Directions: Read one of the following articles and answer the questions on the back of this packet.
(A.) Money!
By Louise Classon and Camille Floyd
Have you ever wondered what the expression “money makes the world go around” means?
A look at the early history of money might help you understand. The first money was not the coins and
bills we have today. Thousands of years ago, the first money was commodity money. Commodities are
things that everyone values enough to trade for and accept as payment. Commodity money varied
from place to place, depending on what the local people valued. Cows were important in ancient
Greece. In ancient Mesopotamia, barley was a main source of food. In many countries on the
Mediterranean Sea, salt was necessary for preserving food. Because cows, barley, and salt were
valuable in those parts of the world, they were used as money. But many forms of commodity money
were difficult to carry and could lose their value: Cows can die. Barley can spoil. Salt can dissolve in
water.
Over time, people began to recognize the need for some kind of standard money. It had to be valuable
to everyone, easy to carry, long-lasting and durable, but not too plentiful.
Small metal coins provided the answer. The first standard metal coins appeared in Lydia (now Turkey)
about 2,600 years ago. By the ninth century, the Chinese had introduced paper money, which actually
was a record of how many coins that person had. (Paper was easier to carry than heavy coins.)
Today Americans use money daily to purchase goods or to pay for services. But when the first settlers
came to North America in the 1600s, they brought with them very little money and did not have easy
access to more.
Early colonists provided for most of their own needs by hunting, fishing, and farming. They bartered
for items that they could not supply themselves. They used wampum to obtain animal skins and other
items from native people. In turn, the animal skins and other commodity items, such as tobacco grown
in the Colonies, were traded for household goods and other things imported from foreign countries.
As trade increased, English shillings, French louis d’ors, and Spanish gold doubloons all began
circulating in the Colonies. These coins, however, were scarce and varied in value, causing many
problems. For example, how many Spanish doubloons should be given in change for a purchase made
with English shillings?
To add to the confusion, coins, or “tokens,” were sometimes manufactured privately and circulated
widely. And paper crop notes, which were receipts that noted the quality and quantity of a crop that
had been deposited in a centralized warehouse, had a perceived value and were used as money. The
use of so many different types of money hampered trade.
By the 1700s, various colonies were printing and issuing their own paper money, called bills of credit.
The bills of credit could be used to pay off public debt to the local governments. But when the Colonial
governments printed too much of the paper money, it lost its value: Colonists couldn’t buy as much
wheat or cloth with the same amount of paper money as they once could, and Colonists started to
mistrust it.
During the Revolutionary War (1775–1783), the Continental Congress needed a way to pay for the cost
of the war. It issued paper bills called Continental notes. These notes served as IOUs and were to be
redeemed when the war was over. As the conflict continued, so many Continental notes were issued
that they lost their value. The saying “not worth a Continental” comes from this time. Meanwhile, the
individual states, also looking for ways to pay for the war, began issuing their own paper money, too.
By 1781, the Articles of Confederation gave individual states the right to strike their own coins.
Soon, however, the Founding Fathers took steps to create order out of the financial chaos. The U.S.
Constitution replaced the Articles of Confederation as the framework of the U.S. government. It
included a clause prohibiting the states from creating their own coins and reserved for the federal
government the right to design and create national coins. The United States was on its way to creating
a standard national currency.
Remember the saying, “Money makes the world go around?” Well, it does because money has evolved
as a tool that allows people to trade easily. It has become both a medium of exchange and it functions
as a store of value that people can save and use later.
Bartered means made an exchange without the use of money.
Wampum is beads made from seashells that were used as units of exchange among native people.
Traded means made an exchange with or without the use of money.
(B.) Where It All Began
By Daniel and Chaddie Kruger
Think like the Greeks and don’t take coin design for granted.
Have you ever wondered who invented coins? The first people to use them lived in Sardis, the capital
of ancient Lydia, now in modern-day Turkey. Scholars believe the Lydians started minting coins
between 650 and 625 b.c. These coins were made from electrum, a mixture of gold and silver that
occurred naturally. The electrum was taken from the Pactolus River, which ran through Sardis. One of
the ways it was gathered was by staking sheepskins to the bottom of the river. In this way, nuggets of
electrum became embedded in the fleece and could be removed easily.
Early electrum coins showed the head of a bull facing the head of a lion on one side. The reverse, or
other side, had no design. Instead, there was a simple, square indentation impressed into the metal.
This is called a punch mark. Within 100 years, Lydians began minting coins in gold and in silver. We
know this is true because some of these coins survive and because the ancient Greek historian
Herodotus records that Lydians were the first to mint coins in gold and silver.
Design’s the ‘Thing’
By 550 b.c., coins were being minted in many Greek cities, including Athens, Corinth, and Thebes.
Each city had its own identifying design. For example, Corinth’s silver money featured the mythical
winged horse Pegasus. The coinage of Thebes depicted a shield. Athens had several coin types but was
best known for a four-spoke wheel that resembled the round, wheel-shaped wall that surrounded
Athens.
Forty years later, Athens changed its coinage to herald the beginning of Athenian democracy. The new
style showed Athena, patron goddess of Athens, on one side and her symbol, the owl, on the other
side. The Athenians continued using this design for more than 200 years, and their coinage became
one of the most widely used currencies in the ancient world.
Around 168 b.c., Athens changed to a new portrait of Athena. It mirrored the statue of Athena
Parthenos, the large ivory and gold statue of Athens’ patron goddess in the Parthenon (a temple on the
outcrop of rock in Athens called the Acropolis). The non-portrait side of this coin had a new version of
the owl surrounded by a wreath. Also new on the owl side were the names of the officials in charge of
issuing the coins.
In addition to Athens, Corinth, and Thebes, many other Greek cities began issuing coins. Soon, minting
spread from mainland Greece through the Aegean islands to southern Italy and Sicily. Eventually, coins
were made in gold, silver, and bronze. The silver ones were the most widely circulated and, like those
fashioned of gold and bronze, came in different weights. Silver denominations ranged from the tiny
half-obol to a drachma (about the size of a dime) to a stater (about the size of a quarter) to a
tetradrachma (worth four drachmas and about the size of our half-dollar).
Money That Brags
Each city was proud of its design. Larissa in northern Greece displayed a graceful horse grazing. The
island of Aegina featured a sea turtle. The island of Naxos, believed to be the home of Dionysus, god of
wine, had coins with grapes on them. Himera, a Greek colony in Sicily, was known for its rooster. A
delicate rose signified the island of Rhodes; and an apple, the island of Melos. These last two coins
represented puns, since the word rhodes in Greek means “rose” and melos means “apple.” (See
Rhodian silver stater dating to about 300 b.c.)
Cities also bragged on their coinage. For example, Sybaris was extremely rich and issued coins
showing a bull, because cattle were a sign of wealth in antiquity. Today, the word “sybarite” means
someone who indulges in an excessively luxurious lifestyle.
Greek coins were produced individually by hand and designed with great artistry. They not only give us
insight into ancient history and economics but are unique and beautiful pieces of art that have greatly
influenced coin design in the western world.
Daniel Kruger is a practicing attorney, a classical numismatist, and a Fellow of the internationally renowned Royal Numismatic Society.
His wife, Chaddie Kruger, is the chair of foreign languages at Texas Military Institute in San Antonio, where she also teaches Latin and
classical civilization.
Dr. Dig says:
Lydia was so wealthy that a myth arose about one of its kings, a man named Midas. Not content with
the riches he had, Midas prayed for a “golden touch.” The gods decided to grant his wish, and soon
everything Midas touched turned into gold—including his daughter! Horrified at what his greed had
caused, the grieving king asked to have his wish reversed. Again the gods decided to answer his
prayer, and he lost his golden touch. But the legend continued, and there is a kernel of truth to
the story—the real gold in Lydia’s Pactolus River.
(C.) China: Spirit Money
by Ann Seaman
“Money to burn.” In our society that is about as rich as anyone can be. But in China, people burn paper
money whether or not they are rich. It is called spirit or ghost money, and burning it is the Chinese
way of transferring wealth from this world to the invisible world of the spirits.
Since ancient times, people have traded with various kinds of money, from things such as feathers and
shells to widely used metals—especially gold, silver, and copper. The chief function of money, whatever
its form, is exchange. Measuring the value of other things in terms of the value of feathers, shells, or
metal coins makes trading easier. In modern life, we rely mostly on paper money and use the numbers
printed on it as our guide to value because the paper itself has no real value of its own.
The Chinese invented paper around A.D. 100. They introduced paper money during the Tang dynasty
(early seventh to early tenth century), when merchants traveling along the flourishing Silk Route
began accepting payment in IOUs written on paper. Gold, silver, and copper money were too heavy—
and too tempting to robbers—to carry over the long distances back home.
The IOUs, lightweight and easy to transport, were called “flying cash,” and thus paper money was
invented, centuries before it was heard of in the West.
Soon a different kind of paper money also began to be made in China: “gold bills” for use by gods,
“Silver bills” for ancestors, and “copper bills” for ghosts.
Millions of Chinese believe that a large number of gods rule heaven and hell. These gods have ranks
like military figures and are believed to have their own servants, horses, and armies. They also are
believed to need money, just like humans.
The highest god of heaven is the Jade Emperor. When a worshiper asks the Jade Emperor for help—say
with a dire illness or a failing business—he or she tries to please the god by offering elaborate foods,
fine incense, and the most valuable kind of spirit money—gold.
Gold spirit money is paper stamped with elegant designs and gold foil. It comes in nine denominations.
Burning gold spirit money shows the high esteem in which a god is held. For the highest gods, it is
made in sheets several feet square. Bundles of these sheets are burned, leaf by leaf, in a brazier
placed in front of a statue of the god being worshiped. As the money burns, it is considered to be
moving from this world to heaven.
A less elaborate gold spirit money is burned for lower-ranking gods to give thanks for a piece of good
fortune or an answered prayer. A still smaller denomination is offered to the minor household gods
who guard homes against invading spirits or ghosts.
Silver spirit money is less ornate than gold. It is smaller in size, comes in only two denominations, is
embossed with silver foil, and is offered only to one’s ancestors.
The Chinese have always felt a great debt of gratitude to their ancestors for giving them life. Ancestors
are believed to exist somewhere in the afterworld and to have some power over the living. The main
hall in a Chinese house has an altar where offerings are made to the ancestors to honor and care for
them in their life as spirits. Incense, food, and silver spirit money are given at regular intervals. The
silver spirit money helps pay the ancestors’ expenses in the afterworld. People burn the higher
denomination at times such as New Year’s, when everyone’s ancestors are honored. The smaller
denomination is burned by family members in regular rites for one year after a person’s funeral, when
he or she is thought to be traveling through hell; nearly everyone is believed to go there immediately
after death. It would be an insult to offer silver spirit money to gods and in most cases unsuitable to
offer gold spirit money to one’s ancestors.
Paper spirit money representing copper coins is offered to hungry ghosts—that is, wandering spirits of
the dead who have no descendants to care for them and no place to go. The Chinese traditionally
believe that once a year the gates of hell are opened and ghosts are let into the human world to look
for homes. This is a time to be especially generous and compassionate, and much food and copper
spirit money are offered at the Hungry Ghost Festival. With enough money, a ghost might even buy its
way back into life.
Ancestors and ghosts also are thought to have ordinary daily needs. Instead of being printed with
numbers indicating amounts of gold, silver, or copper, much spirit money for ancestors and ghosts has
pictures of combs, mirrors, clothing, scissors, and other such items that the spirits might need.
As people in China and many other countries know, paper money sometimes loses its value in day-today life. Inflation means that you need more and more money to buy the same things you bought
before. Many Chinese now put their faith in precious metals and jewels instead of paper money. But
they continue to believe in the value of spirit money no matter what the fate of its paper cousin in the
material world.
Questions:
1. Pick one of the articles (A, B, or C) and write 3 new facts that you learned from it.
2. How does this article challenge or confirm any previous knowledge you had about money?
3. Based on these readings, what do you think we are going to learn about (besides money) in
our next unit? How does this connect to what we learned about in the previous unit?