Step into the intriguing world of horse racing, a sport dripping with history and time-honoured traditions.
Amidst all the excitement, you’ll find a fascinating blend of the old and the new.
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Changes? Yes, there have been plenty, but the sport’s enduring traditions stand as firm as ever.
Take, for instance, the measurement of race distances. We still use the term ‘furlong’, an ancient term originally used to define the length of a furrow in a one-acre field – a quaint nod to our agricultural roots!
Now, let’s talk about something really intriguing: Why are horses sold in Guineas, a currency seemingly lost in time?
You might be scratching your head, wondering why this archaic system persists in our modern world.
Well, dear reader, it’s time to pull back the curtain and reveal the story behind this captivating tradition. Ready for the ride? Let’s dive in!
WHAT’S A GUINEA?
Guineas were gold coins minted in the United Kingdom between 1663 and 1813. Originally they were worth one English pound, equal to twenty shillings. However, as the price of gold went up, the value of a Guinea increased, at times up to thirty shillings.
The name came from the Guinea region in West Africa, where most of the gold used to mint the coins originated.
In the Great Recoinage of 1816, the Guinea coin was replaced in Britain with the pound and Sovereign gold coin. Despite this, for a long period afterwards, lawyers, doctors and other professionals continued to charge in Guineas.
These days the term ‘Guinea’ is really only used in horseracing as well as in the sale of some livestock such as rams.
HOW MUCH IS A GUINEA WORTH TODAY?
Today, you can still see the purchase price of a horse quoted in Guineas, although no real gold coins change hands during transactions.
For the purposes of buying and selling horses, a Guinea is worth one pound and five pence.
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However, a seller at the auction will only receive £1 pound per Guinea for any horse sold.
The remaining 5p on every pound will be taken as a commission by the auctioneer. The practice still remains in some auction rooms, but these days most leading bloodstock auctioneers quote prices in £ sterling – although the 5% commission remains!
The value of a Guinea today can be worked out in two ways. Firstly you can value a real Guinea coin. Many of these old coins have a value well beyond the gold they contain. R. Ingram, a dealer in Antique coins, has a rare example listed for sale at £26,000.
The second way to value a Guinea is to work out the value of the gold in the coin. We know a Guinea is a 22-carat gold coin and weighs 8.3g; at today’s gold price, that would be worth around £400.
So why do they still sell horses in Guineas? Well, it’s the gentleman’s way of saying, “Don’t forget to add my commission!”.
FAMOUS ‘GUINEA’ RACES
The use of ‘Guinea’ in racing titles is common. Great Britain, Ireland, and Australia all feature races which bear the name ‘1,000 Guineas’ and ‘2,000 Guineas’.
The 2000 Guineas Stakes was first held on 18 April 1809 and is open to three-year-old thoroughbred colts and fillies. Run over a distance of one mile, it is also the opening leg of the Triple Crown. The race is followed by the Derby and St Leger, although the feat of winning all three is rare. The most recent winner was Nijinsky in 1970.
Of course, prize money is much higher than the original equivalent of 1,000 or 2,000 Guineas. For example, the prize money for QIPCO 1000 was nearly £500,000 in 2019.
THE MOST EXPENSIVE HORSE EVER PURCHASED
The most expensive horse ever purchased was a thoroughbred racehorse named Fusaichi Pegasus, which was sold for an astonishing $70 million in 2000. He was a bay colt, born in 1997 and bred by the Japanese-based Northern Farm. His sire was Mr. Prospector, and his dam was Angel Fever.
Fusaichi Pegasus had an impressive career as a racehorse, winning the Kentucky Derby in 2000 and the Irish 2,000 Guineas Stakes in 1999. He also placed second at the Preakness Stakes and third at the Belmont Stakes that same year. In total, he won seven of his eleven races and earned over $2 million in prize money during his racing career.
The factors that led to Fusaichi Pegasus’s high price tag were his impressive pedigree, performance record, and good manners. His sire, Mr. Prospector, had been one of the most successful sires of all time, with over 200 stakes winners to his name. Additionally, Fusaichi Pegasus had already proven himself to be a top-class racehorse before he was sold – having won multiple races, including the Kentucky Derby – which made him even more desirable to potential buyers.
The impact that Fusaichi Pegasus has had on the horse racing industry is undeniable; he set a new standard for what could be achieved by thoroughbreds and raised expectations for future generations of horses.
His sale also showed that there is still great demand for quality horses with strong pedigrees and good performance records – something which has been reflected in recent sales prices across the world.
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TELL ME MORE ABOUT THE GREAT RECOINAGE
The Great Recoinage in Britain was an event that took place in the late 17th century and early 18th century, a period of significant monetary reform in the country. Specifically, the Great Recoinage is usually associated with the years 1696 to 1699.
In the years leading up to the Great Recoinage, the British currency system was in a state of disarray.
The hammered silver coins that were in circulation at the time had been clipped and debased so much that they often contained less than half of their original silver content. The situation was so bad that it was undermining public confidence in the currency, which was threatening the stability of the economy.
The government decided to recall and replace all hammered silver coins with milled ones, a decision known as the Great Recoinage. This was an enormous and expensive undertaking that required the construction of new minting machinery and the temporary establishment of provincial mints across the country.
The project was headed by Sir Isaac Newton, who was the Warden of the Mint at that time. Newton’s diligent work helped restore confidence in the British monetary system. He pursued counterfeiters and ensured that new coins were produced to a high standard.
The Great Recoinage also introduced important changes to the denominations of British coins. The guinea, worth 21 shillings, was minted during this period, although it was later replaced by the simpler system of pounds and pence in the 19th and 20th centuries.
MOVING OFF THE GOLD STANDARD?
The decision to move off the gold standard is a complex and controversial topic among economists and historians, and opinions vary widely. There are arguments both in favour of and against the gold standard.
Proponents of the gold standard argue that it provides a stable value for money, restricts inflation, and discourages reckless government spending.
By tying the value of a currency to a physical quantity of gold, the gold standard can prevent governments from simply printing money to pay off debts, a practice which can lead to inflation.
However, critics of the gold standard argue that it can lead to economic instability. Under a gold standard, the value of a currency is tied to the supply and demand of gold, which can fluctuate for reasons unrelated to the economy, such as gold mining discoveries or technological improvements in gold extraction.
This can lead to unexpected inflation or deflation. Moreover, the gold standard can limit a government’s ability to respond to economic crises. Without the ability to print money, it can be more difficult for a government to stimulate the economy during a recession or depression.
Most of the world’s economies, including the U.S., abandoned the gold standard in the 20th century in favour of fiat money, where the currency’s value is not backed by a physical commodity but by the government that issued it. It’s at this point that betting on horses seems more rational than betting on your government’s ability to manage its currency.
Whether this was a mistake or not largely depends on one’s perspective and economic philosophy. The gold standard has both advantages and disadvantages, and different economists weigh these factors differently. Ultimately, the effectiveness of any monetary system depends not only on the system itself but also on how well it is managed.