During the late Middle Ages the Venetian ducat became
the preferred international currency, sometimes referred to as the dollar of its
time, a reference to the dominant role the United States dollar played in
post–World War II international trade. By the fifteenth century the prestige of
the gold ducat of Venice made it the standard for currency reform in Muslim and
Christian nations of the Mediterranean. The Mamluk ashraftil, the Ottoman
altun, and the Portuguese and Castilian ducat were based upon the
Venetian ducat.
Venice first minted the gold ducat in 1284 at a weight and fineness of 3.5
grams of virtually pure gold (0.997 fine), a standard of purity and fineness
that would be maintained until the end of the Venetian Republic in 1797. Gold
coinage had disappeared in Western Europe after the eighth century, and the
Italian city-states were the first European governments to renew coinage of
gold. Florence and Genoa first struck gold coins in 1252, and Venice minted its
ducat at the same weight and fineness as the Florentine florin, a coin
that commanded the prestige of an international currency before it lost
credibility when the Florentine government minted issues of lighter weight. The
florin also suffered from inferior imitations issued by other governments. The
Venetian ducat clearly superseded the florin in the fifteenth century as the
international currency par excellence.
Venice has been regarded as the birthplace of capitalism, a forerunner of
capitalist cities such as Amsterdam and modern Hong Kong, economies whose only
resources are good harbors and social and legal environments that favor
commercial and financial activity. In Venice political power and social prestige
had passed from the land-owning aristocracy, which still controlled most
governments, to a class of hereditary mercantile families who jealously sought
to preserve the position of Venice as an international trading center. Although
feudal monarchies all too easily turned to currency devaluations, debasements,
and seigniorage to finance government expenses, the mercantile oligarchy that
ruled Venice weighed the long-term consequences and steadfastly maintained the
integrity of its currency, symbolizing Venice’s commitment to fair dealings. The
Venetians lodged complaints against other governments for issuing inferior
imitations of Venetian ducats, and allowed only Venetian citizens to work at the
mint, discouraging foreign access to stamp patterns employed to strike the
Venetian coins.
Venice was on a silver standard when ducats were first struck. At first the
value of gold rose as gold was in greater demand at mints for coinage. In 1326, however, the value of gold dropped significantly, putting a
hardship on debtors using gold ducats to pay debts defined in silver. The
debtors, including banks needing to pay depositors and the government needing to
pay bondholders, persuaded the officials to switch to a gold standard, fixing
the gold price of silver at a rate that prevailed before the value of gold
plummeted.
During the mid-fifteenth century, the value of gold rose relative to silver,
and Venice returned to a silver standard. The name of the gold ducat was changed
to zecchino and the term ducat came to refer to a unit of account,
such as dollars are a unit of account in the United States. The Venetian mint
began producing silver ducats.
In 1797 Venice lost its independence as a sovereign state at the hands of
Napoleon, ending the long history of the Venetian ducat (zecchino) as one of the
most trusted coins in monetary history.
See also:
References:
Cipolla, Carlo M. 1956. Money, Prices, and Civilization in the
Mediterranean World.
Lane, Frederic C. 1973. Venice: A Maritime Republic.
Lane, Frederic C., and Reinhold C. Mueller. 1997. Money and
Banking in Medieval and Renaissance Venice. Vols. I–II.