Coins, cash,
notes, currency… it’s all about the money
Money is what
people use to buy the things they need. A long time ago people didn’t
use money. They would trade something they owned for something they
needed. This was called bartering. Thousands of years
ago, when most people were hunters and farmers bartering worked fine.
For example, a farmer would trade vegetables they grew to a hunter
for meat. Bartering worked for many years until it was no longer convenient
to trade. The solution to this problem was money.
There are
different kinds of money… coins and paper money. After bartering,
metal became the most popular form of money in most of Europe and
Asia. People used gold, silver, and copper as money because they were
pretty and hard to
get.The first metal money was in lumps and bars, and how much it was
worth depended on how much it weighed. This wasn't very convenient,
because if someone only wanted to spend part of their money, they
had to melt down the metal to divide it up. Eventually, people figured
out that they could make metal into pieces of equal size and weight.
They stamped the weight on the pieceof metal, along with some design
that proved it was real,like a picture of the king. These were the
first coins. Today in the United States, coins are made at a place
called the United States Mint.
The problem
with the metal was that it was too heavy. People hated carrying it
around. So they started using paper. The Chinese were the first to
invent paper money, as we know it. People wanted safe places to keep
their coins. People left their money with goldsmiths, who gave them
pieces of paper to show how much gold they had in safekeeping. Eventually,
these goldsmiths became bankers, and the pieces of paper became "bank
notes." People could trade these bank notes for metal coins.
Today in the United States, paper money is made at the Bureau of Printing
and Engraving.
Did you know
that the largest paper bill in circulation today is the $100? Did
you also know that a penny is the most used form of currency? Only
the government can make money. All money gets sent to a place called
the Federal Reserve Bank. Money stored at the Federal Reserve is sent
to financial institutions in your area.
