MONEY

Money is something that is very difficult to explain . People in various cultures think of money in different ways. A London banker and an African tribesman have different ideas of what money is.

Many people think of money as a currency –metal coins and paper bills . We need it to buy the things in life that we need. We also get money for the work that we do. So, money is a way of exchanging goods and services .

The History of Money

In early civilisations people did not have money. They traded objects. Maybe a hunter had more animal furs than he could use and his neighbour might have caught more fish than he could eat himself. They soon saw that they needed each other. The fisherman neededfurs to protect himself from the cold and the hunter needed something to eat, so they exchanged their goods . This is called barter .

Barter also had disadvantages . If there weren’t any more people who needed the hunter’s furs he couldn’t trade them for the things he needed.

Early Forms of Money

As time went on, people used things that were valuable as a kind of money. Cattle was one of the earliest forms of money. People who had many cows were thought to be very rich. Later on, grain and salt were common forms of money. They had advantages because you could weigh them.

The Aztecs used cacao beans as money. They were valuable and easy to carry. The early American colonists used gunpowder , tobacco and nails as money. These things were very rare .

Coins

In the course of time people searched for better ways of trading goods. They found out that metal ,especially gold and silver, was very valuable .

Some historians believe that the first coins were made at around 700 B.C. by the Lydians . The Greeks and Romans also had silver and gold coins . Their value was guaranteed by the government .

But it was not until the late Middle Ages that coins became common throughout Europe. Metals werestamped and coins had to have a certain weight . People knew how many coins they needed to buy something because they had a fixed value .