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At first, this question sounded basic to me, but I couldn't find easy answer in Wikipedia. Since this SE prefers restricted scope, let's limit it to the empires of the 9th-10th century, e.g. the Carolingian Empire, the Byzantine Empire, the Abbasid Empire, or the Tang dynasty in China.

My assumption is that the government issued coins (exclusively?), and the coins would be used by its subjects for trade as well as to store wealth. How did the coins that were issued by the central government get into everyone's hands? One obvious way is through government expenditure, e.g. by paying people or buying things, someone other than the government would have coins, who would then pay someone else, and so on.

Was that all? My guess is that government expenditure would be a small part of the total trade, would the coins circulated this way be enough for everyone's trading and wealth-storing needs? Also, how about the corners of the empire, which might not have interacted much with the central government? Since the government collected taxes as well, wouldn't this also cause the money to be taken out of circulation?

Related Wikipedia articles (but none seemed to directly answer this question): Mint, Coin, History of Money.

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    For much of history, people didn't have or use coins. While the national economy may have been technically specie/coin, village life used barter and paid taxes in kind. (food) – Mark C. Wallace Jan 11 '18 at 8:24
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    @user69715 Yes I saw, I meant to say that is basically how it happened. The public sector has always been a huge part of the economy, so government purchases are more than enough to introduce a currency into circulation. Remember, it only has to be done once - once a coin is in the economy, it can be traded over and over for many decades. – Semaphore Jan 11 '18 at 8:34
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    In relation to (exclusively?), in many countries if you had bullion (gold, silver, etc.) you could go to a mint and get it converted into coins for a fee (seigniorage). – SJuan76 Jan 11 '18 at 8:35
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    @jamesqf It's different today because merchants can get get coins from banks. I don't think most of today's coins entered circulation because somebody took coin payments or salary from the government. – user69715 Jan 11 '18 at 21:14
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    @jamesqf Not sure the comparison is meaningful. First (in my experience at least) retailers do get coins from banks in significant quantities but most importantly, people get banknotes from them all the time. – Relaxed Jan 12 '18 at 6:54
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Public sector spending, in days gone by, depended upon the availability of acceptable coinage; this was usually coinage that had a definite content of silver or gold, along with smaller valued coins in brass or bronze for making change.

In normal times, the silver or gold content was fixed to some standard, though under perilous conditions even the Romans issued adulterated coins, with the result that the new, "bad" coins were under-valued with respect to the older, "good" coins.

The source of acceptable coinage could be trade or new mintage; Spanish milled dollars passed easily in the United States during its early years, even when broken down into "bits", or portions, with two-bits equal to a quarter of a dollar, based on weight, and easy to see!

One-bit, two-bits, half-dollar

The mint produces coins from bullion, old coins, or refined ore. Completed coins are given into the custody of a treasury official, making them an available for official disbursements. Throughout history, many countries have had regional mints, sometimes near sources of refined metal, and at other times near places with a need for coinage. From the mint, coins would be sent, usually under armed escort, to the paymasters in the field.

So the paymaster has a source of coins, old or new, and pays them to soldiers, sailors, and merchants with accounts to be settled; there are, of course, a myriad of government expenses, but these often account for the direct transfer to common people.

In what was later to become the City of Detroit, the military payroll was the dominant source of hard currency between 1796, when the Americans took control from the British, until after the War of 1812. For the earliest years, Detroit was the HQ for the bulk of the American Army! The coins spent by the soldiers and sailors went into the local economy, and then traveled east to pay for imports from Montreal, Buffalo, and Pittsburgh. When coins were short, they went to a barter economy, with small notes, a form of IOU, passing between men of means, such as Army officers, gentlemen, yeoman farmers and merchants, who were expected to be able to cover their debts with the next Army payroll.

A note of June 10th, 1835, from Wm. Steers, of Springwells, to pay $32 to John C. Stainbach, payable. on January 1st, next year.  A partial payment of $4 is noted. This note is in the Burton Historical Collection, at the Detroit Public Library.

So there are methods to get around a shortage of coins, but it increases the effort, and makes the coins more valuable in that local economy. Plentiful coinage is a boon of good government, as long as it is "good" money.

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    All true, but I'm not sure it is responsive. How did the coins get from the mint to private hands? – Mark C. Wallace Oct 21 '18 at 22:11
  • @MarkC.Wallace: An oversite, on my part. I've added a paragraph to cover the mint, and the related treasury officials. It is still very general, but agrees with everything that I have learned over many years, both as a collector of coins, and as a researcher on Michigan Territory, and general history. – Peter Diehr Oct 21 '18 at 22:56

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