Monetary system in medieval Serbia - part two

Article 168 of Dusan’s Code started the statutory regulation of monetary relations by stipulating that dinars could be minted only in imperial towns. This first ever Serbian coinage law allowed the goldsmith working in imperial towns to mint imperial money, while the composition and weight were set in accordance with conventional rules. At that time, around the middle of the XIV century, it was still inappropriate to determine by law the permissible departure from the prescribed weight of coins. The primitive coinage methods applied made it possible for coins of the same kind to differ significantly in weight. The Mine Law enacted in 1412 by Despot Stefan Lazarevic (1389-1427) prohibited the sorting of coins and the checking of their weight. Coins turned out by a mint were sorted and weighed so that the lighter coins could be put in circulation and the heavier coins are re-minted or hoarded. The prohibition against sorting and checking the weight of the newly minted coins indirectly sanctioned the ruler’s right to mint coins whose weight is different from the prescribed weight. That was the beginning of the legalized debasement of coins and reduction of their material to a functional value.
The minting of coins in the late Middle Ages was an important source of royal revenue. Royal rights, stemmed from the ruler’s supreme ownership of the country. Supreme ownership of the country allowed the ruler to exercise his royal rights also in parts of the state territory directly owned by representatives of the privileged classes and thereby limit the right of direct owners to use their lend. Coin minting was seen partly as major and partly minor royal rights. As a prerogative of sovereignty over the whole state, it was included in minor royal rights. In the late middle Ages, the exercise of monetary rights meant that the ruler either organized the minting of money or leased the mints.
Before Dusan’s Code and after his sudden death, royal monetary rights were exercised in medieval Serbia by leasing out mints. However, Article 168 of Dusan’s Code solely legalized organization of minting by the ruler. In this way, Dusan and his supervisors could control the mints. The earlier leasing system meant that the mint lessee answered to the ruler for the weight and quality of coins with his reputation only. Such system provided greater opportunities for abuse than when the ruler organized the minting, because neither the minters nor the supervisors were appointed by the ruler. Dusan organized the minting of money himself in order to complete the unification of money he had started by re-minting the old regal and early imperial coins.


Monetary system in medieval Serbia - part one

Silver coins were minted in medieval Serbia using the locally produced silver, which was made possible by restoring of the mines originally exploited in the Roman period. Silver mining was restored according to established plans. Like in Bohemia and Hungary, the mining and smelting were done by Saxon, miners from the Rhineland, who were invited in mid XIII century by Serbian rulers. They were granted a number of privileges: they were allowed to settle down near the sites on which they prospected for or mined the ore, clear forests, establish autonomous colonies lead by their own chiefs, and establish partnerships whose members owned shares in the mines, which they could bequeath, sell or mortgage. The organization of mining was thus left to free enterprise.
There were no state mints in Nemanjic Serbia, and coins were made by goldsmith whose workshops were in the imperial towns. Another reason why money was minted at several places is certainly the fact that the Nemanjic state never had a permanent capital. The capital was wherever the current ruler established his court and it had that status for as long as the court was there. From the marks on the Serbian medieval coins, it has been established that the use of money developed most during the reigns of King Milutin and Emperor Dusan. The only mint before Milutin’s reign was in Brskovo and it is quite certain that the mints in Rudnik and Novo Brdo were started up during his reign. During Dusan’s reign mints were working in Rudnik, Novo Brdo, Plana, Prizren, Trepca, Skoplje and Ohrid.
By analyzing the weight of preserved Serbian dinars, numismatists have established that the Venetian grosso, weighing 2,178 grams and of 965/1000 silver fineness, served as the model. Although minor deviations from the prescribed weight occurred from the very beginning of regular money minting in medieval Serbia, the ratio did not change until almost the end of the reign of King Stefan Decanski (1321-1331). The Serbian dinar lost a quarter of its value in the first half of Dusan’s reign. This was no longer due to uncertainly value about the Venetian mint ratio. It was a deliberate reduction of the weight of coins, most probably caused by military spending and Serbia’s rapid expansion at the expense of Bulgaria and the Byzantine Empire.
Around 1348, Emperor Dusan conducted a currency reform aimed at stabilizing the national currency by mass re-minting of all dinars minted during the preceding part of his reign. These old coins, whose weight varied from 2,12 to 0,98 grams, were re-minted into imperial coins weighing 1,50 grams on average. Following the mass re-minting of the regal and early imperial period coins, the weight of imperial Serbian dinars remained stable.
In medieval Serbia, the right to coin money belonged to whoever exercised de facto power in a given territory. There were times when that right was being shared by the rulers ruling concurrently in different parts of Serbia, ceded by the ruler to deserving lords or usurped. The causes of this phenomenon should be sought in a patrimonial attitude towards territory which was at that time prevalent throughout Europe. This attitude made it possible for a single state to be divided by agreement between members of the ruler’s family, resulting also in de facto division of power. The Nemanjic state was ruled from 1282 to 1316, concurrently by two kings, Milutin and Dragutin, and both minted money.


Function of money in medieval Serbia, part two

The Nemanjic’s dinar was in high demand on foreign markets, just like noble metals from Serbia. Goods and money travelled from Serbia by caravan to the East and by ship to the West. The use of Serbian dinars as a means of payment outside the Nemanjic Serbia is corroborated by medieval documents from Venice, Dubrovnik and Hungary, as well as by the many Serbian coins found in Bulgaria, Bosnia, Greece, Italy, Romania and France. Nemanjic dinars were being taken out of Serbia mostly by the merchants of Dubrovnik, who brought caravans of fabric, salt, spices, glassware, fine clothing and other valuable goods to Serbia. In return, they accepted only good dinars, so that they could get a proper equivalent for the merchandise they sold. By refusing to accept bad coins, the merchants effectively prevented the action of Gresham’s law, according to which good coins were hoarded and bad coins remained in circulation. Had they not, good money would have remained hoarded or been melted down and possibly turned into a greater amount of bad money. Chaos would have hit markets world-wide, because trading would have lost its foundation: a durable standard for measuring and comparing the value of various kinds of goods. Emperor Dusan understood quite well the importance of the principle of optional acceptance of money in circulation, since Article 118 of his Legal Code prohibited anybody from forcing merchants to accept money they did not want in return for their merchandise.
Besides rulers, the Orthodox Church also disposed of coins in the Nemanjic State. Churches and monasteries received donations in coins from rulers on the occasion of construction of new or restoration of old Church buildings. This practice was taken over from Byzantine emperors. The Nemanjic’s also regularly filled the church and monastery treasuries with donations in coins by granting annual subsidies for maintenance of monastery residents. Serbian lords had substantial monetary assets. During Emperor Dusan’s reign, the Serbian nobility was already so wealthy that it became commonplace for nobles economical than the accumulation of cattle or weighed silver.
Emperor Dusan counted on the fact that the nobles, court officials, artisans and merchants possessed assets in monetary form, as demonstrated by the fact that his legislators did not shun the possibility of seizing of such assets in certain conditions.
With the accumulation of monetary assets, conditions were created in Serbia for the lending and deposit coins. The Nemanjic’s accepted the view of the Byzantine emperors that the lending of coins at a given rate was an economic necessity. There is no reference in medieval Serbian documents to any general ban on the lending of money. According to a charter granted by Emperor Dusan to the Monastery of the Holly Archangels near Prizren in 1348-1353, only the clergy were not allowed to lend money. The lending of domestic silver coins against a mortgage on property is to be referred to from the beginning of the XIV century. With the strengthening of economic power and centralized government in the first half of the XIV century, the attitude towards mortgages was accepted without reserve, as a necessary insurance for the lenders. A reserve was later introduced, as mortgage was considered to be an act aimed against the borrowers’ interests.
Domestic lenders mostly extended loans to merchants, because the trading community suffered from a chronic shortage of money. Merchants often financed their transactions by setting up special trading companies. Some members of these companies acted exclusively as financiers, while others were responsible for the organization and conduct business. These companies were usually set up for each project or each trip. More permanent arrangements involving a yearly settlement were much rarer. The merchant companies created by domestic merchants and lenders operated exclusively between the Serbian towns on the Adriatic coast and inland markets. Trade between the Italian city states and the coastal markets of Nemanjic Serbia was controlled by foreigners, who also joined together in merchant companies.
Medieval Serbian documents show that the citizens of Dubrovnik gave valuables for safekeeping to some Serbs in Nemanjic Serbia and that Serbs deposited their money with the city of Dubrovnik and private lenders from Dubrovnik. There are no records of the rate of interests on private loans, but Dubrovnik city paid annual interest rate of five percent on deposits. In order to expand their lending and deposit business, Serbian rulers were prepared to accept foreign citizenship. For instance, King and subsequently Emperor Dusan became a citizen of Venice, regardless of the fact that the title of a Venetian citizen was very much inferior to his royal title. The acquisition of Venetian citizenship involved real benefits. Namely, foreigners were not allowed to engage in financial transaction in Venice.


Function of money in medieval Serbia, part one

Barter trade and use of primitive money prevailed in domestic trading in the Nemanjic’s State, which was a kingdom from 1217 and an empire from 1346. The use of foreign coins was quite rare. The earliest domestic coins date back to the reign of King Radoslav (1228-1233), who issued on rare occasion coins akin to the Byzantine scyphatus. The minting of coins was discontinued after his death and revived toward the end of the reign of King Uros (1243-1276) or at the beginning of that of King Dragutin (1276-1282-1316). It was then that the regular minting of the national silver currency, the dinar, began. The Venetian grosso served as a model. Thanks to widespread use of the dinar in the XIV century, Serbia had one of the highest levels of commodity trading in Europe. Serbia reached its full economic prosperity during Emperor Dusan’s reign in the middle of that century. The dinar continued to be minted until the Serbian medieval state fell under Turkish rule in 1459.
Coins were supplemented in domestic trade by primitive money. Initially, the means of payment was linen, followed by cattle and, finally, weighed silver. The practice of paying in linen came with the Slavs, when they moved to the Balkans from the lands of their origin in the VII century. This practice persisted until the beginning of the XIV century, as is corroborated by a charter granted by King Milutin (1282-1321) to the monastery of St Stefan in Banjska, in 1313-1318. From the IX to the XI century, Serbs also used cattle as money. They took this Roman practice from the Wallachians, Romanized Illyrians and Thracians. Cattle were used as money in domestic trading until the middle of the XIV century and the last reference to cattle as a medium of exchange was made in Dusan’s Code. The only form of primitive money used in domestic trading right up to the fall of the Serbian medieval state under the Turkish rule was weighed silver.
The trading of goods for coins expanded at different rates in the various parts of the state. It was practiced the most on the big markets of the coastal towns, like Kotor, Budva, Ulcinj, Skadar, St Srdj and Drivast and the least in the modest markets of the inland fiefs and monastery estates. In the period in which the mining industry flourished, in the mining towns of Brskovo, Novo Brdo, Rudnik, Trepca and Plana had developed trade. During Emperor Dusan’s reign, intensive trading also went on in Prizren, Lipljan, Skoplje, Veles and Stip, all towns taken from the Byzantine Empire. Big town markets worked every day and small village markets opened only on Sundays and major Church holidays, when fairs were organized. Annual fairs are staged in villages of Serbia to this day.
The penetration of trading goods for coins into the fiefs is corroborated by Article 198 of Dusan’s Code, under which the master of every house had to pay a tax in coins or grain. This tax was introduced in the Serbian common law during King Milutin’s reign, near the end of the XIII century, as a regular tax in money like the Byzantine annona. The rulers of the medieval European states often resolved the problem of the general shortage of coins, by allowing taxes to be paid either in money or kind.
Medieval rulers decided the quantity of produce to be surrendered or the amount of money to be paid to the state as a basic poll tax. In doing so they effectively set a ratio between the value of certain kinds of commodity money and coin money. This is how a system of dual currency began to function as an instrument solely for tax collection purposes. In the dual currency system of the Nemanjic’s State, a pail of grain (about 15 kg) was worth 12 dinars. The system was modeled on the example of the Byzantine Empire, where the annona was set at one modi (pail) of grain or one golden nomisma. When King Milutin introduced similar tax in Serbia at the start of the XIV century, a corrupted nomisma was worth only 12 dinars, having lost a half of its nominal value. King Milutin used this reduced value of a nomisma when setting the poll tax. When Emperor Dusan subsequently allowed the poll tax to be paid in dual currency, he changed neither the sum of money nor the quantity of grain Serbian peasants had to pay.
While Silver coins were used as a medium of exchange in domestic trading, the price of goods, state taxes and fines were nominally expressed in perperas. Like Dubrovnik, medieval Serbia used the perpera as an accounting unit in order to set a permanent ratio between the silver dinar and the price of gold. Although the medieval Serbian state did not mint any gold coins, the ultimate goal of the development of its metallic monetary system was, as in other European states, the minting of gold coins. In Serbia, the perpera was always used as an accounting unit of 12 dinars, regardless of the actual duodecimal measure of silver, whose value could change exclusively in relation to gold.
The perpera was named after the perper, one of the Greek names for the Byzantine gold nomisma. While Dubrovnik, Serbia and Bosnia used the perpera as their accounting unit, many West European states used solidus in the same way. In terms of value, a perpera corresponded to a solidus, so that either accounting unit expressed, for example, half the value of a Venetian ducat. The Italian city states, including the Venetian Republic, kept the nominal (ideal) solidus in their monetary systems in order to preserve a single standard for measuring prices in all of Europe, even when the minting of gold coins became more common in the latter half of the XIII century.


Counterfeits of the banknotes of the Kingdom of Serbia

The first counterfeit of the banknote of the Kingdom of Serbia appeared in 1891, or exactly six years after the ten dinar banknote in silver was put in circulation. Six years later a new counterfeit of this banknote appeared, but this time was much more dangerous. It was made in Gomos (Austro-Hungary) and an attempt of passing it was discovered in Sabac. Austro-Hungarian authorities arrested the forgers quickly, confiscated the whole material and brought the participants into court. The second two attempts of counterfeiting were discovered by the help of informers even before the forgers succeeded in making the banknotes. Both attempts were tried abroad, one in 1899 in Sophia, and the second in 1921 in Temishvar. It is interesting that both attempts were discovered during the purchasing the lithography stone. One of the most perfect counterfeits of the ten dinar banknote in silver before the war was discovered in the village of Kicevci near Kragujevac. It was so well made in all details that it differed from the real banknote very little. Apart from color and paper, water seal was also well made. Thanks to the noticeable behavior, so that they managed to pass only 114 pieces. The forgers were persecuted by the Belgrade district court. If the quantity of spread banknotes was taken for criterion, then the largest in the Kingdom of Serbia before the war was the so-called Nis counterfeit, which was discovered in 1906. Although the counterfeits could be easily noticed because of its technical faults, the forgers, thanks to carelessness of the villagers, managed to pass a greater quantity in Nis district, and some of it in Bulgaria and Romania. This counterfeit was also related to a ten dinar banknote in silver, which was in usage before the war. Other banknotes, especially those in gold, were more seldom in use. They were paid more attention to so that they were not interesting to the forgers, and the only exception was a hundred dinar banknote in silver from 1915 which was counterfeited a few times.
One more attempt was made during the war and it can be considered as a unique one by its details. The attempt was with the banknotes withdrawn from use, that were already perforated and prepared for burning but because of the sudden evacuation of the National Bank from Belgrade, they remained in the bank vault. The occupation authorities forced the enemy into the bank vault and spread the perforated banknotes in considerable number. They were used by the enemy for agitation, as evidence that the Serbian money lost every value. When the National Bank returned to Belgrade it was found out that a few individuals tried more than once to pass the banknotes that were glued on the perforated places.


Medieval Serbian coins – period of feudal lords

Smaller coins, usually bearing Latin inscriptions, were minted in abudance during the rule of Prince Lazar and Despot Stefan Lazarević. At the time of Vuk Branković (1375-1396) new types of dinars were issued, much lighter than the above-mentioned stable dinar of this period. Various versions of this type of coin today weigh from 0.69-0.63 g. One of them, probably the first dinar of this new weight, bears the inscription „VLKOV DINAR“. Of a similar reduced weight is a coin from Novo Brdo issued by Prince Lazar and another type of coin during the period of feudal lord Đurđe Branković, its average present day weight ranging from 0.85-0.80 g. Dating from the time of Despot Đurđe Branković are coins of the same weight (present day average weight 1.08-0.98 g)as normal Serbian dinars circulating from the time of Emperor Uroš until Despot Đurđe, but with visible differences in size and thickness. While the above-mentioned stable Serbian dinar was 20-17 mm in diameter and thin, this new coin had a smaller diameter, 15-12 mm, and was thick. Since the features of this small thick coin corresponded completely with the contemporary Turkish aspra, akča, and since at the time of Despot Đurđemany accounts were reckoned in aspras, which were worth 20 percent more than dinars (a ducat was worth 35 aspras, or 42 dinars) it can be assumed that the aspras mentioned in documents refer to the above-mentioned coin issued by Despot Đurđe Branković. Aspras were smaller, thicker coins issued by Đurđe Branković weighing slightly over one gram, while the dinars then in circulation of a lesser value had an average weight of 0.85-0.80 g.
A receipt issued to Despot Đurđe Branković for treasure deposited in Dubrovnik lists among his gold and silver as silver coins only a million aspras. Since Despot Đurđe Branković minted a lot of coins, the money deposited clearly consisted of Serbian aspras, and not the Turkish money used in Serbia as formerly believed, since in that case it would have been listed only as part of the money deposited as was the case with Turkish gold coins in the gold deposit, which contained mostly Venetian and Hungarian gold coins. On the basis of the total weight quoted for the above-mentioned million aspras, one arrives at the current average weight of 1,08 to 0,98 g, if one adds six percent for wear.
During the rule of despots Stefan Lazarević and Đurđe Branković the smallest Serbian coin was minted, smallest in terms of circumference and weight, its original name unknown, today sometimes referred to as an obolus, but more appropriatey designated by the folk term maljušnik. It should be mentioned that the towns of Smederevo and Rudnik minted aspras, while Smederevo and Rudišta produced the maljušnik. Known examples of the maljušnik have an average weight of 0,26g, i.e. one fourth of the weight of the last stable Serbian dinar, that is, Serbian aspra.
Following the death of Emperor Dušan there is little point in classifying the types of coins owing to the large number of different types (stable or transitional), of persons and cities that minted coins, as well as the frequent lack of established local authorities responsible for the stability of issue, etc. Therefore, during this period coins were rarely and only exceptionally given names. A document dated 1367 mentions that Nikola Altomanović was paid 750 perperi in Rudnik dinars (9000 dinars), which may have referred to his own minted coinage.
The situation as regards coins was clearer on the coast where large amounts of stable types of coins were in circulation. Kotor dinars are mentioned in the second half of the 14th century, the late 14th and first half of the 15th centuries „grossi Balse“. Dinars minted by Balša III, which are considered the last stable type of Serbian dinar, today have an average weight of 1,05 g.
Of special interest are Serbian countermarked silver coins. Countermarks, that is, subsequently affixed marks, appear mostly on dinars minted by Emperor Dušan, generally on examples with Latin inscriptions. They are also found on dinars minted by the Bosnian ruler, Stjepan II Kotromanić (1314-1353). Analysis of the material indicates that countermarks, which exist in three forms, were affixed to damaged coins, coins that were worn down or nicked, but still kept in circulation. A number of circumstances indicate that these countermarks were affixed in western Serbian regions, probably in Zahumlje, during a period of a shortage of coins in Dubrovnik and its hinterland, as a result of the plague (1348), the re-establishment of Bosnian rule in Zahumlje (1350), or a change of rulers in Bosnia (1353).


Medieval Serbian coins – period of empire

During the reign of Emperor Dušan (1345-1355) a new basic type of coin appeared, stable as regards weight, the so-called imperial dinar, “del imperador”, which included several types of imperial dinars differing in terms of inscription and images. Their present-day average weight (1.41-1.34 g), six percent more or less due to wearing, is so close to the figure 1.52 g, which is what this coin weighed in 1353. This includes dinars depicting Emperor Dušan seated on his throne with a sword on his knees, or standing while two angels place a crown on his head, or on his horse and those with the imperial signature in several lines.
Towards the end of Dušan’s reign the imperial dinar, its weight greatly reduced, led to a new type of coin, “grossi de tercio” weighing a third of the stable imperial dinar (average present day weight 0.58-0.46 g). Also appearing during the imperial period were Kotor dinars, minted by Dušan and Uroš (1355-1371), their average weight 1.68 g. The Kotor dinars were also minted later during the existence of the Serbian state by foreign city protectors, Hungarian king Louis I (1342-1382) and Bosnian king Stefan Ostoja (1398-1404).
Comparing the average weights of the different types of coins we can say that from the time of Emperor Uroš until Despot Đurđe Branković (1402-1456) there were many different types with an average present day weight of about one gram (1.12-0.97 g, generally 1.08-1.04 g), i.e. dinars which originally weighted a little over one gram – about 1.15 g. Such dinars were minted by Emperor Uroš, King Vukašin (1365-1371), Prince Lazar (1370-1389), Despot Stefan Lazarević (1389-1427), along with numerous coins issued by Despot Đurđe Branković. The coins issued by Nikola Altomanović (1367-1373)and Balša III (1403-1421) also belong to this type. Along with this reduced dinar, Dušan’s small coin „grossi de tercio“, which kept its former weight during the reign of Emperor Uroš, was converted into a half dinar. During the rule of Emperor Uroš and King Vukašin and members of his family smaller dinars were also minted.