1 Scudo – Papal States

In 1738, the Papal States found themselves in a complex and challenging monetary situation, typical of many Italian states in the 18th century. The currency system was not unified but a fragmented mosaic of different coinages. The primary unit was the Papal Scudo, divided into 100 Baiocchi, but in practice, a multitude of older regional coins from cities like Bologna and Ferrara, as well as foreign currencies from Spain, France, and other Italian states, circulated simultaneously. This created constant difficulties in exchange rates and commerce, as the value of coins depended not only on their metal content but also on fluctuating official decrees and local custom.

The root of the instability lay in chronic fiscal pressure. The Papal government, under Pope Clement XII (elected in 1730), faced significant debts from earlier conflicts and the costs of administration and patronage. A common response to such debt was the debasement of coinage—reducing the precious metal content in coins while maintaining their face value. This practice, though providing short-term revenue, led to inflation, a loss of public confidence, and the hoarding of older, purer coins (Gresham's Law). Consequently, the monetary stock was unreliable, hindering economic activity and creating a disparity between the official monetary standard and the actual value of circulating metal.

Furthermore, 1738 fell within a period of relative peace but ongoing financial restructuring. The papal administration was aware of these monetary disorders and had made some attempts at reform, including minting new coins and issuing edicts to regulate exchange rates. However, these measures were often piecemeal and struggled against deeply entrenched local practices and the sheer variety of circulating specie. The situation therefore remained one of managed confusion, where the theoretical authority of the papal mint in Rome contended daily with the practical reality of a balkanized and unstable currency landscape that would persist until the Napoleonic invasions forced a more radical overhaul.