Free «History of Money» Essay Sample

Syncretism consists of the attempt to reconcile disparate or contradictory beliefs, often while melding practices of various schools of thought. The modern money system used in the world today is very intricate and integrated in the western countries. Money forms one of the basic units of civilization, without money modern development cherished around the globe would have not been achieved. Without trade and exchange of commodities by people from different regions world population would still be living in segregated units strained by lack of some resources but coping through used of hard alternatives that they once used (Robert, 2002).

With money a buyer chooses what, where, how and when to acquire commodities or services they require. All communities in the western region in their primitive settings had their own of exchange or special value commodities. In some communities value for their wealth was stored in the herds of livestock, valuable stones or other rare and beautiful products. These valuables were presented during community ceremonies such as weddings. Wealth was envisaged as possession of a lot of the valuable commodities amongst other members of the same society. Barter trade was the only mood of exchange during this age.

One form of the primitive exchange units used widely during this age was shell; it was used in for trade in America Africa and even Asia through the Trans-Atlantic trade and also the triangle trade. Shell that was derived to some islands in the Indian Ocean was in great demand both in India and china. Another commodity that was used for exchange during this age was wampum that was valued amongst the European countries.

One of the earliest forms of money used for commercial exchanges was found in Mesopotamia and Egypt by 3rd millennium BC. Gold was weighed to ascertain its value and the amount of commodities that would be exchanged for the same.

Between the 7th and the 3rd century BC coin casters in china started using bronze in molding valuable shapes that were used in exchange.

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There were particular shapes that were replicated in most of the Chinese states; two of the most common shapes were knife blade and spade with handles. On this shapes there were chine symbols to show the identity of their originality. These shapes were particularly developed during the Zhou dynasty. During the ruin of Emperor Shi Huangdi first round coins were forged from bronze. They had a characteristic square hole at the centre which was common with coins from different parts of Europe. These design for these coins remained unaltered for more than two thousands years (Mauss, 2002, p.36).

Banking systems in Greece started in early 4th century BC before other primitive societies could also develop any form of banking. Entrepreneurs, public members and temple were able to make deposits, withdraw from their savings and get loans from these banks. The government made precise standards for determining the quality, size and weight of the currencies. Book keeping to control and track the banking history of various customers was also developed during this period (Mauss, 2002, p.37).

Book keeping was developed after it emerged that some customers were forced to carry large loads of coins from one point of transaction to the other. By the second century AD, banking was developed such that making deposits and loans were very easy and usury became a common practice in the region. Prosperity in terms of developing an elaborate banking system continued until the aggressive church out grew the governing emperors. This brought banking to a halt, people stated shying away from the bankers as the church took more stun measures on the usury and the interest rates charged on any borrowings. The church discouraged usury and made look like an offence (Davies, 1994, p.54). The banking systems that had been thriving for a few centuries were for once slowed and almost brought to an end.

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Currencies that are used today in most parts of the world can be traced from Roman history. The coins that were developed by the Romans during the middle centuries were replicated in many parts of the world and are still in use to this day. The Byzantine Empire developed a golden coin, during the early trade and exchange the coin found its way to other regions. The origin of the first shillings was inspired by this coin (History of the World, 2002). Other coins were developed by the year 690; dinar used in Latin America. In the next century, France through king Pepin III introduced the first silver penny that was to be later used as standard coin in the larger European region. Standardization of penny with the shilling came later in history when the kingdom felt that the currencies needed to be standardized to allow unified exchange in the region.

The standardized currency ratio was penny: shilling: pound (1: 12: 20). Later, the currencies were changed during decimalization period in the French Revolution. Later, the currencies were changed; penny remained as a currency. The golden shilling became a yardstick value coin. The pound on the other hand became a unit for measuring weight. However, in other parts of Europe, pound and shilling were used as coins. The coins were instrumental as the banking systems in Europe and other parts of Europe were developing. Dollar currency origin is attributed to the penny that was also known as thaler in Bohemia (History of the World, 2002).

First paper money was used in china around the year 920 AD. Paper money developed during the five dynasty era. The greatest challenge that faced the authorities was making uniform and unique notes that would not be duplicated. They also had a problem in authenticating the legal notes and the fake notes. Authorities in china encouraged use of notes by making available lots of notes in the market. There a lot of notes in circulation at one time such that the sum totals value of the notes would buy all the treasures in the world. Soon the society was faced with inflation problem. Something had to be done to save the societies economy, the government banned the use of notes in china in the 15th century to cutout the consequences of excess notes in circulation.

Paper currency was first used in Europe in early 17th century. Stockholm Banco was established in 1656 by Palmstruch. Although the bank was private it had a lot of state influence. In 1961 customers were first issued with credit notes in exchange with silver coins they previously possessed. In 1966, the bank present the population with the first regular notes that were hand signed by eight people, this was used as an authenticating measure. Palmstruch, printed enough notes to redeem the number of coins in circulation. People could use the notes as long as they had the confidence of re-exchanging the notes for coins at the bank. The notes were becoming popular in the public that Palmstruch printed excess notes to serve the population. He failed to balance the coins value and his notes and notes out weighed the coin value. He was convicted in 1666 on account of fraud (Davies, 1994, p.57). Later the notes were introduced in many parts of Europe and regulated to avoid a repeat of the previous cases.

Gradually the public confidence with the notes grew especially now that the government had reserves for the currencies. Notes were used comfortably for exchange of commodities and services. Now the risk of the currency reserves becoming deflated ceased as the government would regulate printing and supply of the notes. The only problem that existed during the initial stages of note development was inflation as there were no developed modalities for controlling and regulating currency level in circulation.

In conclusion, money and currencies have been evolving for centuries to get to the point is today. Money is a vital tool in trade, with globalization and industrialization around the globe, trade between nations from all parts of the world is inevitable. To achieve the global millennium common goals that were set by world leaders and other individual targets the world needs very unified currencies. Other the years, acceptability of currencies from other regions have improved. Inter-region trade has been made easier and faster by using selective globally accepted currencies; the euro, American dollar and the British Pound (William, 1994, p.30).

In anticipation of global currency exchange, other forms of payments and money transfer have developed. Checks, credit and debt cards are used in transfer without physical money being availed. Although exchange of goods and services can be achieved with much ease, new methods are being developed everyday to make the process even more flexible and convenient.


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