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<p>[QUOTE=&quot;The Eidolon, post: 8249577, member: 102103&quot;]Thomas J. Sargent&#039;s &quot;The Big Problem of Small Change&quot; has a lot of useful theoretical discussion as to the shortages of minor coinage in Medieval and Early Modern coinage.&nbsp; Some of the math and economic theory went over my head, but if I got the gist of it, the main argument went something like:</p><p><br /></p><p>Small change is more useful than larger money in allowing transactions to take place.&nbsp; To use a modern example, almost anything you can buy with a dollar you could also buy with 4 quarters.&nbsp; But unless change is readily available, there are lots of things you could buy with 4 quarters which you can&#039;t buy with a dollar.</p><p><br /></p><p>Even when all the currency units are made of the same metal (such as silver in the Medieval Era), small change still tends to be inherently in short supply.&nbsp; In addition, smaller money had a higher cost of production per unit value than larger coins, so governments were reluctant to produce it in adequate quantities.&nbsp; Governments tried to solve the problem by debasing the minor coinage, but that just led to inflation and a change in the value ratio of minor to major coinage.</p><p><br /></p><p>The problem was only really resolved when technology improved enough to issue &quot;token&quot; coinage which didn&#039;t need to contain its full metal value.&nbsp; Modern milled coinage allowed for circulating copper and less than full-bodied silver without the rampant counterfeiting that previously occurred.&nbsp; </p><p><br /></p><p>The UK especially exacerbated the problem by 1) not having copper coinage be legal tender which could be freely exchanged for silver; 2) not addressing the silver:gold price ratio to keep silver in circulation in the late 1700s; and 3) suspending the convertibility of paper money during the French Revolution/Napoleonic Era.</p><p><br /></p><p>China&#039;s &quot;cash&quot; system of full-bodied copper coinage is also an interesting example.&nbsp; As far as I know copper traded with silver ingot-based money at what was effectively a floating exchange rate, which solved some problems but caused a a bunch of others.&nbsp; Larger-denominated copper coins were highly inflationary.</p><p><br /></p><p>Anyway, here&#039;s my &quot;full bodied&quot; copper coinage:&nbsp; Sweden 4 daler 1756 (1.93 kg)</p><p>[ATTACH=full]1453034[/ATTACH][/QUOTE]</p><p><br /></p>

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