A Brief History

Before coins, bartering (exchanging one commodity for another) was the original method of commerce. Then, in the 7th century B.C. in Lydia and Ionia in Asia Minor (currently known as Turkey), coins were invented. Coins were the first practical means of financial exchange because they could easily be transferred from person to person. Gold, silver, and bronze became the standard for coins in these ancient times.

The word money originated from the Latin word moneo which means "to warn." Juno, the Roman goddess of warning and guardian of finances, became known as Juno Moneta. Currency comes from the Latin word currens (to run or flow), signifying the constant movement of money from one person to another.

Paper money is any type of currency printed on paper. The world's first paper money is believed to be from China, and attributed to the T'ang Dynasty in 650 A.D. Besides wood pulp and cloth rags, paper money has been made from tree bark, leather, silk cloth, and other materials. The term paper money is used to describe money made from various papers, paper-like substances, and other types of materials used through the ages. Paper money eventually dominated the use of coins because paper was easier and cheaper to make, store, and use. Although most of the world's countries took a long time to accept paper money (18th century paper money experiments led to 19th century acceptance, which led to 20th century dominance of paper money), people eventually loved it because it was less heavy and bulky compared to coins.

In the United States, few coins were in circulation, except for foreign coins that arrived through trade or those that were brought over by the first settlers. Despite a need for coins in Colonial times, Great Britain considered it a royal right and granted franchises sparingly. Much of the Colonial economy, therefore, consisted of bartering for food staples, crops, and goods. Indian wampum or bead money also was used initially for fur trade and later for Colonial purchases.

Copper pieces were produced about 1616, but coinage really began in 1652 when John Hull produced silver threepence, sixpence, and shillings under the General Court of Massachusetts. The coins were marked 1652 to avoid problems with England. After many years of coinage plans by several people, Thomas Jefferson wrote "Notes on Coinage" for the Providence Gazette and Country Journal in 1784, proposing a decimal system of coinage. This early proposal (which included plans for a dollar, half-dollar, fifth of a dollar, tenth of a dollar, one-fifth copper coin, gold ten dollar coin, and copper one-hundredth coin), although revised over the years, was the basis for our system of U.S. coinage.