Money matters

February 3, 1690: Massachusetts Colony issues a new currency – America's first paper money. The Sumerians (c. 5300 BC-1940 BC) developed large scale economies based on commodity money – money whose value comes from the 'commodity' it's made from. Gold, silver, copper, and tin are recognizable commodities but this form of money can also include salt, peppercorns, decorated belts, shells, or any item perceived to be valuable. Simple barter created many problems that could be overcome with the addition of a form of money useful in the intermediate stages of trade.

In lands without a fiat currency – a method of packaging monies based on it usefulness, not the intrinsic value – the citizens may adopt foreign currencies because they ease trade. Gold has often been the standard or basis for the fiat currency. Standardized coinage was backed by the reigning personage and stamped with a picture or words was used. The discovery of a touchstone increased the use of gold. A touchstone is a dark stone such as slate. When a coin of dubious metal is rubbed across the touchstone, a trail is left and can be used to assess the purity of the coin when compared to a trail left by rubbing a coin of known worth.

Eventually, the use of representative funds came into use. A banking institution held valuable metals such as gold or silver in reserve. Rather than striking coinage from the metal, they issued receipts for the precious metals left on deposit. It wasn't long before the receipts for the actual wealth were traded between merchants. Banks began to print banknotes worth the face value as a holding against the actual gold or silver in their possession.

Banknotes were printed for individual banks and led to a plethora of bills. There eventually was a move to standardizing printing by governmental agencies. They printed nationally backed bills. The US dollar, represented by the "$" symbol, is divided into 100 cents. Bills are printed in $1, $5, $10, $20, $50, and $100 denominations. Other bills have been available in the past, including $500, $1,000, $5,000, $10,000, and even $100,000 bills. Coins are available in 1¢ (penny), 5¢ (nickel), 10¢ (dime), 25¢ (quarter), 50¢ (half-dollar), and $1 (dollar) amounts with the last two rarely used.

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"There is some magic in wealth, which can thus make persons pay their court to it, when it does not even benefit themselves. How strange it is, that a fool or knave, with riches, should be treated with more respect by the world, than a good man, or a wise man in poverty!" - Ann Radcliffe

"Endless money forms the sinews of war." – Cicero

"Money is the sinew of love as well as war." - Dr. Thomas Fuller

"The mint makes it first, it is up to you to make it last." - Evan Esar