[throwaway183839]

Sure, pounds sterling had a different value in 1720 (although the question arises - a different value in comparison to what? The US dollar and the Euro didn't exist in 1720! You could take a set quantity of gold as your comparison, but the value of an oz of gold has fluctuated more than the value of a pound sterling over the same period).

However, it is all a bit immaterial. If the debt was denominated in pounds sterling, then it will be repaid in pounds sterling. If it was in guilders, then it will be repaid in guilders (or in sterling, at whatever the current nominal sterling/guilder exchange rate is).

[dredmorbius]

The question of how to compare prices over time is an interesting one in economics. There are a few answers which have been arrived at.

There's Angus Maddison's history of GDPs dating to the year 1.

Gregory Clark of UC Davis has compiled a price history of England dating from 1209 to 1914:

http://www.econ.ucdavis.edu/faculty/gclark/papers/Agprice.pd...

Generally, there are commodities with fairly well-established prices and costs, including food and energy. In particular, food as a share of average wages is a reasonable proxy over time.

Another argument is that money should ultimately be considered to be backed in energy units, an idea I've traced to H.G. Wells and a 1914 short story. It appears subsequently in Arthur C. Clarke, R. Buckminster Fuller, and Kim Stanley Robinson's writings.

Clarke was quite the fan of Wells.

[mohanmcgeek]

>The value of an oz of gold has fluctuated.

Compared to what? Other goods.

So, value of pounds is determined by its purchasing power