The famous English economist, John Maynard Keynes, wrote in his Treatise on Money, Vol. I (1930):
Nor am I aware of any chartalist change of standard, expressly designed to benefit the State at the expense of the public, earlier than the second Punic War—Rome being the first original to add this instrument to the armoury of statecraft. From that time on chartalist changes of standard, generally in the form of debasement, sometimes for one purpose and sometimes for another, are the favorite theme of historians.
As early as the sixth century b.c. Athens had changed its monetary standard to relieve debtors, but not to benefit the government. Although a thorough study of ancient history would probably turn up earlier examples of currency debasement for the benefit of a government, historians have cited the Roman debasement during the Punic Wars as the fateful beginning of a series of currency debasements that had completely debauched the Roman currency by the second and third centuries a.d.
In 338 b.c. the Roman government issued copper coinage to replace cattle as the medium of exchange. The unit of measure was the as, equal to one pound of copper. The coins bore the image of an ox, a sheep, or a hog, and were called pecunia, from pecos, the Latin word for “cattle.” In a.d. 269 the government minted two silver coins: the denarius, equal to 10 asses, and the sestertius, representing 2 1/2 asses.
There is sketchy evidence of currency manipulation during the First Punic War. According to Pliny, the Roman government eliminated its public debt during the time of the First Punic War (268–241 b.c.) by reducing the aes to two ounces of copper. A. R. Burns (1927) states that “the only certain and important currency reduction under the Republic was made during the second Punic War (218–201 b.c.).”
The Lex Flaminia of 217 b.c. provided for the reduction of the legal weight of the as from two ounces to one, and for the reduction of the legal weight of the denarius, decreasing it from one-seventy-second to one-eighty-fourth of a pound of silver. Also, the law raised the value of the denarius from 10 asses to 16 asses, and for military pay a denarius was to be paid for every 10 asses due.
Later, during the Second Punic War, the government issued silver-plated copper coins that passed for denarii। These coins left the mint looking just like sterling silver coins, but even the barbarians that traded with Rome preferred the older silver coins. By mid-second century the Roman Republic was issuing full-bodied metal coins. The Roman Empire hastened its own deterioration with currency debasements, climaxing in a brief episode ऑफ़ wage and price controls at the beginning of the fourth century.
The spread of state-managed paper money made currency debasements an obsolete method of financing government expenditures in excess of tax revenue.