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I am an ardent blogger and a web enthusiast. My blogs include varied topics from the picturesque details of my travelogue to theology and worldly facts. My passions are reading English and Tamil classics, Management Topics, Playing Tennis and taking long walks. I live with my wife in Bangalore. Visit regularly my children in Michigan and Colorado to spend time with them and three grandsons. Please brief your opinions there in when you read my blog :-

Monday, June 29, 2009

' History & Significance of Money ' !

Money is used as a medium of account, a measure of value, a standard for payment and a store of value. The money as a means of exchange should be such it can not be faked,easy to carry and be divisible into small units. Barter system was in vogue before Money became the medium of exchange.

Coin Money:-

7th Century BC was the time when coin money came into existence. Sumerians cut cone shaped shells into sections of different size and used them for purchases. The shell of the cowrie species became widely used 5000 years ago in the Middle East.

In ancient Rome, soldiers were paid in salt and our modern word ' salary ' is derived from the Latin word' salarium' which means ' salt money ' !! Since ancient times, many unusual things have been used as money. Soap, cocoa beans, drums, copper rod, teeth of whales, piece of cloth were used besides 'tea money', 'tobacco money', 'bronze money'. The heaviest coin was a 20 kg Swedish ten daler by which two cows could be bought.

Asia Minor used 'Electrum', an alloy of gold and silver with traces of copper, but it was difficult to place an exact value for this coin money. Silver rods were used in Mesopotamia as money. Bullion is gold, silver or platinum in ingot or bar forms which were used as money without reckoning to the vale of metal used there in. The ancient coins used as money can be seen in select Museums only today.

'Cuneus' is the Latin word for coins . A person who had no wealth was called ' impecunious'. In other words, the description meant that he had no coins.

Britain issued a coin to mark the first total solar eclipse of the Sun over 70 years, picturing Queen Elizabeth on one side and two birds watching the eclipse on the front side. 13th & 14th Centuries, Gold came back to use from Florence with the florin. In those days silver penny was the basic unit and 240 pennies made a pound of silver or 240 sterling. Coin made of silver was called a sterling. So this unit was called a pound sterling in U.K.

China popularized Coin Tree and Coin Sword in 18th century, which were beautiful to look at and helped in warding off evils.
Picture of a Coin Tree & Coin Sword

This practice existed in Ancient India also.

The coins in India of old years were truly fascinating in their diversity for they stood for different kingdoms, dynasties, and cultures. The Gods of Siva, Karthikeya, Budha were depicted on the coins of Gupta Empire. In Godavari regions, the coins showed elephants, lions, bulls. In Vijayanagara, Gold & Silver Coins carried the portrait of Lord Venkateswara of Tirumala-Tirupati.

7 years after India India became Republic, new decimal system was adopted -the Anna was replaced by paise, the British monarch portrait was replaced by the picture of lions in the Asoka Pillar and sheaf of corn replaced the tiger.

The New Ten Rupee Coin has released in June 2009 a new first ever bimetallic ten rupee Coin 27mm dia, weight 8grams.

Paper Money:-

China has the distinction to make use of paper money first. One of the most popular currency today is the dollar that derives the name from Thaler, a German Silver Coin.

The Rupee in India was introduced in 1835 by the British. The princely States in India used paper money in the name of 'rupiya' which became Rupee in the British rule. In fact Sher Shah introduced the Indian Currency or one rupee in the 16th century. After independence, India introduced the Bank Notes in 1949 - the first bank note was one rupee. The actual one rupee note carried the signature of the Secretary, Govt. of India, Dept. of Finance. But today the notes are issued by RBI signed by its Governor carrying a promise to pay the bearer the value of the money of the currency he possesses. They are not real paper money in the strict sense.

The largest paper note was issued in China 33 by 23 cms and was shaped like a towel.The highest value of the currency in circulation was the US$10,000. The smallest paper money in use today is Hon Kong cent. Horse Blanket is the Russian Ruble Note and called so due to its vast size.


Money was deposited in Temples for safety, then with money lenders. Banks developed when money became important for trade and to handle it wisely and to offer security to the public. Swiss Banks are famous for their stability and privacy and protection they give to their customers. In some accounts the depositors are known by a number and only the senior most official of the govt. knew the details of such accounts. Swiss Frank are the most secure notes for they have 18 security features in each of them. Variable ink that changes colour as the light hits it, glittering digits, a water mark register, and a water mark portrait are some of the salient security features.

Karnataka is known as the cradle of Banking in India. Seven leading Banks Vijaya Bank, Corporation Bank, Karnataka Bank, Canara Bank, Syndicate Bank, Mysore Bank ,etc. have their origin in Karnataka.

RBI plays an important role like issue of notes, transact Govt. business, controlling the volume of credit created by banks in India, in charge if prevailing bank rates and exchange rates and thus in country's development and growth.

Public Debt is what the Govt. borrows from public for ongoing plans and for development and provide services to the citizens. Taxes alone can not meet all the money the Govt. needs.

Revolutionary Trends:-

Personal banking, Credit Cards, Debit Cards, Net Banking, Electronic Clearing System, EFT, Real Time Gross Settlement System(RTGS) , Phone Banking, ATMs - all these can be termed revolutionary as well as as ingenious modes of the modern business world.

I remember the old economic definition of Money viz
" Money is that which Money does "



Blogger Ajay Natarajan said...

Beautiful article, with pictures and words well laced. Lots of very interesting facts. Where did you get all the pictures?

July 12, 2009 at 10:25 AM  
Blogger Anand Bhairat said...

The article was very informative and useful.

I especially liked the pictures in particular.

It was nice to see new 10 rupee coins.

Anand Bhairat
Way2goals software India Private Limited

September 25, 2009 at 9:25 PM  

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