money in middle earth

[Melilot Brandybuck]

I just wondered, as I am re-reading FoTR, does the Shire mint its own money? There are quite a few references to money at the beginning. I believe Bilbo hands out a few pennies to children hanging around near BagEnd before his party. Frodo worries about the small amount of money he is carrying when he first suspects Aragorn of being a rogue. They pay the apparently astounding amount of 12 silver pennies for Bill the Pony, and then Butterbur pays Merry 18 silver pennies for the loss of Merry's ponies.

(IMO, I don't think it was fair of Merry to accept Butterbur's money. After all, it was due to the presence of the hobbits that the inn was attacked in the first place. They were all fully aware that the animals were taken to hinder their departure. Not only did Butterbur reimburse Merry, but he would have been honor-bound to reimburse the owners of the other horses that were missing. He's lucky they were later returned to him - bar one - but he wouldn't have known that at the time.)

But back to my original query. Is this money only valid in the Shire? Is the value of silver the same throughout ME? It just makes me wonder about the economy of the Shire. I would have thought that if there is a Mint, there is a Treasury and all the offices that go with it.

[Mithalwen]

This is spooky because I was thinking about the same thing in a different context with regard to Lake Town and the claim on the dragon gold to pay for the repairs. This and the fact of the woodelves trade with the Lakemen which seems to involve paying for goods rather than barter implies some form of currency must have been in operation. It was certainly based on the value of the metal rather than the sophisitcated form of credit notes we use. Interestingly it seem to be the less sophisticated cultures (woodelves, dale and breemen and hobbits who have the more sophisticated economies). The highelves and dunedain seem more feudal -that probably isn't the right term but I am sure there is an economist/ social-historian amongst the downers who can explainit properly

[alatar]

This has been growing on my mind of late...

It all started when I considered what Frodo did with his life prior to year 3018. How did he eat, buy beer, pay for Sam's employ? Am I just clueless regarding how such a culture or economy would function, or is this just glossed over, being mostly irrelevant to the story?

Consider: Frodo inherits Bad End, and so he has no 'mortgage.' He's a bachelor with no dependents, which makes things a bit simpler. He has to, however, heat and light the place, and so either purchases or gathers wood and makes candles. Somehow I doubt that Frodo was out chopping wood. He, being a hobbit, eats like a shrew, and even if he fixes his own suppers Frodo has to get the provisions from somewhere. Of course he has a garden, but I guess that he somehow pays Sam to work there, and also Sam maintains Bag End, keeping the place standing against the tides of time.

So how does he pay for the things that he does not have nor cannot make? Bilbo may have left a fortune, but what good would it be? For example, let's say that Bilbo left Frodo a bunch of little Arkenstones (not the big one, but smaller essays). Could Frodo use these to buy labor or materials? To me it would be like going to the local grocery (not that we have those in "Merica, as they've all been consumed by UberMegaBigBoxMarts) and attempting to trade a gold brick for some bread and cheese. Even if the grocer accepted the trade, eventually I would run out of gold bricks. The value in Gondor of the little arkenstones might be a princely sum, but in the Shire their value may be less - even if I bought the entire stock of the baker, I would still run out of stones, or their value would decrease as everyone (the innkeeper, Sam, etc) would have one. And what would the baker or innkeeper or Sam do with a bucket of arkenstones? If no one else accepted them - they're pretty little baubles, but you can't eat them nor burn them - the people that Frodo paid would not accept more of the same.

Anyway, my concern is that Frodo's 'wealth' might not allow him to sit idle for so many years.

Could he invest his money so that even if he were buying bread with arkenstones that he could live off the 'interest' on his wealth? In what could he invest that would provide a return? I just have no grasp on how that would all work in such a primitive (I don't mean that derogatively) and agrarian culture.

Plus, obviously, I want to find out Frodo's secret so that I, too, can spend my days walking the countryside, looking at maps and chatting with elves.

[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.

[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.

[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.

[Frodo Baggins]

Perhaps just like the Hobbits used the calendar set up in Gondor by the king (i.e. King's reckoning) they used some sort of "universal" currency also set up by the kings and/ or stewards? Perhaps this currency was used among most settlements of Hobbits and men. Though I doubut that elves or dwarves used such currency, as stand-offish as they can be.

Wealthy families like Bagginses and Tooks I'm sure had a system like the old days of the humans. The weathy people owned scads of land and had other people work it for them. The landlords in turn got a percentage of whatever money the peasants made or grew. They also may have collected rent from people living on their land. For all we know, the Gamgees of Bagshot Row may have been paying rent to the Bagginses!!

[Formendacil]

Originally Posted by Lalwendë

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.

I agree that it is not feudal- hence my attempt to suggest that Frodo's position as chief landlord in the Hobbiton area- if the case at all- is more of a lingering effect of the once more-feudal Baggins homeland. All that would be needed is for Frodo to own a few substantial farms and maybe a Bagshot Row or three, and someone as modest in needs as he was would probably be set.

What difference does it make if Frodo comes by these "investments" as you call them, through the investment of money or through his inheritance?

And call the Bagginses middle-class stereotypes if you like, but to me Bag-End smacks more of a manor house suited to a beknighted peer than something truly middle class.

[davem]

Clearly Hobbits did use coins

[Mithalwen]

Originally Posted by Formendacil

And call the Bagginses middle-class stereotypes if you like, but to me Bag-End smacks more of a manor house suited to a beknighted peer than something truly middle class.

But the Bagginses are definitely middle class while the Tooks are "gentry"/aristocracy. There is a huge difference in mentality if not finance. Maybe it is hard also to realise how (ridiculously) this mattered then but it is barely a century since my great grandmother was disowned by her family for marrying "in to trade" - she was also spat at in the streets for being so immodest as to ride a bicycle ..... Bit of a Belladonna Took herself

[A_Brandybuck]

I think, that the behaviour of Lotho is crucial in this discussion.

Return of the King, The Scouring of the Shire:
He'd funny ideas had Pimple. Seems he wanted to own everything himself, and then order other folk about. It soon came out that he already did own a sight more than was good for him; and he was always grabbing more, though where he got the money was a mystery: mills and malt-houses and inns, and farms, and leaf-plantations. He'd already bought Sandyman's mill before he came to Bag End, seemingly.
'Of course he started with a lot of property in the Southfarthing which he had from his dad; and it seems he'd been selling a lot o' the best leaf, and sending it away quietly for a year or two. But at the end o' last year he began sending away loads of stuff, not only leaf. Things began to get short, and winter coming on, too. Folk got angry, but he had his answer.

Farmer Cotton clearly stated, that there is money in the Shire. At least Lotho bought some buildings with money. The question came up, where he got all the money and it seems clear, that he had some tradings with Isengard, which is (for me) obviously the source of his money.
Farmer Cotton didn't know, where the money came from, so I think, that this was very 'normal' money, which seems to look not very exotic. I mean Farmer Cotton didn't explicitly mention that this was money from elsewhere or that there was such a rumour. In this case he would clearly have mentioned it, because this had (at least partly) answered the question, where he got that money.

And alone the possibility the Lotho could make such deals with some foreigners could mean, that there must be a shared basis, of which the tradings underlie.

[Rumil]

One source of cash, or precious metal, for the Shire must have been derived from their dealings with the Dwarves.

The Dwarves often travelled through the Shire and seem to have bought agricultural produce from the hobbits, probably sometimes by barter for 'ironmongery' of various types, but conceivably with coins. The Dwarves were not farmers and had a similar sort of relationship with the men of the second age. I seem to remember this from UT where Gandalf explains his dealings with Thorin and 'of Dwarves and men'.

[Kuruharan]

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.

Not really. Historically speaking, people were not always nearly as finicky about the…err…”national origin” (an extremely clumsy expression, but I don’t know how else to put it) of currency. This was because the issue at stake was the value of the metal itself (often easily expressed in weight or comparison to other metals), not the relative credit of the coin’s nation of origin. The gold would have been gold and spendable in a money economy that had experience with gold (and I am presuming that the Shire did based on general common sense and the points made by Rumil) whether the coins happened to be stamped with the head of Thror, King Under the Mountain or stamped with the head of Isumbras III, Thain of the Shire.

[Lalwendë]

Originally Posted by Kuruharan

Not really. Historically speaking, people were not always nearly as finicky about the…err…”national origin” (an extremely clumsy expression, but I don’t know how else to put it) of currency. This was because the issue at stake was the value of the metal itself (often easily expressed in weight or comparison to other metals), not the relative credit of the coin’s nation of origin. The gold would have been gold and spendable in a money economy that had experience with gold (and I am presuming that the Shire did based on general common sense and the points made by Rumil) whether the coins happened to be stamped with the head of Thror, King Under the Mountain or stamped with the head of Isumbras III, Thain of the Shire.

That's true. Archaeological finds of money often contain a variety of coins, from a variety of countries. Just because say a Saxon hoard includes say Italian coins, does not mean those Saxons went there, just that these coins had come to them through trade of other people. Probably bad examples to contrast, but there you go! It was the actual quality of the money that counted, which is where that image of someone biting a coin to see if it is real comes from.

I was thinking of what might happen if someone came to The Shire with actual bullion. Obviously a lump of gold would be less useable than coins, except maybe if a Hobbit wished to buy a new Smial. Coins, even if they are not all of the same Mint, can be measured for what they are worth, and are obviously easier to use on smaller purchases - try knocking lumps out of a gold bar to pay for your groceries, it's not a very accurate way of paying!

There's also another question to raise. If there was not a Mint in the Shire, how could the flow of cash be controlled? Too much cash in the economy would cause serious inflation, so would Bilbo's return with 'treasure' have raised eyebrows in more ways than one?

[davem]

Originally Posted by Lalwendë

There's also another question to raise. If there was not a Mint in the Shire, how could the flow of cash be controlled? Too much cash in the economy would cause serious inflation, so would Bilbo's return with 'treasure' have raised eyebrows in more ways than one?

Maybe this is why Bilbo refused to take a full share of the treasure & only took two small chests....

[The Saucepan Man]

Here's another thread discussing the place of money in Middle-earth, which also includes a discussion on the likelihood of trade between different realms:

Money!

As for my own contribution to this thread, I shall take the liberty of quoting myself from that earlier thread:

Originally Posted by The Saucepan Man

Of course, it does not follow from the existence of trade that any form of currency existed in ME. Goods could be bartered. But there is some evidence for the existence of currency. The auction involving Bilbo's furniture has been mentioned, and auctions tend to involve goods being exchanged for currency, rather than bartered for other goods. Also, the Trolls that Bilbo and the Dwarves encountered had a purse, the purpose of purses generally (although not exclusively) being to carry coinage, and their hidden horde included pots of gold coins.

I doubt that a society as complex as that of Gondor could function without some form of currency. And it seems that the Shire probably had some form of currency too. I hardly imagine, however, that there was any form of exchange rate between currencies of different realms. Possibly, there was a universal currency, perhaps consisting of gold, silver and copper coins, although that raises the question of where they were minted. Could anyone with access to the relevant precious metals and the necessary technology have minted coins which would be acceptable elsewhere in ME? It seems more likely to me that realms which operated on the basis of currency would develop their own currency, signifying the coinage as their own by impressing upon it the likeness of their ruler. I would therefore speculate that some (although not necessarily all) realms did have some form of currency of their own. However, it is likely that trade between different realms mostly took place by barter.

[Formendacil]

Another thing to note, too, is that Gold was probably not the only metal used in the making of coins. We know, from the silver pennies that Merry received from Butterbur, that silver was also in general use. And, since I believe that Merry received ONLY 18 silver pennies in compensation for 5 ponies, there must have been another, lesser, denomination for smaller, more everyday purchases. Looking at history, it seems safe to assume that these would have been copper, or possibly bronze (I've never heard of bronze coins, but I assume that they COULD exist...).

[davem]

Just found this essay by Michael Martinez on Merchants in Middle-earth. He makes reference to something Tolkien wrote for the Appendices of LotR which had to be excised for reasons of space.

From the essay:

Just prior to The Lord of the Rings' publication J.R.R. Tolkien was forced to condense the extensive material he had prepared for the appendices. Among the excluded passages which were only published in The Peoples of Middle-earth was a brief but fascinating section detailing the names of money used in Gondor. The tharni, we are told, was a silver coin, the fourth part of a castar. The tharni may thus have been equivalent to the silver pennies of Eriador.

The Elven equivalents for tharni and castar were canath (from kanat-, 'four') and mirian (from mir, 'a jewel or precious thing'). "The Etymologies" provides a root-word, mbakh, meaning 'exchange', from which words for 'trade', 'tradesman', and 'commerce' were derived in Qenya (the precursor to Quenya). There were also words for 'pedlar' and 'ware' in Noldorin (Sindarin).

Unfortunately I'm still trying to find the exact part of Vol 12 that Martinez refers to. I'll keep looking - unless someone beats me to it.

[A_Brandybuck]

Beat you. ;-)

PoME, On Translation:
Similarly farthing has been used for the four divisions of the Shire, because the Hobbit word tharni was an old word for 'quarter' seldom used in ordinary language, where the word for 'quarter' was tharantin 'fourth part'. In Gondor tharni was used for a silver coin, the fourth part of the castar (in Noldorin the canath or fourth part of the mirian).

But I cannot find a reference to the suggested equivalence to the silver pennies of Eriador.

[davem]

Thanks - you did just beat me (its on P 45 of vol 12 if anyone is interested)

[Formendacil]

Originally Posted by A_Brandybuck

But I cannot find a reference to the suggested equivalence to the silver pennies of Eriador.

The Lord of the Rings, The Fellowship of the Ring, Book I, Chapter XI "A Knife in the Dark":

Originally Posted by J.R.R. Tolkien

Bill Ferny's price was twelve silver pennies; and that was indeed at least three times the pony's value in those parts. It proved to be a bony, underfed, and dispirited animal; but it did not look like dying just yet. Mr. Butterbur paid for it himself, and offered Merry another eighteen pence as some compensation for the lost animals. He was an honest man, and well-off as things were reckoned in Bree; but thirty silver pennies was a sore blow to him, and being cheated by Bill Ferny made it harder to bear.

I forgot, in my original reference to the silver pennies, that Butterbur also paid 12 for Bill, but I'm pleased to see that I was right about the number 18...

[A_Brandybuck]

Sorry, but I don't get it. What part exactly means, that The tharni may thus have been equivalent to the silver pennies of Eriador ?

[Formendacil]

Originally Posted by A_Brandybuck

Sorry, but I don't get it. What part exactly means, that The tharni may thus have been equivalent to the silver pennies of Eriador ?

Tolkien never said that... Michael Martinez said that, based on the assumption- fairly valid- that silver coins in one place (Eriador) would have been worth roughly the same as silver coins elsewhere (Gondor). The quotes about the tharni and Butterbur's pennies are where we get the idea of the two silver currencies from in the first place.

Also, since the currency used in the Shire and Bree is undoubtedly Arnorian in origin, and since Arnor and Gondor likely had similar currencies, it seems likely to assume that since Gondor only had one denomination of money cast in silver, that it would be equivalent to the silver pennies of the North (why call them silver if another coin were made of silver?).

But if you're looking for a quote by Tolkien that says "Silver pennies = tharni", then you are doomed to failure.

[Formendacil]

P.S.

My apologies for misreading your questioning post as a request for the reference in Tolkien to Butterbur's silver pennies. In case it wasn't already clear, that's what- in my hastiness, I fear- I thought you were asking.

[davem]

The tharni, we are told, was a silver coin, the fourth part of a castar. The tharni may thus have been equivalent to the silver pennies of Eriador.

The Elven equivalents for tharni and castar were canath (from kanat-, 'four') and mirian (from mir, 'a jewel or precious thing').

I think from the above passage from the Martinez essay that the coinage of both Gondor & Arnor was originally Numenorean & had its origin in Elven coinage. Probably then all the areas of M-e which came under Numenorean influence in the Second Age would have had a similar coinage.

[Azaelia of Willowbottom]

Someone mentioned the exchange of currency between realms... And I have these guesses to offer:

*While it would have been pretty impossible to fix a rate of exchange for currency between realms, I would have to assume that currency in Gondor and Rohan would probably be about equivalent. The two civilizations are close enough together that trade/exchange of money would occur fairly regularly.

*If the Hobbits came in contact with money from other parts of the world, through chance events like Bilbo showing up with dragon gold, or through the rare excursion to Bree, I am sure they could work out how much foreign money was worth through weighing/examining the coins.


And on currency within the Shire itself:

*The halflings are skilled with their hands, so I see no reason why a smith or jeweler of some kind wouldn't take it upon himself to make coins/currency for the Shire.

*Wealthier families, as has been said before, probably had enough resources to trade in coins, whether they were gold, silver, or bronze. Merry certainly was able to handle money effectively, case in point, the brief mention of currency in Bree.

*Not much has been said, however, about lower-class families like the Gamgees. My own vision (which has no proof that I can discern) is that these groups of less wealthy citizens would mainly barter for what they need.
The Gamgees are gardeners, and can thus probably feed themselves pretty well, but they may need tools to plow, rake, etc. Perhaps in that event, they would trade produce for the materials they needed. I'm sure you didn't just walk into the Green Dragon, plunk down a zucchini and ask for a beer. Drinks were probably pretty cheap way back then (not much inflation). Lower-class families may have made some small coinage by selling their veggies in a market (that may have been a mix between bartering and trading coin), that they could use to go out for a pint with their buddies.

*I don't really see Frodo paying Sam in cash. He certainly would make sure that Sam's needs (and those of his family) were looked after--food in hard times, clothing if needed, fuel for heat, etc., but I am not sure that it was ever mentioned that either Bilbo or Frodo ever paid the Gamgees with actual money.

*Hobbits seem like polite, cheery, accommodating people overall, so I doubt that lack of coin money was ever a problem. They love feeding each other and sharing what they have, so I can picture a more mixed economy than I see in a larger, more rule-based society like Gondor, which is probably strictly cash.