Money, Money, Money.....MONEY!

In our class discussion today when printed knowledge was introduced we discussed a lot of aspects of it. I had never heard the background concerning how the first printing press started or any of that information so there was lots to be gleaned by me.

One thing that was raised which sparked particular interest and curiosity was the question about printed money and when about it originated and how it came to be. I don't think i'm too abnormal to be fascinated by money and have an affinity for it, so that's why opted to learn a bit more about it's background and history. I can tell you now, it definitely didn't begin like I had imagined..




This topic is vast and has as much research as much as you could possibly want, or at least it seemed like it. So I toyed with the idea of giving a general broad overview or if I wanted to focus it in on one specific culture and how they adopted the way of printed money. I have decided to go with a more broader approach with some specific examples of varying cultures.

If one was to live prior to the time of print and printed money nearly all of your transactions and purchases would have been done through bartering (which still occurs today) but you would use left over goods and commodities to do such. These excess goods were stored at home, community warehouses, or other public places and this is actually where print in general became necessary because there was a need of documentation of who had what stuff stored in the facility.

I had imagined that when they introduced printed money that it would have been adopted by which ever country and they would have taken it and ran with it, but that wasn't the case at all. It turns out that the idea of printed money failed miserably for quite some time.
Printed money started out more as a receipt for goods than an actual value of money or how we know it to be used today.

From what I read, China was one of the first civilizations to try this out and the emperor granted 16 merchants to make printed money (or also often called "banknotes") which they could use amongst each other. So the Issuer would be in charge of producing his own banknote or paper and the idea was that one could print something along the lines of saying "Upon presenting this note to the issuer, you will receive _________ (whatever amount they decided usually in a coin value or whatever currency was currently being used)".

One of the earliest banknote discovered This comes from China and the symbols on it
represent the coins that the note is worth

The problem with this was that when it came time for the individual or whoever to redeem the note, often times the issuer was not able to pay in full what was expected to be redeemed. This problem didn't only exist in China either. It was widespread among europe as well. The problems came from various aspects, there weren't many laws enforced by the government as to who could print money and so counterfeiting and also just any John Doe deciding to print his own money was a normal occurrence. Anyone that had access to a printing press could participate in the fun! This resulted in the face value of printed money almost meaningless, it would seem as though it would be like if everyone went home and blew off the dust of their monopoly board games and pulled out the printed money inside and that was the currency in which they wanted to use. Obviously that would be meaningless to nearly everyone and there would be such an abundance that it's value would be obsolete.

During this time it was tricky for a consumer or nearly everyone I suppose because it was extremely hard for one to know whether the money that they were received was real and then on top of that, whether the issuer was actually reliable and would they even be able to redeem the note and get full value. Values of printed money was often determined by the reputation of the issuer so it was rare that a  note would circulate and maintain face value when being traded. Sometimes there was a discount off face value and even times when it would be rejected completely when it came to trading or circulating it.

So you might be wondering "how did it ever work than??" Well you may or may not be surprised that one of the first countries to successfully use printed money and have it be credible and functioning was the country of Sweden in europe. It was very well structured and that was the key. The monetary authorities issued banknotes with no fewer  than 16 certifying endorsements from prominent and trustworthy officials-all signed individually by hand! This was also backed by a guarantee from the government to redeem the banknotes in specie. This was an immediate success  as it replaced the need to carry large, heavy, easily stolen quantities of Silver or Gold.

Swedish Banknote/Money from 1661

So most of the printed money was fairly crude, it wasn't until more structure came into play from the government with laws and regulations that money started appearing pristine and crisp as it does today. For some, using crude materials was actually a tactic because the issuer would have hopes that if he printed on poor quality paper that it would disintegrate or become illegible before anyone would try to redeem it (extremely shady!).

We sure have come a long way since the early times of printed money and i'm grateful that I have the assurance to know that the printed money in my wallet is worth what it says it's worth and it received at face value basically anywhere I go.
Just for fun, I'll post the printed money that i'm most used to.

Canadian Currency