In Book I, Chapter 3 of The Lord of the Rings, Tolkien wrote, "Just why Mr. Frodo was selling his beautiful hole was even more debatable than the price."

After appreciating this example of (probably) unconscious humor, it led me to wonder: Hobbits and other races of Middle-earth did use coins as money; they are mentioned in several places. In the LOTR appendices, Tolkien gave us a tremendous amount of information about the languages, scripts, calendars, and chronology of Middle-earth, but didn't write a comparable treatment of money, which is odd considering that European histories often do include a page or two about the value of such coins as florins and ducats. Perhaps he described the Hobbit monetary system in detail elsewhere in his voluminous published and unpublished writings. What, in sum, do we know about the Hobbit monetary system?

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    They certainly could use coins of Gondor, although it's rather a long way off, and there's little long-distance traffic by the late Third Age. If hobbits did not mint their own coinage, they probably used a hodge podge of whatever drifted in from other lands. Quite possibly there are still a fair number of coins floating around from when the Shire was part of Arnor/Arthedain. Commented Sep 24, 2021 at 4:09
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    Realistically, if the population was stable, and there wasn't a whole economy where everybody worked and was paid in money, as long as people don't lose too many coins, the same money could just go around and around for centuries without minting more — especially with the odd cash injection like Bilbo's. Commented Sep 24, 2021 at 10:19
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    It would be logical to conjecture that Dwarves minted coins from the metals that they mined, and used them to pay for food grown by neighboring Men and maybe Hobbits. But, as Mustapha Mond pointed out, there were some aspects of culture that did not interest J. R. R. Tolkien. Commented Sep 24, 2021 at 13:41
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    Why, they used HobBitCoin, naturally.
    – Lexible
    Commented Sep 24, 2021 at 18:48
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    It is possible they didn't use coins for transactions like this at all. In a stable society where everyone broadly speaking trusts everyone else, money can exist as accounts or other tokens without cash. This is true of ancient as well as modern societies. In Mediaeval England tally sticks were used quite a bit (for instance) as Tolkien should have known. Commented Sep 24, 2021 at 22:15

3 Answers 3


I am not aware of any description of the monetary system, but since Tolkien was a medieval scholar and the Shire seems to be a representation of England, I assume his internal thought was medieval English denominations. It certainly is not a modern system, since the sale of Bill Ferny's pony is six silver pennies, and pennies are usually copper post-medieval. I had thought that the medieval values were derived from the Roman system, which had 60 gold solidus per pound of gold, however, things seem to have become a mess [1].

There is a summary of Richard II's coinage [2] that seems like a reasonable mental model for Hobbit currency.

[1] https://en.wikipedia.org/wiki/%C2%A3sd

[2] https://archives.history.ac.uk/richardII/coinage.html

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    In Britain, pennies were minted in silver for general circulation until the late 17th century, and continued to be minted until the late 18th century. Britain didn't start minting copper pennies until the very late 18th century (though private copper tokens were circulating before then). en.wikipedia.org/wiki/Penny_(British_pre-decimal_coin) Commented Sep 24, 2021 at 20:21
  • While each of the answers have been thoughtful, this one seems to be the most useful for understanding how Tolkien thought and wrote about money in the Shire. Silver pennies: That's a good point indeed. Commented Sep 25, 2021 at 23:56

Basically, nothing. There are a handful of references to specific coins, primarily in the Bree section of FOTR. Bill Ferny sells a pony for 12 silver pennies; Barliman Butterbur makes an allusion to a gold piece being of substantial value. Other than that, there are scattered references to money but nothing specific. We might surmise that the chests of gold and silver that Bilbo brought back from the Lonely Mountain are primarily coinage.

There was a brief mention of "double dragons" as a type of gold coin in the Shire in an early draft of "A Long Expected Party" but it got dropped in subsequent drafts. In general, it seems clear that nothing was ever detailed by Tolkien, and that monetary systems did not interest him.

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    History of Middle-Earth does contain a very brief mention of Gondor coinage - the castar, comprised of four tharni. This is in a section on translation, and is not expanded on further, and did not make it into the published LOTR. Commented Sep 24, 2021 at 4:15

Until European rulers discovered fiat currency by adulterating the coinage, coins simply had the value of however much they weighed. There was no need for exchange rates, because you just weighed the coins and that was what they were worth. Standard-sized coins gave convenient ranges of values which reduced the need for weighing, but ultimately the weight was the value.

This meant that although every country around Europe had its own sizes of coins, there was no real "monetary system" as we would understand it today with fiat currency and exchange rates. The "monetary system" was simply that a certain weight of gold or silver was worth a certain weight of gold or silver, and that was all there was to it.

In the absence of a major centralising authority in Middle Earth, it seems likely that this would be the same there too. This is purely hypothetical though, and Tolkien hasn't given us strong evidence of any of this, beyond the fact (per Smaug's hoard in The Hobbit) that coins do exist.

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    While very correct in terms of the statements made, this doesn't answer the question at all. While a shilling was literally worth its weight in silver (likely a troy ounce, given there were twelve to the pound sterling), pence, shillings, pounds and so forth carries a much different flavor from dollars and cents or sou and franc.
    – Zeiss Ikon
    Commented Sep 24, 2021 at 12:41
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    Adulteration of coinage goes back into ancient times. (It's a pretty obvious idea if you are minting coins and short of bullion...)
    – Mark Olson
    Commented Sep 24, 2021 at 13:01
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    I'm not sure this answer is even true within its own frame of reference: if you have coins at all, you have some system for labelling and exchanging them. Just because you could theoretically melt down a certain number of denarii and re-cast them as a certain number of drachmae, you can still describe Ancient Rome and Ancient Greece as having different monetary systems.
    – IMSoP
    Commented Sep 24, 2021 at 17:39
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    @IMSoP Price was in local coins as a local quantum of value, sure. But coins from anywhere else were equally acceptable, at a value which only depended on the weight of the coins (or fractions of coins, as with "pieces of eight" which were one coin cut into fragments to pay for smaller values more conveniently). Foreign coins appeared all over the place, and were used together with local coins with no question about their value. And smaller principalities simply didn't bother minting their own coins as a result. Coinage was a monarch's vanity project, nothing more.
    – Graham
    Commented Sep 25, 2021 at 13:02
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    @Graham OK, then how about we reword the question as "what did hobbits use as their every-day quantum of value?" The distinction between that and a monetary system feels pedantic to me, and the answer remains "there are mentions of coins, but Tolkien didn't discuss details".
    – IMSoP
    Commented Sep 25, 2021 at 16:39

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