History of Money

Ancient Money

In order to better understand what money is and what role it plays in our lives, we should begin by defining what we mean by the word ‘money’. Simply put, money is nothing more than what is offered or received for the purchase or sale of goods and services. The earliest money came in many forms–cattle, salt, grain, tobacco, whiskey and stones, to name a few. In Southeast Asia, the use of cowry shells (bia) dates back to pre-history.

Traders realised that it was easier to assess the quality and weight of metals than other commodities. References to the use of gold and silver as money can be found in 3000 year old Hindu epics. During the Srivichai period from 850 to 1450 (1400 – 2000 BE) each region in what is today Thailand had its own distinct form of money. In the South, the ‘namo’, a coffee bean shaped silver piece stamped with a Sanskrit letter, was introduced via Indian traders. Silver bracelet money (‘gamlai meu’), droplet money (‘ngoen tork’) and Chinese money were all commonly used in the Lanna kingdom in the north; while, in the Northeast, merchants under the influence of the Lan Chang empire, used bar-shaped ingots made of various metals, known as ‘hang’, ‘tu’, ‘hoy’, and ‘lat’.

With the emergence of Siam as a modern state, the use of bullet money (‘ngoen paduang’), became more widespread. The bullet money, 89 to 95% silver and marked with the stamps of the King, the government and the smith, was known to villagers as ‘bent leg’ money (‘ngoen ka ngor’) or ‘coiled pupa’ money (‘ngoen kad duang’) due to its appearance. Initially, bullet money was produced by both government and private silversmiths; while the bullet money of the government was supposed to be uniform, the bullet money of the silversmiths varied greatly in size, weight and composition. Various attempts were made to restrict the production of bullet money to government-sanctioned smiths.

After the Bowring Treaty in 1855 (2398 BE), foreign coins began to enter Siam along with the flow of trade. During this period, Mexican, Peruvian, Dutch, Chinese and Indian coins were commonly used. The Royal Minting Department produced the first Siamese coins, known as ‘pae’ in 1860 (2403 BE). Along with increased usage of coins came the discovery, as had been made in Europe, that by slightly altering the coins–lowering the precious metal content slightly or shaving a little bit off the edge of the coin–enormous profits could be had. Eventually, the Siamese government was forced to re-stamp all foreign coins coming into the country in order to assure Siamese citizens that they were genuine. The use of bullet money was finally outlawed in 1904 (2447 BE) by Rama IV–silver artisans could simply not produce enough bullet money to meet the increasing demands of foreign trade. This coincided with the introduction of both coin presses and foreign-made paper notes to the Siamese Kingdom.

A Comparative Chronology of Money


Inflation and the Pendulum Metatheory of Money


Origins of Money and of Banking


Warfare and Financial History


The Significance of Celtic Coinage


The Vikings and Money in England

Paying through the nose! The impact of Danegeld – history’s best-known protection racket! In an age when a penny was a substantial sum of money literally millions of silver pennies were minted in England to buy off the Viking invaders. (This essay is also available on originally the Viking Network for Schools, for which it was originally written).

Money in North American History


 The Origins of the term Dollar and the Dollar Sign

The word “dollar” was used by Shakespeare and derives from “thaler” the name of a European coin. An outline of the convoluted history of central European thalers, Scandinavian dalers, the Spanish peso, the American dollar, and dollars used in Britain and the British Empire, and in China.

Britain and European Monetary Union


Democracy and Government Control of the Money Supply


Third World Money and Debt in the Twentieth Century

The pressure of a rapidly expanding world population on finite resources is a virtually silent explosion as far as monetarist literature is concerned. The task of enabling millions of the world’s poorest men and women to earn a decent living for themselves is the greatest problem facing mankind. Re-anchoring the runaway inflation-ridden currencies of many Third World countries is a prerequisite for successful development.

 Monetary Innovation in Historical Perspective

Why Revolution always Boils Down to Evolution. A review of the major innovations, both in technology and in accounting, over the last three thousand years. This is the text of a keynote address given by Glyn Davies at a conference on e-money with the theme “Digital Money: New Era or Business as Usual?”

Money Through Revolution and War

It has been argued that the American, French, Russian and Chinese revolutions were fought on the back of paper money printed by their respective governments. The economic base and political will simply did not exist to raise the necessary funds from taxation. Moreover, no banker in their right mind would lend such enormous amounts when there was little or no intention to repay. In fact, the inflation which resulted from increases in government-issued money was far less damaging for the domestic political agenda than enormous interest payments to foreign creditors would have been. However, there is one very powerful group whose interests are negatively affected by such inflation–banks.

Post World War Two: The Bretton Woods Agreements

At the end of the Second World War, 730 policy makers from 44 countries attended the Bretton Woods conference in a small resort town of the same name in New Hampshire. While Thailand was not an original signatory to the Bretton Woods treaties, she did agree to join the gold standard in January, 1946, and eventually joined the IMF and World Bank in May, 1949. The primary objective of the Bretton Woods agreement was to attempt to reinstate the gold standard–once again–in order to facilitate international trade and protect creditors from any potential currency devaluations.

The Last Thirty Years

Like the three previous attempts at establishing a universal currency standard, the Bretton Woods agreements soon collapsed. While other nations, particularly Germany and Japan, had reinvested in more efficient industrial production after the Second World War, the US continued with obsolete manufacturing methods; this, combined with the drain of the Vietnam War meant that, as long as the US adhered to fixed exchange rates, international investors would buy in cheap markets overseas and sell in the relatively over-priced American market. By the late sixties, rumours abound that the US dollar was over-valued. Piles of US dollars sitting in European banks, accumulated from the sales of European corporations in the US, were turned into gold. For over twenty years, US dollars had been a safe bet–now it was better to put your money in gold, Deutschemarks or Swiss Francs.

By 1971, the once massive inflow of gold to the US had become an equally alarming outflow, causing President Richard Nixon to rescind his promise to pay the international holders of US dollars in gold. In an attempt to put a brave face on the unilateral violation of an international agreement, the US came up with the term ‘floating exchange rate’ to describe the ensuing devaluation of the US dollar under the Smithsonian Agreements. A similar play on words was given by Thai Prime Minister, Chavalit Yongchaiyudh, to explain his backpedalling on a promise not to devalue the baht in 1997.

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First Metal Money




Leather Currency




Paper Currency









Gold Standard










Pictures of World Paper Currencies

world paper currencies

world paper

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History of Money

Article Writing by : Asad Saimon