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The History of Currency

Currency has been around for a long time. Here’s a quick history lesson.

9000 BC

Livestock + Grain

To Barter or Not to Barter?

Contrary to popular belief, the idea that bartering pre-dates the invention of other forms of currency is now seen as unlikely.1 The reason? Bartering is extremely inefficient. Historically, people engaged in barter economy as a supplement to other forms of payment.

With the rise of agriculture, animals like cattle, sheep, camels and other livestock, along with sacks of grain, were used as traditional “stores of value.” Cattle were even called “capital” in latin, which is where we get the work “capital.”2

1300 BC

Cowrie Shells

Cowrie shells are the small, colorful shells of a certain type of sea snail found in the Pacific and Indian Oceans, and have been used as currency all over the world.3 Individually or strung on necklaces, they represented everything useful in a currency small, divisible, and durable.4

700-600 BC

Coins

Alternative Shapes

Besides the lumps of gold and silver in Turkey, the earliest coins took on shapes like knives, spades, and ships’ hulls.6

The first coins were put into use in the 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.6

600 AD

Paper Money

Leather Goods

In addition to the first paper money, China also invented first “banknotes,” made of leather. One foot square and decorated with patterns and a fringed border, princes were required to purchase these notes at a price of 400,000 copper coins, and to present gifts to the emperor on them.7

The Tang Dynasty of China was the first to put paper money into use, nearly 500 years before it caught on in Europe. But early experiments weren’t without pitfalls: China went through a financial crisis when the paper money productions grew until its value bottomed out, causing massive inflaction.8

1800 AD

The Gold Standard

Through the Nose

The phrase “pay through the nose” has it’s origins in ninth century Ireland. When the Danes conquered the island, they took census by “counting noses,” imposing high taxes on each nose.”9

Britain was the first country to adopt the gold standard as the fixed value of their currency. Germany, France, and the U.S. followed suit in the 1870s. By 1937, in the wake of the Great Depression, not a single country remained fully on the gold standard, and in 1971, the U.S. fully suspended it.10




  1. The Atlantic, February 2016

  2. Scholastic, 2017

  3. Federal Reserve Bank of Atlanta, 2017

  4. National Bank of Belgium Museum, 2017

  5. University of Missouri Museum of Anthropology, 2017

  6. British Museum, 2017

  7. Mint.com, 2017

  8. Time, April 2017

  9. Grammarist, 2017

  10. Encyclopedia Britannica, 2017

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2018 FMG Suite.

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DISCLAIMER: This website is for informational purposes only and does not constitute a complete description of our investment services or performance. This website is in no way a solicitation or offer to sell securities or investment advisory services except, where applicable, in states where we are registered or where an exemption or exclusion from such registration exists. Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding market or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Nothing on this website should be interpreted to state or imply that past results are an indication of future performance. THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, AS TO ACCURACY, COMPLETENESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS OR ANY ‘LINKED’ WEBSITE.

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