John Barnes - LPL Financial Planner

(323) 306-7024

Money

The History of Currency

This is a History of Currency educational infographic with six sections on a beige background. The title reads: The History of Currency. A brief lesson on where currency has been and where it is going.This is a History of Currency educational infographic with six sections on a beige background. The title reads: The History of Currency. A brief lesson on where currency has been and where it is going.The first section, titled Livestock and Grain, covers the earliest use of currency around 9000 BC. It explains that, contrary to popular belief, bartering pre-dates other forms of currency, and is now seen as unlikely because it is extremely inefficient. Historically, bartering supplemented other forms of payment. With the rise of agriculture, animals such as cattle, sheep, camels, and sacks of grain were used as traditional stores of value. The text notes that cattle were called capitale in Latin, which is where the word capital comes from.The first section, titled Livestock and Grain, covers the earliest use of currency around 9000 BC. It explains that, contrary to popular belief, bartering pre-dates other forms of currency, and is now seen as unlikely because it is extremely inefficient. Historically, bartering supplemented other forms of payment. With the rise of agriculture, animals such as cattle, sheep, camels, and sacks of grain were used as traditional stores of value. The text notes that cattle were called capitale in Latin, which is where the word capital comes from.The second section, titled Cowrie Shells, highlights their first use as currency around 1300 BC. It states that cowrie shells are the small, colorful shells of a certain type of sea snail found in the Pacific and Indian Oceans. They were used as currency all over the world. Individually or strung on necklaces, they represented everything useful in a currency: small, divisible, and durable.The second section, titled Cowrie Shells, highlights their first use as currency around 1300 BC. It states that cowrie shells are the small, colorful shells of a certain type of sea snail found in the Pacific and Indian Oceans. They were used as currency all over the world. Individually or strung on necklaces, they represented everything useful in a currency: small, divisible, and durable.The third section, titled Coins, covers their first appearance between 700 and 600 BC. It notes that besides lumps of gold and silver in Turkey, the earliest coins took on shapes like knives and spades. The first coins were put into use in seventh-century Turkey. Not exactly round, they were small lumps of a gold and silver mixture called electrum, often with a pattern stamped on one side. Despite their irregular shapes, early coins were held to strict weight standards.The third section, titled Coins, covers their first appearance between 700 and 600 BC. It notes that besides lumps of gold and silver in Turkey, the earliest coins took on shapes like knives and spades. The first coins were put into use in seventh-century Turkey. Not exactly round, they were small lumps of a gold and silver mixture called electrum, often with a pattern stamped on one side. Despite their irregular shapes, early coins were held to strict weight standards.The fourth section, titled Paper Money, explains its introduction around 600 AD. It states that, in addition to the first paper money, China also invented the first banknotes, made of leather. These were one foot squares, decorated with patterns and a fringed border, and princes were required to purchase them at a price of 400,000 copper coins and to present gifts to the emperor on them. The Tang Dynasty of China was the first to put paper money into use, nearly 500 years before it caught on in Europe. However, early experiments caused problems: China went through a financial crisis when paper money production grew until its value bottomed out, causing massive inflation.The fourth section, titled Paper Money, explains its introduction around 600 AD. It states that, in addition to the first paper money, China also invented the first banknotes, made of leather. These were one foot squares, decorated with patterns and a fringed border, and princes were required to purchase them at a price of 400,000 copper coins and to present gifts to the emperor on them. The Tang Dynasty of China was the first to put paper money into use, nearly 500 years before it caught on in Europe. However, early experiments caused problems: China went through a financial crisis when paper money production grew until its value bottomed out, causing massive inflation.The fifth section, titled The Gold Standard, covers its first adoption around 1800. It notes that the phrase “pay through the nose” comes from ninth-century Ireland, where Danes took census by counting noses and imposing high taxes on each nose. Britain was the first country to adopt the gold standard as the fixed value of its currency. Germany, France, and the U.S. followed in the 1870s. By 1937, in the wake of the Great Depression, not a single country remained fully on the gold standard. In 1971, the U.S. fully suspended it.The fifth section, titled The Gold Standard, covers its first adoption around 1800. It notes that the phrase “pay through the nose” comes from ninth-century Ireland, where Danes took census by counting noses and imposing high taxes on each nose. Britain was the first country to adopt the gold standard as the fixed value of its currency. Germany, France, and the U.S. followed in the 1870s. By 1937, in the wake of the Great Depression, not a single country remained fully on the gold standard. In 1971, the U.S. fully suspended it.
 

Related Content

Global and International Funds

Global and International Funds

Investors seeking world investments can choose between global and international funds. What's the difference?

Behavioral Finance

Behavioral Finance

An amusing and whimsical look at behavioral finance best practices for investors.

Buying vs. Leasing a Car

Buying vs. Leasing a Car

Whatever your relationship with your car, it may eventually come time for a new one. Familiarize yourself with your options.

 

Have A Question About This Topic?


Thank you! Oops!

Making Sense Of A Home Warranty

Understanding the value of a home warranty.

Put It in a Letter

A letter of instruction provides additional and more personal information regarding your estate.

Prevent a Rift: Money Tips for Newlyweds

Couples may be able to head off many of the problems in a marriage that money can cause.

View all articles

My Retirement Savings

See how your current savings rate and contributions may grow into retirement income.

How Long Will Your Money Last?

See how long a lump sum of savings could last based on your withdrawal rate and return.

Simple 401k

See how increasing your 401(k) contributions today could affect your balance at retirement.

View all calculators

4 Elements of an Estate Strategy

Learn about the importance of having an estate strategy in this helpful and informative video.

How to Bake a Pie-R-A

Roth IRAs are tax-advantaged differently from traditional IRAs. Do you know how?

Consider These 3 Things Before Driving Off the Lot

Here are 3 quick tips to keep in mind when buying or leasing your next vehicle.

View all videos