Good Money: Birmingham Button Makers, the Royal Mint, and the Beginnings of Modern Coinage, 1775–1821
Book Review by: Ranald Michie
For Citation: Business History Review 83 (Autumn 2009)
Though written by an American economist, with a foreword by an eminent British one, Charles Goodhart, this is not an economic analysis of Britain’s money supply during the Industrial Revolution. Instead, it covers very diverse aspects of Britain’s history from the 1780s up to 1820 through a focus on the private production of coins. That focus leads George Selgin, who clearly has a passionate interest in such coins, into an exploration of business, counterfeiting, manufacturing, mining, numismatics, and technology, as well as the vexed question of the relations between politicians, government, and private enterprise. The result is a fascinating study that should appeal to the general reader as much as to the business historian. Curiously, for a book on money, readers with an interest in banking and finance will find little of direct relevance, as it does not say much about either credit or capital.
Selgin’s subject is the fact that between 1787 and 1817 a deficit in the supply of coins in England was met through the private production of metal tokens that gained an acceptance as money. The most acute shortage of coins was experienced at the level of the smallest denominations. As few in society earned in excess of one pound per week, gold coins were of little use, and even most silver coins were of too high a value. However, it was the gold and silver coins that the government provided through the Royal Mint that had the monopoly of production. This left numerous transactions without access to a readily available circulating medium, a situation that became more and more acute during the course of the eighteenth century, especially as silver was absorbed by Asia. Though banks were developing, they were banned in 1775 from issuing notes under one pound, an amount that was increased to five pounds in 1787. Thus, the government’s own actions made the problem a growing one in the late eighteenth century. The eventual solution was the modernization of the Royal Mint, which, however, did not take place until 1810. In the meantime, a solution had to be found, as employers were faced with growing problems in supplying their workers with a means of making their daily purchases of food, drink, and other essential items.
That solution came with the discovery of large copper deposits in Wales in the late eighteenth century, as these mines provided an ample supply of a metal that was readily acceptable for small transactions once converted into coins. The way Birmingham’s numerous manufacturers of items such as metal buttons, buckles, and toys turned to coin production at this time constitutes the main subject of this book. In particular, the focus is on Matthew Boulton, whose Soho Mint became a primary source of these copper coins. This episode in Boulton’s business career is traced in great detail through a series of chapters that begin by looking in some detail at the development of a new technology for producing coins and then consider other aspects of the enterprise, such as the types of the clients who placed orders. What emerges is the marginal importance of steam power in the early production of coins, despite the obvious Boulton connection (Boulton, with James Watt, was an early pioneer of steam-engine technology). The many descriptions of the designs used and the attractions these coins had for collectors, both then and now, lead to a discussion of counterfeiting. The complex relations between the Soho and Royal mints and the government are also examined. To meet the growing demand for low-denomination coinage, the government eventually awarded Boulton the contract to produce copper coins. Recognizing the efficiency of the firm’s operation, the government then enlisted Boulton to assist in the modernization of the Royal Mint. In turn, the Soho works stopped minting coins for private customers, leaving it vulnerable as a modernized Royal Mint geared up to produce enough coins to meet demand. Eventually, in 1818, the government itself took steps to ban the private minting of coins for circulation within Britain.
Though a number of interesting strands emerge from this book that contribute to an understanding of the Industrial Revolution in Britain, the main point that Selgin develops is the ability of private enterprise to compensate for an inadequacy in government provision, and to do so successfully. At a time when much is being written about the need for government to compensate for market failure, this historical episode is a useful corrective. However, in terms of the great changes taking place during this time in manufacturing industry and the banking system and arising from the problems caused by engagement in the French revolutionary and Napoleonic wars, the minting of substitute low-denomination coins has to be viewed as a factor that helped to soothe an irritant, rather than as one contributing to major economic change. Nevertheless, this is a well-researched book, in terms of both primary and secondary material, that tells an absorbing tale of how Britain coped with a shortage of coins during a formative period of its economic history.