|
Kipper- und Wipperzeit |
| The German term “Kipper- und Wipperzeit” is derived
from the use of illegal coin scales (Wippen) which quickly tipped (kippen)
if a coin was of the proper weight, i.e. not debased. The term stands for
the monetary crisis that gripped the Austrian dominions and large parts of
the German empire. The Imperial Coinage Codes of the 16th century were at
the root of the hyperinflation: They had prescribed a coinage standard
calling for such a high precious metal content for small coins that it
could only be upheld at a loss. Therefore, many mints debased the coins by
reducing the gross and total weight of the coin as well as the weight of
the precious metal in the coin and reminting more valuable coins as coins
with a reduced fineness or weight. Profiteers would transport the
“bad” money to a region where they would exchange it for “good”
money containing more precious metal, and the home mint would then debase
and remint the “good” money. This inflationary spiral at the beginning of the 17th century was fueled by a general economic deterioration: Europe faced the threat of Turkish invasion, silver production diminished, and an acute need for finance arose with the outbreak of the Thirty Years' War (1618 to 1648). Bohemia and Moravia began to debase its coins in 1619. The Austrian dominions, faced with the need to finance the war and rearmament, began to mint debased coins in 1621, too. The crisis peaked in 1622. When Emperor Ferdinand II (1619 to 1637) leased all mints in Bohemia, Moravia and Lower Austria to a consortium in return for an annual rent of 6 million gulden – six times the seigniorage revenue of the Bohemian coins – the coinage began to deteriorate dramatically. The value of the thaler rose from an original equivalent of 1 gulden 8 kreuzer to 11 gulden 15 kreuzer. A year later, Ferdinand II decreed the withdrawal and exchange of the kipper money. 100 thaler of kipper coins were exchanged for only 13.3 thaler imperial coins – an 87% loss of value tantamount to national bankruptcy. |