money in middle earth

[Aiwendil]

I have always suspected that the Shire did have a monetary system - the appearance of silver pennies in Bree being evidence of this.

The Bagginses were apparently "well off" even before Bilbo's adventure. Bilbo appears to have led quite a comfortable life, at any rate. So I imagine that, even were it not for the dragon-gold, Frodo would have inherited enough money to live on.

I think, though, that the treasure of Smaug might not be all that hard to convert into useable sums of money. It was not all "little arkenstones" - in fact, it seems to have been, for the most part, gold. I don't doubt that gold had great value in the shire, nor that there were hobbits wealthy enough to buy it. Gold ingots could always be melted down and sold to a number of buyers. Gold coins could probably be used in transactions among the very wealthy (the Tooks or the Brandybucks, for instance) or could perhaps be exchanged for silver at Michel Delving. Gems could probably be sold to wealthy hobbits (Tooks and Brandybucks come to mind again).

[alatar]

Originally Posted by Aiwendil

It was not all "little arkenstones" - in fact, it seems to have been, for the most part, gold.

How did Frodo buy a beer?

One of my questions, besides the seemingly lack of a mint, is who or what determined the value of the coinage, and how did the Baggins' wealth transfer into this system?

[JennyHallu]

Gold could have been tested for purity, and its value determined by weight. Bilbo showing up every now and again with a bit of dragon-gold to exchange into Shire-coin would certainly have furthered the Mad Baggins legends, to say the least.

[Mithalwen]

I am sure the shire had a form of currency. They had lawyers so they would have neded a way to pay them .

Currency has been around a while. this explains quite well as far as it goes. Just becasue the shire was small, it doesn't mean there can't have been a viable currency based on the value of the relevant precious metal.

[Formendacil]

I would explain it, thought it is speculation, thusly...

The Bagginses, as we are shown by Tolkien, were an aristocratic family, of the same nature as the Tooks, Brandybucks, Bracegirdles, Sackvilles, indeed, most of the big families we are given reference to in the Books.

These large families each, in origin, had their own homeland. Some families, the Tooks and the Brandybucks are notable here, continued to live mainly in their homeland, but it is said of the Bagginses that they were somewhat dispersed by the time of Bilbo- but we are told that their homeland was in the centre of the Shire, about Hobbiton and Bywater.

Now, I relate this tidbit of Hobbit history to show that the great hobbit families had homelands. And who was the head of the Baggins family? Bungo Baggins, followed by his son Bilbo, followed by his heir Frodo- who usurped the place of Otho Sackville-Baggins, whom we are told had the rather greedy desire to be head of two families: the Sackvilles and the Baggins (and would thus have become, amusingly, Otho Baggins-Sackville-Baggins).

So, the great families have homelands and they have heads. I consider these points of information to be important, because it seems likely that, in origin, the lands of each great family were owned by the family- who's head would therefore have been, as head of the family, the ultimate owner of the land.

Now, this would probably have changed by the time of Bilbo and Frodo- to use Tolkien's statement of the Baggins have become somewhat dispersed as evidence. However, if we assume that the Baggins head still retained a certain ownership in the lands that were once the Baggins homeland, then it doesn't seem all that unlikely that he received a nominal fee or tithe from the people who actually farmed the land.

And so I would explain how Frodo had an income without actually working. He was the chief landlord in a very fertile and product region, and even nominal fees would keep him satisfied.

Obviously, I believe the Hobbits at this time had currency. They did in Bree, evidently, and I see no reason for the much larger Shire to not have had the same.

[alatar]

Originally Posted by Formendacil

And so I would explain how Frodo had an income without actually working. He was the chief landlord in a very fertile and product region, and even nominal fees would keep him satisfied.

I forgot that the Baggins' might get 'tribute,' to use a somewhat harsher word, from those that worked their lands. I just don't see any example of it taking place (though it may have).

And as the children that greet Gandalf and Bilbo when Gandalf returns to the Shire (pre-Party) expect some pennies, I would say that there is coin currency within the Shire. Lotho buys up a bunch of land and exports the crops south for more wealth, allowing him to buy more land and begin controlling much of the state of the Shire. Who then enforces the laws, as it seems to me that the community is ruled by hobbit-sense, which in a way makes me feel that they really had no need for money.

Hope that that is somewhat clear.

[Lalwendë]

I would presume that if someone like Bilbo came back to The Shire with a lot of gold that was not in the form of Shire currency then he would have had to exchange it in some way. Now, if The Shire had currency, then it would also need the bullion to make it from, which presumably would not be all that easy to come by! Therefore, Bilbo could well have passed his bullion on to the 'treasury' or 'mint' in exchange for coinage.

I am not sure if there were banks though, so maybe Bilbo dd have to hide his money in the cellars of Bag End?

I interpret the class structure of The Shire differently. It is clear that the Bagginses are solid Middle Class. Tolkien made it clear that they were quite ordinary, with conservative views, just well off. Bilbo is a fantastically well observed, and gently satirical representation of an English middle class male: likes to read, suspicious of strangers, keen on routines such as teatime, likes small pleasures such as a nice cake. I'm not sure whether his type is dying out nowadays. Putting those things together these days might be seen as creating a less sympathetic character.

Merry and Pippin are clearly of the 'old' aristocratic class, together with the teeming family and the sprawling family home (the 'country estate'). The Sackville Bagginses are a joke of Tolkien's either on the part of Middle Class intellectuals (like the Bloomsbury set, which included Vita Sackville West and Virginia Woolf), or on those who were Middle class and sought to make themselves more aristocratic e.g. by acquiring a double-barrelled name. I've heard Tolkien was quite sporty in his youth and slightly suspicious of more 'aesthetic' types.

Frodo may well have earned much income from quiet investments, maybe a little rent here and there on property or land. Was he left with any money of his own after his parents died?

The Shire is not feudal, it is more advanced. It is more like turn of the century (19th/20th, not 20th/21st!) Britain, but without a Government and all the machinery of State.

[A_Brandybuck]

And don't forget the auction at the end of the 'Hobbit'. The visitors had to pay with something and I guess this would not happen with natural products.