It not only marked the introduction of new British denomination but also the introduction of a classic design, St. George slaying the dragon by Benedetto Pistrucci. This design appeared on many British silver and gold coins for the next century, and still appears on many modern British gold coins.
The sovereign is a beautiful design. And yes, inflation generally follows wars, and historically coin devaluation was another result. Because wars are expensive and unlike "real" investments everything you're spending the money on gets blown up. As we see today, however, wars are not the only cause of inflation. Any colossal deficit spending will do the trick.
Wartime inflation was not the only problem. Before the war, the mint, which was located in the Tower of London, was almost 1,000 years old, and woefully antiquated. The facility could not produce enough coins to run the economy. The government also followed the “commodity theory of money” policy. In other words, the coins melted for their face value. As soon as silver bullion rose in value, the coins were, withdrawn from circulation. The solution was to circulate coins that were “token pieces” that melted for a good deal less than their fact value. This reform worked for a century, until after World War I, when the British had to reduce the purity of their coins to 50% silver.
