What is money?

A wide variety of forms of money are used in the world today. Each of them has a different history.

Banks and governments store their reserves as ingots of gold. Loose change jingles in our pockets and purses. Banknotes and cheque books provide a light-weight, convenient alternative spending-power. Increasingly, however, we are entering a 'cashless society' where plastic cards provide instant credit and money can be moved between bank accounts over the Internet.

What makes something valuable?

Why are certain objects valued and used as money? What makes them suitable for this purpose? We can never answer these questions completely. In some cases it may be a social reason connected with a particular society's idea of attractiveness and value. For others there may a religious or philosophical reason behind the form chosen.

In most cases, the object valued is limited in its supply, and the value might be linked to the difficulty in obtaining or making the object.

Some forms of money have been valued for their beauty. Examples include those made from precious metals, shells and feathers. Feathers were used as money on some of the islands in the Pacific Ocean, and certain colours were especially popular. The feathers were sometimes sewn into rolls which could be used to make important payments. These were especially valued as they could be used in personal adornment and the display of wealth.

Shells have been used as currency in many places around the world. Cowrie shells were first used in China, where records of their use as gifts date from the thirteenth century BC.  The use of cowries spread to other areas and this included their movement along Arab trade routes into parts of Africa, where they were often used for decoration.

Shells were also valued in other parts of the world including North America and some of the islands of the Pacific Ocean.

Practicalities

There are also practical reasons for money taking particular forms. Cowrie shells are portable and durable, just as metal coins are. Animal skins used in trade could be worn for warmth. Food has always been valuable as we need it to survive.

Value is also linked to availability. Feathers and skins could only be obtained through hunting, making their collection difficult. Precious metals were hard to find and difficult to extract. Cloth has also been used in many places around the world as money, with the intricacies of production often having an effect on the its value.

On the Island of Yap, large stones were brought from an island many miles away, which was very dangerous for the people manning the boats. They were greatly valued, but would change ownership often without moving from where they stood.

Paper money was first used in China as the ‘cash’ coins in circulation were too heavy for large transactions, especially when trade was conducted over long distances. The regional differences in the use of money also caused problems for traders. The earliest surviving note is the great Ming circulating treasure note, bearing an image of coins to indicate its value.

Metal shapes

Metal currency has not always taken the shape of small round coins. Although today coins essentially look the same across most of the world, they developed differently in the east and the west. In China the earliest coins were made in the shape of valuable tools, including knives and spades.

Different shapes were made in different areas.

By 210 BC, when China was united under the First Emperor, Qin Shi Huangdi, a regular coinage was enforced. From this point, Chinese coins were all one shape, a circular coin with a square hole in the centre. Chinese ideas spread and similarly shaped coins began to be used in Japan, Vietnam, Korea and Uzbekistan. This shape continued to be used in China until the early twentieth century.

The shape of the Chinese ‘cash’ coin was practical as the coins were low value and could be strung together for making payments. There is also a much more symbolic reason for the shape.

In ancient times, the Chinese believed that the earth was square and heaven was domed. The emperor was thought of as an agent who could communicate between heaven and earth. By making the coins this shape, the emperor was reinforcing his place in the system.

It was not just in China that money was made in shapes that seem usual to us today. Kissi pennies were used in Liberia and Sierra Leone in Africa until the early twentieth century. They seem to be an extraordinary shape, but they are, in many ways, very practical. The shape is made through twisting, hammering, working into a blade and drawing the metal into points. If the iron can be worked in these four ways, it is proved to be good quality.

More information about objects featured here (from top)

Marine Midland Bank credit card, United States of America
Feather money (tevau), Solomon Islands
Cowrie shells, China
Raffia cloth currency, Belgian Congo
Great Ming Circulating Treasure Note, China
Bronze hollow handle spade money, China
Wuzhu coin issued by Emperor Xuandi, China
String of 800 cash, China