Encyclopedia of Money: Silver

Silver and gold were the most aristocratic of the monetary metals. Silver owes its chemical symbol, Ag, to its Latin name, argentum, meaning “white and shining.” Ancient artisans found silver malleable, resistant to oxidation, and beautiful. It is one of the most reflective of all metals, under favorable conditions reflecting about 95 percent of the light striking its surface.

The use of silver for ornaments, jewelry, and a store of wealth stretches into the mists of ancient history. In the Book of Genesis, Abraham, after returning from Egypt, is described as very “rich in cattle, in silver, and gold.” The laws of Moses put a silver value on men, cattle, houses, fields, and provisions. Silver seems to have been in greater use than gold as a monetary metal among the ancient Hebrews, but gold possessed greater religious significance. Hiram, king of Tyre, furnished gold for decoration of the Temple of Jerusalem.

The practice of coinage began in Lydia in the seventh century b.c. and crossed the Aegean Sea to ancient Greece, a country endowed with rich silver deposits. The Laurion silver mines furnished Athens with abundant supplies of silver, and the commercial leadership of Athens lifted the Attic silver standard to a position of dominance in Mediterranean trade. The Roman Empire debased its silver coinage, but maintained the purity and weight of its gold coinage. During the Middle Ages, the Byzantine world maintained its gold standard, but gold virtually disappeared from Europe. Silver remained an important monetary metal in India and the Far East. Given the disappearance of gold, the Carolingian reform of a.d. 755 put Europe on a silver standard that lasted until the end of the Middle Ages. Nevertheless, silver coinage was rare and often severely debased.

Gold coinage returned to Europe in the thirteenth century, but silver remained an important monetary metal. England moved firmly toward the gold standard only in the eighteenth century. On the Continent silver rivaled gold as a monetary metal until late in the nineteenth century.

The discovery of the New World infused vast supplies of silver throughout the world-trading system. It is not commonly appreciated that 98 percent of all the precious metal taken out of the New World was silver. Silver was a favored metal in India and the Far East, and some silver was shipped directly from Latin America to China. The Spanish silver dollar became a worldwide medium of exchange, remaining legal tender in the United States until the 1850s.

In the nineteenth century Europe and the United States began moving away from silver as a monetary standard, although silver continued in use as subsidiary coinage. The subsidiary coinage always kept the silver content sufficiently low to discourage melting down coins for profit. In China and India the silver standard survived into the twentieth century.

Although gold became the preeminent precious monetary metal during the nineteenth and twentieth centuries, silver may have an even longer and more varied history as money. Silver was light enough to be carried in ships, although overland transportation favored gold, which was lighter per unit of value. Silver, however, was next to gold in value per unit of weight. Gold was too precious for many ordinary transactions, but silver, between gold and copper in value, was light enough to be carried around in values useful for ordinary transactions. In addition, silver deposits, unlike gold, were scattered all over the earth, making silver very accessible.