Rory Brown Shares The History Of Money And How The Lydian Kingdom Started It All
- Oct 5, 2023
- 3 min read
Money has come a long way, undergoing many different iterations in different parts of the world over thousands of years. As Rory Brown, the managing partner of Nicklaus Brown & Co., explains, various civilizations created and used money in their own unique ways.
The history of money is a long and twisting tale. Some similarities exist between the "money of old" and what we know today, while plenty of odd tales have no relevance today.
Below is a short history of money around the world.
The Evolution of Coins and Paper Money
Coins were first created and used by the Lydian Empire, says Rory Brown, a Western Asia Minor civilization that started around 1200 BC. King Alyattes minted the Stater as the first coin in the world in the 7th Century BC. It had a government seal and used standardized denominations and weights.
The first paper money originated in China in the 9th Century. China's government started to print paper certificates in large blocks around that time, which allowed merchants not to have to carry huge bags of coins as they traveled for trade.
The certificates ultimately morphed into their own currency form and were named "flying cash" since they were susceptible to blowing away.
The Odd Forms of Money
Money wasn't always represented by the familiar forms of coins and paper. At different points in time, everything from fish to salt to bones to shells was used as a form of money.
One of the strangest forms came from Yap, an island in Micronesia, which used huge stone disks with a hole in the middle. These stone disks were so large and heavy that people couldn't even carry them. This meant that if you bought something, you had to remember that the disk was owned by someone else.
Bills as Wallpaper
The Germans did something very strange with their paper money -- they used it as wallpaper. Why would they do this? Because it essentially became worthless following World War I.
The Weimar Republic's economy was then destroyed by hyperinflation following the Great War, which rendered their paper currency worthless. Instead of throwing out their Papiermarks, though, Germans used them to decorate walls.
Europe Lagged in Paper Currency Adoption
About a thousand years ago, paper currency was used extensively in parts of the world. Marco Polo was so enamored by it while traveling to China that he wrote extensively about it in 1271.
Despite this, many countries in Europe held off on adopting paper currencies until almost 1700.
War Has Another Effect on Currency
Rory Brown says that war had a major effect on paper currency outside Germany, too. In fact, the United States has paper currency because of a war.
Prior to the Revolutionary War, coins were the form of currency used in America. The colonial governments printed paper money to finance their war efforts, known as Continentals. When the war ended, though, Continentals no longer had any value.
Another big war in U.S. history brought back paper currency -- and this time, it stuck around.
Currency that could be easily minted fast was necessary during the Civil War. The government's decision to back this paper currency with gold is what ultimately led to its holding value even after the war ended.
About Rory Brown
Rory Brown is a Managing Partner at Nicklaus Brown & Company. He is the Executive Chair of Goods and Services and Blueriver. Providing excellence in the industry for over two decades, Mr. Brown was chosen as the Financial Services Entrepreneur of the Year by Ernst & Young and he has founded several companies in the Inc. 500
