The History of Money

Do you know that thousands of years ago money had smell? In the days, of primitive man, people used things to wear or to eat as money. Cattle, tobacco grains, skins, salt, beads were used as money. This variety of money was eventually replaced by pieces of metal, particularly gold of silver.

The first coins may have been during the 600's B.C. in Lydia, a county in what is now Turkey. The coins were bean shaped lumps of electrum, a natural mixture of gold and silver. The coins had a stamped design to show that he King of Lydia guaranteed them to be of uniform value. The designs saved people the trouble of weighing each coin to determine its value. Traders accepted these coins instead of cattle, cloth, gold dust, or their goods as a medium of exchange.

Other people around the Mediterranean Sea imitated the Lydians, and gradually the use of coins became widespread. In many cases these coins merely represented some other articles which could not easily be used for money. Thus many coins were stamped with the picture of the object they represented, such a cow.

The greater convenience of metal money led to the use of copper and other metals for coins of small value Early coins had no modem safeguards in design, such as milled edges to prevent tiny bits of metal from being chipped and stolen without being readily noticed. Thus it often happened that coins would lose some of their value because this metal was taken from them.

The development of paper money began in China, probably the AD. 600's. The Italian trader Marco Polo traveled to China in the 1200's and was amazed to see the Chinese using paper money instead of coins.

When the Roman Empire was at its height, standard coins and paper money in the form of letters of credit made trade nearly as easy as it is today. In the later Roman period most sources of gold became practically exhausted, and precious metals were taken out of circulation. As a result, coins were debased, their value went down, and the prices of goods and services went up, along with tax rates.

During the Middle Ages in Europe the coining privilege was owned by numbers of feudal lords resulting in a land flooded with a variety of coins. Most of these coins were of doubtful value except in districts directly under the power of the ruler who manufactured them. Testing coin value by weight became the regular custom.

The discovery of America and the development of mines there vastly increased the amount of precious metals available for coinage.

Text 4D.

1. Read the text and state main stages of money system development in the USA.

Money in the USA

Here are some facts about the history of money in the USA. In the American Colonies, money was scarce. England did not furnish coins and forbade the colonies to make them. The English hoped to force the colonies to trade almost entirely with England. One way of doing so was by limited the money supply. Without money, the colonists could not do business with traders in other countries who demanded payment in cash. But the colonists could buy products from English traders with bills of exchange. They got these documents from other English traders in exchange for their own goods.

Later American colonists used English, Spanish and French money. However, in 1775, when the Revolutionary War became inevitable, the Continental Congress authorized the issuance of currency to finance the conflict. After the US constitution was ratified, Congress passed the "Mint Act" of April 2, 1792, which established the coinage system of the United States and the dollar as the principal unit of the currency. The government did not issue paper money until 1861. During this same period (1793-1861), approximately 1,600 private banks were permitted to print and circulate their own paper currency under State Charters.

With the onset of the Civil War, the Government - desperate for money to finance the war - passed the Act of July 17, 1861, permitting the Treasure Department to print and circulate paper money. The first paper money issued by the Government were Demand Notes commonly referred to as "greenbacks". In 1862, Congress retired the Demand Notes and began issuing Unites States Notes, also called Legal Tender Notes. During the period from 1863 to 1929, the Government again permitted thousands of banks to issue their own notes under the National Bank Acts of 1863 and 1864. These were called "National Bank Notes".

In 1913, Congress passed the Federal Reserve Acts, establishing the nation's Federal Reserve System. This Act authorizes the Federal Reserve Banks to issue Federal Reserve Bank Notes - the only currency still being manufactured today by the Bureau to Engraving and Printing.

The name "dollar" was adopted by the Continental Congress in 1785. Then word "dollar" originates from the German word Thaler (valley) which meant "Coin of Joachimsthal".

There are several versions of the origin of the sign $ But he most popular and authentic is the following: the sign is the result of the evolution of the letters P and S, which is the abbreviation of the word "pesos" (the plural form of the word '"peso", Spanish currency).

The origin of the word "buck" also has several versions. It means "male" (usually it refers to a deer). Buckskins were very popular with the American Indians and colonists; they were used as a standard form of barter.

There was a large amount of silver, which in the Middle Ages had been rarer than gold. The most effective force in establishing more uniform money systems in Europe was the rise of industrial cities. They supports the kings against the nobles. Gradually the kings took over the sole right of coining within their kingdoms. This decreased the confusion created by the use of many different coins developed by the feudal lords