A Pound of Silver

To our ears, the “pound” is just another member of the family of global currencies–all related by the various exchange rates.  But back in the 1600s, it meant much more than that…

I don’t know why it seemed a revelation that what is known today as the British pound “Sterling” used to be worth exactly that–one pound of sterling silver!  In the 1600s this was referred to as “one livre turnois.”  When I first learned that Sir George Cartaret paid the Town Church of St. Helier “28 livres turnois” to have a monument stone installed over Richard Lane’s grave in the floor of the church, it didn’t really sound like a lot of money. But how much was this to the people of that time?

There would seem a very straightforward way to get our hands around how much wealth this represented.  Since the current exchange rate for dollars vs pounds is $1.34, we just have to multiply it out:  16 ounces per pound  x $1.34 per pound x 28 livre turnois (as given to the church) = $600.32, right?   OK, you could probably buy a slab of stone for that, and perhaps even have a name and year carved into it.  But you’d have to shop around to find that deal – and delivery would almost certainly be extra!

ExchangeRate
Today’s exchange rate between an American Dollar and a British Pound Sterling.

Although the calculation is correct, the approach is not.  There was a time when the British livre was tied to the value of a pound of silver (a real standard). There was even a time when the US dollar was required to be backed by a “dollar’s worth of gold” (a relative standard, by the way). But neither is the case anymore.  Currencies are not backed by physical treasure. And perhaps with good reason….

SilverHistoricalPrice
Historical price of silver – 32 years

If you look at the chart above, you will notice that the value of an ounce of silver changes over time–and sometimes radically so!  The price of silver seems to have hovered around $5 per ounce in modern times, before climbing steadily to around $16 per ounce (today’s price) in the first decade of the new millennium.  But in 2010, it spiked to nearly $45 an ounce before taking about 4 years to settle back to its current level.  I don’t recall a 10x change in the political, social or even economic situation in those years, only fluctuations in the stock market based on speculations.  And what about the apparent baseline shift from $4 per ounce to $16 per ounce?  I’m also fairly certain that a large portion of the world’s silver supply wasn’t suddenly transported away by aliens, either.  So much for the supposed stability of the “gold (or silver) standard!”

Just for fun: at the 1980s price of $4 per ounce, that 28 pounds of silver would have been worth: 28 pounds x 16 ounces per pound x $4 per ounce = $1792.00.  At today’s roughly $16 an ounce price, that same calculation yields a value of  $7,168.00.   That seems more appropriate, but it turns out this still doesn’t accurately reflect the useful wealth of that amount of silver in the 1600’s…

Another strategy for calculating value would be to tie it to an intuitive product–like the proverbial loaf of bread, perhaps? On the face of it, this seems a reasonable idea: humans are much the same, and the cost of feeding your family seems a good metric of value.

But this doesn’t work well either (as the following chart shows),  because the fundamental truth (for bread and silver alike) is that prices are determined by scarcity.  Over the centuries, there have been dramatic increases in both productivity and efficiency of food production–to the point comparing prices of commodities over large timespans is a nearly meaningless exercise.  In the chart below, you can see this dramatic decrease in the relative portion of a person’s wages required to buy one 2-lb loaf of bread each day (the magenta line). At the same time, you can see how a skilled worker’s wages went up 6x over these centuries (the blue line).  Over this span of time (that only gets us to the early 1800s) a worker’s wages went up by 4x, which meant the relative cost of feeding his family dropped by 75%.

1600sCostAndValueChart
Wages and cost of living comparison for the 16th-19th centuries. Five shillings a week = wages of 13 pounds a year (20 shillings to the pound). Credit http://www.johnhearfield.com/History/Breadt.htm

And this was before the successive agricultural revolutions of the 1800’s and 1900’s brought about a major shift in global agricultural productivity.  In this next graph you can see the effect of this shift.  Another nearly 75% drop in the (inflation adjusted) price of food at the same time the world population quadrupled. Bread used to be scarce–and therefore it was relatively much more expensive.   And this is a reality–there has been an astounding increase in the real living conditions of the average citizen of the industrialized world.  What we would call “abject poverty” today was the daily reality of much of the world’s population for most of mankind’s existence.

sep12_fuglie_fig01
The staggering increase in global agricultural output is evident in this chart: in the same century (ours) the world population has quadrupled, agricultural food prices have dropped by more than half.

 

But in the wage and cost comparison chart above, I would argue we can find a more meaningful approach for comparing relative value:  what a skilled worker is willing to trade a week’s labor for.  By that metric, the mechanic shown in the above chart would have made around five (5) shillings a week in the middle 1600’s (£13 a year).  The average wage for a similarly skilled worker in England today is around £27,000 annually (£519 per week).  That’s 2,077 times the wages for a similar week’s work…

Of course, we have a lots more to spend those earnings on today. Things like housing with automatic temperature control, professional police and fire services, indoor toilets, always-on electricity powering a refrigerator, and even an unending supply of hot and cold drinking water to wash our hands in.  In the 1600s, a man of reasonable means had the luxury of owning a horse. A man of reasonable means today keeps around 600 of them stabled under the hood of his retro Mustang GT.  Not feeling well?  We have doctors who can replace a failed liver, or swap out a damaged knee with an artificial one.  And of course, the option for a modern citizen to occasionally climb into an airplane and “pop” over to the other side of the planet for a few weeks to pursue an interest.  But, that’s a subject for an upcoming article…

And so, the 28 pounds of silver given by Sir George Cartaret to the church of St Helier in 1650 for the emplacement of a monument stone over Richard Lane’s tomb was a small fortune.  It was a little more than two-years wages for a good mechanic–around £58,200 modern equivalency (or about $78,000 here in “the colonies”)!

This would seem a far more fitting tribute to the memory of a man whose funeral procession included the future king of England–a funeral procession led by 80 musketeers carrying their muskets “reversed” (barrel down) in honor.  That much money would have bought a very nice monument stone indeed – and would have gone a long way toward feeding the poor of the St Helier parish.

But as the War of Three Kingdoms was winding down, Jersey would soon be the last holdout of Royalist resistance.  Within a year, Jersey would fall to that concentration of  parliamentary forces, no longer diluted by the subjugation of Ireland and Scotland.

And so, with the funeral service concluded, the floor stones restored to their places in the church floor and any stray dirt swept away, the task of placing a monument over Sir Richard Lane’s tomb was not the parish’s immediate concern.  As Jean Chevalier must have later appended to the account of the funeral in his diary:

“After the funeral, Sir George Cartaret gave twenty-eight livres tournois to the poor of Saint Helier’s parish. It was intended to raise a monument over the  tomb, for Milord Keeper was the first lord to be buried in Saint Helier’s church. He was a man of letters and learning, and for that reason had been made Lord Keeper of the Seal by the late king, as well as for the fidelity and lively wit with which he was endowed.  Nevertheless, no monument was ever set up, and with the passing of time his memory had faded away.”

——

Your comments and corrections are gladly welcomed.  I admire great writing, but have little choice but to approach this task as one of grinding a workable edge onto a rough blade – with my thanks for your generosity of spirit and firm critique in the meantime! 

-Greg Sherwood

 

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