From the mid-fourteenth century to the mid-fifteenth century the Wendish Monetary Union maintained and guarded a common monetary standard for cities of the Hanseatic League. The Wendish Monetary Union ranks among the first of the European examples of monetary union, a distant ancestor to the contemporary European Monetary Union.
The Hanseatic League was an association of north German towns, mainly maritime towns and inland towns engaged in foreign trade, that dominated Baltic trade during the fifteenth century. The league negotiated trade concessions and monopoly privileges from foreign countries such as England, Norway, and Russia, often at the expense of local merchants. The league operated self-government trading compounds, called kontors, at trading centers such as London, and these kontors were shared by the merchants who were citizens of Hanseatic towns.
The Wendish Monetary Union was formed in 1379 and officially included only four cities of the Hanseatic League, Lubeck, Hamburg, Wismar, and Luneburg. Other towns adopted the standard unofficially, making the union influential over a broad area, including all of Scandinavia. The union regulated the currency of northern Germany until 1569 and its monetary system was based upon a silver standard.
The union struck a silver coin equivalent to the Lubeck mark, containing 18 grams of fine silver, and bearing the coats of arms of the four member towns. The union purchased the precious metal and supervised its coinage, including the activities of goldsmiths and the mint’s employees. Compliance with the regulations of the union was voluntary, and regular reminders issued by the union suggest that it had a difficult time maintaining cooperation.
The spread of gold coinage in the fourteenth century was met with a less-than-hearty reception among the towns of the Hanseatic League. During the mid-fifteenth century in Wendish towns the penalty for buying goods with gold was confiscation of the goods. Apparently, the union feared the destabilizing effects of fluctuating exchange rates between gold and silver, perhaps reinforced by the union’s own unsuccessful efforts to maintain a fixed ratio between gold and silver. In 1340 Louis IV, emperor of the Holy Roman Empire, granted Lubeck the privilege to mint gold coins, leading to the introduction of the Lubeck gold florin, which was comparable to the Florentine florin in weight and fineness.
Unlike many feudal governments the merchants of the Hanseatic League never sought to profit from currency debasement. Often governments dominated by merchant princes or commercial classes displayed a strong commitment to currency integrity, perhaps to help attract commercial activity. Venice, living on an empire of trade and finance, maintained the value of the ducat for over 500 years, and in the nineteenth century England became the staunch defender of the gold standard against bimetallism, which would have allowed debtors to substitute silver for gold in the repayment of debts.
Dollinger, Phillipe. 1970. The German Hanza.
Williams, Jonathan, ed. 1997. Money: A History.