History of Money

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History of money
The history of money spans thousands of years. Numismatics is the scientific study of money and its history in all its varied forms.
Many items have been used as commodity money such as natural scarce precious metals, cowry shells, barley, beads etc., as well as many other things that are thought of as having value.
Modern money (and most ancient money) is essentially a token — in other words, an abstraction. Paper currency is perhaps the most common type of physical money today. However, objects of gold or silver present many of money's essential properties.
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Non-monetary exchange: barter, gift, and debt
Contrary to popular conception, there is no evidence of a society or economy that relied primarily on barter.[1] Instead, non-monetary societies operated largely along the principles of gift economics[1] and debt.[2][3] When barter did in fact occur, it was usually between either complete strangers or would-be enemies.[4]
With barter, an individual possessing a material object of value, such as a measure of grain, could directly exchange that object for another object perceived to have equivalent value, such as a small animal, a clay pot or a tool. The capacity to carry out transactions is severely limited since it depends on a coincidence of wants. The seller of food grain has to find a buyer who wants to buy grain and who also could offer in return something the seller wants to buy. There is no common medium of exchange into which both seller and buyer could convert their tradable commodities. There is no standard which could be applied to measure the relative value of various goods and services.
In a gift economy, valuable goods and services are regularly given without any explicit agreement for immediate or future rewards (i.e. there is no formal quid pro quo).[5]Ideally, simultaneous or recurring giving serves to circulate and redistribute valuables within the community.
There are various social theories concerning gift economies. Some consider the gifts to be a form of reciprocal altruism. Another interpretation is that implicit "I owe you" debt[2] and social status are awarded in return for the 'gifts'.[6] Consider for example, the sharing of food in some hunter-gatherer societies, where food-sharing is a safeguard against the failure of any individual's daily foraging. This custom may reflect altruism, it may be a form of informal insurance, or may bring with it social status or other benefits.
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The emergence of money
In his book "Debt: the first 5000 years"[7] anthropologist David Graeber refutes the suggestion that money was invented to replace barter. The problem with this version of history he suggests, is the lack of any supporting evidence. His research indicates 'gift economies' were common, at least the beginnings of the first agrarian societies, when humans used elaborate credit systems based on gift economy to buy and sell goods prior to the invention of formal money. Since invading soldiers are not generally local, known and trustworthy people, money may have been invented as an alternative to economic tool to discourage or deter armed robbery and looting.
The Mesopotamian civilization developed a large scale economy based on commodity money. The Babylonians and their neighboring city states later developed the earliest system of economics as we think of it today, in terms of rules on debt,[2] legal contracts and law codes relating to business practices and private property. Money was not only an emergence, it was a necessity.[8][9]
The Code of Hammurabi, the best preserved ancient law code, was created ca. 1760 BC (middle chronology) in ancient Babylon. It was enacted by the sixth Babylonian king, Hammurabi. Earlier collections of laws include the code of Ur-Nammu, king of Ur (ca. 2050 BC), the Code of Eshnunna (ca. 1930 BC) and the code of Lipit-Ishtar of Isin (ca. 1870 BC).[10] These law codes formalized the role of money in civil society. They set amounts of interest on debt... fines for 'wrong doing'... and compensation in money for various infractions of formalized law.
The shekel was an ancient unit of both weight and currency. It was first used in Mesopotamia around 3000 BC to define a specific weight of barley and equivalent amounts of materials such as silver,bronze and copper. The use of a single unit to define both mass and currency was a similar concept to the British pound, which was originally defined as a one pound mass of silver.
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Commodity money

1742 drawing of shells of the money cowry, Cypraea moneta
Main article: Commodity money
Bartering has several problems, most notably that it requires a 'coincidence of wants'. For example, if a wheat farmer needs what a fruit farmer produces, a direct swap is impossible as seasonal fruit would spoil before the grain harvest. A solution is to trade fruit for wheat indirectly through a third, "intermediate",commodity: the fruit is exchanged for the intermediate commodity when the fruit ripens. If this intermediate commodity doesn't perish and is reliably indemand throughout the year (e.g. copper, gold, or wine) then it can be exchanged for wheat after the harvest. The function of the intermediate commodity as a store-of-value can be standardized into a widespread commodity money, reducing the coincidence of wants problem. By overcoming the limitations of simple barter, a commodity money makes the market in all other commodities more liquid.
Many cultures around the world eventually developed the use of commodity money. Ancient China, Africa, and India used cowry shells. Trade in Japan's feudal system was based on the koku – a unit of rice. The shekel was an ancient unit of weight and currency. The first usage of the term came from Mesopotamia circa 3000 BC and referred to a specific weight of barley, which related other values in a metric such as silver, bronze, copper etc. A barley/shekel was originally both a unit of currency and a unit of weight.[11]
Wherever trade is common, barter systems usually lead quite rapidly to several key goods being imbued with monetary properties[In the early British colony of New South Wales, rumemerged quite soon after settlement as the most monetary of goods. When a nation is without a currency it commonly adopts a foreign currency. In prisons where conventional money is prohibited, it is quite common for cigarettes to take on a monetary quality, and throughout history, gold has taken on this unofficial monetary function.
The Evolution Of Money
In separate places, under different cultures, all over the world, the concept of a "medium of exchange" grew. People noticed that some goods were easier to trade than others. And people also noticed that these "more tradeable goods" had similar properties: * They were durable * They were easily divisible into larger or smaller amounts. * They were comparatively scarce, procuring them required effort. * They were "homogeneous". Every item of the commodity was exactly like every other item. * They were convenient. It was easy to carry enough around to made trades for other commodities.
Over time, a shorter and shorter list of commodities passed all these tests. These select commodities began to exhibit a sixth property, all important in the evolution of money.
This short list of commodities (most of them metals) had one thing in common with all other commodities. They were useful and commanded an exchange value in their own right. But because they were easier to trade than any other goods, they came to be perceived as having a value over and above their basic utility. They came to have a value as a "most (easily) tradeable good". They came to have a value as a MEDIUM OF EXCHANGE.
Once this value became widely recognized, the commodity in question was no longer "consumed" for any but the most vital purposes. Instead, it was used in exchange. It had become a MONEY.
History of Philippine Money

Philippine money–multi-colored threads woven into the fabric of our social, political and economic life. From its early bead-like form to the paper notes and coins that we know today, our money has been a constant reminder of our journey through centuries as a people relating with one another and with other peoples of the world.

Pre-Hispanic EraTrade among the early Filipinos and with traders from the neighboring islands was conducted through barter. The inconvenience of barter later led to the use of some objects as medium of exchange. Gold, which was plentiful in many parts of the islands, invariably found its way into these objects that included the piloncitos, small bead-likeb gold bits considered by the local numismatists as the earliest coin of the ancient Filipinos, and gold barter rings.

Spanish Era (1521-1897)
Three hundred years of Spanish rule left many indelible imprints on Philippine numismatics. At the end of the Spanish regime, Philippine money was a multiplicity of currencies that included Mexican pesos, Alfonsino pesos and copper coins of other currencies.
The cobs or macuquinas of colonial mints were the earliest coins brought in by the galleons from Mexico and other Spanish colonies. The silver dos mundos or pillar dollar is considered one of the world’s most beautiful coins. The barilla, a crude bronze or copper coin worth about one centavo, was the first coin struck in the country.
Coins from other Spanish colonies also reached the Philippines and were counterstamped. Gold coins with the portrait of Queen Isabela were minted in Manila. Silver pesos with the profile of young Alfonso XIII were the last coins minted in Spain. The pesos fuertes, issued by the country’s first bank, the El Banco Espanol Filipino de Isabel II, were the first paper money circulated in the country.

Revolutionary Period (1898-1899)
Asserting its independence, the Philippine Republic of 1898 under General Emilio Aguinaldo issued its own coins and paper currency backed by the country’s natural resources.

One peso and five peso notes printed as Republika Filipina Papel Moneda de Un Peso and Cinco Pesos were freely circulated. 2 centimos de peso copper were also issued in 1899.

The American Period (1900-1941)
The Americans instituted a monetary system for the Philippine based on gold and pegged the Philippine peso to the American dollar at the ratio of 2:1. The US Congress approved the Coinage Act for the Philippines in 1903.

The coins issued under the system bore the designs of Filipino engraver and artist, Melecio Figueroa. Coins in denomination of one-half centavo to one peso were minted. The renaming of El Banco Espanol Filipino to Bank of the Philippine Islands in 1912 paved the way for the use of English from Spanish in all notes and coins issued up to 1933. Beginning May 1918, treasury certificates replaced the silver certificates series, and a one-peso note was added.

The Japanese Occupation (1942-1945)

The outbreak of World War II caused serious disturbances in the Philippine monetary system. Two kinds of notes circulated in the country during this period. The Japanese Occupation Forces issued war notes in big denominations. Provinces and municipalities, on the other hand, issued their own guerrilla notes or resistance currencies, most of which were sanctioned by the Philippine government in-exile, and partially redeemed after the war.

The Philippine Republic

A nation in command of its destiny is the message reflected in the evolution of Philippine money under the Philippine Republic. Having gained independence from the United States following the end of World War II, the country used as currency old treasury certificates overprinted with the word “Victory”.

With the establishment of the Central Bank of the Philippines in 1949, the first currencies issued were the English series notes printed by the Thomas de la Rue & Co., Ltd. in England and the coins minted at the US Bureau of Mint. The Filipinazation of the Republic coins and paper money began in the late 60’s and is carried through to the present. In the 70’s, the Ang Bagong Lipunan (ABL) series notes were circulated, which were printed at the Security Printing Plant starting 1978. A new wave of change swept through the Philippine coinage system with the flora and fauna coins initially issued in 1983. These series featured national heroes and species of flora and fauna. The new design series of banknotes issued in 1985 replaced the ABL series. Ten years later, a new set of coins and notes were issued carrying the logo of the Bangko Sentral ng Pilipinas.
Banknotes
(Click on the notes for a larger image.)
5 Pesos
The 5 peso note depicts Emilio Aguinaldo, a Philippine resistance hero who first fought the Spanish, and later the American occupiers of the country. The first president of the Philippines. On the reverse you can see the proclamation of Philippine independence, from the balcony of Aguinaldo's house. You won't find this note much in circulation today, as it has been replaced by a 5 peso coin. 10 Pesos
The 10 peso note depicts Apolinario Mabini and Andres Bonifacio. You can also get across an older version with only Mabini. On the reverse is the church of Barasoain.

20 Pesos
The 20 peso note depicts Manuel L. Quezon. On the reverse you can see the Presidential Palace, the Malakañang. 50 Pesos
The 50 peso note depicts Sergio Osmeña. On the reverse you can see the Executive House. Be careful not to confuse it with the 20 peso note, as the color is nearly the same. 100 Pesos
The 100 peso note depicts Manuel A. Roxas. On the reverse you can see the buildings of the Philippine National Bank. 200 Pesos
Introduced in 2002, the 200 peso note commemorates the the June 12 Independence Day, and the EDSA II uprising. It depicts president Diosdado Macapagal, the father of the current president, Gloria Macapagal Arroyo, who is also depicted on the back of the note. 500 Pesos
The 500 peso note depicts Beningno S. Aquino Jr. 1000 Pesos
The 1000 peso note depicts Jose Abad Santos, Vincent Lim, and Josefa Llanes Escoda. On the reverse you can see the rice terasses in Banawe, and some tribal artifacts. You won't come across this note very often, and you shouldn't expect your taxi driver to have change from it.