The origin of money

The origin of money (3 min 24 s)

Added on April 21, 2015

Description

Alex travels back in time to learn more about where money comes from and how it has evolved from 687 B.C. to today.

  

The origin of money (3 min 24 s)

Added on April 21, 2015 | Desjardins Group

Note: The text in square brackets describes audio and visual content in the video other than the dialogue or narration.

Meet Alex.

For history class, Alex has to research where money came from and how it's evolved over time. Desperate times call for desperate measures, so he decides to check for himself only to find a time travel machine to answer all of his questions.

Alex finds himself in 687 B.C., when people used to barter to pay for things. To get products and services, they traded all sorts of goods. Since he crashed into this poor sculptor's work, this is the system Alex has to use to pay for the damage. It was common back then to trade iron, salt and even pets!

They say that Gyges, the King of Lydia, ended this custom by introducing a metal coin system to make trading easier. The coins were made of a gold and silver alloy called electrum.

Other civilizations also invented their own coins. Between 350 and 200 B.C., Chinese coins looked like spades with pointed legs and engravings.

Around 280 B.C., the Romans started using heavy bronze discs called "aes grave."

Later, between the 7th and 10th centuries A.D., paper money first came into use in China during the Tang dynasty.

Over time, paper money or banknotes, took on greater importance.

In 1742, the Bank of England held a monopoly on paper money in Europe. In order to get around this monopoly, private banks invented another type of money: Cheques.

In the 20th century, money began straying from its historically physical form. It is generally understood that the first credit card was issued by the American bank Western Union in 1914. It was metal!

Credit cards let people make purchases or get cash advances that will be paid back later to the issuer of the card. Depending on how the card is used, there may also be fees for interest. The credit card evolved from cardboard in 1951 to plastic in 1957. Meanwhile, in 1953, the first debit cards gave people direct access to their bank accounts.

In 1984, the new Interac network enabled withdrawals and purchases at merchant locations across North America. In 2000, new technologies brought about Internet-based payments. Today, money is almost entirely removed from its physical form and circulates virtually.

So, what about the financial institutions that manage this money? Let's rewind a little bit in our research.

In the 16th century, an increase in commerce led to the creation of public banks. It was easy for wealthy people to deposit their assets there. But the banks didn't offer their services to everyone, especially not labourers.

That's why people started to organize themselves and form cooperatives. In 1844, the cooperative banking movement was born out of a concern for the greater good.

In Quebec, this concept later took shape in 1900, when Alphonse Desjardins opened the first Caisse populaire Desjardins.

Now that Alex has learned enough to finish his history report, he also sees that looking back helps him understand the future!