Drachma's History Offers Hints About its Future: Echoes

Before Greece entered the euro area, its basic monetary unit was called the drachma. As the country debates with growing seriousness whether to return to its old currency, the coin's history and design repay a closer look. They speak of the extreme persistence of an idea, a coin and an image -- going back 25 centuries.

The word drachma comes from the Greek "drax," meaning a handful. It originally referred to a handful of six iron rods, called obols. Obols were used as currency before the widespread use of coinage.

The ratio of six obols to one drachma held during the first few centuries of the drachma's production in Greece and well beyond. Six tiny silver obols were the equivalent of one silver drachma, a coin about the size of a penny. And four drachmas made up a larger coin called a tetradrachm, or piece of four drachmas.

Tetradrachms, drachmas and obols often bore the same obverse and reverse designs. In Athens, the coins' obverses bore a head of the goddess Athena, facing right, while their reverses depicted an owl, staring directly at the viewer. Behind the bird, which was sacred to Athena, a sprig of olive bore testimony to the region's wealth in olive oil, an essential trading commodity in ancient times (used in lieu of soap, which hadn't been invented yet).

The Athenian coins were copied all over the eastern Mediterranean. They entered the language: An Athenian silver coin was often called an owl, and if you wanted to say that someone was well-heeled, you might observe that he "had a large flock of owls in his attic." Perhaps that's why, when the drachma and its relatives fell into disuse with the waning of Classical times, the images of the owl and the goddess were never quite forgotten.

Nor was the drachma: When Greece secured its independence from Turkish rule in the early 1830s, the reborn nation took up where it had left off and it made the drachma its official monetary unit.

The new silver drachma was soon associated with similar coins from adjacent nations, all of which joined the Latin Monetary Union, a precursor of the euro area, in 1865. Spearheaded by France's Emperor Napoleon III, who wanted to extend and expand the monetary experimentation carried out by his famous uncle, the Latin Monetary Union succeeded in persuading most of Europe and a good deal of Latin America to subscribe to a single coin of an agreed-upon weight, size and silver content.

Although a coin might have been called a franc, lira, leu, leva -- or drachma -- it was always the same coin, interchangeable from one country to the next. This hopeful experiment in monetary cooperation fell victim to World War I and the Great Depression. But the ideal remained, and at the turn of the millennium, another attempt to create an international unit of exchange was undertaken. It resulted in the euro, and Greece was in the forefront of the movement.

Euro coins display two messages. Their obverses depict the pan-European ideal, symbolized by a map of Europe. Their reverses are given over to themes and designs appropriate to the member states. Greece chose the longest-lived, most famous image it could find: the owl. Thus, after centuries of neglect, the Athenian owl was back in circulation.

Will the euro region meet the same fate as the Latin Monetary Union? At the moment, its demise seems possible. And the chance of Greece's returning to a purely national coinage has begun to look more likely. If the Greeks do strike out on their own again, the economic and political consequences are hard to foresee. But two things are almost certain: They'll call their new coin a drachma, and they'll put an owl on it.

(Richard Doty is the Smithsonian's senior curator of numismatics and the author of nine books. The opinions expressed are his own.)

To read more from Echoes, Bloomberg View's economic history blog, click here.


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