½ Falus – Morocco

In 1781, the currency situation in the Kingdom of Morocco was characterized by significant instability and complexity, largely stemming from the policies of Sultan Sidi Mohammed ben Abdallah (r. 1757-1790). While a reformer who sought to centralize power and stimulate foreign trade, his reign saw a chronic shortage of specie, particularly silver, which was the lifeblood of both local commerce and international exchange. The economy relied on a bimetallic system of gold benduqi and, more crucially, silver dirhams, but these coins were frequently debased, and their values fluctuated wildly between regions and even between different mints, leading to widespread confusion and arbitrage.

This monetary chaos was exacerbated by several factors. European merchants, particularly the French and English, drained silver from the country through trade imbalances, paying for Moroccan goods like wheat, saltpetre, and leather with goods rather than hard currency. Furthermore, the Sultan’s own military expenditures, including payments to often-unruly tribal militias, required massive coinage, leading to periodic reductions in the silver content of newly minted dirhams to stretch state reserves. This debasement eroded public trust, causing older, purer coins to be hoarded (Gresham's Law in action) and further reducing the effective money supply in circulation.

Consequently, the Sultan attempted a major monetary reform in 1781, ordering the minting of a new, standardized silver dirham in cities like Marrakech and Essaouira. His aim was to unify the currency, restore confidence, and facilitate both domestic taxation and international trade. However, the success of this reform was limited. The underlying structural issues—trade deficits, hoarding, and the state's fiscal pressures—persisted, preventing lasting stability. Thus, the currency situation of 1781 represents a pivotal but ultimately struggling effort to impose order on a fragmented and volatile monetary system within a pre-modern economy increasingly engaged with European commercial powers.