HOM-301 Lessons

Welcome back to History of Magic! I hope they went well after the last lesson. We don’t have time to stop and ponder them too much as today we continue to dive into magical European history, but this time, from a more economic perspective. We will be ‘following the money,’ as some would say!

The Origin of Wizarding Money

While the origin of using something physical (specifically metal) for money began as early as 5000 BCE, though the details of its use are unclear (due to this being squarely in Prehistoric times with no written word to document anything). 

In the millenia that followed, many less conventional things were also used as money -- particularly among wizards -- starting with a plant called Niffler’s Fancy. Named for its shiny, coppery leaves, this plant was certainly something the little creatures would certainly enjoy. Sadly, the plant is now quite rare, in part due to its overuse in ancient days. Additionally, Occamy eggshells, vials of potion ingredients, and even a failed system that tried to assign different monetary values to various breeds of dragon eggs were all used at some point or another. Imagine going to Diagon Alley today and trying to use those!

However, it wasn’t until much later that various societies began using formal currency. The Lydians of Asia were the first, and their practices soon spread across the landmass to Europe. From there, coins traveled toward the Greek mainland through trade routes, mainly via Egypt and Babylon, and around 650 BCE the entire Greek nation, and both wizards and Muggles, used coins, round and made of metal, as a way to trade. 

But it was Argyros, a magical philosopher who lived around 644 BCE, who penned the first European essays on the concept of money and its value to the economy a bit before their heyday in Classical Greece which we will discuss in a moment. In his work Oeconomicus (a title much used later by Aristotle, Xenophon, and other Greek philosophers), which literally translates to “household management,” he described different kinds of societies, each with their own problems regarding money, trade, and transferring goods. He then stated the best way to address the international problem with trade was to unify possession and value in a specific, wizard-only coinage. He named this new coin after himself -- I mean, who wouldn’t -- and called it the Argium. 

More like Argyros sprang up during Classical Greece (a period which lasted from 501 BCE to 323 BCE), and magical and Muggle philosophers theorized about money and the economy the best combination to use them in order to hold a society together. However, the Argium remained strong throughout this period among wizarding cities and citizens. Still, as we shall see in a moment, paying with wizarding coinage as we know it continued to undergo many changes to get to what we know today.

Changing Currency

The Argium traveled around the various Greek-controlled lands without issue. Several cities, including Phocaea (the home city of the Greek colonists invading the Celtic and French lands), Athens, and Samos (the island home to Pythias the Rational) adopted the Argium as local, legal tender. This coin started off as a round, electrum (an alloy of gold and silver) coin with a large capital alpha, or “A” on one side, and on the other either an animal or a shape, depending on the city in which it was coined. This remained the legal tender for wizards for quite some time, remaining popular until around 132 CE. The greatest catalyst behind the Argium sweeping the European mainland by storm was the Magi-Graeco Influence Shift, as well as through Roman legislative pressure.

Towards the middle of the second century, the Argium gained more and more popularity amongst the wizarding populace north of Massilia and Rome, extending its influence throughout the Celtic --  and later partially Roman -- lands. In 132 CE, however, the meeting of the Consilium Imperii Magi changed the legal wizarding currency (at least in Europe) to the modern day golden Galleones, silver Sicci and bronze Knuti -- or what over time, eventually translated to Galleons, Sickles and Knuts.¹

The Galleon, Sickle, and Knut made their way through the Roman empire and attracted the attention of the goblin monarchy located deep inside the Germanic regions (an area that today includes Germany, the Netherlands, and various nearby countries). As goblins are quite fond of wealth and valuables, this monarchy sat atop a giant gold mine near the city of Złotoryja, or literally Gold Mountain. Hoping to use the gold to replenish their stores for minting the Galleon, the wizarding community negotiated -- albeit in vain -- over the possession of the gold. It was clear to the goblins that there was demand, and as they delayed the price of gold rose, and the value of Galleons with it, caused by increased scarcity. The goblin society thrived off of this scarcity, and began to expand towards other gold and silver mines in Europe at the same time as the fall of the Roman Empire.

Now that we know some history regarding goblins and wizards we can see why some feel that the presence of goblins in our banks is…objectionable, to say the least. There are those that maintain the goblins have infiltrated our society in order to claim one of the basic and most valuable assets we possess -- our gold -- and that the idea of goblins “protecting” it as if it were their own possession seems a bit suspect. Many people have their own ideas of goblins, but I would like to remind you that they are still individuals, albeit ones that may have made mistakes, though the witches and wizards have made some terrible ones as well. 

Goblin Political Influence

The goblin rebellions are part of your Seventh Year curriculum, along with the Giant Wars and various other conflicts, so we will not go into too much detail today. However, in 1400 CE the goblin population possessed over 95 percent of European ore mines, either in good faith with Muggles or without their knowledge. The International Warlock’s Convention -- the same that wrote the International Statute of Secrecy -- convened to discuss a growing necessity to break the goblin monopoly on gold and silver and to encourage other businesses to thrive. The convention toyed with the idea of offering compensation in either money, property, or other valuables deemed suitable in an attempt to encourage other businesses. Great Britain led the way with a banking initiative commemorating Bridget Wenlock -- the Arithmancer who died a few hundred years prior to the convention. One of many attempts at stimulating wizarding-owned banking, “Wenlock’s Locks!” was a local endeavour aimed directly at the British Isles. Unfortunately, it failed miserably. Interestingly, this had nothing to do with goblin influence, but was more due a lack of pure-blooded interest in putting their money in a bank they perceived as less prestigious, time-tested, and safe. Though, to be fair, it was hard for a new bank with no record to compete with an established goblin bank.

In 1474, a goblin named Gringott, an older patriarch from the aforementioned Germanic region, got in touch with the same British pure-blooded wizards and convinced the pure-blood families that, since the goblins had defended against the International Warlocks’ initiatives for that long, their underground safes were perfectly protected. Any pure-bloods whose possessions were not already housed with goblin strongholds quickly followed suit (or most of them). However, this took even more wealth from the wizarding community, and in response to a quickly unbalancing economy that people feared would give political control over to the goblins, Burdock Muldoon, the Chief Warlock of the British Wizard’s Council, mandated in 1488 that all wizarding money lost its value once stored out of the country. This didn’t last long. Feeling threatened by Muldoon, the pure-blooded families pressured Muldoon into changing the legislation, but they soon found out that it was Muldoon’s intention to suppress the goblin economical monopoly, rather than devalue most of the wizard’s fortunes. The purebloods and the council united and, unable to take the additional pressure from his clients, Gringott moved his vaults to London where they still presently reside.

Once the goblin vaults had been moved to sovereign soil, Muldoon demanded that Gringott relinquish almost the entire administrative force of his business to the Wizards’ Council and, by 1502, the council had a large amount of power over Gringotts. To the goblin population’s dismay, wizards were hired as curse-breakers to find and retrieve treasures from ancient and classical wizarding locations in order to find more sources of wealth and continue to grow the bank. Under the council’s rule, the wizarding bank thrived and quickly became the biggest and best, guarded with trolls, dragons, and invisible charms and potions alongside goblin magic. Towards 1692 and beyond the bank stayed in the Wizards’ Council’s possession, though under the new name of the British Ministry of Magic.

As you may know, several goblin rebellions occurred between 1612 and 1864, of which the most important occurred during the Executive Decree of 1631, which many credit with stressing the pre-existing wizard-goblin feud to a breaking point that shed more blood than both Wizarding Wars together. However, no one can deny that tensions between the two species had already been growing for centuries. The executive decree, also known as the Wand Ban, made carrying of wands for Non-Wizard Part-Humans completely illegal. Although it was not the first rebellion, many goblins refused to lay down their weapons -- wands, knives and/or swords -- and managed to seriously harm or kill hundreds of wizards and lose their lives in the process. Possession of the bank during this time was… complicated, and it saw a split even between wealthy pureblood families, as some began to remove their currency, feeling it couldn’t possibly be safe to leave it with a species with whom they were at war (and who might well use the money to kill them, rather than thoughtfully guard it for them). 

Eventually, due to the quelling of these rebellions and the period of relative calm after the last serious goblin rebellion of 1864, and the still-persistent pressure from the pure-blood families over the safety of their valuables, the Ministry of Magic (with Minister for Magic Dugald McPhail) decided to put Gringotts wizarding bank back in the hands of the goblins -- a decision that has been upheld to this day.

For now, we will leave this topic to return in Year Seven. If you want to know more about the political and sociological influences of goblins, I suggest you stay tuned for further years of History of Magic. I leave you with yet another essay assignment. For questions, don’t hesitate to owl me!

Footnotes:
1. Obviously, other forms of currency were still used elsewhere, though the nations in attendance at the Consilium all adopted the precursors to the Galleon, Sickle, and Knut. Various time periods and geographic regions since then have been witness to the creation of other currencies (such as the Glissa of Caria). Some remain viable alternatives to the Galleon in their specific area, while others were little more than a passing fad.

Original lesson written by Professor Julius Dowler
Image credits here, here, here, here, and here