Fighting as a knight involved expense that became greater over time. In the twelfth century [C.E.] the knight’s basic equipment (horse, helmet, hauberk, and sword) required the annual revenue of 150 hectares. Three centuries later it cost the yearly income of 500 hectares. The horses alone of Gerard de Moor, Lord of Wessegem, amounted in 1297 to 1,200 livres tournois….
— Barbarians, Marauders, and Infidels, p. 177
All samurai had duties and were paid stipends, and from this they had to buy whatever of their equipment wasn’t issued and furnish their household (if they had one). The basis for the economy was rice, and a unit of rice that could feed a man for a year, called a koku, was the universal measure of wealth. Fiefs and estates were described in the terms of how many koku of rice they produced. One koku is 120 litres. The lowest samurai received a little less than a koku (assuming his meals were all on his lord’s estate’s books).
Middling lords, and castle commanders, might receive a stipend of several hundred koku, and with that he had to pay the samurai in his service, supply his garrison, feed his horses, pay his servants, etc. For convenience sake, hard cash was used to make payments, but ultimately it was a rice-based economy. Even the Takeda of Kai, who sat on the most valuable gold mines in the nation, needed rice to feed their soldiers.
Like everything else about the Middle Ages, styles of money varied from place to place, and understanding the relationship between denominations can therefore be confusing. In fact, in the thirteenth century [C.E.], there was only one type of coin in existence: a small, silver piece known in England as a penny and in France as a denier. In England, twelve pennies equaled a shilling (although there were no shillings minted, you simply counted out twelve pennies into someone’s hand); in France twelve deniers equaled a sous (although, likewise, there were no sous in existence). There were, in England, 20 shillings or 240 pennies to a pound sterling; in France there were 20 sous or 240 deniers to a livre. Once again, there was no actual coin struck representing a pound or a livre; to payoff the debt of a pound the debtor handed the creditor a sack containing 240 pennies; in France, to pay off the debt of a livre, the sack would contain 240 deniers. In England, just to make the concept as complicated as possible, they also measured silver by a weight measure called the mark. A mark was two-thirds the weight of a pound sterling, so a mark of silver was the same as 160 pennies. But if the debt was in marks, you didn’t have to supply pennies, a person could use any silver he or she happened to have lying around the house, like a silver plate, just so long as it weighed the right number of marks. When [King Henry III of England] and [Queen] Eleanor promised to pay the pope 135,541 marks to fund [their son] Edmund‘s campaign for the kingship of Sicily, they were promising to pay approximately £90,812, or nearly three years’ income, some of which, presumably, could have come in the form of the royal dining service.…
Just like today, French money and English money differed sufficiently so as to require a rate of exchange. In France, the quality and fineness of a denier (and therefore of a livre composed of those deniers) varied so much that the coins were labeled by location, which is why some of the French sums mentioned in [this book] were specified as livres toumois (minted in Tours, of high quality) and others as livres parisis (minted in Paris, of much lower quality).… The exchange rate in 1265 [C.E.] between livres parisis and the pound sterling was 90 sous (or 1,080 deniers) to the pound. To make it easier, there were 4½ livres parisis to a pound sterling, and 3 livres parisis to a mark. The annual French royal income of 250,000 livres (most likely livres parisis) was therefore the equivalent of about £55,556, a much larger sum than was available to their English counterparts. Henry and Eleanor only had an average annual income of about £36,000.
Anyone who wants to go deeper into this subject should definitely read Peter Spufford’s authoritative and comprehensive work, Money and Its Use in Medieval Europe (Cambridge University Press, 1988), and its complement, The Handbook of Medieval Exchange.
In the fifteenth century [C.E.], [the English] one pound sterling (£1) was divided not just into twenty shillings (20s), or two hundred and forty pence (240d), but also into six parts: one sixth (3s 4d) was known as a crown, a third (6s 8d) as a noble and two thirds (13s 4d) as a mark. To give the reader a rough idea of the current values of these sums, I have used figures supplied by the Office for National Statistics, which equate £1 in 1415 with £414 ($666.54) in 1999.
In the year 948 [C.E.] an Arab traveller named Ibn Hawkal visited Spain. About twenty years later he composed a geographical handbook, ambitiously called the Description of the World, which included an account of Spain based on his travels there. He was an intelligent and observant man, and if we wish to discover what al-Andalus was like in the tenth century we can do no better than to put ourselves in his hands.
Ibn Hawkal was struck in the first place by the general prosperity of al-Andalus:
There are uncultivated lands, but the greater part of the country is cultivated and densely settled…. Plenty and content govern every aspect of life. Possession of goods and the means of acquiring wealth are common to all classes of the population. These benefits even extend to artisans and workmen, thanks to the light taxes, the good state of the country and the wealth of its ruler—for he has no need to impose heavy levies and taxes.
He correctly saw an indicator of this prosperity in the great amount of money in circulation. From the eighth century [C.E.] the only coin struck in Muslim Spain was the silver dirhem, but in the 920s ‘Abd al-Rahman III inaugurated a period of bimetallism by undertaking the minting of gold coins called dinars. The ratio was seventeen dirhems to one dinar, which was in line with the ratio in the rest of the Islamic world and in the Eastern Roman empire—in itself an indication that al-Andalus was now part of a larger commercial community. The state mint at Cordoba exercised control over the weight, fineness and design of the coinage. The volume of coin in circulation seems to have been very large, and this is another indicator of commercial prosperity, for only a favourable trade balance could account for the inflow of bullion to sustain an ample monetary circulation.
For centuries in Egypt there had been no true currency with which to buy and sell goods. Most markets operated on a barter-and-exchange system. For very large-scale transactions it was possible to pay in gold or other precious metals, but the idea of coinage was still relatively new. True monetary economies had emerged in the city-states of the Mediterranean beginning around 650 [B.C.E.], probably first in Lydia, whose later King Croesus had made himself a byword for fabulous wealth. Ptolemy I had made some attempts to follow suit, issuing coins called staters just as Alexander had, but outside Alexandria these were as much demonstrations of royal power as they were useful coins. His son, however, now massively extended this scheme with the creation of a state-run banking system with local branches throughout the towns and villages of the country, all reporting back to the central bank in Alexandria. From these banks a coin-based currency was introduced, backed up by a system of written “bills of exchange”—promissory letters which could be exchanged for real money, or, as we would call them, banknotes. The entire rural economy was to be centered on these local branches, which provided the capital—seed grain and tools—that the farmers needed. They also provided massive state-aided infrastructural schemes such as the creation of a reservoir in the Southern Fayyum oasis which held 360 million cubic yards of water and irrigated 60 square miles of arable land. This was not pure largesse, however. Nearly all the grain produced by farmers was taken into the royal treasury in the form of tax. More land under cultivation meant more grain, and more grain meant more money in the Alexandrian coffers.
The driving force behind this economy was, of course, the immense quantity of grain produced in the Nile Valley. The annual flooding of the Nile, which ran through an almost rainless desert, made this the most productive agricultural land in the known world, where the sun always shone on the crops, but never dried their roots. Such valuable land was largely owned by the crown or the temples and leased to farmers, who were free men and women who often used slave labor to maintain their estates. Such estates produced a vast surplus, much of which the state took. Yet Ptolemy’s system also allowed for a degree of individual enterprise, as banks could handle private financial transactions, provide loans, and broker deals.
Whatever capital was left could be spent in the thriving open markets. Traditionally Egyptians had acquired the necessities of life they couldn’t produce for themselves by direct barter—effectively swapping a loaf for a pint of milk. The Greek immigrants, however, greatly encouraged the development of markets throughout the whole country. These were often held in the precincts of temples, and records exist of the temple taxes levied on the traders. In the town of Oxyrhynchus, for example, had you taken a stroll into the courtyard of the temple of Serapis on market day, a chaotic vista would have opened up as you passed through the first pylon. That day the peace of the temple would have been shattered by the cries of stallholders, all hoping to relieve you of some of the coins in your pocket. Here the local farmers and traders sold local vegetables, wood, olives, rushes, bread, fruit, wool yarn, and plaited garlands from wooden stands, each of which had been licensed (for a fee) by the temple. Among the crowd you might pick out the priests of Serapis, moving between the stalls, checking their goods and imposing the appropriate import duty on everything from olives, dates, cucumbers, squashes, beans, spices, and rock salt to pottery, green fodder, wood, and dung. The throng would also have attracted other traders offering more sophisticated wares, from the bulk grain dealers looking to turn a profit back in Alexandria, to the tailors, leather embroiderers, tinsmiths, butchers, and brothel keepers who always gravitated toward a crowd.
[The Persian quisling] Tiridates led Alexander [the Great] into a large building behind the palace of Xerxes [at Persepolis] that served as both an armory for the royal bodyguard and a repository for the king’s wealth. Diffused light filtered through a series of openings in the roof above and washed gently over the tons of gold and silver bullion that had been neatly and methodically stored there. Within the treasury building were 120,000 talents of bullion, the largest single concentration of wealth to be found anywhere in the ancient world.
Darius I had imposed a tribute of precious metals in addition to a tribute of goods on his satraps and on the subject nations of the empire. Instead of converting that tribute into coins that could then have been put into circulation, Darius and his successors had it melted and then formed into ingots of gold and silver. The bars were stored in the palace treasury, and when the kings of Persia needed to finance particular projects, wars, or adventures, the precious metals were cast into coins. It was Darius who had introduced the coining of money into the empire; hence, the Persian coin became known as the Daric. Until that time, the empire had been administered largely on the basis of barter.
Successive generations of Persian kings had dipped into the treasury and spent vast sums on themselves. Over the years, they had spent great amounts on administering and expanding the empire and had dispensed large sums in fighting, hiring, and bribing the Greeks. Yet no matter how much money the kings spent, every year at the New Year ceremony more came in to replenish and add to the royal coffers. In the treasury building at Persepolis, Alexander was shown the full measure of how wealthy the Achaemenid kings of Persia had been and how wealthy he had now become.
For comparision, Alexander started his invasion of the Persian Empire with a war chest of only 70 talents of gold.