Ephraimiten

From 1756, Ephraimiten were the inferior coins which dominated the economy of the kingdom of Prussia during the Seven Years' War. They were traded by normal citizens at the value of coins with the pre-war precious metal content, but they were in fact inferior to them in fineness.

Frederic the Great used them to finance the Seven Years' War which started in 1756. By producing and issuing such coins of low value the royal treasure could make a considerable profit. This was mainly the task of the banker and court Jew Veitel Heine Ephraim (1703–1775) from Berlin who produced these "fake coins" named after him "Ephraimiten".

"In Leipzig the entrepreneurs Ephraim, Itzig and company produced vast masses of low-valued money, in Tympfs, six-, three- and most often in eight groschen pieces. At first they used Saxon stamps found in 1753 and later on newly produced indentors of the Saxon type.“Emil Bahrfeldt: Brandenburgisch-preußische Münzstudien"; Berlin: Verlag der Berliner Münzblätter, 1913 (Reprint: Transpress 1986). (reference and footnote missing)

The financial gain was that the content of gold and silver was significantly lower than legally ordered, and large amounts of silver were replaced by inferior copper, for example.

However, the coins were initially put in circulation with their full value and accordingly yielded big profits.

The older but original coin stamps which were mainly used came from other countries, preferably from Saxony. These Saxon coin stamps mainly dated back before 1756 and could be confiscated in the Duchy of Saxony which was under Prussian occupation at that time.

Ordinary citizens could not identify the inferior value of the coin at first sight, as coin stamps were in use that had produced full-value coins before the war. Citizens initially accepted the "Ephraimiten" still according to the (pre-war) face value just to find out at the next occasion that the better informed merchants and, shortly after that, also the other tradesmen, artisans and innkeepers would not accept this money at its full face value (=old price of goods and services) any more.

From 1757, however, even Prussian 1/6 thaler coins were significantly reduced in fineness by Prussia without official announcement. There are Prussian full copper counterfeits of the 1/6 thaler piece from this time which were silver-coated only on the outside. This leads to the possible assumption that in the chaos of war there were also private counterfeiters at work.

...
Wikipedia