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From products
through paper to plastic
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Early people had
no system of money as we know it. To get the things they wanted,
people used the barter system of trading. Gradually people
learned that almost everyone would accept certain goods in
exchange for any product or service. These goods included animal
hides, cattle, cloth, salt and articles of gold and silver. (In
India, farm labour is paid in cereals, including poisonous
Khesari dal ). |
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The earliest coins
were in fact made during the 600 BC in Lydia what is now western
Turkey. The coins were bean-shaped lumps of electrum, a natural
mixture of gold and silver. They had a stamped design to show that
the King of Lydia guaranteed the currency to be of uniform value.
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Other countries
saw the advantages of the Lydian coins and began to mint their
own metal money. Many historians believe that coins were also
invented independently in ancient China and India. The
development of paper money began in China, probably during the
AD 600s. The Italian trader Marco Polo travelled to China in the
1200s and was amazed to see them using paper currency.
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In spite of Marco
Polo's description, Europeans could not understand how a piece of
paper could be valuable. They did not adopt the use of paper money
until the 1600s, when banks began to issue paper notes, called
bank notes, to depositors and borrowers. Until 1800s, most of the
paper money in circulation was notes by banks or private
companies. Gradually, governments and central banks took over the
issuing of paper money. Today, increasingly
we are entering a 'cashless society' where plastic cards offer a
convenient, globally accepted alternative. |
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(Courtesy:
Keemat & Greater Bank, Mumbai)
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