Vienna pfennig,
Albrecht II (1330 to 1358)
Vienna pfennig,
Albrecht II (1330 to 1358)
A rich variety of images used on the Vienna pfennigs, as they were initially renewed periodically, generally once a year, and people had to be able to tell the coins apart. This renewal, known by the Latin term renovatio monetae, served to raise seigniorage, that is, the revenue raised from coining, which became a lucrative source of income as the volume of coins in circulation expanded. The circulating coins were declared to have lost their legal tender status, their nominal value was retained, and they were replaced by new coins with a lower gross weight and a lower fineness. In this fashion, the mintmasters profited from a kind of indirect tax in addition to the seigniorage.
In the mid-14th century this practice of what was in effect debasement was halted when revenues dropped and the populace balked, and the mints at Enns and Wiener Neustadt were closed down. Duke Rudolf IV (1358 to 1365) introduced a more profitable 10% sales tax on basic food items termed Ungeld (literally, unmoney) as a substitute for the practice of renovatio monetae. Thus in the second half of the 14th century, the right of coinage lost importance as a source of budgetary income.
By renouncing the practice of debasement, Duke Rudolf IV (1358 to 1365) intended to create a “lasting” pfennig that would always be legal tender. In addition, he tried to secure this new pfennig’s value by introducing a new coinage standard linking the pfennig’s value to the market price of silver. This link had one big drawback, however: The coin’s value did not remain stable, because its fine silver content had to be adjusted whenever the price of silver fluctuated. In time, as the price of silver rose, the coins’ silver content had to be reduced, and they depreciated more and more even though their appearance remained unchanged.
From the end of the 14th century, large volumes of low-quality pfennigs, above all various Bavarian pfennigs, swamped Austria. Moreover, the exploitation of the right of coinage by various sovereigns boosted inflation, and the pfennig’s value diminished rapidly against that of the gold gulden. While the gulden had been equal to 95 pfennigs in 1350, in 1411, 1 gulden was equivalent to 160 pfennigs and in 1455, 240 pfennigs (1 accounting pound) corresponded to 1 gold gulden.
The coins’ appearance also reflected the rapid devaluation. To lower costs, the pfennigs were first issued with an image only on one side; later, even unpolished pfennigs, socalled “black pfennigs,” were issued.
Vienna pfennig,
HT – mintmaster Hans Teschler,
around 1462
All efforts to head off the continuing devaluation proved futile. True to Gresham’s law, bad money – the black pfennigs with a high copper content – drove out good, white pfennigs with their high silver content.
In the mid-15th century, the erosion of the currency climaxed when, during their dispute over the inheritance of the Austrian lands, Emperor Frederick III (1452 to 1493) and his brother, Archduke Albert VI, pursued an inflationary policy. Under financial pressure, they transferred the right of coinage to their creditors, who minted huge volumes of inferior pfennigs. These coins were made almost wholly of copper and were thus referred to by the derogatory term schinderlings.
In 1460, there were 3,600 pfennigs to the gold gulden. The imperial minters of Wiener Neustadt and Graz had defected abroad, and Albert VI’s minter had disappeared. Under the pressure of the guilds, Emperor Frederick III decided to stop minting pfennigs. He charged Niclas Teschler, a wealthy burgher from Vienna, and the Hausgenossen guild with minting a better pfennig. While the monetary standard of the new pfennig was accepted, monetary conditions remained difficult even after the death of Albert VI in 1463 and the reuniting of the Habsburg family lands.
The pfennig had been the standard coin in Austria up to the schinderling era, but was simply a divisional coin after it had lost this function in 1460. With the Coinage Code of 1481, Frederick III officially proclaimed the Austrian gulden as the standard coin.
