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middle, to make the coins easier to carry in bulk by passing a string through the hole. The Chinese are also fervent believers in the power of luck and some of their coins, particularly during the 10th century, were considered very auspicious and were known as ‘little brothers’. Across Asia you can still buy these, and their multiple successors and copies, as amulets or temple souvenirs.

      Unlike European rulers, the Chinese royals and nobles resisted the temptation to put their own faces on the coins. Indeed it would not be until 1912 that the first Chinese face appeared – that of Sun Yat-sen, president of the newly formed Republic of China. China also originated paper money. But it seemed in no hurry to do so. Having invented paper around 100 CE the Chinese did not produce their first paper money until 1,000 years or so later, during the Song dynasty. This was a matter of convenience. At that point, China was divided up into many regions, each of which used its own currency, often in the form of low-value iron coins. Moreover, some regions forbade the export of coins. Itinerant merchants found this very awkward, and so started to buy goods not with coins, but with ‘exchange notes’, a kind of IOU which promised to pay the bearer the appropriate amount of cash or gold at a later date in a more convenient place. If the buying merchant who wrote the note had a good reputation, then that note, before it expired, was as good as gold.

      Later, Chinese rulers latched on to this innovation and started to issue such notes themselves. But they did not put any time limit, and offered the more general promise to the bearers that they could exchange the notes at the mint for gold or silver or, if preferred, less-tattered notes. By the time of the Mongol Yuan dynasty, from the 13th century, the government permitted only paper money. When the Venetian merchant Marco Polo arrived in 1275, he discovered that China, as so often, was some way ahead of the rest of the world.

       Pounds to pesos to dollars

      London, by contrast, in the first millennium CE was still in the numismatic dark ages. Indeed, even coinage was rare until the eighth century when King Offa of Mercia issued the first silver penny. Subsequently some of the Saxon kingdoms started to issue silver coins, known as ‘sterlings’, of which they could turn out around 240 from a pound weight of silver. Hence the term a pound of sterlings, later abbreviated to a ‘pound sterling’. At this point most documents were written in Latin, in which the word for pound is ‘libra’, which is why the symbol for the pound is a crossed L, or £ in its more ornate form. Eventually, after the Normans conquered England, they developed an accounting system that also involved 240 pennies to the pound. This was to last, though with pennies made of copper, until 1971 when the UK decimalized the coinage, retaining the pound but dividing it instead into 100 pence – popularly, if inelegantly, abbreviated to ‘pee’.

      Elsewhere in Europe there were the first stirrings of the almighty dollar. One origin was the St Joachim valley in what is now the Czech Republic, which had a number of silver mines. The German for valley is Tal and the coins produced there were often called thalers. This suffered many variations in spelling and pronunciation and, given the well-known gift for languages among English-speaking peoples, the thaler was often mispronounced as the dollar.

      Other coins in continental Europe at this time included in Spain the ‘peso’ which is simply Spanish for ‘weight’. The prosaic peso does, however, have the distinction of having provoked an early example of global inflation. In 1544 the conquistadores who were trampling across South America came across in Potosí, in what is now Bolivia, a mountain which consisted largely of silver ore. For three or more centuries they excavated this treasure trove, delivering in all more than 62,000 metric tons of silver to Spain. This was an excellent result for the Spanish, who used this to pay off many of their debts. But it was less beneficial for the toiling Amerindian miners who dug out the ore, largely as slave labor. And it was also a mixed blessing for many other people back in continental Europe since, over the period 1500 to 1600 as the silver flowed across the Atlantic, prices rose fivefold. This was then transmitted to other countries. In England, for example, in the 200 years or so following the discovery of the Americas, prices rose three and a half times.⁵ If the citizens of Europe had not heard about the discovery of the New World in any other way, they would have felt the impact in their pockets.

      The peso was also widely used in Britain’s American colonies. Here it became known as the Spanish milled thaler or dollar. So when the US designated its own currency in 1792 it also adopted the word dollar. But where did the $ sign come from? Surprisingly, its origins have been lost. One explanation is that it came from the standard abbreviation of the peso, a P, for which the plural was PS. If you just keep the vertical stroke of the P and superimpose the S on it you get the $. Quite so. On the other hand, the dollar sign often has two vertical strokes, prompting another explanation. The Spanish dollar had two vertical lines on the reverse to represent the Pillars of Hercules, and it is said that these lines eventually got transferred to the US dollar. Since no-one is entirely sure where the $ came from, feel free to invent your own explanation.

       Finding funny money

      Of course not everyone was trading with coins. A favorite observation of Europeans travelling to exotic parts was that these foreigners seemed to be using many odd things for money. Travellers venturing across Africa and the Pacific, for example, often ‘discovered’ people exchanging a wide variety of objects. One of the most common was salt. In 1520 a Portuguese visitor to what is now Ethiopia found people trading with blocks of salt ‘cut out of mountains’. English colonists in North America found the native people in Virginia using clam shells, while visitors to parts of India found local people using cowrie shells. Travellers to the Pacific encountered an even more diverse array of possibilities including teeth and, in one of the more arcane options, ‘the little feathers near the eye of fowls’.⁶

      While these make for curious travellers’ tales they probably say more about the perceptions of the colonists than about the places they visited. For one thing, many of these countries had previously used coins: the kings of Ethiopia, for example, following Roman influences, had issued coins from the third to the seventh centuries. And India, following Greek patterns, had a long and sophisticated tradition of coinage from the fourth century, which by the 16th century had flowered into more than 300 types of rupya (Hindi for ‘silver coin’).

      The predilection for spotting curious types of money resulted partly from the limitations of the new arrivals who, puzzled by complex cultures they could not understand, tended to reduce them to their own simple terms. In fact many of the exchanges they observed were concerned not with commerce but with religion or social customs or hierarchy. These might indeed involve a ritual exchange of cloth or shells but not as a commercial transaction.

      One example is the Lele people in what is now the Democratic Republic of Congo who exchanged cloth woven from raffia. For centuries the Lele, under Belgian colonial rule, were all too familiar with the experience of laboring for Belgian francs. But they also had a wide variety of other circumstances in which, for the purposes of forging social ties, the only acceptable payment was cloth – for fees to traditional healers, for example, or fines for adultery, or as gifts to mark rites of passage.

      In fact money is often strange, but not because of peculiar forms of currency. All over the world money has evolved and mutated. Nowadays it is a complex phenomenon, based on indirect forms of credit, and appearing and disappearing at the stroke of a pen – largely because of the invention of banking, which is the focus of the next chapter.

      1 F Martin, Money, the unauthorized biography, The Bodley Head, London, 2013. 2 A Mitchell Innes, ‘What is Money?’ in Credit and State Theories of Money – The Contributions of A Mitchell Innes, Edward Elgar, Cheltenham, 2004. 3 C Eagleton and J Williams, Money: A history, British Museum Press, London, 2007. 4 J Cribb, Money: From Cowrie Shells to credit cards, British Museum Publications, London, 1986. 5 JK Galbraith, Money: Whence It came, Where It Went, Houghton Mifflin Company, Boston, 1975. 6 Eagleton and Williams, op cit.

       2 The creation of banks

       People with money or other valuables looked for ways of keeping these safe, by storing them in the vaults

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