18. During the Thirty Years’ War, the city-states of Germany began minting devalued foreign currency in an effort to elevate their own struggling economies relative to their neighbors
In 1618, the Thirty Years’ War engulfed Europe. Lasting until 1648, during which time an estimated 8,000,000 people died, armies from more than a dozen European states, including France, Sweden, England, and Spain, fought throughout the territory of the Holy Roman Empire. Starting in 1621, city-states of the Holy Roman Empire, desperate to raise revenue to fight the conflict but unable to institute effective taxation, resorted to the debasement of currency. Known as “Kipper und Wipper”, literally “Tripper and See-saw”, referring to the use of tipping scales to identify pure or devalued coinage, coins were mixed with base metals and reissued with a lower value.
City-states, in a selfish attempt to protect themselves at the expense of others, initially did not debase their own currency but that of neighboring regions. Manufacturing low-value imitations of foreign currency, the German states engaged in an early form of economic warfare against one another. An incalculable number of mints were established to produce virtually worthless coins, with children allegedly playing with them in the street rather than spending them. By 1623, the public had discovered the ruse and denounced the practice, whilst governments began to receive their own fake coinage in revenues. Although stopping, it was too late and resulted in widespread financial chaos throughout the region.