In early modern Europe, currency was far less standardized than it is today. There were several different metals with monetary significance: gold, silver, and copper. Countries usually struck coins from all of these metals and often combinations of them together. In addition to local coins, circulating in any given place would be foreign coins made abroad and imported through trade.

           In the early 17th century, fluctuations in the values of coined metals made this system unstable since conditions incentivized the debasement of some coins and the hoarding or melting down of others. When the Thirty Years’ War injected even more instability into this situation, the result was the Kipper und Wipper, an episode of monetary disorder characterized by the widespread debasement of coins across Germany and nearby regions.


           Europe underwent substantial monetary change in the 16th century. Spanish discoveries of precious metals in the New World, most notably at Potosí in the 1540s, led to an influx of gold and silver into Europe. These were not the only important monetary metals though and the century also saw rising copper exports from Sweden, a metal which was used in the production of lower-denomination coins. The increased supply of precious metals created inflation and not only in Spain or Sweden. The money supply rose across the continent as foreign coins regularly circulated outside their home country. Indeed, it was peculiar for any nation in Europe, especially city-states or other smaller countries, to truly have only a single currency in common circulation.

           The prevalence of several distinct coins, many foreign, in a single city or country meant it was not always easy to tell a fake, debased, or clipped coin, from a genuine intact one. The manner in which coins were struck did not help matters. Mints had not yet developed basic anti-counterfeit or anti-defacing measures like milled edges, an innovation which would eventually make it easier to identify a damaged coin. Also, coins were struck then from dies by hand so some variation from coin to coin was common, even inevitable. This made it very easy to defraud people by shaving metal off coins or producing replicas with lower precious metal content.

Holy Roman Empire

           There were about as many countries in Europe as there were coins. At the time, both Germany and Austria, along with parts of what is now France, Belgium, and Italy, were comprised of nearly two thousand independent states, some miniscule. These independent states were variously known as electorates, principalities, duchies, cities, and bishoprics. They were only loosely associated through the Holy Roman Empire, a polity run by the Habsburg dynasty out of Vienna.

           This meant that Germany was especially susceptible to the problems of a jumble of different currencies. True, currency was regulated in the Empire under an Imperial Mint Ordinance from 1559; this specified who could issue coins and subjected mints to inspection. However, the regulations failed to withstand the rapid changes in the supply and value of the various coined metals in early 17th century Europe.

Tainted Coins

           In practice, the Imperial Mint Ordinance went essentially unenforced and the fluctuations in metal values continued to strain the monetary system. The supply of American silver decreased for the first time in the early 17th century. This caused a shortage of small coins which in turn led to the creation of unofficial mints, largely focused on producing low-denomination coins. So, by way of example, whereas Brunswick already had seventeen mints in operation in 1620, the number grew to forty within three years. In Brunswick, even a convent was converted to a mint and within a few months employed between three- and four-hundred workers.

           The new mints were a reaction to silver supply that had already peaked while the supply of copper held up. The unofficial mints debased coins in accordance with these conditions, replacing silver with copper and even cheaper metals starting around 1600. So much copper was being used by the mints that copper products, from musical instruments to kettles, were being melted down to make coins. This was a symptom of a disintegrating old monetary order unable to cope with the changing relative values of various metals, especially lower-value metals like silver and copper. High-denomination gold coins were largely unaffected.

           Debased coins were merely clad in a metal like silver to give the appearance of a legitimate coin. It was also easier to pass along these debased coins of lower denomination because people were less likely to scrutinize their provenance or authenticity. The ease with which debased coins passed as legitimate and entered circulation meant more production of these coins and inflation was the result. Even mint officials normally charged with regulating the coinage were participating in the manufacture of dodgy coins. Unofficial mints, subject to inspection, would simply keep enough genuine coins on hand to show mint inspectors when they arrived.

           Legitimate coins were melted down and used to make even more debased coins, called kippergeld, of the same purported value. Legitimate mints shut down as they couldn’t compete in producing the low value coins that were at the core of the disarray. As predicted under ‘Gresham’s Law’, bad money drove out good money as people chose to hoard the latter and used only the former in purchases so that only the former circulated widely. This led to a spiral of worsening coinage, a phenomenon known as the Kipper und Wipper, variously translated as ‘Tilting and Seesawing’ or ‘Clipping and Seesawing’ and in any case a reference to the scales of machinating moneychangers.

The Minting and Measuring of Coins, circa 1650 (Unknown Author, Source: Wikimedia Commons)


           An even worse disaster struck Germany in the early 17th century when the Thirty Years’ War began in 1618. As a result of the war, large swaths of Germany were depopulated. In the area of Lippe for example, hardly the region most affected by the war, the population fell by 35% between 1618 and 1648.

           The worst years of the Kipper und Wipper, roughly 1621 to 1622, coincided with the early years of the war and there is a connection. During the war, German princes hoarded legitimate coins and turned-out debased coins to pay for the fighting. With only a few exceptions, most European states could not borrow large sums of money through loans so seigniorage, the income from producing currency, was critical to funding military efforts.

           During the Kipper und Wipper, princes would lease mints by the week to glorified counterfeiters. Many were enriched by means of corrupt coinage, especially nobles and generals, along with some well to do commoners who entered the coin minting business. One of the prominent mint operators was Albrecht Von Wallenstein, a German prince who led the Imperial Army during the war. He made a fortune controlling a mint he leased from Emperor Ferdinand II at a cost of six million gulden of sixty kreuzers each in the early 1620s. Wallenstein produced enough debased coins to allow him to buy up the confiscated estates of fallen nobility and to pay for his own private army during the war.


           German princes devised a means of increasing their seigniorage revenues still further, producing debased coins and carrying them abroad to be exchanged for good coins. During the war years, this had the often-desired effect of undermining the monetary stability of other states. Bad money would simply be smuggled past customs inspectors by hiding it in produce; such acts were difficult to stop by the force of law.

           States that hadn’t debased their coinage were now encouraged to do so; if his monetary system was going to be sabotaged like this, a German prince might as well do it himself and accrue some benefit from it. Also, once a particular country came to have only lousy money in circulation, it would become less of a target and having a capacity for producing large amounts of coins could allow it to rob its own neighbors for a change.


           Though obscured by the war, the Kipper und Wipper likely had disastrous economic effects on its own. Trade fell as people were hesitant to let go of their wares for suspicious coins. Tax revenues fell and interest rates rose. Indeed, the mayor of Lübeck complained of interest rates that had risen to “unchristian heights never known since the world began”.

           Prices rose in terms of the debased coins; by this measure, market prices for foodstuffs rose eightfold between 1620 and 1623. In Mulhouse, a quartaut (barrel) of wheat tripled in price, from ten to thirty livres between January 1622 and January 1623 alone. Over a longer period of time, the price of rye in Augsburg rose from 787 pennies to a bushel in 1618 to 6,516 by 1622. However, in terms of silver, or in ‘real’ terms to put it differently, prices were actually falling since the devaluation of the currency exceeded the rise in prices. This obviously affected the real incomes of landowning farmers. However, none of this should be taken to mean that others’ wages kept up in ‘real’ terms, that is compared to the price of goods. In fact, real wages, the basis of ordinary people’s standard of living, fell by perhaps 50% in this period.

           The depreciation of commonly-debased coins, like the kreuzers, could be tracked by comparing them to the value of other coins. For example, an intact silver Reichstaler, which would have been worth seventy-two kreuzers at the start of the century, increased its relative value against the persistently debased lower-denomination kreuzers. So, the value of a Reichstaler was over one hundred and twenty kreuzers by the end of 1619 and six hundred kreuzers by the peak of the monetary disorder in 1622.

Source: William Arthur Shaw’s ‘History of Currency’, p. 103

           By 1623, the Kipper und Wipper was coming to an end. Since people were altogether abandoning the use of coins in trade, the game was up. In Upper Saxony the mints were winding down because they could no longer find any takers for their coins. Around the same time, the Elector of Saxony commissioned officials to resolve the coinage problems. It didn’t take them long and within a day, the officials returned with a 26-page report recommending a return to the neglected mint ordinance.

           Order returned when the old Imperial Mint Ordinance was restored in 1623 and a new valuation of the Reichstaler coin was introduced at 90 kreuzer. At nine Reichstalers to a mark (eight ounces) of silver, this was a devaluation of 25% compared to the 72 kreuzers at the start of the 17th century but the new valuation held for another forty years. Nonetheless, thanks to the monetary crisis and, even more importantly, the Thirty Years’ War itself, German cities were still regarded as being in steep decline relative to other parts of the continent.

           However, financial innovation was not halted. Another product of the Kipper und Wipper was the creation of institutions like the Bank of Amsterdam (Amsterdam Wisselbank). At the Bank of Amsterdam, deposits would be assayed, weighed, and recorded at their metal value so that debased coins were recognized as being worth less than genuine coins. Bills of exchange drawn on the Bank of Amsterdam would therefore replace coins in trade because there could be more certainty as to the bill’s value than as to the value of coined money.

           While the Bank of Amsterdam was created back in 1609, banks formed in its image were launched in Middelburg, Hamburg, Venice, Delft, and Nuremberg during the Kipper und Wipper era. Elsewhere in Germany, other forms of credit came to fill the role in trade previously held by coined money. Indeed, it was ‘bank money’, often maligned in a later era by advocates of ‘hard money’, that actually came to the rescue during this crisis in ‘hard money’.


           Kipper und Wipper illustrates several problems with the system of currency that existed in Europe in the 16th and 17th centuries. For one, several metals had monetary significance simultaneously and, despite the best efforts of governments, fluctuations in their values fatally impaired the stability of the system. The production of coins was also not well standardized. Many mints existed, often privately, producing different coins with ineffective oversight. Add in the straining effects of war and the result was a breakdown of the old monetary system. While it was restored to some extent, the system was also partially replaced by banks which supplied a new form of money, namely deposits and bills of exchange, in greater volume in 17th century Europe than ever before.

More from the Tontine Coffee-House

           Read about the bungled recoinage scheme that caused a run on the Bank of England and a stock market crash, one of the first in history. Also, learn of the role of the ‘rentenmark‘ in ending Germany’s 20th century hyperinflation. Consider subscribing to this blog’s newsletter here

Further Reading

1.     Dash, Mike. “‘Kipper Und Wipper’: Rogue Traders, Rogue Princes, Rogue Bishops and the German Financial Meltdown of 1621-23.”, Smithsonian Institution, 29 Mar. 2012.

2.     Kamen, Henry. “The Economic and Social Consequences of the Thirty Years’ War.” Past & Present, no. 39, Apr. 1968, pp. 44–61.

3.     Kindleberger, Charles P. “The Economic Crisis of 1619 to 1623.” The Journal of Economic History, vol. 51, no. 1, Mar. 1991, pp. 149–175.

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