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Cattle
Animal skins, including deer and elk bucks
Tobacco
Wampum- white conch and black mussel
shells
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Medium of Exchange
 Salary comes from Latin term “salarium”
 Romans got paid in salt
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Measure of Value
Store of Value
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China= Tea leaves compressed into “bricks”
Russia= compressed cheese
East African Masai= miniature iron spears
fastened together to form a necklace
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Commodity money- money that has an
alternative use as an economic good or
commodity
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Flat money- money by government decree
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Portability- easily transferrable
Durability
Divisibility into smaller units
Limited Availability
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1811 state banks became popular
Each bank issued their own currency as long
as it was backed with gold and silver reserves
By the Civil War, the US had more than 1600
banks issuing more than 10,000 kinds of
money
 Different currency for each bank
 Temptation to issue too many notes
 Counterfeiting
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1862 Congress passed the Legal Tender Act
 Print $150 million US notes
 Help support the Civil War
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Greenbacks
National Currency
Gold certificates
Silver certificates
Treasury coin notes
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1900 Congress passed the Gold Standard Act
Price of gold was $20.67 an ounce
Money could be exchanged for gold
Ended during the Depression in the 1930’s
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Advantages
 Security
 Prevents the govt. from printing too much money
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Disadvantages
 Gold stock may not grow fast enough to support a
growing economy
 Everyone can convert to gold, depleting the stock
 Gold prices are variable
 Risk of failure
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1863 Congress passed the National Banking
Act
1913 Congress created the Federal Reserve
System
 Federal reserve notes
 FDIC & NCUA
p.301
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Demand Deposit Accts (checking accounts)
Mutual Savings Banks
Savings and Loan Associations
Credit Unions