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The History of Money

The History of Money



History of money

History of money



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    The History of Money The History of Money Presentation Transcript

    • History of Money
      • In the beginning, trading or bartering was the way of life.
      • Bartering predates the use of money. As a matter of fact, money derived from bartering.
      • Even today, individuals, governments, and institutions use bartering as a form of exchanging goods and services.
      • The use of livestock, shells, and beads were later used as money.
      • Money is any commodity that satisfies the following:
        • Medium of exchange (item accepted for exchange)
        • Store of value (value stored over time)
        • Unit of Account ( common measure of goods/services )
      • Portability (easily transported)
      • Durability (lasts when handled)
      • Divisibility (divisible into smaller units)
      • Limited Availability ( available in limited supply.
      • Croesus, king of Lydia, created the first gold and silver coins in 561 B.C.
      • Charlemagne standardized Medieval coins when he conquered most of Europe in 800 A.D.
      • In 806 A.D., the Chinese started issuing paper currency, but it led to inflation.
      • Gunpowder, musket balls, corn, and hemp served s commodity money. It was used to settle debts and make purchases.
      • Some colonies established fiat monies such as wampum (shells used by Narragansett Native Americans).
      • In Europe during the 1600’s, goldsmiths’s notes can be used as evidence of ability to pay. It mark the first use of banknotes in England.
      • A monetary standard where basic currency unit is equal to and exchanged for a specific amount of gold.
      • Advantages:
        • People feel secure about their money
        • Prevents government from printing too much paper currency
        • Disadvantages:
        • Gold stock don’t grow fast enough to support economy
        • Price of gold likely to change
      • The colony of Massachusetts was the first colony to issue paper currency in the US.
      • When George Washington was president, the Spanish peso was used. He assigned Benjamin Franklin and Alexander Hamilton to establish a money supply for the new country.
      • During the Revolutionary War, congress issued “Continentals”. Due to oversupply, they were worthless.
      • Continental Congress chartered a national bank in 1781.
      • Second Bank of the US charted in 1816.
      • Design of U.S. currency made in 1863.
      • “ In God We Trust” first appeared on currency in 1955.
      • Dollar bills redesigned to make counterfeiting more difficult.
      • http://www.pbs.org/newshour/on2/money/history.html
      • http://library.thinkquest.org/28718/history.html
      • http://projects.exeter.ac.uk/RDavies/arian/llyfr.html
      • http://www.wdfi.org/ymm/kids/history/default.asp