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Saxons first start to produce gold coins in significant numbers.

As a result of the gradual rebuilding of commercial and cultural contacts with France and Italy Anglo-Merovingian types of coinage begin to circulate in south-east England.

 

806-821 Reign of Emperor Hien Tsung and paper money.In China a severe shortage of copper for making coins causes the emperor to issue paper money notes.

 

Chinese Paper Currency: 1020.Quantity of Chinese paper money reaches an excessive level. The total amount is nominally worth 2,830,000 ounces of silver. Vast amounts of cash are used to buy off potential invaders from the north and to pay for imports causing a cash famine.

As a result the authorities increase the note issues thus fuelling inflation.

Middle Ages: 800 – 1500:Medieval coinage was standardized by Charlemagne when he conquered most of Europe around 800.

1095-1270 The Crusades:The large sums of money to finance the Crusades results in the re-emergence of banking in western Europe.

1100: British Tally Sticks:King Henry issued the first Tally Sticks in 1100.

This practice lasted in England for over 700 years.

Paper Money in Europe:In the 1660’s, goldsmith’s notes are accepted as evidence of ability to pay. These notes mark the first use of Banknotes in England.

The New World:The colony of Massachusetts was the first colony to issue paper currency in the US.

The Massachusetts Bay Colony issues official paper money.

Notes used to pay soldiers returning from expedition to Quebec.

Used to pay taxes and accepted as legal tender.

Other colonies subsequently copy the example.

Gold/Silver Certificates: In an effort to increase precious metal reserves, the government began issuing gold and silver certificates in 1863.

The Federal Reserve System was created in 1913 by Woodrow Wilson.

 

Convertible Paper

ü Paper claim on some amount of a commodity money

ü Can be converted on demand into gold or silver, for example

ü More convenient for transport

ü Indirect evidence of usage of “drafts” in Babylon, Egypt Greece & Rome.

Genoese bankers 12th & 13th centuries

The first [bills of exchange] for which definite evidence exists was a contract issued in Genoa in 1156 to enable two brothers who had borrowed 115 Genoese pounds to reimburse the bank’s agents in Constantinople by paying them 460 bezants one month after their arrival.

“1000 cash” bill from the Ming dynasty in China. Issued in 1374 by the Imperial Treasury.

Prior to 1914 most paper currency circulating in the US was issued by private banks.

1935 one-dollar silver certificate. This note was issued by the US Treasury and was redeemable for a fixed amount of silver.

 

Fiat Money

Money that circulates “by command”.

It is not explicitly backed by any commodity.

“Continentals” were issued by the Continental Congress to finance the Revolutionary War. They were redeemable for gold, but only at a future date.



“Greenbacks” were issued by the US Treasury to finance the Civil War. They were not redeemable for gold.

Greenbacks could be used by the US government to pay its debts, but the government would not accept them as payment.

 


Date: 2016-03-03; view: 639


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