History of money
The word money comes from the name of the Roman goddess Moneta in whose temple silver coins were made.
One of the earliest forms of money was metal, such as gold or silver. In North America, Native Americans used beads made of shell, called wampum, as a form of money.
People invented money to avoid barter. The value of paper money and coins comes from an agreement between all people.
People have used money for more than 4,000 years. In the 600s BC the kingdom of Lydia in what is now Turkey began to make coins.
The first types of paper money were used in China more than 1,000 years ago.
In the Beginning was Barter
Barter is the exchange of resources or services for mutual advantage, and may date back to the beginning of humankind. Plants and animals have been bartering for millions of years. Today individuals, organizations, and governments still use barter as a form of exchange of goods and services.
9.000 – 6,000 BC: Cattle
Cattle are the first and oldest form of money. With the advent of agriculture came the use of grain and other vegetable or plant products as a standard form of barter in many cultures.
1,200 BC: Cowrie Shells
The first use of cowries, the shell of a mollusk that was widely available in the shallow waters of the Pacific and Indian Oceans, was in China. Historically, many societies have used cowries as money. The cowrie is the most widely and longest used currency in history.
1.000 BC: First Metal Money and Coins
Bronze and Copper cowrie imitations were manufactured by China at the end of the Stone Age and could be considered some of the earliest forms of metal coins. Metal tool money, such as knife and spade monies, was also first used in China. These early metal monies developed into primitive versions of round coins. Chinese coins were made out of base metals, often containing holes so they could be put together like a chain.
500 BC: Modern Coinage
Outside of China, the first coins developed out of lumps of silver. They soon took the familiar round form of today, and were stamped with various gods and emperors to mark their authenticity. These early coins first appeared in Lydia, which is part of present-day Turkey, but the techniques were quickly copied and further refined by the Greek, Persian, Macedonian, and later the Roman empires. These new coins were made from precious metals such as silver, bronze, and gold.
118 BC: Leather Money
Leather money was used in China in the form of one-foot- square pieces of white deerskin with colorful borders. This could be considered the first documented type of banknote.
800 – 900 AD: The Nose
The phrase “To pay through the nose” comes from Danes in Ireland, who slit the noses of those who were remiss in paying the Danish poll tax.
806 AD: Paper Currency
The first paper banknotes appeared in China. In all, China experienced over 500 years of early paper money, spanning from the ninth through the fifteenth century. In 1455, the use of paper money in China disappeared for several hundred years. This was still many years before paper currency would reappear in Europe.
History of money
“Potlach” comes from a Chinook Indian custom that existed in many North American Indian cultures. It is a ceremony where not only were gifts exchanged, but dances, feasts, and other public rituals were performed. In some instances potlach was a form of initiation into secret tribal societies.
The earliest known use of wampum, which are strings of beads made from clam shells, was by North American Indians in 1535. Most likely, this monetary medium existed well before this date. The Indian word “wampum” means white, which was the color of the beads.
1816: The Gold Standard
Gold was officially made the standard of value in England in 1816. At this time, guidelines were made to allow for a non-inflationary production of standard banknotes which rep-resented a certain amount of gold. Banknotes had been used in England and Europe for several hundred years before this time, but their worth had never been tied directly to gold. In the United States, the Gold Standard Act was officially enacted in 1900, which helped lead to the establishment of a central bank.
1930: End of the Gold Standard
The massive Depression of the 1930’s, felt worldwide, marked the beginning of the end of the gold standard. In the United States, the gold standard was revised and the price of gold was devalued. This was the first step in ending the relationship altogether. The British and international gold standards soon ended as well, and the complexities of international monetary regulation began.