• Submitted By: fflower
  • Date Submitted: 10/06/2009 7:04 AM
  • Category: Business
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University of International Business

Hand out #1

University of Intemational Business Subject: Money, Credit, Banking

Lecture theme: History and Origin of Money and Banking Senior Professor: A.M. Sohrabian, M.Sc.

Faculty of Finance & IT Department of Finance & Credit Fall Semester

Academic Year: 2009-2010

There are numerous myths about the origins of money. The concept of money is often confused with coinage. Coins are a relatively modern form of money. Their first appearance was probably among the Lydians, in Asia Minor in the 7th century BC. And whether these coins were used as money in the modem sense has also been questioned.

To determine the earliest use of money, we need to define what we mean by money. But with any reasonable definition the first use of money is as old as human civilization. The early Persians deposited their grain in state or church grainaries. The receipts of deposit were then used as methods of payment in the economies. Thus, banks were invented before coins. Ancient Egypt had a similar system but instead of receipts they used orders of withdrawal - therefore, making their system very close to that of modern checks. As a matter of fact, during Alexander the great's period, the grainaries were linked together, making checks in the 3rd century BC more convenient than British checks in the 1980s.

However, money is older than written history. Recent anthropological and linguistic research indicates that not only is money very old, but it's origin has little to do with trading, thus contradicting another common myth. Rather, money was first used in a social setting. Probably at first as a method of punishment. Dowries were probably also an early use. These early origins have left their traces in our language - as in "pay one's dues".

Early stone age man began the use of precious metals as money. Until the invention of coins, metals were weighed to determine their value. Counting is of course more...