Money's Influence on             Humanity  

   

   The earliest forms of money were shells and beads used by early societies which existed alongside and gradually replaced a system of exchange based on trade and barter. My research for this inquiry project centered on how the change from trade to using money occurred and why it happened. In order to answer these questions, we must look to the earliest known examples of currency. The earliest predecessor to currency and many societies were shells and beads. These were not used as everyday currency as we think of it today nonetheless but are examples of seemingly worthless objects that were nonetheless highly valued and exchanged as gifts and for useful materials. Examples of this sort of currency are found in Africa, India, and China but most Americans will probably be more familiar with the decorative beads that aboriginal Americans used, called wampum, which were exchanged in a similar capacity.

   In ancient modern day China, shells unique to the Maldives Islands of the Indian Ocean which, being very beautiful, were considered valuable and used as a currency. These shells were exchanged even in areas rather far away from the Indian Ocean like northern modern day China where they were very scarce and not easily acquired. It was here that we see the advent of new currencies using shell shaped beads made from materials like pottery, stone, bone, jade, bronze, and gold. Bronze beads in particular came to be regularly exchanged enough to be considered the world’s first coin.

    These items are not however world’s first true currency as, though they had artificial value and could be exchanged like a currency, they were not used for regular commercial transactions and were not standardized. The first true currency originates from the third millennium BC and can be found in Egypt. Here gold bars were exchanged in large commercial transactions with their value based on their weight. Gold rings were also made to allow for small denominations of currency as they weighed less. Large amounts of gold were stored at temples, which were known for being secure places in which one could keep wealth. In Babylon around the time of Hammurabi, 18th century BC, there are records of loans being made by the priests of the temple, thus functioning as the world’s first bank.

   The earliest known coins in Europe came from the city of Ephesus in Ionia (in western Turkey) around 650 BC. The metal used in the coins is electrum which is a natural alloy of gold and silver found locally in the area. The coins were bean shaped and had a distinguishing mark on one side such as the image of a lion. Shi Huangdi, the first emperor of China, introduces the more well-known round coin in the late 3rd century BC. Cast in bronze rather than struck, they have a square hole in the middle which would become a characteristic of far eastern coins for the next two millennia. China would also develop paper currency which, despite its rocky start, is the basic form of currency that we know today.