17. From Cattle to Cash

In Europe and Asia the first "medium of exchange" or "standard of value" was not gold or silver, but cattle (the Spanish words relating to cattle, pecuario, and to money, pecuniario, both have the same root). In other parts of the world, however, such different commodities as salt, shells, stones and cocoa beans were all used as "money". They all offered advantages over the barter system (the direct exchange of goods), but none of them was perfect. Some were too heavy, some could not be divided into small enough parts (how much of a cow would you need to buy a piece of cheese?), some were not permanent enough. The solution was money as we know it, that is, money in the form of coins.

The invention of coins appears to have occurred almost simultaneously but quite independently in ancient Greece and in China in about 700 B.C. The reason why historians believe the development was independent is because of the notable differences in the two systems.

In Greece, a natural alloy of gold and silver called "electrum" occurred in rivers in nugget form. The first coins were taken out of these nuggets with a tool called a punch. In order to distinguish these coins from gold ornaments, a design, or "type", to use the technical numismatic expression, was added on one side. At first, these types were very simple: flowers, squares or, in the case of the city of Phocaea, a seal (seal—foca in Spanish). Meanwhile, in another part of Greece, circular silver coins were made, and these quickly became more common everywhere in Greece than the electrum ones. Soon, inscriptions appeared, the first known one being "I am the sign of Phanes," from Halicarnassus around 600 B.C. About 200 years later, the first portraits of rulers appeared on coins.

The first money to appear in China was very different. Firstly, it was made of bronze. More notably, it was not circular, but in the shape of a knife! The knife had a hole pierced in the handle so that it could be suspended (for example, from a string), and, like some Greek coins, it generally bore an inscription. Other shapes included keys or spades, but what they had in common was the pierced hole. It was probably around 250 B.C. that the first Chinese money we would recognize as coins appeared, and, subsequently, the famous Ming mint produced a round coin with a square hole in it. This particular coin bore the inscription, "Knife of Ming," but later the knife itself disappeared. It was from this coin that the famous "cash" developed. The Chinese word, "cash", means "a small unit of currency". Although Chinese coins often had inscriptions, they virtually never had portraits, or types of any kind, until the nineteenth century when they were influenced by western models.

As for paper money, that was a Chinese invention, too. In the thirteenth century A. D. Marco Polo brought stories of such money to Europe, but the concept did not inspire the Europeans of his time. In fact, the true ancestors of modern paper money were the billets printed in France in 1716 by the Scottish financier, John Law. So the English word "cash" comes from a Chinese word, and the Spanish word billete comes from a Scotsman in France. Money certainly seems to make the words go round!