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Veitel Heine Ephraim, 1703 – 16 May 1775 in Berlin) was a jeweller to the Prussian Court, a silk entrepreneur in Potsdam, since 1750 the chairman of the Jewish congregation in Berlin/Prussia, and since 1756 Mintmaster in Saxony and from 1758 also in Prussia. During the Seven Year's War Frederick the Great devalued the Prussian coin five times in order to finance the war; debased coins were produced (with the help from Ephraim and Daniel Itzig, mintmasters in Saxony and Prussia and spread outside Prussia: in Saxony, Poland, and Kurland. He and his companion Itzig became infamous for adding copper, up to 70%, into the fake coins, known as (Ephraimiten). The revenue from the impact of the coin transactions from 1759 to 1762 exceeded 29 million Thaler and thus, for example, the amount of British subsidies. The coin frauds of its coin entrepreneurs became an existential element of war financing. Schrötter distinguishes three periods: 1. from 1756 to 1 January 1759; 2. from 1759 to 1 September 1760 and 3. from September 1760 to 1 June 1763.

Life


Veitel Ephraim was the fifth child of Altona-born jeweller, and elder of the Jewish Community Nathan Veitel Ephraim (1658-1748), who moved from Hamburg (Altona) to Berlin? His mother came from Vienna. The Ephraim family lived in Spandauer Straße 30, opposite of the townhall. Around 1744/1745 Ephraim became court jeweller of Friedrich II. They had known each other since 1738, when they met at Schloss Rheinsberg. Already as Crown Prince Friedrich was in debt to Ephraim. In 1748 Ephraim leased a factory in Potsdam for lace and had orphans taught in the production of it. In 1750 he was appointed by the King as the senior elder of the Berlin Jewry. In November 1752 Ephraim delivered silver to Graumann for the Prussian mints.

Mint activities


After Johann Philipp Graumann's fall in February 1755, Moses Fränkel and his brother-in-law Veitel Ephraim leased the Königsberger and Breslauer (?) mint. Interesting contract that calls Fränkel an Entrepreneur as well as Lieferant. Their success was so great that under similar conditions they were given the lease of the mints of Cleves, where one of Ephraim's sons became in charge on 16 August and started to produce in the end of September. In Juni/October 1755 Ephraim leased the mint facility in Aurich. On 6 October 1755, Gumpertz, Isaak (-1776) and Itzig took over the remaining Prussian mint facilities from Graumann. A new contract was signed in which all six Prussian mints were leased that canceled the contracts with Fränkel and Ephraim. The contract was signed by Generalmajor von Retzow who distrusted Ephraim, and instead goes to a consortium of other entrepreneurs: Gumperts and Isaac & Itzig. This was a very aggressive contract since it called for minting 100 tons of silver per year at seigniorage of 5.2 percent per year (Kluge says 4.4 percent but this may be wrong).

In February 1756 it became clear that Gumpertz produced Polish tympfen - more profitable than other coins - for Poland. Zelfs de post werkte mee; de zakken werden niet geopend.

"Da der König sich noch vor dem "schlechten und infamen Gelde" scheute, wurde auf den Rat des Generalintendanten Retzow, der seit dem Mai 1756 allen Münzstätten vorstand, beschlossen, daß das neue Geld in Preußen selbst nicht kursieren dürfte."

At the beginning of the Seven Year's War, May/June 1756, Frederick suspended his new coin principles. The first debased coins from Cleves were exchanged in the Baltic states and Poland. On 21 November 1756 Ephraim offered the king a seignorage of 20% for leasing the Leipzig mint; he paid the king within four months. (Before the war (under August III of Poland) in Leipzig were already debased coins produced for Poland. )

Although their competitors in the silver supply, Moses Hertz Gumpertz, Daniel Itzig and his brother-in-law Moses Isaac, passionately endeavoured the lease for themselves to win, and to bring the victorious party by ugly intrigues for the favour of the King and the mint officials.

"In order to be able to pay the extraordinarily high seignorage of 340,000 thalers a year desired by the king, the entrepreneurs were compelled, at the great risk they received, to stamp out a very high number of minor coins [for Poland], and that for a worse than the usual coin standard of 14 Taler on the fine Mark. (N.B. At 18, 19 and 20-foot).

In May 1757 Ephraim & Sons got the licence to mint Austrian coins to pay the Prussian Army in Bohemia; the plan was cancelled after the loss of the Battle of Kolin.

From June 1757 when Ephraim was appointed Münzmeister in Dresden, inferior money was minted. Ephraim decided to move the machines to Leipzig, where Ephraim & Sons had the free hand. When Kleve was occupied by the French army in 1757, the coinage activities were continued in Magdeburg, Königsberg and Berlin. Itzig and Gumpertz were banned from Saxony.

Gumpertz complained about Ephraim's activities in Dresden, producing debased coins for Prussia. Then Gumpertz was appointed in Dresden. Early 1758 Ephraim was arrested and put in prison (Pleissenburg, outside Leipzig) for a while. Ephraim paid 30.000 Thaler for his release. Moses Isaac negotiated with the British government and bankers on Frederick's behalf about subsidies in gold and silver for the Prussian war effort (and of course the mints). Ephraim himself was almost captured by the Russians in Berlin. Victor Frederick, Prince of Anhalt-Bernburg and Heinrich Carl von Schimmelmann started to compete in Schwerin with the Jewish entrepreneurs in Prussia and Saxony.

"1758 wurde eine Fiktive Briefsammlung „Der gerechtfertigte Ephraim. Oder, Historische und beurtheilende Nachrichten über den vergangenen, gegenwärtigen und künftigen Zustand des Sächsischen Finanz-Wesens : Nebst einer Vergleichung der Preußischen und Sächsischen Oeconomie … durch den Juden Ephraim zu Berlin an seinen Vetter Manasses in Amsterdam“ von Jean-Henri Maubert de Gouvest publiziert."

After the death of Gumpertz at the end of 1758 Ephraim reconciled himself with Moses Isaak and Daniel Itzig and joined them to form a new law firm, Ephraim & Co.

At the end of 1758 Ephraim & Co were allowed not only in Saxony but also in Prussia to introduce the 19$3⁄4$ Talerfuß for all Prussian, and 30 Talerfuß for Saxon and Polish varieties, that is to stamp on the fine mark silver 5$3⁄4$ Taler more than before and the content of the gold coin, Friedrichsdor's, to reduce by 41%, a reduction that could be achieved only by a corresponding mixing with copper. Om te verhinderen dat goud werd uitgevoerd, verordonneerde Friedrich dat de betalingen aan de Koninklijke kassen moesten geschieden in Friedrich d'or, die evenwel niet genoeg voorhanden waren. Het gebruik van "Scheidemünzen" bij het afsluiten van wisselcontracten was verboden.



All six Prussian and two Saxon mints were from February 1759 leased to one Jewish consortium, who had to pay the king a high seignorage of 3$1⁄2$, 4 or 4$4⁄10$%, but otherwise had virtually a free hand, flooding Saxony and Poland with small coins. In February 1959, Ephraim sent one of his sons to Hamburg to buy for nine million more gold, from which it is said that the new Louis d’or are to be coined. That must have been a profitable trade since gold was relatively cheap. Other shopping areas were Poland, Russia, and Hungary, where the Jewish peddlers traded the debased coins for the better coins circulating there and delivered them to their clients.

In August 1759, Dresden was reconquered by the Austrians, and the local mint, led by Ephraim, ceased to exist. Ephraim and his son Benjamin Veitel Ephraim fled to Hamburg and Kopenhagen. An arrest warrant was issued against Ephraim in Hamburg, but he was able to avoid this by invoking the Danish citizenship of his parents.

We are poorly informed of the results of the monetary policy of 1759, since almost all the acts relating to them in Leipzig have been destroyed, and moreover, most of the correspondence has been in the ciphered script. We only hear that this year's seignorage is said to have amounted to the sum of 5,650,000 Prussian thalers. Ephraim was permitted to mint coins at 30-Talerfuß.

{{quote|Veitel Ephraim übergebene Prägung 1759 6,5 Millionen Taler gebracht hatte, wurden von Februar bis November 1760 aus der gleichen Menge Gold nicht weniger als 9 Millionen noch minderwertigere Taler ausgeprägt, die - an die königliche Kasse abgeführt - von ihr vorwiegend als angeblich polnisches Geld in Umlauf gesetzt wurden.{{cn}}

On January 2, 1760, Itzig and Ephraim & Sons requested a ban on the transit of bad currencies and the export of good coins. Moses Isaac abandoned cooperation with Ephraim and Itzig, and settled in Bernburg in early 1760. According to Schrötter the coins from Bernburg - is it Harzgerode? - were used to buy silver in Amsterdam and Hamburg.

In May 1760, Ephraim and Itzig requested a ban on the import and transit of non-Prussian or non-Saxon coins. Frederick ordered that the jewish entrepreneurs were allowed to collect "good" coins, minted before 1/1/1759 (which meant the end of 14-Talerfuss). In June 1760 Itzig and Ephraim hoped that the use of Saxon coins would remain in use with the allied armies in Minden, where there was a shortage. During the Summer a new mint facility in Berlin was opened.

General Gottlieb Heinrich Totleben, a German in Russian service, threatened to destroy Prussian factories and warehouses during the raid on Berlin and take Itzig and Ephraim hostage. Ephraim and his son Benjamin fled to Magdeburg to avoid that.

From Rachel and Wallich it is clear that late 1760 is a turning point in the Ephraimiten story.{{cn}} Is it because on 28 October also debased Saxon and Bernburger coins were accepted in Prussia to pay off the Russian occupation? The entrepreneurs' negotiations with Friedrich in late 1760 are very intense, but after the Battle of Torgau, they finally agree to three contracts, none of which have survived, unfortunately. Ephraim himself was almost captured by the Russians in Berlin. Maybe Ephraim decides that Friedrich will win?

{{quote|Es scheint, als haben Ephraim und Co. mit den Anhalt-Bernburger Münzen ihren Grössten Coup gelandet und selbst Friedrich an der Nase herumgeführt. }}

In 1761 single and double Saxon August d'ors were minted under constant deterioration of the gold content. As a reward Ephraim and Itzig received the rights of Christian merchants on March 9, 1761.

The percentage of copper in newly minted coins has been secretly increased by Itzig and Ephraim (from 19$3⁄4$ to 30-Talerfuß. By 1761, coin tenants were said to have raised 50 million gold from the eastern states and used it for the royal coin. Another way to raise money was to remelt gold subsidies received from England and to double and triple them by mixing them with other metals.

On 18 November the (foreign) debased coins, like Mecklenburger, Stralsunder, Hildburghausen (Thuringia), Plöner and Zerbster, Bernburger coins were not accepted (by Frederick and Ephraim & Itzig) since Gotzkowsky suggested on 7 November to spread half of the amount under the Allies. The men were arrested on 9 November in Bielefeld and the money was confiscated on 24 November 1761 and later melted down. Johann Ernst Gotzkowsky and Leendert Pieter de Neufville started to rival Ephraim's melting business.

The misery of Ephraim & Sons became so great that they "so modestly" acquired their property in such a laborious, dangerous, but honest, and honourable manner, that they offered Frederick 200,000 talers when he dispensed them from the Mint enterprise.



In March 1761 Ephraim made plans to settle in Berlin. Ephraim Palais on the corner of Poststrasse/Mühlendamm was built for his children by the architect Friedrich Wilhelm Dieterichs. In 1762 he sent Benjamin to Weesp or Amsterdam to assist his uncle Marcus Ephraim. Benjamin made contacts with the bankers Harman or Jan van de Poll (1721-1801) and Theodorus and Raymond de Smeth. In 1762 Ephraim & Sons also achieved by supplying the silver, which they were able to buy cheaper because of their many foreign relations than provided for in the treaties. They used their extensive business and relational foreign relations to acquire the necessary gold and silver in Holland, especially on the Amsterdam market, in England and in Hamburg by means of Hamburg and Dutch exchange. Ephraim tried to involve Moses Mendelsohn in his business. When on 12 August 1761 the Polish Großkronschatzmeister Theodor von Wessel issued a declaration of invalidity against the introduced inferior money, the Ephraim consortium spent 100,000 Taler on bribes in order not to lose Polish Commonwealth as a sales region of the "Ephraimiten".

In February 1762 he leased the gold- and silver manufacture in Berlin. In 1761 he bought a garden on Schiffbauerdamm, where the silver smeltery was located? Then he provided jobs for 1000 or 1,500 people.



In May 1762, Ephraim and Itzig urgently requested permission to melt coinage on a 40-Talerfuß. . In 1762 Ephraim was the first Jew to buy land in Berlin. Acquisition in Berlin of the gold and silver manufactory of the Potsdam orphanage, and produced gold and wire drawing, a blond factory for silk lace, a factory for Muslin.

When the Russians had withdrawn from East Prussia, Ephraim wanted to travel to Königsberg. The mint masters asked permission to buy high-value money in Western- and Eastern Pomerania. Only 1761 and 1762 debased money with the correct year appeared. The smeltery in Heemstede was only set up by him after the purchase in May 1762, when the Mecklenburg Notgeld was also offered by Ephraim & Sons to be melted down.

The closure of the operated by the King of Denmark coin to Rethwisch, he reached with the help of 250,000 thalers.

On December 7, 1762, the last major contract with Ephraim and Itzig was completed. Besides Ephraim succeeded to deactivate the mints in Sondershausen, Anhalt-Bernburg, Schwerin, Quedlinburg, Holstein-Plön. Was it in June, August or December that Ephraim managed to get hold of the Holsteiner mint in Rethwisch?

After the Peace of Hubertusburg
On 1 June 1763, the exchange should be completed and only Prussian money was still allowed. Ephraim asked permission to assign the remelted silver from the inferior coins to the Prussian mints.

On July 23, 1763, Benjamin Veitel Ephraim received permission in Berlin to melt silver so that it would no longer have to be carried out at great expense. A few days later, he suggested that others could also supply the silver.

Marcus Ephraim, the brother of Veitel Ephraim, would also belong to the bankrupt.

On Wednesday, 3 August, the bankruptcy of De Neufville was a fact; also eleven other Amsterdam firms, such as Anthony Grill and J.M. Ephraim announced their bankruptcy on that day.

Itzig and Ephraim made a request to the king for support with an amount of three million Thaler to get out of trouble.

Itzig and Ephraim refused to invest so much money in Johann Ernst Gotzkowsky's businesses. Itzig and Ephraim said that the bankruptcy of Gotzkowsky was inevitable.

"Op 16 augustus hebben de Münzjuden uit Berlijn voor drie miljoen daalder baren zilver naar Hamburg verstuurd [59. J.G. van Dillen (1922) De beurscrisis te Amsterdam in 1763. In: Tijdschrift voor geschiedenis, ISSN 0040-7518, vol. 37 (1922), pag. 241-253] om daarmee een deel van de problemen, het betalen van wisselbrieven, op te lossen."

On 28 January 1764, Frederick the Great Itzig and Ephraim ordered that they invest the great assets they had earned in the Prussian economy.

29 maart 1764 herintroducering van de Graumannische muntvoet. Ephraim kocht Wilhelmplatz 1 in Berlijn.

Ephraim left a fortune when he died; he is buried at the Jüdischer Friedhof (Berlin-Mitte).

His son, Benjamin Veitel Ephraim (1742-1811) fell out of favour with the Prussian government and died poor.