How did the first coins appear, what came before them, and who printed the first bills

2024 Author: Richard Flannagan | [email protected]. Last modified: 2023-12-15 23:55

Money is a fairly ancient means of calculating. But market relations emerged much earlier. For centuries, ancient people made purchases, exchanged goods without the use of coins, banknotes and IOUs. How it was possible to conduct trading operations, and what led to the emergence of modern money - in our material.

Than people were calculated in ancient times

Market relations arose as early as 7-8 millennium BC. After the disintegration of the primitive communal society, not only the living conditions improved, but also the tools of labor. Thanks to this, people began to have surpluses of manufactured products, which were exchanged for more useful ones.

Different peoples had their own items that acted as money. For example, hunting tribes exchanged surplus game for grain and fruits from tribes that were engaged in agriculture and gathering, and livestock from pastoralists. In the Pomor settlements, fish acted as currency, which was exchanged for bread and meat. However, due to different human needs, it was not always possible to come to a mutually beneficial agreement.

The inconvenience of direct exchange led to the emergence of a universal product that was able to satisfy as many requests as possible. It was later called the general equivalent. In its role in different countries were goods of different nature and purpose. Many peoples used livestock as currency. For example, the northern peoples paid with deer, and the ancestors of the Germans - with cows.

Barter is a system of equal exchange

Gradually, direct exchange has ceased to be relevant. People began to realize that the products they exchange are not equivalent. Then barter became a system of equal exchange.

As a rule, important commodities played the role of barter. In some societies, these were sugar, furs, ivory, cocoa, while in others, cowrie shells, beads, allspice and tobacco leaves. Such an exchange also had its drawbacks, since it was difficult to objectively determine the value of a particular product. For example, it was impossible to say exactly how many bags of grain to give for one sheep. In addition, like a direct exchange, barter included a human factor, in which both parties to the process must mutually conclude that the transaction is beneficial to both. This factor severely limited the possibilities of commodity exchange.

Gradually, the system of commodity-money relations became more complicated, which led to the emergence of a market. More significant goods were involved here: honey, gold, jewelry, grain, fur, salt, in some countries slaves served as currency. This contributed to the emergence of fairs. For the purpose of enrichment, traders from different countries began to come to them.

When coins were first minted

When trade smoothly moved from the local to the international level, there was an urgent need for a currency that would suit everyone. Initially, these were small bars of precious metals of different weights and shapes. They were very popular and highly valued. Their authenticity was confirmed by the stigma that the merchants left on them.

The first coins were minted in Lydia around 700 BC. Unlike bullion by weight, the state itself was engaged in the manufacture of such currency. The main metal for minting was gold, copper and silver. But with the advent of the first coins, counterfeits also appeared. To confirm the value of public money, the government put an image with an inscription on it. In many countries counterfeiting was punishable by death.

The advent of the official currency greatly simplified the economy and strengthened money as a means of payment. Minted coins gradually replaced barter, and the value of goods began to be calculated according to a special formula. The used materials, labor intensity of work and time costs have already been invested in the prices. The designation of the cost made it possible to make the process of commodity exchange more convenient, faster and easier.

When did the first paper money appear?

Although the coin was firmly established in everyday life, some difficulties also arose with it. For example, it was difficult for merchants to store or transport them, for this purpose they hired special carts and guards. In addition, it was difficult to get metal for minting coins. This became a prerequisite for the emergence of new means of payment.

The first paper money began to be used in China, in the 1st millennium AD. The Chinese were the first to think of depositing their savings in "banks". In return, a special document was issued, which indicated the amount that was in the custody of the "banker". This allowed people to pay not in coins, but in certificates.

Such receipts circulated throughout the world until the 16th century, and confidence in them only grew. Such banknotes were small rectangles made of paper, each of which was marked with the denomination of the banknote. This kind of money made it possible to solve the problems with debt tickets and really support the economy. In Russia, the first paper money appeared only in 1769 under Catherine II.

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