The Origin Of Money And Banking

1. Origin of Money.
2. Origin of Banking

Money did not develop spontaneously at the same time across the world. It has evolved and developed gradually over the past 5,000 years  till it develops into the various forms in which we now know it today. It has assumed different unfamiliar shapes, structures, recognized in certain objects  in whatever communities where it had been used as a medium of exchange before transforming into the present universally acceptable coins, bank notes, and now the “cashless society” where credits can be accessed with mere presentation of plastic cards, or use of telephone to obtain money from a bank.

Indeed the origin of money and banking had come a long way, and this is exactly what this paper is out to explore.

According t, Gly Davies, (2002),

 "Money originated very largely from non-economic causes: from tribute as well as from trade, from blood-money and bride-money as well as from barter, from ceremonial and religious rites as well as from commerce, from ostentatious ornamentation as well as from acting as the common drudge between economic men.

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"  [1]

The barter system is the system that has sustained mankind before the evolution of money. But this was discarded because of its complexities and inconveniences.  So the use of money developed out of deeply rooted needs for a more convinient medium of exchange and to some extent customs; the clumsiness of barter provided an economic impulse but that was not the primary factor.

The evolution of money had seen it taken different nature, various forms of tools and objects.

For example, various precious metals had been accepted and used as money in primitive communities, Also, cowrie shells obtained in some island in the Indian Ocean. In the words of Davies (2002) quoted above, . "So important a role did the cowrie play as money in ancient China that its pictograph was adopted in their written language for money."[2] Even in most communities in West Africa used this medium of currency until the recent times. In Nigeria, the cowrie was in use till even the recent decades.

Also in China, disc shaped stones were used, and this is known as yap. In variuos other communities in objects like sheep, goat, cattle, manillas, and whale teeth were once used as money. China and some European countries had also produced metal coins in some other forms of objects like spade, hoe, and knives, and they had long been accepted as currencies in their communities.

Most archeologies suggested that coins and metal money evolved at the end of the second millenium. The same time that the European coins evolved too. The ancient Greeks used iron nails as coins. Even Julius Ceasar had to taunt the primitive Britons as backward for using sword blades as coins.

The invention and modernization of money makes trading and commerce easier. With money, all prices can be expressed in the same way, in terms of how much money is needed to buy the product. The unit of money becomes the measuring stick of value, or what economists call the standard of value. With money, making choices, becomes easier.

ORIGIN OF BANKING.

According to the account of  Benjamin Bromberg, (1942), he traced the origin of banking to ancient Babylon, in the city of Mesopotamia, where the royal palaces and temples provided safety and security for keeping grains and other commodities. Receipts were issued for all such goods deposited. Even private houses got involved in such banking operations that laws regulating their activities was included in code of Hammurabi.[3]

Also, in Egypt, the centralization of state warehouses also led to a ststem of banking. In the view of morris Jatrow (1911), It is believed that the temple is the first bank in the whole world. It has noble existence for about four thousand years. However, its exact financial record did not date beyound the reign of Sabuis (1884-1831)[4] The kept record of payment of tithes, and every revenue from other cities.

[1] Davies, Gly . History of Money. From the Ancient Times to the Present Day. Cardif: University of Wales Press. 2002. Pp. 36.

[2] Ibid. Pp 36.

[3]Benjamin Bromberg,  The Origin of Banking: Religious Finance in Babylonia. The Journal of Economic History, Vol. 2, No. 1 (May, 1942), pp. 77

[4] Jastrow Morris, Aspects of Religious Believe and Practice in Babylonia and Assyria. New York: Princeton Publishers. 1911. Pp 277.