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Medieval Sourcebook:
Jewish Views of  Royal Monetary Policy in Aragon, 13th Century

The following two thirteenth-century rabbinic responsa (answers to legal questions) both address the question of the legality (in Jewish law) of royal manipulations of the coinage. The implications of the answer related to the legitimacy of resisting the imposition of the new coinage. Both responsa center around an analysis of the Talmudic dictum, "the law of the kingdom is the land." Both also address perceptions of royal authority and royal legislation.

I. Nahmanides (Ramban)

Your question: was about the king, who changed the [value of] the coinage, and revalued it considerably, and made a general decree that this coinage should be valid for the payment of debts and all other matters of loans in place of the old coinage.

Answer: From your words, I learned that you rely on the opinion of some of the sages of the previous generation who taught that the principle "the law of the kingdom is the law" (Baba Kamma 113ab, Baba Batra 54b, Gittin 10b) only applies to business relating to the king's own needs, as when "[royal officials] cut down palm-trees and build bridges [with expropriated wood] to make themselves a road" (Baba Kamma 113b), or in a land where they levy the land-tax (tasqa) where the king said that "whoever pays the land tax shall have the benefit [from the land]" (i.e. anyone willing to pay the taxes may take possession of the land of those refusing to pay; since the king levies land-taxes, he may determine who owns land) (Baba Batra 54b).   In truth, this reasoning has been transmitted to us from some of our teachers.

Nevertheless, I do not agree with you that matters of coinage are not royal prerogatives; since they [kings] control the coinage, they mint it, and disseminate it through their lands, if the valuation of coinage were not their [business], they have lost [all the benefit to them from their rights over coinage].  This law is equivalent to the law about taxable land, to which the decrees of the king apply, that is that "whoever pays the landtax shall have the benefit [of the land]" . . .

(Having argued that even if the application of "the law of the kingdom is the law" is limited to cases of direct benefit to the king, the king has the right to manipulate the coinage (as might be suggested by the two Talmudic texts cited so far), Nahmanides offers a third text which supports a broader application of the principle:)

Furthermore, with regard to documents drawn up in the courts of idolaters, [most of which are accepted as valid in Jewish courts], the Talmud poses the question that while this rule makes sense in the case of a bill of sale, in which money changes hands], "but in the case of a gift, how does the recipient formally acquire the gift?   Can it be by means of the document? but is this document not just a mere piece of clay? [On the contrary,] Samuel said, 'the law of the kingdom is the law."' (Gittin 10b) This makes clear that they based the validity of documents of [non-Jewish] courts on "the law of the kingdom." All such documents are valid, even if they have nothing to do with royal affairs. . . .

(The responsum continues with a detailed exposition of the exact application of the principle "the law of the kingdom is the law." -- In brief, Nahmanides argues that the principle applies solely to traditional laws of the kingdom, and traditional royal prerogatives, applicable to the entire kingdom, but not to new laws passed on a whim, or applicable unevenly.  He returns to the specific issue of the king's control over the value of the coinage, and concludes:)

And with regard to an increase [as opposed to a devaluation] in the coinage in which the king decreed that a quantity of this coinage should be paid in place of the same quantity of the old coinage, which you said would fall under the prohibition against charging interest, even so his decree is law.  For this increment is not paid because of the agreement or at the will of the parties [to the debt contract], and if it were not for the royal decree, it would not be interest but robbery.  Given that the royal degree is law, and his act of confiscation is valid, this is neither interest nor robbery. In any case, kings today do not usually lower the value of the coinage, but raise it.

Source: Teshuvot haramban, ed. C. Chavel, no. 47; Sefer haTerumot, ed. A Goldshmit, 46.8.5).

II. Solomon b. Abraham Adret (Rashba)

You asked: about one who loaned his friend a sum of money, and the king then changed the coinage, and the new coinage is worth considerably less than the old, i.e. that 100 original dinars are worth 130 of the new dinars.  The borrower claims that he only has to pay the amount in the new dinars as ordered by the king and the lender claims that he has to pay according to the original coinage as is written in the loan document, and moreover, that they are not worth so much.  Tell me whose claim is correct.


(Adret gives various opinions, and concludes):

As for me, I tend to agree with R. Alfasi [that if the devaluation was more than a certain amount, the borrower should pay according to the original coinage].  In any case, if this is a royal proclamation, he can decree how much the borrower shall give the lender in the change of coinage, and the law is according to whatever the king decrees.   At one point, I asked the gentile sages, and they said that it is one of the royal prerogatives (lit: the laws of the king) that he can say "this coinage is changed by this much," and thus, we accept that it is "the law of the kingdom."

(Teshuvot haRashba, vol 3, no. 34).

Historical background: monetary policy in the Crown of Aragon

As both Nahmanides and Adret well knew, control of the coinage was indeed a royal prerogative, and a profitable one.  The kings could profit either by manipulating the value of the coinage or by levying a tax in exchange for promises not to change it.   In reality, the temptation to debase the coinage for short-term gain was held in check by the commercial importance of a strong coinage.  James I debased the old "quaternal" coinage (containing 4/12 silver) to a new "doblench" coinage (containing only 2/12) in 1222, and then overvalued the new coins by 25%.   This coinage proved too weak, and in 1258, James increased the quantity of silver to 3/12 ("ternal"). (For more information on this subject, see Thomas Bisson, The Medieval Crown of Aragon; for really technical information, see idem, Conservation of Coinage). 


Translated by Elka Klein




Paul Halsall, November 1998