The English pound sterling, in the time of Edward I. contained a pound,
Tower weight, of silver of a known fineness. The Tower pound seems to
have been something more than the Roman pound, and something less than the
Troyes pound. This last was not introduced into the mint of England till
the 18th of Henry the VIII. The French livre contained, in the time of Charlemagne, a pound, Troyes weight, of silver of a known fineness. The fair of Troyes in
Champaign was at that time frequented by all the nations of Europe,
and the weights and measures of so famous a market were generally
known and esteemed. The Scots money pound contained, from the time of
Alexander the First to that of Robert Bruce, a pound of silver of the
same weight and fineness with the English pound sterling. English,
French, and Scots pennies, too, contained all of them originally a
real penny-weight of silver, the twentieth part of an ounce, and the
two hundred-and-fortieth part of a pound. The shilling, too, seems
originally to have been the denomination of a weight. "When wheat is
at twelve shillings the quarter," says an ancient statute of Henry
III. "then wastel bread of a farthing shall weigh eleven shillings and
fourpence". The proportion, however, between the shilling, and either
the penny on the one hand, or the pound on the other, seems not to
have been so constant and uniform as that between the penny and the
pound. During the first race of the kings of France, the French sou or
shilling appears upon different occasions to have contained five,
twelve, twenty, and forty pennies. Among the ancient Saxons, a
shilling appears at one time to have contained only five pennies, and
it is not improbable that it may have been as variable among them as
among their neighbours, the ancient Franks. From the time of
Charlemagne among the French, and from that of William the Conqueror
among the English, the proportion between the pound, the shilling, and
the penny, seems to have been uniformly the same as at present, though
the value of each has been very different; for in every country of the
world, I believe, the avarice and injustice of princes and sovereign
states, abusing the confidence of their subjects, have by degrees
diminished the real quantity of metal, which had been originally
contained in their coins. The Roman as, in the latter ages of the
republic, was reduced to the twenty-fourth part of its original value,
and, instead of weighing a pound, came to weigh only half an ounce.
The English pound and penny contain at present about a third only; the
Scots pound and penny about a thirty-sixth; and the French pound and
penny about a sixty-sixth part of their original value. By means of
those operations, the princes and sovereign states which performed
them were enabled, in appearance, to pay their debts and fulfil their
engagements with a smaller quantity of silver than would otherwise
have been requisite. It was indeed in appearance only; for their
creditors were really defrauded of a part of what was due to them. All
other debtors in the state were allowed the same privilege, and might
pay with the same nominal sum of the new and debased coin whatever
they had borrowed in the old. Such operations, therefore, have always
proved favourable to the debtor, and ruinous to the creditor, and have
sometimes produced a greater and more universal revolution in the
fortunes of private persons, than could have been occasioned by a very
great public calamity.
Adam Smith, The Wealth of Nations