Coins were first issued in Italy during the sixth century BC. Greek coins were based upon the system of 1 silver drachm = 6 silver obols with larger coins simply being multiples of the drachm, i.e. the tetradrachm was equal to 4 drachms. Under the Roman empire, 1 gold aureus = 25 silver denarii = 400 copper asses = 1600 copper quadrantes. However, the currency was gradually debased until it was reformed under Diocletian (284-305). Under the Byzantine Empire, which ruled over Italy between 552 and 751, 1 Gold Solidus = 24 Siliqua = 180 Nummus = 7200 Solidus. The Tremissis, equal to 1/3 of a Solidus was often minted in parts of the former Roman Empire.
After the fall of the Roman Empire, Italy became a crossroads for invasions from different parts of the Mediterranean and Europe. Each invader brought their own monetary system into Italy.
The Carolingian system of accounting, based upon 1 Lira equal to 20 Soldi or 240 Denari, was introduced into Italy in the 800s. Although the Lira went through numerous changes during the 1000 years that followed, and there were numerous sub-multiples of the Lira that varied from one Italian state to the other, the Lira was the basis for the monetary systems of the Italian states throughout this time period.
Genoa and Venice reintroduced the minting of gold in 1252, and the gold Lira/Florin/Guilder/Ducato became the primary coin of the Italian States. Initially, the Ventian Grosso was equal to 24 denarii.
When Napoleon invaded Italy, he established the Kingdom of Napoleon and introduced the Franc as the medium of exchange at par with the Lira. After Napoleon was defeated, the Lira was reintroduced, but decimalization became more common. The Kingdom of Italy was established on March 17, 1861 after Sardinia had annexed all the Italian states except Venice (October 3, 1866) and the Papal States (October 19, 1870).
After the unification of Italy, the Lira (ITL) became the national currency. It was divided into 100 Centesimi, and set at par with the French Franc. Italy was part of the Latin Monetary Union (XULL) from 1865 until 1927, and the coins of the other members of the Latin Monetary Union were legal tender in Italy.
Banknotes were issued by no less than six banks - a state of affairs that lasted until 1893. In the North there was the Banca Nazionale nel Regno d'Italia, the center boasted two Tuscan banks: Banca Nazionale Toscana and Banca Toscana di Credito per le Industrie e il Commercio d'Italia, Banca Romana continued to operate in Rome and in the South both Banco di Napoli and Banco di Sicilia issued notes. In 1866 banknotes were declared inconvertible - so that it was compulsory to accept them in place of coins (which were minted by the State Mint) - but the earliest legislation on the matter dates from 1874. Towards the end of the century, there was a serious banking crisis, in which Banca Romana was involved. The subsequent radical reorganization of the banking system led in 1893 to the creation of the Bank of Italy through the merger of three of the six existing banks of issue (Banca Nazionale nel Regno d'Italia and the two Tuscan issuing banks). At the same time Banca Romana, which had been at the centre of a notorious scandal, was wound up. Banco di Napoli and Banco di Sicilia continued to issue banknotes until 1926, when the Bank of Italy became the country's only bank of issue.
During the 1930s and 1940s, currency controls in Italy, and the occupation of Italy, led to the introduction of several variations on the Lira. Both a Lira Turista (ITLT) for currency conversions by tourists and a Lira Rinvestimento (ITLR) for investments floated at substantial discounts to the official rate on the Lira. The Allies introduced two versions of the Lira. The British Military Lira (ITB), at the rate of 480 Lira equal to 1 Pound Sterling was used in Italian colonies, and the American Military Lira (ITA), with 100 Lira equal to 1 US Dollar was used in Italy itself. After Marshall Pietro Badoglio was appointed premier of liberated southern Italy in 1943, and Mussolini was restored to power in northern Italy, two Lire circulated simultaneously in Italy, the "Badoglio" Lira, with 400 Lira equal to 1 Pound Sterling, and the "Mussolini" Lira, with 10 Lira equal to 1 Reichsmark. Although in 1943, 2 Mussolini Lira equaled 1 Badoglio Lira, the Mussolini Lira steadily depreciated against the Badoglio Lira. The two notes could be differentiated by the insignias on the back of the banknotes.
The Treasury issued small denomination notes between 1874 and 1975. The Banca d'Italia was founded in 1893 by merging the Banca Nazionale del Regno d'Itali and two Tuscan banks. It has issued banknote since 1896.
Italy adopted the Euro (EUR) on January 1, 1999, with 1 Euro equal to 1936.27 Liras. Euro coins and banknotes began circulating on January 1, 2002. The Euro is divisible into 100 Cents and is issued by the European Central Bank.
The discussion of different states below explains some of the variations in the Lira that occurred while Italy was divided into different Kingdoms. Various state Treasuries and private banks issued bnaknotes while Italy was separated into separte states.
Florence began minting gold coins in 1252, Florence began minting the gold Lira/Fiorino/Guilder/Ducato and the silver Fiorino/Soldo/Grosso. In 1737, the Grand Duchy of Tuscany passed from the Medicis to the House of Lorraine-Austria. During the 1700s, there were four systems of accounting in Florence, the Scudo d'Oro (XITS), the Ducato (XITD), the Pezza (XITP) and the Lira (XITL), all of which were used to varying degrees until the French occupied Tuscany in 1801 and introduced the Italian Franc (XITF). The Lira was divisible into 12 Crazie, 20 Soldi or 240 Denari. The Pezza was equal to 5.75 Lire, the Ducato 7 Lire, and the Scudo d'Oro 7.5 Lire. Florence returned to the Lira once the French had left, and issued numerous specie moneys in gold, silver and copper until Tuscany was annexed to Italy in 1859 when the Italian Lira, equal to 100 Centesimi, was introduced.
The Most Serene Republic of Genoa kept accounts in Lira (XITL) beginning in the 1200s. The Genoa Lira was divisible into 2.5 Genovino, 20 Soldi, 60 Grossi, 240 Denari or 960 Quartero. During the French occupation from 1805 to 1814, the Lira was set at par to the French Franc. After the French left in 1815, Genoa was annexed by Sardinia, and Genoa took on the monetary system of Piedmont, which continued to use the Lira, but minted coins similar to French coins. Piedmont's coinage was decimalized, and was divisible into 20 Soldi or 100 Centesimi. After the unification of Italy, the Lira (ITL) was made the legal tender currency of Italy. Corsica was under the control of Genoa and used the Genoan monetary system until 1762 when it became a republic for six years before falling under the control of France in 1768.
Lucca, Mantua, and Modena all used the Italian Lira (XITL) as the basis for the monetary system, though the coins and denominations used by each varied. In Lucca, the Lira (Doppia) was divisible into 3.33 Grossi, 10 Bolognini, 20 Soldi, 60 Quattrini or 240 Denari. In Mantua, the Tallero was equal to 12 Lire, and the Lira was divibile into 20 Soldi, 40 Sesini or 240 Denari. In Modena, the Tallero was divisible into 3 Small Scudi, 12 Lire, 36 Capelloni, 240 Soldi, 480 Sessini or 2880 Denari.
Milan used a monetary system based upon the Lira (XITL) with the Scudo divisible into 6 Lire, 120 Soldi, 240 Sessini, 480 Quattrini or 1440 Denari. The Kingdom of Napoleon introduced the Franco (XITF) in 1805. After Napoleon was defeated, Milan became part of the Lombard-Venetian Republic, which used the Lira Austriaca (XITA).
Venice was one of the strongest states in Italy from the Dark Ages until the 1700s. Venice used two monetary systems, one based upon the Scudo (XITS), and the other based upon the Ducat (XITD). The Ducat was equal to 6.2 Lire and was divisible into 24 Grossi or 288 Grossetti. The Scudo was equal to 7 Lire, and was divisible into 280 Soldi, 560 Bezzi, or 3360 Denari. The Franco was used in Venice while it was French territory from 1798 until 1813.
After the Napoleonic wars, Venice and Milan became part of the Lombard-Venetian Republic, which used the Lira Austriaca (XITA) as its unit of account since it had been ceded to Austria in 1815. The Lira Austriaca was equal to 1/3 Austrian Guilder with 1 Guilder/Fiorino divisible into 100 Kreuzer/Soldi.
Lombardy became part of Italy in 1859 and Venice in 1866, and the Italian Lira (ITL) became the medium of exchange.
The Kingdom of Two Sicilies was formed by the merger of the Kingdom of Sicily and the Kingdom of Naples on December 8, 1816. Before 1800, Sicily had used the Oncia (XITO) as their unit of account from the 1500s until occupation by France in 1806. The Oncia was divisible into 2.5 Scudi, 5 Fiorini, 30 Tari, 60 Carlini, 450 Ponti, 600 Grani or 3600 Piccioli. Naples had relied on the Ducato (XITD) as its unit of account from the 1500s until the 1800s. The Ducato was divisible into 5 Tarini, 10 Carlini, 40 Cinquini, 100 Grani, 200 Tornesi, 300 Quatrini, 600 Piccioli or 1200 Denari.
Napoleon was crowned in Naples, creating the Kingdom of Napoleon, and the Franco was introduced throughout Italy. The monetary systems of Naples and Sicily were unified on April 20, 1818 and based upon the Ducato of Naples. After unification with the rest of Italy, the Italian Lira (ITL) was introduced as the sole medium of exchange.
Sardinia had a monetary system based upon the Scudo (XITS). After the Napoleonic Wars, Sardinia used the Lira (XITL) as its primary monetary system, and after Sardinia had annexed the rest of the Italian states, the Lira (ITL) was introduced as the national currency. |
