When Small Change was not a Big Problem

Abstract In a proportional coinage system with several denominations, there is a risk of shortage of small change. The main reason is the higher production costs of small coins. This was a major problem in large parts of Europe in the late Middle Ages and Early Modern period. Cipolla has suggested a standard formula to this problem: issue small coins as credit coins, mint them on government account, and make them convertible, for example, by accepting them as payment of taxes. In this paper we show that other solutions were put into effect in Antiquity and the Middle Ages. In the early and High Middle Ages, small change was created by simply cutting the main denomination in halves or quarters. In the late Middle Ages, minting authorities in central and northern Europe coined small change as uni-faced ‘hohlpfennigs’ by using a cheaper minting technology. We show that there was no shortage of hohlpfennigs, and explain why this technology was cheaper and why it was abandoned in the early sixteenth century.