Chronology of Money Timeline »
Posted By truthiness 1 year ago in Business & Financean extensive chronology of money, it's like deja vu all over again.
Read Full Story at projects.exeter.ac.uk »
1262 Views Share Story 9 Comments Report
RSS Join the Discussion
+ Add CommentComments So Far: 9 (view all)
-
100%
truthiness1 year ago
This comment is below the standard viewing threshold View It »
c. 3000 - c. 2000 BC
Reply
Development of Banking in Mesopotamia
Banking originates in Babylonia out of the activities of temples and palaces which provided safe places for the storage of valuables. Initially deposits of grain are accepted and later other goods including cattle, agricultural implements, and precious metals.
687 BC
Crude "coins" invented in Lydia (according to Herodotus)
Herodotus criticises the gross commercialism of the Lydians who are not only the first people to coin money but also the first to open permanent retail shops.
c. 600 BC
Pythius operates as a merchant banker in Asia Minor
Pythius, who operates throughout western Asia Minor at the beginning of the 5th century BC, is the first banker in the area of Greece and Asia Minor of whom we have records. Many of the early bankers in Greek city states were Greek city states were "metics" or foreign residents.
405 BC
Aristophanes' comedy The Frogs is produced
In the play Aristophanes refers to how the new, inferior coins [copper] have displaced the old superior ones [silver] from circulation - probably the world's first statement of Gresham's law, that bad money drives out good.
390 BC
The Gauls attack Rome
The cackling of geese in the capitol, where the city's reserves of money are kept, alerts the defenders. The grateful Romans build a shrine to Moneta, the goddess of warning, and from Moneta the words money and mint are derived.
218 - 201 BC
2nd Punic War between Rome and Carthage
Because of the enormous demand for coins to pay troops the Roman rulers debase their coinage in purity and weight, causing inflation.
30 BC - 14 AD
Reign of Augustus Caesar
Augustus reforms the Roman monetary and taxation systems issuing new, almost pure gold and silver coins, and new brass and copper ones, and also introduces three new taxes: a general sales tax, a land tax, and a flat-rate poll tax.
c. 30 AD
Christ drives the money changers out of the Temple in Jerusalem
Jesus overturns the money changers' tables (Matthew 21.12). To gentiles the practice of money changers conducting their business in and around temples and other public buildings would have seemed commonplace. The Greek bankers or trapezitai derived their name from their tables just as the English word bank comes from the Italian banca for bench or counter. -
Neutral
truthiness1 year ago
This comment is below the standard viewing threshold View It »
54- 68 AD
Reply
Reign of Nero
Nero slightly debases the gold and silver coinages, a practice copied by some later emperors, starting mild but prolonged inflation.
c. 435
Coins cease to be used in Britain as a medium of exchange
As a result of the Anglo-Saxon invasions Britain, uniquely among the former Roman provinces, ceases to use coins as money for nearly 200 years. When they are re-introduced from the Continent they are used initially for ornament.
928
Statute of Greatley
Among the provisions of this statute is that England should have a single national currency.
1095-1270
The Crusades
The need to transfer large sums of money to finance the Crusades provides a stimulus to the re-emergence of banking in western Europe.
1156
Earliest known foreign exchange contract
Two brothers borrow 115 Genoese pounds and agree to reimburse the bank's agents in Constantinople the sum of 460 bezants one month after their arrival in that city. In the following century the use of such contracts grows rapidly particularly when profits from time differences are seen as not infringing canon laws against usury.
1159
Scutage tax introduced by Henry II in lieu of military service
The annual 40 days service owed to him by his tenants-in-chief and their retainers is commuted into cash payments and with the proceeds he is able to establish a permanent army of mercenaries or professional soldiers as they commonly became known after this time from the solidus or king's shilling that they earn.
1215
The Magna Carta signed
Among its provisions were restrictions on the right of the king to raise taxes without the consent of the Barons.
c. 1455
China abandons paper money
There are no known references to paper money being in circulation after this date. Thus after well over 500 years of experience with paper currencies, during which there have been repeated episodes of inflation and currency reform, China ceases to use paper money.
1498
Vasco da Gama reaches India
The development of new, long-distance trade routes involving new modes of transport as a result of the voyages of Vasco da Gama and Columbus stimulates the development of capital and foreign exchange markets, and the use of bills of exchange. The pooling of resources to reduce the risks of trade with far-away destinations leads to the development of new experimental forms of equity capital from which the joint-stock company eventually evolves.
1511
The Protestant Reformation begins
Although Luther, Calvin and Zwingli condemned traditional forms of usury they weakened the church's power and influence over economic affairs. Later on in England, Henry VIII, after breaking with Rome, legalises the charging of interest and seizes monastic property.
1526
Nicholas Copernicus writes his Treatise on Debasement
With many provinces of his native Poland, and other parts of Europe, suffering from debasement the great astronomer argues that it is the total number of coins in circulation, rather than the weight of metal they contain, that determines the level of prices and the buying power of the currency.
1542-1551
The Great Debasement
Henry VIII debases the coinage of England as a means of raising revenue. In Ireland the debasement started earlier, in 1536, and does not finish until 1560.
p 197-202
1545
Henry VIII legalises interest charges on loans
An upper limit of 10% per annum is set.
1601
Poor Law introduced in England
The aim is to establish a national pattern for parishes to copy in dealing with the problems of the destitute, which have become more obvious since the dissolution of the monasteries, 1534-1540. -
100%
truthiness1 year ago
This comment is below the standard viewing threshold View It »
1619
Reply
Tobacco begins to be used as currency in Virginia
Barely a dozen years after its introduction to Virginia tobacco starts being used as currency and this use continues for nearly 200 years.
1637
Wampum becomes legal tender in Massachusetts
This is only for sums up to one shilling. Wampum is a type of shell used by the native Americans as currency and adopted by the settlers.
c. 1660
Goldsmiths' receipts become banknotes
Because goldsmiths' notes are accepted as evidence of ability to pay they are a convenient alternative to handling coins or bullion. The realisation by goldsmiths that borrowers would find them just as convenient as depositors marks the start of the use of banknotes in England.
1672
First state issues of copper coinage in England
There had been occasional licensed issues by private minters since 1613. The attractive new, milled coinage with the image of Britannia, tends to disappear from circulation, in accordance with Gresham's law, though not as quickly as the new silver coins do, while the existing badly worn, unattractive hammered coins and tokens continue to be used.
1690
The Massachusetts Bay Colony issues official paper money
These notes are used to pay soldiers returning from an expedition to Quebec. They can be used to pay taxes and are accepted as legal tender. Other colonies subsequently copy the example of Massachusetts.
1693
The English Parliament passes the Tontine Act
This act, based on the ideas of the Italian adviser to the French court, Lorenzo Tonti, marks the beginning of the English national debt. The tontine is a scheme for raising money on a long-term basis by weighting rewards in favour of the longest lasting contributors.
1719-1720
The Mississippi Bubble
The Mississippi Company had been set up to exploit the wealth of French colonies, especially in Louisiana. In 1719 it is also given a monopoly of trade with the East Indies and China and a speculative boom in the value of its shares ensues. The boom, combined with the over-issue of notes by the Banque Royale, leads to a drain of precious metals from France to London. Law's enemies persuade the Regent to dismiss him from his post as Minister of Finance, the bank stops payment and the boom collapses. The debacle sets back the development of banking in France by about 100 years.
p 264,268,278,554-555
1719-1720
The South Sea Bubble
Contemporary with the Mississippi Bubble a speculative boom takes place in the shares of the South Sea Company, originally set up to break the Spanish monopoly of trade with Central and South America, after it proposes to take over the National Debt. Numerous other companies are set up to take advantage of the speculative mania. The sudden collapse of the boom leads to changes in company law which affect the future development of banking in both Britain and America.
1760
Wampum factory opened in New Jersey
Demand for wampum as currency, and later ornament, remains strong. In the factory steel drills are used to make the holes that are used for stringing the shells together. This increases output of wampum enormously causing inflation. The factory remains in production for 100 years.
1789
US Constitution gives Congress power over money creation
The States are not allowed to coin money, issue bills of credit or make anything except gold and silver legal tender.
1791
Bank of the United States receives a 21 year charter
Because of opposition to the bank and fears that it would contravene the Constitution, Washington is going to use his veto but is persuaded not to by Alexander Hamilton.
1794
US Mint Starts Operations
The Mint in Philadelphia is the first purpose-built structure authorized by the United States.
1797
US extends legal tender status to Spanish dollars indefinitely
Because of a slight over-valuation of silver little gold is brought to the Mint. Also users hold on to the new silver coins preferring to pass on the older, duller Spanish ones. Consequently there is a shortage of both US gold and silver coins.
1800
Number of banks in the US reaches 29
Their number has increased from just 4 in 1790, despite fears that the Bank of the United States would enjoy monopoly powers preventing the rise of new banks.
1802
Barings buys 2,220 shares in the Bank of the United States
The number of British shareholders grows in the years leading up to the date when the bank's charter is due for renewal.
1803
The Louisiana Purchase doubles the size of the United States
Napoleon, being short of cash, offers to sell Louisiana to the United States for 15 million dollars. Two British banks, Barings and Hopes, agree to lend the money to the US government and, despite the wars, transfer it to Napoleon.
1812-1814
War between the United States and Britain
Inflation takes off in the United States. This is only partly because of the war. Without the restraining hand of the Bank of the United States there is a huge increase in the number of banks issuing notes with very little specie backing. This experience swings opinion in favour of creating a new national bank.
1833
Jackson removes US government deposits from the Second Bank
Instead the deposits are placed in selected State Banks which come to be known as pet banks.
1837
US banking crisis
The uncontrolled, chaotic expansion of banking in the US is slowed, then partly reversed by a financial crisis in which every bank is forced to suspend specie payment of notes. The crisis leads to a depression in the economy which lasts until 1843.
1840
US establishes an independent Treasury
Its powers are more firmly established by a later act in 1846. Without a central bank the US Treasury has to carry out its own banking operations, relying as far as possible on specie for government payments and receipts.
1841
The Second Bank of the United States crashes
By this time it is simply a private bank and no longer a national institution. When it ran into difficulties during the 1837 crisis it was still the largest bank in the world, but it finally crashes in 1841. -
100%
truthiness1 year ago
This comment is below the standard viewing threshold View It »
1857
Reply
World-wide banking crisis starts in the US
In the month of October 1,415 US banks are forced to suspend specie payments. Because of huge European, especially British, investment in the US the effects are felt on the other side of the Atlantic. In Germany many of the new industrial banks founded in the early 1850s fail. However recovery from the crisis is rapid.
1861-1865
The US Civil War
The Confederacy finances its war effort mainly by printing money. In addition to the Confederate notes, the States, railway, insurance and other companies also issue notes. The resulting hyperinflation renders Confederate paper worthless. By comparison inflation in the North is relatively moderate as the Union government raises very substantial sums of money by taxation and borrowing.
1864
US National Bank Act
This amends and expands the provisions of the Currency Act of the previous year. Any group of five or more persons are allowed to set up a bank, subject to certain minimum capital requirements. As these banks are authorized by the Federal, not the State governments, they are known as national banks. To secure the privilege of note issue they have to buy government bonds and deposit them with the Comptroller of the Currency.
1867
International Monetary Conference in Paris
An attempt is made to widen the area of common currencies based on French gold and silver 10 and 5 franc coins. The US, being on a bimetallic standard, sends representatives.
1873
Bank panic in the US and Germany
Lacking a central bank or lender of last resort able and willing to supply sufficient liquidity to quell crises in their early stages the US proves prone to bank panics. As in 1857 the panic spreads across the Atlantic and causes many bank failures in Germany.
1913
US Federal Reserve System established
Instead of a single central bank, like the First and Second Bank of the United States, 12 Federal Reserve districts are established each with its own reserve bank. All national banks have to become members of the system and the state banks are given conditional permission to join. Banks are also allowed to establish branches abroad.
1917
US enters 1st World War
As a result the national debt increases from about $1 billion in 1916 to $25 billion in 1920.
1922-1923
Germany suffers from hyperinflation
The situation gets so bad that wages are paid as frequently as twice a day to give people a chance to spend them before the notes lose their value. Other countries agree to ease the burden of war reparations. A new, interim currency, the Rentenmark, secured on mortgages on land and industrial property, restores stability.
1924
US Federal Reserve System adopts easy money policy
The decision is taken in order to combat a decline in business activity and to encourage international capital flows. This action helps Britain to import enough gold to return to the gold standard the following year.
1925
Britain returns to the gold standard
Keynes argues that the value of sterling has been fixed at an unsustainably high rate.
1928-1929
Stock Market boom in US
The Fed takes no effective action to stop the boom getting out of control.
1929
The Great Crash
The New York stock market crashes on 24 October. The Fed, whose easy money policy stoked the boom, now tightens credit causing a slump in the US economy.
1929-1930
The Great Depression
Widespread bank failures and the surviving banks' curbs on lending cause businesses of all kinds to go bankrupt. The US net national product falls by over half.
1931
Macmillan Report on Finance and Industry
The committee tends to side with bankers in the dispute over whether or not the banks are doing enough for British industry and criticises other countries for not adhering to the rules of the gold standard. However, it emphatically points to a lack (henceforth famous as the Macmillan Gap) in the long-term finance available for small and medium firms.
1931
Britain abandons the gold standard
This marks the beginning of the move from classical to Keynesian economics. The Commonwealth (except Canada), Ireland, Scandinavia, Iraq, Portugal, Thailand, and some South American countries follow Britain off gold.
1932
Bank rate as a policy tool is abandoned by the Bank of England
Until the financial crisis the Bank of England has sought to control the monetary system by varying the interest rate it charges. After June 1932 bank rate remains unchanged for nearly 20 years, apart from a brief period just before and after the outbreak of the Second World War.
1933
US Home Owners Loan Corporation created
Like the Federal Home Loans Banks created the previous year this institution is intended to combat the depression by stimulating the building industry.
1933
US Federal Deposit Insurance Corporation created
Through payments of a small premium by practically all banks a fund is set up to guarantee repayment of customers' deposits.
1934
US Gold Reserve Act
The official price of gold is raised from $20.67 to $35 per ounce, a substantial devaluation of the dollar, and the internal circulation of gold is ended.
c. 1938
Cattle still used as money in parts of Africa
Even scrawny cattle are highly valued because of their monetary functions. Overgrazing resulting from attachment to cattle as a store of value continues to cause environmental problems as late as the 1980s.
1939-1945
The Second World War
Keynesian policies are successfully put to the test as the British government borrows larger sums than ever before at lower interest rates than in the First World War and other wars. From being a large creditor to, mainly poorer, Commonwealth countries Britain becomes a large debtor.
p 389-391,605
The US national debt, which was only $16 billion in 1930, reaches a peak of $269 billion in 1946 but this borrowing is also made at very low interest rates. Whereas the economies of most European countries are devasted the US gross national product rises substantially.
p 515-516
Revenue raised from taxation (48% of government expenditure) and the resources of the occupied countries, together with a compulsory price freeze, enable the German authorities to suppress inflation until near the war's end.
p 575
In Japan the financial, administrative and industrial powers of the Zaibatsu are strengthened as they form the economic heart of the military machine.
1944-1971
The Bretton Woods agreement
The agreement, reached at Bretton Woods in New Hampshire, USA, envisages a system of convertible currencies, fixed exchange rates, and free trade. New financial institutions are to be established; the International Monetary Fund and the International Bank for Reconstruction and Development. Plans for an International Trade Organization fail as they are not ratified by the US Congress but they pave the way for the General Agreement on Tariffs and Trade (GATT).
1951
Bank rate restored as a policy instrument in Britain
During the era of the gold standard the Bank of England could successfully control the monetary system by varying bank rate. However, when the policy is used again in the 1950s it is much less successful.
965-1987
Rapid expansion of US banks abroad
From 13 US banks with a total of about 200 foreign branches the numbers increase to about 200 banks with around 800 branches. The growth is temporarily interrupted by the stock market crash of 1987.
1969
International Monetary Fund creates Special Drawing Rights
These are to tide over countries with balance of payments difficulties. By this time all countries have dispensed with internal circulation of gold and, in most cases, do without gold backing for their currencies. The creation of SDRs makes international trade less dependent on the constraints of an almost fixed supply of gold or the vagaries of favourite currencies.
1970
American banks in Britain overtake the London clearing banks
By the end of 1970 deposits in American banks in Britain have grown seventy-one times since 1959 and exceed those of the London clearing banks and are also 10 times those of the Scottish banks.
1971
The Bretton Woods agreement breaks down
After a big drop in US gold reserves and a large increase in foreigners' claims on US dollars, the US suspends the convertibility of the dollar to gold. Although the IMF had been set up to promote exchange rate stability it adapts quickly to a world of floating exchange rates.
1976
British government adopts monetarism
A financial crisis causes the socialist government to abandon Keynesian policies after inflation reaches over 25% and adopt monetarism instead.
1979
European Monetary System created
This includes an exchange rate mechanism allowing narrow fluctuations of 2.25% (6% in the case of certain weak currencies) either side of an agreed central rate, a strengthening of the European Monetary Cooperation Fund, founded in 1973, by the deposit of 20% of each member's gold and dollar reserves, and the creation of the new European Currency Unit or Ecu, based on the weighted average of 10 European currencies.
1984-1990
Rapid expansion of foreign banks in the US
The value of foreign banks' assets in the US increases from $80 billion to $209 billion.
1987
The Great Crash
A fall on Wall Street reaches record levels on Friday 16 October. The same evening a hurricane sweeps over southern England and on Black Monday the London Stock Exchange suffers a similar fall to the one on Wall Street. Fearing that this crash, like the Wall Street Crash of 1929, might cause a world-wide slump the world's monetary authorities increase the money supply.
1992
European single market comes into effect
By the end of 1992 the European Union officially has a single market with no barriers to capital, labour, goods or services. The inclusion of banking and financial services in the single market increases the pressure for a single currency.
1995
By value over 90% of all transactions in the US are made electronically
The high costs of cheque and coin payments is a strong motivating factor in the development of electronic payment systems in the US and abroad. -
-
100%
truthiness1 year ago
This comment is below the standard viewing threshold View It »
the lesson to be learned from reading through the extensive timeline laid out in the linked article is that everything we are experiencing now, has happened before. not only that, but it all could be avoided by simply paying attention to the lessons of history.
Reply
1) speculative investment leads to booms followed by crashes
2) increasing the amount of currency in circulation leads to inflation followed by a crash
3) an unregulated economy leads to chaotic economies that collapse on themselves
4) wars lead to increased national debt, a national debt significantly greater than GDP leads to the destruction of the nation
5) the value of a currency is directly related to the amount of that currency in circulation
6) attempting to borrow a nations out of trouble has never worked
7) removing currency from circulation increases its value, and is an effective way to stimulate an economy-
Neutral
canadianrancher571 year ago
This comment is below the standard viewing threshold View It »
I have only a few minutes for lunch today and I argee with the first six lessons but seem to have a problem getting number 7 to soak in. If the US. reduced the amount of money in circulation it would increase its value against other world currencies but since the US. is a major exporter of goods would this not make its products more expensive in export markets. I can see number 7 working only if one had a closed system and also if they had all natural resources needed within the country.
Reply
If you could provide a little more of your thoughts on number 7 I would appreciate it, there must be something that I am not seeing here.
-
More News
Daily Finance
PepsiCo Earnings Preview: Company Is a Mirror of the Economy
The Wages of Recession: Average 2010 Raises Will Barely Cover Inflation
The Tough Choice Facing SAP's New Leaders: How to Cut Costs
House Panel to Ask Experts About Unwinding Stimulus
Avast, Ye Scurvy Dogs! America's Cup Hijacked By Lawyers, Billionaires
Add a Comment
Sign In With Your Propeller Account
Please keep your comments relevant to this story.
To create a live link, simply type the URL (including http://) or email address and we will make it a live link for you. You can put up to 3 URLs in your comments. Line breaks and paragraphs are automatically converted — no need to use <p> or <br /> tags.