The History of Money – Our Civil Remedy

School is back in session, so the boys will not have as much time to spend in the park next to the small lake by the canal in the small residential area where the boys lived next door to each other. In fact, they had managed to get part-time jobs in one of the local grocery stores, stocking shelves and cleaning. It didn’t pay much, but they earned money for the first time It felt different than the small allowance they received from their parents. Now, the only time they would have to visit with the old lawyer who lived in the retirement community near their homes would be on Sunday after church.

One of the boys recalled that the last time they talked with him, he mentioned earning money in his practice by seeing clients in Mesa, Gilbert, Chandler, Scottsdale, and Phoenix. He even had clients as far away as Queen Creek and Apache Junction. One of the boys commented that it was no wonder he retired after working in all those places. But with all the work he did he must have made lots of money. Maybe that’s why he mentioned money the last time they talked. Now that they had their own money, they were anxious to know more about it.

The boys asked the retired lawyer what he knew about where the money came from. He shrugged his shoulders with a pensive look on his face. After several moments he began to explain. The actual history of money from the beginning is not completely understood. Before money was developed, bartering was most likely the system where goods were sold or acquired. Bartering is a system where people would directly trade goods and services. For example, a farmer who raised corn would give some of the corn to a farmer who grew wheat in exchange for some of the other farmers’ wheat. Not only were goods exchanged in this manner, but work and service were as well, even though placing value on such products was difficult. One farmer might trade livestock for vegetables, while another might trade labor or lumber for livestock. Bartering dates to 6000 B.C.

We can look at the history of money in this manner: At about 6,000 B.C. Bartering was used almost exclusively. From about 3,000 B.C. Clay tablets were developed and utilized as money in Mesopotamia. In about 630 B.C. China began using metal coins made of bronze and shaped like farming tools. It was about 1020 A.D. that China began using paper money. Although no one knows for sure where or how money was first used, it is believed that metal objects were first used as money as early as 5,000 years B.C.E ( Before the Common Era or (BC, Before Christ))

The first metal coins date back to the 7th century in Turkey and China. In Turkey, they were made of gold and silver. The first paper money was created in China. Merchants were tired of carrying coins and began using transaction receipts. These receipts eventually became paper money. It was around 1020 that governments took over and began to issue those receipts as the first official paper money

The United States adopted the Gold Standard Act in about 1900. This meant that the government’s gold backed the paper money issued. The gold standard slowly faded from usage by 1970 but was important to its history. The government issues U.S. Money.

It might be fair to say that the time frame for the development of money could be:

6,000 B.C. Bartering

3,000 B.C. Clay tablets in Mesopotamia

630 B.C. Metal coins in China

1020 A.D. Paper money in China

1100 – 1200 A.D. Medieval banking

1860 A.D., Europe adopts gold standard (This means that the government has gold to back up the issued paper money)

In 1900 A.D., the United States adopted the Gold Standard Act. This act required that paper money issued by the government be backed up by gold in the government’s hands.

The gold standard slowly faded from usage by 1970 but is important in its history. Now, U.S. Money is issued by the government.

None of this information has been researched completely; however, is an effort to explain as much information as possible about the history of money.

Money is one of the most important parts of human history. Its invention allowed our ancestors to break out of the constraints of the barter system, where they had to exchange goods and services physically. The creation of paper currency allowed society to function more easily on a wider scale. Paper money and credit made trading much more convenient and profitable.

The old lawyer paused to catch his breath, saying, “Boys, I know this is much more information than you need or want. I hope it will help you appreciate how money, credit, and government involvement impact your earnings.”

The boys said, “Now that we have money, we can buy what we want. Our parents don’t use the money they earn. They put everything on their credit cards.”

“OK, boys. Don’t ask me to talk about that. It would take at least another hour.”

The boys laughed and said, “Don’t worry. We won’t ask. Even though we love to hear you talk, enough is enough.”