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Money and Trading


What is money?

Something that serves as:
  1. Medium of Exchange
  2. Store of Value
  3. Measure of Worth


During the medieval times, money consisted of metal coins. Paper currency was unknown at the time. The value of the coin depended on which type of metal it was made from. The most valuable coins were gold then silver, and then copper. This was widely recognized as the 'standard' of currency throughout the medieval world. There were many different coins, each of which had different designs, weights, inscriptions, and the purity of the metals varied greatly. In the Byzantine Empire, gold, silver, and copper coins were minted and used throughout the medieval period. The most important Byzantine coined was the gold nomisma. This is because it was the standard of exchange in the Mediterranean trade. The most important mint in the Byzantine Empire was in Constantinople, but there were other provincial mints as well. The Islamic world of this time had no coins of its own, but as the Muslims conquered the Byzatines, they adopted the minting processes, and soon started minting their own coins.The most important Islamic coin was the gold dinar. The dinar had inscriptions from the Qur'an that reflected its Islamic Ideals. In the Islamic world, the relationship among values of coins was not set, so it was determined in the marketplace by supply and demand. The coins of Western Europe were very diverse, they had many different authorities because of Feudalism so the coins vary in size, shape, and weight. But increased trading led to the standardizing of coins. This allowed for trade from one region the next. The earliest coin was the gold triens, it was derived from an early Roman coin. Charlemagne standardized the coinage system in his empire. The basic coin in his empire was the silver coin called the denarius or penny.

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What is trade?

The exchange of goods and services from one place to another

Armenian Trade

Armenia is located along the east-west land routes between the Mediterranean and Central Asia/ Far East. Because of the location, it plays a big part in the medieval trading. Under the Byzantine Empire, Armenia was the center of trade for Persia and countries next to the Black Sea and Europe. During the mid 600's, the Arabs invaded, so the constant warfare closed the land trade routes. This caused the Armenian commerce to decline and many of the cities were converted to Arab military garrisons. A revival of commerce began when the Bagratid dynasty came into power. The major east-west route was reopened and trading flourished again. New towns and cities were built and the populations grew to rival those of Western Europe. Before this time, the trade in this area had been transit, which means it was just a stop over for what passed through. (Now the Armenians are more dependent on its native industries.) Then in the 100's when the Byzantine Empire was fighting the Seljuck Turks ended this prosperity. The towns and cities were destroyed in the fighting. After this time, the Mongol Empire expanded into Western Asia, and trade was again expanded. But the taxes the Mongols imposed were rising, so this ruined the Armenian economy. The final blow to the Armenians was the new sea route for the European nations to get to Asia.

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Byzantine Trade

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The trade in the early Byzantine Empire used the pattern established by the Roman Empire. Trade within the Empire was great because the empire was like one big trading organization. This is because there were low tax rates, common currency, and custom fees. The government interfered with much of the trading, so private individuals were not able to operate factories. Small trades still happened on a local level in forms of exchange. During the 600's, the wars and the plagues resulted in a decline in the population. This made the economy mostly agricultural because the people concentrated on producing enough for them to eat. The empire lost much land to the Arabs, and they felt the lost of Egypt with their grain. After the Arabs took over most of the Byzantine Empire, trade was mostly centralized in Constantinople and the Black Sea. Though the population and prosperity grew most of the people were still rural. Then in the 900s, the western Europeans began trading with the empire using merchants who set up colonies there. Eventually, the ruling class began renting out land to the merchants. In the 1000s, the Byzantine Empire began to move into larger cities. The empire then extended its trade to Italy, Egypt, Russia and Turkey. Though the Byzantine merchants became wealthy with all this trading, they still had little power in the Empire.

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Islamic Trade

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Trade in the Middle East happened long before the rise of Islam. Where there were cities and towns, there was trade. Muhammad himself was a trader, but by the late 600s and early 700s the political systems and culture had many affects on its trade. This caused many areas to join together together into one, which made the Arabs stronger and able to conquer many other civilizations. They captured gold, silver and many precious metals, which jump-started their economy. The center of this empire was Baghdad. Regardless of the size of the cities, they were all important to the well being of the Arabs. The Islamic people were also the first ones to start loans. They had little slips of paper which promised to pay some one back.Islam had a positive attitude toward commerce as long as it was honest.

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Western European Trade

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Trade during the Middle Ages was divided into two, the sea and the land. Trade in northern Europe was based on the rivers and the sea while southern Europe used the Mediterranean and the land. The Romans had used large scaled transport of goods, but when Rome fell, the long distance trade declined. When the Vikings invaded, it stimulated the economy because though not well known was the fact that Vikings were great traders. Much of the trading done during this time was done at fairs, the most famous of which is the one was in Champagne. The goods, which came from the Far East, came to Western Europe on land and through rivers. There were major wars in this time disputing who would trade with whom. The Scandinavians were pushed out by the Germans so the merchants from these towns followed the routes which the Vikings used and opened a new trade route to Russia. To organize this trade route they formed the Hanseatic League. The Bubonic Plague hit this region hard it led to a decline in trade. After this plague the people in the areas were able to feed themselves with the products of their own countryside. Political and Military events in the late medieval time period also disrupted trade. By the end of the medieval period Western Europe trading was in a period of deep decline.

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This page written by Duke Chen.

Last revised: 12/5/1998