Trading has been a practice since the birth of mankind. Giving up one thing to gain another, for after all that is all currency is. Giving someone money for an item you need or want, it’s a trade. However two thousand years ago if you were to offer someone a piece of paper with a number and picture on it for an item you wanted, you’d probably be laughed at. Trading objects for paper money is in relative terms, still a fairly novel concept.
So where did this radical notion originate? I’ll give you one guess, China. Paper currency was first developed in the Tang Dynasty during the 7th century (which was from 601-700AD), although true paper money did not appear until the 11th century (1001-1100). The usage of paper currency would later spread throughout the Mongol Empire and be utilized by explorers in their own countries. Such as European explorer Marco Polo, who introduced the concept in Europe during the 13th century.
Paper money originated in two forms: Drafts, which are receipts for the value held on account, and “Bills”, which were issued with a promise to exchange at a later date. The concept of banknotes as money has evolved over time. Originally, money was based on the value of precious metals. Banknotes were just seen as a way to IOU – a promise to pay someone with precious metals upon redemption of the banknote. However, with the gradual removal of precious metals, banknotes progressed to represent credit when being backed by the government.
In America the first place to issue circulating banknotes was Massachusetts in the early 1690’s. The use of fixed denomination and printed banknotes came in the early 18th century, when each of the individual 13 colonies issued their own banknotes. Each state continued to use their own currency for approximately 100 years until the adoption of the Constitution in 1789 and Congress authorized for the first time the Bank of the United States to issue all banknotes.
Now there are thousands of different banknotes being used daily around the world, so which of them will end up in your collection? If you read the last blog I wrote you may have an idea of where you’ll start your collection, just as I hope you have a better idea of how currency originally got its own start.
With all this in mind, one great thought about collecting banknotes, money, bills, dosh, sponduliks, or whatever you like to call it, just think when you hold a banknote from say Nepal in your hand, it is always interesting to think that someone in that country maybe (or has been for older currency) been using this in the same way we use our dollar bills. It is fascinating to think that over the years people all over the world, just like us have paper money so different in color, size, denominations, depictions etc, but are using it pretty much the same way as we do. To add a final thought, just think recently in Zimbabwe they had been using banknotes with 14 zeros – that is 100,000,000,000,000 or 100 Trillion dollars and this probably brought you a carton of eggs (definitely not a Starbucks coffee).