Throughout history there have been many forms of currency used and accepted around the world. While some currencies, like the British pound, hold a long and illustrious history, a great many of those legal tenders still in existence today were introduced in the last seventy years. Rather than focus on that long list of relatively young forms of money, in this post we will be taking a look at some of the currencies no longer in circulation.
First on our list, the Zimbabwean dollar was instituted in 1980, replacing the Rhodesian dollar at par. At this time, the Zimbabwean dollar was actually worth more than the US dollar, with a value of 1 ZWD = 1.47 USD. However, while this was the rate given in the official exchange market, it did not reflect the actual purchasing power of the ZWD, and subsequently the currency devalued rapidly. By August of 2006, the value had fallen so much that 1 USD = 101,347 ZWD. The country’s economic crisis, and the problems associated with the devalued currency, had grown to such levels that, between 2006 and 2009, the Zimbabwean dollar was re-denominated three times. Each of these attempts was made with the aim of revaluing the currency and tackle the issue of runaway inflation; a problem that had grown so serious that in February of 2007 the Reserve Bank of Zimbabwe even went to the lengths of declaring inflation illegal. However, unsurprisingly, this measure met with little to no success.
Despite a second re-denomination in 2008, the Zimbabwean economy was steadily becoming dollarised and laws were passed that same year acknowledging the growing reality – many shops would only accept US dollars or South African rand. The third re-denomination occurred in 2009, but by this point in time the economy was almost completely dollarised. By February of 2009 the rate had reached 300 trillion ZWR (the code given after the second re-denomination) = 1 USD, and in April it was announced that the Zimbabwean dollar would be suspended.
Today, Zimbabwe remains a completely dollarised society with a basket of currencies in use, including the US dollar, South African rand, Botswana pula, British pound, euro, Chinese yuan, Japanese yen and Australian dollar. Dollarisation resulted in the stabilisation of consumer prices after years of runaway hyperinflation. The Zimbabwean government has made clear that the local dollar will not return until key economic fundamentals, such as productivity in key sectors, has been achieved.
Second on our list, the French franc. The first franc was a gold coin introduced in 1360 to pay the ransom of King John II of France, during the Hundred Years’ War. Several legends exist over the naming of the coin. One stems from the fact that one side of the coin depicted King John on horseback, and as it had secured his freedom, it was given the name franc à cheval, or “free on horse”. Another suggests that the name derives from the French king’s title Francorum Rex, “King of the Franks”.
Whatever the truth behind its origins, the name stuck. While throughout the Middle Ages and early Modern period the term franc was used only as a synonym for the livre tournois, during the French Revolution and the currency reforms that followed, the decimal “franc” was established as the national currency. This measure took place in 1795, with 1 franc = 10 décimes = 100 centimes. At the time, the franc itself was minted with 4.5 grams of fine silver. During the upheavals of the revolution the face and substance of the currency changed several times, but with Napoleon’s ascension as emperor. Under Napoleon’s rule, the currency system was stabilized and remained in place until the outbreak of the First World War, when France was forced to abandon the gold standard of the Latin Monetary Union (which it had helped to found in 1865).
The war greatly undermined the strength of the franc, and devaluation and loss of purchasing power over the course of two world wars left the currency in 1959 at 2.5% of its 1934 value. In 1960, le nouveau franc was established – a revaluation of the currency with 100 existing francs equalling 1 new franc. Despite the revaluation, inflation continued to hamper the French currency, and by the time the euro was adopted on the first of January 1999, the franc was worth less than 12.5% of its 1960 value. In January 2002, the franc ceased to be recognized as legal tender.
First issued in 1948, the Deutsche Mark, or German mark, was established under the Allied occupation to replace the Reichsmark. During the first few years of occupation no agreement could be reached between the Allied powers on the subject of currency, with each zone of occupation being issued its own. However, on June 20th of 1948 Ludwig Erhard, the then Director of Economics for the western German states, introduced a new mark for Germany, the Deutsche Mark.
The introduction of this new currency was intended to serve as a safeguard against a second wave of hyperinflation and to put a stop to the black market trade that had been running rampant since the end of the war. While the Deutsche Mark was initially only distributed within the British, French and American zones in the west, and not in Berlin, the Soviet government saw the move as a threat. The new currency thus proved the leading cause in the onset of the Berlin Blockade, where all land traffic from the Allied zones to Berlin was cut off. The response by the British and Americans was an airlift that kept West Berlin alive. Huge amounts of vital coal and food supplies were flown into the city around the clock, and the distribution of the Deutsche Mark began as well.
The introduction of the Deutsche Mark, and the other economic reforms surrounding it, brought stability and new growth to the West German economy. Its introduction had wiped out about 90% of government and private debt (as well as private savings: there were some hard years for the average German citizen after the war). In July 1990, the Deutsche Mark was introduced as the official currency of East Germany, paving the way for the reunification of the German states. While the currency had a reputation as one of the most stable currencies in the world, second only to the US dollar in size as an international reserve currency, it was replaced by the euro in 1999; ceasing circulation in 2002.
New France Card Money
A type of fiat money printed on playing cards (or just plain cardboard), card money was used as the official currency in New France from 1685 to 1763. It was first instituted as a result of a growing colonial population and an inability on the part of the French government, mired in wars and financial difficulties of its own at home, to finance its colony. While the colonial authorities were used to the late arrival of specie (coins, rather than paper notes), and were usually inclined to simply delay the payment of merchants for supplies until money arrived, 1685 was a particularly hard year. With soldiers to be paid (who could not be kept waiting as the merchants could), the Intendant of Justice, Police and Finance in New France, Jacques de Meulles, made the decision to issue notes on cards, to serve instead of money. To de Meulles’ credit, on the cards upon which he wrote he pledged himself, in his own name, to redeem the notes.
Although the King of France, Louis XIV, denounced this new card money, citing the dangers of extravagant expenditure and ease of counterfeit, the currency took off. By 1705 card money had become the legal tender in the colony (mainly as a result of insufficient supplies of coin). King Louis’ concerns were legitimate, however, and despite the popularity of card money rates of inflation increased, and forgeries did occur. Still, the royal measure in 1717 of withdrawing card money without providing a valid replacement, placed the colony in recession. Ten years later, after failed attempts to substitute copper coins in its stead, card money was back as the official tender. Inflation continued, but by 1757 the government of New France was relying entirely upon card money and treasury notes to fund the operations of the colony, discontinuing all payment in specie.
After the British conquest in 1760, card money had become all but worthless. Coin and silver that had been hoarded away by the colonists began to return into circulation, but the citizens of New France still possessed about 16 million livres worth of the paper money, and it wasn’t long before British merchants began to accept it as a form of currency (albeit at a rate of 80-85%). In 1763, the French government agreed to reimburse the cards at one fourth of the original value, and the currency was discontinued for good in what was now the British colony.
The last currency on our list, and with some amusement on our part, is Continental currency. So named by the Continental Congress when it first began printing it at the outbreak of the American Revolutionary War in 1775, the continental had, without doubt, the shortest run out of any of the currencies on this list. Depreciating badly very fast, five years after its inception the currency was worth 1⁄40 of its face value. The cause of this was threefold. Firstly, Congress and the individual states did not coordinate on their monetary policy, leading to the continued issue of bills of credit long after it should have been stopped. Secondly, the British very successfully engaged in economic warfare with the rebel patriots, counterfeiting continentals on a large scale. Thirdly, and perhaps most significantly, there was a lack of will or means on the part of Congress to retire bills from circulation.
All of this led to the runaway inflation and collapse of the currency in the spring of 1781, with Benjamin Franklin noting that the depreciation of the currency had effectively served as a tax to pay for the war. The well-known phrase “not worth a continental” stems from this period, and while the expression was certainly valid back then, we here at Continental Currency Exchange would like to believe that Continental has a much more positive connotation today.
While these may no longer be available, you can purchase currencies that are currently in use with Continental Currency Exchange!
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