Both notes and coins are known as token money because the material in them is worth far less than the value stated on them. The quantities issued are controlled by the R. I, notes and coins are legal tender— that is, money which the law requires people throughout the country to accept as a means of payment.
Thus, a shopkeeper may refuse a cheque but cannot refuse notes in payment for goods on display. Coins are legal tender up to limited amounts. Larger amounts of small change may, of course, be accepted but the law gives the right to refuse. Bank Deposits: Though not legal tender, cheques based on bank deposits are accepted throughout the community as the normal means of making large payments.
Bank deposits, therefore, come within the definition of money. A cheque is an instruction to a bank to pay a stated sum of money out of a deposit in cash or transfer it into the deposit of another person named on the cheque. The cheque itself is not money but represents a sum of money in a bank deposit and is a means by which ownership of that money is transferred from one depositor to another.
In an advanced society with a developed banking system, bank deposits are the main form of money. They are convenient to hold arid, through cheques, can be easily and safely transferred in quantities of any size.
It is common practice for a cheque to be crossed with two parallel lines at the top left corner requiring it to be paid into a bank account and not cashed directly over the counter.
Qualities of Money: In order to carry out the functions outlined above, whatever serves as money must possess certain qualities? These are the following: 1. Portability: Money must be portable or easily carried about. It would be very difficult to use anything large and bulky as money.
Divisibility: Money must be able to be divided into smaller amounts to enable small purchases to take place. The use of large goods or animals would not facilitate divisibility. Acceptability: Money must be accepted as having some value. Before that time, it is assumed that a system of bartering was likely used. Bartering is a direct trade of goods and services - I'll give you a stone axe if you help me kill a mammoth - but such arrangements take time. You have to find someone who thinks an axe is a fair trade for having to face the foot tusks on a beast that doesn't take kindly to being hunted.
If that didn't work, you would have to alter the deal until someone agreed to the terms. One of the great achievements of money was increasing the speed at which business, whether mammoth slaying or monument building, could be done. Slowly, a type of prehistoric currency involving easily traded goods like animal skins, salt and weapons developed over the centuries.
These traded goods served as the medium of exchange even though the unit values were still negotiable. This system of barter and trade spread across the world, and it still survives today on some parts of the globe. Asian Cutlery Sometime around B. Nobody wants to reach into their pocket and impale their hand on a sharp arrow so, over time, these tiny daggers, spades and hoes were abandoned for the less prickly shape of a circle, which became some of the first coins.
Token coins are coins in which the face value of the coin is far much higher that the value of the metal used to mint it. Such coins are cheaper to produce and are durable. Paper money The use of full-bodied coins as money was fraught with risks. The coins could be easily lost. Paper money was initially introduced by goldsmiths however banks developed and took up the responsibility of issuing paper money.
With the expansion and development of trade and the need for more paper money, governments took up the responsibility of issuing paper money. Paper money issuance is called fiduciary issue. Legal tender is an attribute that is granted to money by law for it to be acceptable in the exchange of goods and services in a given jurisdiction. Legal tender can be convertible or nonconvertible. When it is nonconvertible it implies that one can exchange it for foreign currency on demand. Because these objects are often exchanged ceremonially during some given social events, many ethnologists have compared them to a reduced or primitive, specific, form of metal currency, which was in force among all the present-day civilized peoples until some time ago until it was definitely substituted by the so-called bank notes.
Now, we suggest a different interpretation: these specific objects seem to have two completely separated functions. The first one, fundamentally social, creative and sustaining social relations, is the one which develops through the actual, specific, exchange of these specific objects, in certain, very well specified cases, of great social importance. The second, exclusively utilitarian one, is that of being used as standards of value measurement in the exchange of the ordinary utilitarian goods.
In this second case, the objects are never really exchanged, but they are only an abstract reference to calculate equivalences among other goods, valued in them: this is what we have called a monetary unit. The values in monetary units attributed to goods produced or producing goods are the market values of such goods. Most of the times, the ethnologic documentation we have is not enough to confirm or to invalidate this interpretation with an empiric basis. This is due mainly to the prejudices of ethnologists, who direct their observation towards some given realities, neglecting some more significant ones for an overall study of the primitive utilitarianism.
In spite of this difficulty, we have chosen a couple of examples which seem to go in the given direction. First example: in the Admiralty Islands Malaysia , the natives can evaluate all their goods in shells and dogs teeth. In ordinary exchanges, however, the shells and dogs teeth are almost never used, while their use is compulsory in ritual exchanges. Second example: among the Lele of Kasai Congo , the raffia fabric is the wedding heritage which any man about to marry must have.
But, at the same time, the goods which are the object of non-ritual exchange may all be evaluated in raffia fabric units: in these exchanges, then, the raffia fabric does not appear as a real merchandise, but only as a value standard. In these peoples, then, we are bound to talk about the existence of abstract monetary units, and not of real monetary objects as some ethnologists do.
In order to make this interpretation extensive to all the neolithic peoples who know some sort of monetary reality, it would be necessary to carry out thorough studies which do not exist yet -or, at least, are not within our reach-. The monetary systems of the rising civilizations. Archaeology has shown us in the last decades how the first civilizations rose in Southwestern Asia, the Indus Valley, Egypt, and later the Aegean Sea, the Valley of the Danube These civilizations were based on an advanced neolithic utilitarianism, with extensive corn cultivation and with a well-established work division.
With them writing appears; but writing is only a consequence of another social practice we are very interested in, that is the use of monetary instruments. Probably these societies had, from the beginning of their reaching the neolithic age, well-defined monetary units. For example, in Mesopotamia the monetary unit was rye, and later also silver.
This does not mean, as we have just said, that in the specific exchanges goods were bartered against rye or silver , but only that rye and silver were the value standards with respect to which the value of each one and all the goods could be expressed. Now at this moment -which coincides with the beginning of the Bronze Age, during the the 4th millennium b. Trade is carried over very large distances. This sort of economic explosion is coupled to the appearance of very strange artifacts, which have been recently studied and interpreted.
We are talking about the bullae, which are a sort of clay bags, more or less spherical, full of different clay shapes, and sealed on the outside. These bullae are the heirs of a complex accounting system 6 based on tokens -apparently representing different goods and different numerical values- which goes as far back as the beginning of the Neolithic, towards the 9th millennium b.
These tokens are of the same sort as the ones which are found, at a later time, inside the bullae. But the introduction of bullae means an important quality change. We may interpret the fact that the tokens were kept together, closed inside a clay envelope, as an indication that these tokens represented a given transaction carried out between two people.
The fact that many of the bullae discovered up to now carry two different seals gives support to this interpretation. If this were so, the bullae would be what we have called a monetary instrument-document 7 : a document acting as a go-between and recording an elementary trade operation which has been carried out.
Probably, in addition, these bullae could be intercompensated, because we know that the Mesopotamian temples already then carried out complex banking and administration functions. The bullae, then, were what we would call today an agreed voucher, an accepted invoice and a cheque cashed written out by the customer. Later, the bullae became the famous cuneiform tablets: the tokens sealed inside the envelope started to be graphically represented on the outside.
This is the most probable origin of the cuneiform writing. Emergence of the specific metal currency. From a given historical moment onwards -which we probably may locate in the 3rd millennium b. The primitive monetary instruments which we have just described in the previous paragraph, had a radically abstract-auxiliary nature, had no intrinsic value.
Their operation did not imply the use of any specific object, but only the reference to an abstract monetary unit. Even if the abstract monetary unit were symbolized by a given specific merchandise some shells, a sack of rye, an ox In Mesopotamia, however, probably since the middle of the 3rd millennium b.Money Vs. Happiness Is it possible for money to buy happiness in life? Is work worth every second that you cannot spend with family? Should lives be wasted on material items when there is much more to life, such as faith, love, family, and health?
Greek and Roman financiers: from the 4th century BC Banking activities in Greece are more varied and sophisticated than in any previous society. Palmstruch's notes the earliest to survive dates from a issue are impressive-looking pieces of printed paper with eight hand-written signatures on each. First example: in the Admiralty Islands Malaysia , the natives can evaluate all their goods in shells and dogs teeth.
The effect was worsened with Asian traders not sharing the European appreciation of gold altogether — gold left Asia and silver left Europe in quantities European observers like Isaac Newton , Master of the Royal Mint observed with unease. It is interesting that when someone says, "as rich as Croesus", they are referring to the last Lydian king who minted the first gold coin. A store of value-Since money is not perishable producers of perishable goods e. When the Restriction Period ends, in , the British government takes the precaution of introducing the gold standard.