The History of Money
IN THE BEGINNING:
BARTER
Barter is the exchange
of resources or services for mutual advantage, and the practice likely dates
back tens of thousands of years, perhaps even to the dawn of modern humans.
Some would even argue that it's not purely a human activity; plants and animals
have been bartering—in symbiotic relationships—for millions of years. In any
case, barter among humans certainly pre-dates the use of money. Today
individuals, organizations, and governments still use, and often prefer, barter
as a form of exchange of goods and services.
9000 - 6000 B.C.:
CATTLE
Cattle, which
throughout history and across the globe have included not only cows but also
sheep, camels, and other livestock, are the first and oldest form of money.
With the advent of agriculture also came the use of grain and other vegetable
or plant products as a standard form of barter in many cultures.
1200 B.C.: COWRIE
SHELLS
The first use of
cowries, the shells of a mollusc 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, and even as recently as the middle of
this century, cowries have been used in some parts of Africa. The cowrie is the
most widely and longest used currency in history.
1000 B.C.: 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 B.C.: MODERN
COINAGE
Outside of China, the
first coins developed out of lumps of silver. They soon took the familar 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. Unlike Chinese
coins which depended on base metals, these new coins were made from precious
metals such as silver, bronze, and gold, which had more inherent value.
118 B.C.: 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.
A.D. 800 - 900: 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: PAPER CURRENCY
The first known paper
banknotes appeared in China. In all, China experienced over 500 years of early
paper money, spanning from the ninth through the fifteenth century. Over this
period, paper notes grew in production to the point that their value rapidly
depreciated and inflation soared. Then beginning 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, and three centuries before it
was considered common.
1500: POTLACH
"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. Because the exchange of
gifts was so important in establishing a leader's social rank, potlach often
spiralled out of control as the gifts became progressively more lavish and
tribes put on larger and grander feasts and celebrations in an attempt to
out-do each other.
1535: WAMPUM
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
represented 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
officialy enacted in 1900, which helped lead to the establishment of a central
bank.
1930: END OF THE GOLD
STANDARD
The massive Depression
of the 1930s, 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.
THE PRESENT:
Today, currency
continues to change and develop, as evidenced by the new $100 U.S. Ben Franklin
bill.
THE FUTURE:
ELECTRONIC MONEY
In our digital age,
economic transactions regularly take place electronically, without the exchange
of any physical currency. Digital cash in the form of bits and bytes will most
likely continue to be the currency of the future.
Article taken from: http://www.pbs.org/wgbh/nova/ancient/history-money.html
