Emperor Maximilian I on a visit to Hall mint, "Weißkunig", about 1517, woodcut by von Hans von Burghmair the Elder
Coinage Code of 1560 for the Austrian crownlands (according to the third Imperial Coinage Code of 1559)
Maximilian I (1508 to 1519), who unified the Habsburg dominions, launched an administrative reform which included the establishment of a uniform monetary system. The Coinage Code he issued in 1510 for the Austrian duchies was issued in nearly identical form for Tyrol in 1511. This laid the formal groundwork for a common Austrian currency. Erratic deliveries of precious metals and disputes between the minter appointed by the emperor and the Hausgenossen guild (which was endowed with special coinage prerogatives by the sovereign) caused setbacks, however. The Hausgenossen had started to mint coins in the interregnum after the emperor’s death, a practice prohibited in 1522 by Ferdinand I. Ultimately, the Hausgenossen guild was dismantled.
When Ferdinand I became the ruler of the Austrian duchies of the Habsburgs in 1522, he continued Maximilian’s reform efforts and issued a further Coinage Code in February 1524. This new code was based on the Tyrolean coinage system and established the denominations in the Austrian Habsburg estates – the guldiner, half guldiner, pfundner, sechser and kreuzer.
The unification of the currency throughout the Holy Roman Empire, which had begun with the issue of the first Imperial Coinage Code in November 1524, failed. No agreement could be reached on a coinage standard to establish an acceptable ratio between the values of the various thaler and guldiner issues and the gulden. Not until the Imperial Coinage Codes of 1551 and 1559 were issued would generally valid rules for the issue of large silver coins be established and the problems involved in a bimetallic ratio be resolved by canceling the link of silver money to gold. As a consequence, the thaler evolved into a generally accepted means of payment.
The rise in European silver production, the inflow of American gold and the growing importance of credit transactions, hand in hand with factors such as demographic growth and the expansion of European economies and trade, triggered a massive inflation in the 16th century. In the Danube region, the price of grain skyrocketed 170%; meat prices soared by 110%. Prices in Tyrol also exploded, albeit from an already dizzying level at the beginning of the century. The price of manufactured goods and wages did not keep up with the precipitous rise in agricultural prices: A Viennese bricklayer’s apprentice had received daily wages equivalent to eight pounds of beef in 1500; in 1600, his daily earnings netted him only five pounds of beef.
The demand for money also increased because of the growing need of the territorial states to finance representation, administration, wars and the maintenance of mercenary troops. The traditional sources of revenue no longer sufficed for this purpose, and public debts rose accordingly.
At the beginning of the 17th century, inflation accelerated, finally leading to a bout of hyperinflation known as “Kipper- und Wipperzeit” in 1621–22.
½ kipper thaler worth 60 kreuzer, 1621, Joachimstal, Ferdinand II (1619 to 1637)
Kipper thaler worth 150 kreuzer, 1622, Kuttenberg, Ferdinand II (1619 to 1637)
Die for the reverse of a 24 kreuzer coin, 1623
Flier from the Kipper and Wipper period against the debasement of coins by reducing their fineness or weight: An die Gotts- und Gwissenlose Geltwucherer (Addressed to the Godless and Unscrupulous Usurers), 1622, woodcut (Österreichische Nationalbibliothek)
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.
The consequences of the Kipper and Wipper period and of the Thirty Years’ War affected the Austrian estates until past the mid-17th century. In 1695 Emperor Leopold I (1658 to 1705) tried to use seigniorage to stabilize public finances and established a Coinage Code called Münzeinrichtungswerk. He planned to introduce new denominations in addition to the thaler – a 6 kreuzer and a 15 kreuzer coin – that would be inexpensive to produce but would yield high revenue. At the same time, the value of the thaler was to be adjusted downward slightly to that of the Tyrolean thaler, and its price was to be held stable across all Habsburg lands.
The risen need for money to deflect the threat of Turkish invasion after the mid-17th century foiled this plan, however. Again, Austria was swamped with inferior money, and a second, albeit less dramatic, Kipper period ensued. The coins were withdrawn in 1695, and a landkreuzer, a coin with a very low silver content, was issued.
