Untitled Document
How
Did People Buy Goods a Long Time Ago?
 A
long time ago, people didn't have any coins or paper money. So they couldn't
buy goods from other people with
money. They used barter. Barter is the exchange of a good or service
for another good or service. For example, if you want
to buy bananas, you can ask someone who has bananas to trade a pound of apples you have
for a pound of bananas. This kind of exchange started at the beginning of humankind and is still used today. From 9000-6000
B.C., livestock was often used as a unit of exchange. Later, people used crops for barter. Also, at
about 1200 B.C., people used shells as money in China.
Living without Money Was Hard!
Bartering was useful, but there were problems.
Sometimes> people couldn't
agree what something was
worth in exchange. And sometimes
they didn't want what the other people had. To solve those problems,
people developed what is called
"commodity money."
In the past, salt, tea, tobacco, cattle and seeds were commodities, so
they were once used as money. However,
using commodities as money had other problems. Carrying bags of salt and
other commodities was hard. Also, commodities were difficult to store.
The Birth of Coins
 In
1000 B.C., people in China started using tools made of metal as money. Then, they
created coins made out of base metals. The Chinese
coins had holes in them so that people
could put them together to make a chain.
By 700 B.C., people in Lydia made the first coins in the Western world. Soon, other
countries started making their own series of coins. Unlike Chinese coins, these
new coins were made of bronze, gold and silver. Since coins were given a
certain value, it became easier to compare the cost of goods people wanted.
The Birth of Paper Money
The first paper money was used in China from the 9th Century. European
countries stared using paper money many years later. The Bank of Stockholm
in Sweden made the first banknotes in Europe in 1661. In Portugal,
the first use of paper money as a means of payment was recorded in
the 17th Century. |
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