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Kaiserslautern And Gresham's Law

 
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Author Previous TopicReplies: 7 / Views: 184Next Topic  
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 Posted 11/21/2022  5:26 pm Show Profile   Bookmark this topic Add retiredkper to your friends list Get a Link to this Message

Back in old England economist Sir Thomas Gresham 1519-1579 said that 'Bad money drives out good money". At that time nearly all money was precious metal coinage. Being in coin form standardized the metals to government standards and made commercial transactions possible. That was good money. Bad money was basically inflationary when greedy rulers debased or lowered the gold or silver content of the coins. People recognized the difference in the coins quickly. They hoarded the good ones while spending only the lower value debased coins. Good coins disappeared even faster in times of war when gold and silver was replaced with copper and paper money as in the American Civil War. Ten years later when the Franco-Prussian war broke out the city of Kaiserslautern, which used Bavarian coins suddenly experienced a coin shortage that brought commerce in the city to a stand still. Silver coins vanished and with 200,000 German troops stationed in the city or passing though, the demand for coins sky-rocketed. To remedy the situation the city fathers authorized the issue of Darlehen Schein notes with the denominations of one, two and five gulden dated July 31, 1870. These notes were valid until three months after peace was declared. (A Darlehen Schein is a note issued by a state loan office or bank much like a mortgage bank.) Here we have a one gulden note that was issued to the Kammgarnspinnerei.
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 Posted 11/21/2022  5:44 pm  Show Profile   Bookmark this reply Add Hondo Boguss to your friends list Get a Link to this Reply
retiredkper, thank you for this educational post. And that's a fine guilden note!
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 Posted 11/21/2022  6:05 pm  Show Profile   Bookmark this reply Add hokiefan_82 to your friends list Get a Link to this Reply
Thanks for the very interesting post, retiredkper!
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 Posted 11/21/2022  6:40 pm  Show Profile   Bookmark this reply Add erafjel to your friends list Get a Link to this Reply
Very interesting, thanks for sharing!
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 Posted 11/21/2022  7:16 pm  Show Profile   Bookmark this reply Add sel_69l to your friends list Get a Link to this Reply
Thanks for the write-up.

I assume that very few of these Notes would have survived.
An interesting piece of Bavarian economic history, at a time of great political, military, industrial, social, and economic change within modern German history.
This Note is, and provides, some of the evidence.
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 Posted 11/21/2022  9:17 pm  Show Profile   Bookmark this reply Add retiredkper to your friends list Get a Link to this Reply
Thanks everyone.
I would guess most of these notes were redeemed but since they expired no one cared to destroy them and more than a few survived as souvenirs.
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 Posted 11/21/2022  9:31 pm  Show Profile   Bookmark this reply Add Sap to your friends list Get a Link to this Reply
Interesting; just judging from the appearance, if I saw it in a bulk bundle of notes, I'd have assumed it was just regular notgeld, until I saw the date.
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 Posted 11/22/2022  09:12 am  Show Profile   Bookmark this reply Add jbuck to your friends list Get a Link to this Reply
An interesting piece of history! Thank you for sharing the note and its background.
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