PART #2 “The History of Money”
Author: Gloria Henderson Education Get Real FINANCIAL LITERACY: - “The Money Trail” 10
The History of Money
From Bartering to Electronic Money In the beginning, bartering was the only medium of exchange of goods and services, and the practice of bartering dates back thousands of years. Overtime it became more and more difficult as civilizations grew and territories expanded, and new mediums of exchange for goods and services became necessary. The first and oldest form of money was cattle (cows, camels, sheep and other livestock). Cowrie shells, found in the Pacific and Indian Oceans, were accepted by many civilizations as money. These shells were the most widely and longest used currency in history. Salt has been exceptionally important for thousands of years. Its ability to preserve food was a foundation of civilization. Salt was difficult to obtain and a highly valued trade item and considered a form of currency. The earliest form of metal money was made from bronze and copper at the end of the Stone Age by the Chinese. The development of modern coinage included lumps of silver (melted silver ore), these coins were stamped with various gods and emperors for authenticity. Later, the Roman empires and others copied and refined the coins by using precious metals such as gold, silver and bronze thus giving them greater value. Money evolved and recognized as the medium of exchange throughout history included: Leather money (deerskin), potlash (Chinook Indian custom), wampum (string of beads made from clam shells), gold standard (England in 1816), paper money/currency – Continentals (issued during the American Revolution), Greenbacks (issued during the Civil War), to today’s accepted currency issued and controlled by the Federal Reserve Banks. Now, in the digital age, financial transactions take place electronically without the exchange of physical currency. Source: http://www.pbs.org/wgbh/nova/ancient/history-money.html
United States Currency The Department of the Treasury – The Constitution was adopted in 1788, and it gave Congress the sole authority to mint coins and control their value. In 1789, Congress established the U.S. Department of Treasury, and the first Secretary of the Treasury was Alexander Hamilton. The Department of Treasury was responsible for overseeing the production of coins and currency notes. Congress established two agencies to manufacture the currency: The United States Mint and The Bureau of Engraving and Printing. The United States Mint – The Coinage Act of 1792 created the United States Mint. It is the federal agency responsible for the production and distribution of coins. Today, coins are made of copper, nickel, and an alloy, however, in the past the Mint produced gold and silver coins. Coins are minted/manufactured in denominations of a penny, nickel, dime, quarter, half-dollar, and dollar. These coins are minted in Denver and Philadelphia, and the coins are marked below the date it was minted with a “D” for Denver or “P” for Philadelphia, however, not all coins minted in Philadelphia have the “P” mintmark. The Bureau of Engraving and Printing – Congress authorized the Bureau of Engraving and Printing in 1862 to design, engrave, and print the official paper money of the United States. The Federal Reserve notes are issued today in the amounts of: $1, $2, $5, $10, $20, $50, and $100, and these notes are the legal tender of the United States of America.