If the status and usefulness of historical knowledge is high, why is there so little of it in central and local government ?
Since the machinery of government is reorganised so often and ministers, civil servants and policies are so ephemeral, surely a collective memory is required?
Surely governments need to understand the complex roots of policies and problems?
Surely analysis of past human experience should be fed back into the system? …
In this article we shall dive into the origins of money and the treasury.
The history of money concerns the development of many social systems that provide at least one of the functions of money.
Such systems can be understood as means of trading wealth indirectly or not directly as is the way with barter.
Money is a mechanism that facilitates this process.
Money may take a physical form as in coins and notes, or may exist as a written or electronic account.
It may even have intrinsic value
be legally exchangeable for something with intrinsic value (representative money), or only have nominal value like (fiat money)
After all its all a created conscious concept of mankind designed to make barter and life easier for all.
The invention of money took place long before the beginning of written history.
Consequently, any story of how money first developed is largely based on conjecture and logical inference.
One thing is sure .
The significant evidence establishes that many things were bartered in ancient markets that could be described as a medium of exchange.
Ones labor in exchange for goods or services is another.
These included livestock and grain –
things directly useful in themselves –
but also merely attractive items such as cowrie shells or beads were exchanged for more useful commodities.
However, such exchanges would be better described as barter, and the common bartering of a particular commodity (especially when the commodity items are not fungible)
Due to the complexities of ancient history (ancient civilizations developing at different paces and not keeping accurate records or having their records destroyed), and because the ancient origins of economic systems precede written history, it is impossible to trace the true origin of the invention of money and the transition from “barter systems” to the “monetary systems”.
Further, evidence in the histories supports the idea that money has taken two main forms divided into the broad categories of money (debits and credits on ledgers) and money of exchange (tangible media of exchange made from clay, leather, paper, bamboo, metal, etc.).
Accounting records – in the monetary system sense of the term accounting – dating back more than 7,000 years have been found in Mesopotamia, and documents from ancient Mesopotamia show lists of expenditures, and goods received and traded and the history of accounting evidences that money of account pre-dates the use of coinage by several thousand years.
The earliest ideas included Aristotle’s “metallist” and Plato’s “chartalist” concepts.
There are at least two theories of what money is and these can influence the interpretation of historical and archeological evidence of early monetary systems.
The commodity theory of money (money of exchange) is preferred by those who wish to view money as a natural outgrowth of market activity.
Others view the credit theory of money (money of account) as more plausible and may posit a key role for the state in establishing money.
The Commodity theory is more widely held and much of this article is written from that point of view.
Overall, the different theories of money developed by economists largely focus on functions, use, and management of money.
So its clear money and bartering have been around a long time in historical terms however its also clear that the worth of money is merely a concept a system made by mankind ourselves based on theory and functionality.
A great example of this is fact can be seen throughout history when the people discard moneys into the streets as being worthless or good for toilet paper.
However its also a fact that money helps society grow and interact with each other through the purchasing of goods and services.
Money is supposed to be a good thing for all.
However it can be very complicated when using forms of money outside ones realm or country, For instance, gold may be seen as valuable in one society but not in another or that a bank note is merely a piece of paper until it is agreed that it has monetary value.
The use of barter-like methods may date back to at least 100,000 years ago.
However There is no evidence, historical or contemporary, of a society in which barter is the main mode of exchange.
When barter did in fact occur, it was usually between either complete strangers or potential enemies.
Greek philosopher Aristotle contemplated the nature of money.
He considered that every object has two uses: the original purpose for which the object was designed, and as an item to sell or barter.
The assignment of monetary value to an otherwise insignificant object such as a coin or promissory note arises as people acquired a psychological capacity to place trust in each other and in external authority within barter exchange.
The Mesopotamian civilization developed a large-scale economy based on commodity money.
The shekel was the unit of weight and currency, first recorded c. 3000 BC, which was nominally equivalent to a specific weight of barley that was the preexisting and parallel form of currency.
The Babylonians and their neighboring city states later developed the earliest system of economics as we think of it today, in terms of rules on debt,legal contracts and law codes relating to business practices and private property.
Money become a necessity for day to day life.
The Code of Hammurabi, the best-preserved ancient law code, was created c. 1760 BC (middle chronology) in ancient Babylon.
It was enacted by the sixth Babylonian king, Hammurabi.
Earlier collections of laws include the code of Ur-Nammu, king of Ur (c. 2050 BC), the Code of Eshnunna (c. 1930 BC) and the code of Lipit-Ishtar of Isin (c. 1870 BC).
These law codes formalized the role of money in civil society.
They set amounts of interest on debt, fines for “wrongdoing”, and compensation in money for various infractions of formalized law.
From about 1000 BC, money in the form of small knives and spades made of bronze was in use in China during the Zhou dynasty, with cast bronze replicas of cowrie shells in use before this.
The first manufactured actual coins seem to have appeared separately in India, China, and the cities around the Aegean Sea 7th century BC.
While these Aegean coins were stamped (heated and hammered with insignia), the Indian coins (from the Ganges river valley) were punched metal disks, and Chinese coins (first developed in the Great Plain) were cast bronze with holes in the center to be strung together.
Aureus, basic gold monetary unit of ancient Rome and the Roman world.
It was first named nummus aureus (“gold money”), or denarius aureus, and was equal to 25 silver denarii; a denarius equaled 10 bronze asses. (In 89 bc, the sestertius, equal to one-quarter of a denarius, replaced the bronze ass as a unit of account.)
In c. 211 BCE a whole new coinage system was introduced. Appearing for the first time was the silver denarius (pl. denarii), a coin that would be the principal silver coin of Rome until the 3rd century CE. The coin was initially funded by a tax on property but then via war booty as the wars against Carthage swung in Rome’s favour. The denarius was equal to 10 bronze asses (sing. as), each of which weighed 54 g. or 2 oz. There were other coins such as the silver victoriatus which was in weight equal to three quarters of a denarius, the quinarii, worth half of a denarius, and other bronze and gold coins but these were not always widely or consistently used. From c. 200 BCE only Rome now produced coins in Italy and the movement of troops ensured the wider circulation of Roman coinage.IN 46 BCE JULIUS CAESAR MINTED THE LARGEST QUANTITY OF GOLD COINS YET SEEN IN ROME.
As Rome expanded and took ever more treasure from her enemies silver began to replace bronze as the most important material for coinage.
This was especially so following the acquisition of the silver mines of Macedonia from 167 BCE, resulting in a huge boom in silver coins from 157 BCE. In addition, in c. 141 BCE the bronze as was devalued so that now 16 were equivalent to one denarius. It was now no longer necessary to mark coins as Roman as there were no others in Italy and by the 1st century BCE Roman coins were now also being widely used across the Mediterranean.
However All modern coins, in turn, are descended from the coins that appear to have been invented in the kingdom of Lydia in Asia Minor somewhere around 7th century BC and that spread throughout Greece in the following centuries: disks, made of gold, silver, bronze or imitations thereof, with both sides bearing an image produced by stamping; one side is often a human head.
Gold and silver have been the most common forms of money throughout history.
Paper money was introduced in Song dynasty China during the 11th century.
The development of the banknote began in the seventh century, with local issues of paper currency.
Its roots were in merchant receipts of deposit during the Tang dynasty (618–907), as merchants and wholesalers desired to avoid the heavy bulk of copper coinage in large commercial transactions.
The issue of credit notes is often for a limited duration, and at some discount to the promised amount later.
The jiaozi nevertheless did not replace coins during the Song Dynasty; paper money was used alongside the coins.
The central government soon observed the economic advantages of printing paper money, issuing a monopoly right of several of the deposit shops to the issuance of these certificates of deposit.
By the early 12th century, the amount of banknotes issued in a single year amounted to an annual rate of 26 million strings of cash coins.
Bills of exchange became prevalent with the expansion of European trade toward the end of the Middle Ages.
A flourishing Italian wholesale trade in cloth, woolen clothing, wine, tin and other commodities was heavily dependent on credit for its rapid expansion.
Goods were supplied to a buyer against a bill of exchange, which constituted the buyer’s promise to make payment at some specified future date.
Provided that the buyer was reputable or the bill was endorsed by a credible guarantor, the seller could then present the bill to a merchant banker and redeem it in money at a discounted value before it actually became due.
The main purpose of these bills nevertheless was, that traveling with cash was particularly dangerous at the time.
A deposit could be made with a banker in one town, in turn a bill of exchange was handed out, that could be redeemed in another town.
These bills could also be used as a form of payment by the seller to make additional purchases from his own suppliers.
Thus, the bills – an early form of credit – became both a medium of exchange and a medium for storage of value.
Like the loans made by the Egyptian grain banks, this trade credit became a significant source for the creation of new money.
In England, bills of exchange became an important form of credit and money during last quarter of the 18th century and the first quarter of the 19th century before banknotes, checks and cash credit lines were widely available.
Goldsmiths in England had been craftsmen, bullion merchants, money changers, and money lenders since the 16th century.
But they were not the first to act as financial intermediaries; in the early 17th century, the scriveners were the first to keep deposits for the express purpose of relending them.
Merchants and traders had amassed huge hoards of gold and entrusted their wealth to the Royal Mint for storage.
Origins of Stock
Stock markets were started when countries in the New World began trading with each other.
While many pioneer merchants wanted to start huge businesses, this required substantial amounts of capital that no single merchant could raise alone.
As a result, groups of investors pooled their savings and became business partners and co-owners with individual shares in their businesses to form joint-stock companies.
Originated by the Dutch, joint-stock companies became a viable business model for many struggling businesses.
In 1602, the Dutch East India Co. issued the first paper shares.
This exchangeable medium allowed shareholders to conveniently buy, sell and trade their stock with other shareholders and investors.
The idea was so successful that the selling of shares spread to other maritime powers such as Portugal, Spain and France.
Eventually, the practice found its way to England.
Trade with the New World was big business so trading ventures were initiated.
Other industries during the Industrial Revolution began using the idea as a way to generate start up capital.
This influx of capital allowed for the discovery and development of the New World and for the growth of modern industrialized manufacturing.
In 1640 King Charles I seized the private gold stored in the mint as a forced loan (which was to be paid back over time).
Thereafter merchants preferred to store their gold with the goldsmiths in the city of London, who possessed private vaults, and charged a fee for that service.
In exchange for each deposit of precious metal, the goldsmiths issued receipts certifying the quantity and purity of the metal they held as a bailee (i.e., in trust).
These receipts could not be assigned (only the original depositor could collect the stored goods).
Gradually the goldsmiths took over the function of the scriveners of relending on behalf of a depositor and also developed modern banking practices; promissory notes were issued for money deposited which by custom and/or law was a loan to the goldsmith, i.e., the depositor expressly allowed the goldsmith to use the money for any purpose including advances to his customers.
The goldsmith charged no fee, or even paid interest on these deposits.
Since the promissory notes were payable on demand, and the advances (loans) to the goldsmith’s customers were repayable over a longer time period, this was an early form of fractional reserve banking.
The promissory notes developed into an assignable instrument, which could circulate as a safe and convenient form of money backed by the goldsmith’s promise to pay.
Hence goldsmiths could advance loans in the form of gold money, or in the form of promissory notes, or in the form of checking accounts.
Gold deposits were relatively stable, often remaining with the goldsmith for years on end, so there was little risk of default so long as public trust in the goldsmith’s integrity and financial soundness was maintained.
Thus, the goldsmiths of London became the forerunners of British banking and prominent creators of new money based on credit.
Heres where things got intresting.
History of the Stock Market
As the volume of shares increased, the need for an organized marketplace to exchange these shares became necessary.
As a result, stock traders decided to meet at a London coffeehouse, which they used as a marketplace.
Eventually, they took over the coffeehouse and, in 1773, changed its name to the “stock exchange.”
Thus, the first exchange, the London Stock Exchange, was founded.
The idea made its way to the American colonies with an exchange started in Philadelphia in 1790.
The history of the Department of the Treasury began in the turmoil of the American Revolution, when the Continental Congress at Philadelphia deliberated the crucial issue of financing a war of independence against Great Britain.
The Congress had no power to levy and collect taxes, nor was there a tangible basis for securing funds from foreign investors or governments.
The delegates resolved to issue paper money in the form of bills of credit, promising redemption in coin on faith in the revolutionary cause and On June 22, 1775 — only a few days after the Battle of Bunker Hill, Congress issued $2 million in bills; on July 25, 28 citizens of Philadelphia were employed by the Congress to sign and number the currency.
On July 29, 1775, the Second Continental Congress assigned the responsibility for the administration of the revolutionary government’s finances to Joint Continental Treasurers, George Clymer and Michael Hillegas.
The Congress stipulated that each of the colonies contribute to the Continental government’s funds.
The United States Treasury Department is founded on September 2, 1789.
The institution’s roots can be traced to 1775, when America’s leaders were looking for ways to fund the Revolutionary War. Their solution–issuing cash that doubled as redeemable “bills of credit”–raised enough capital to fuel the revolution. but also led to the country’s first debt.
The Continental Congress attempted to reign in the economy, even forming a pre-Constitutional version of the Treasury.
Neither this move, nor the signing of the Declaration of Independence, which enabled the U.S. to seek loans from foreign countries, proved effective.
The debt kept mounting, while war notes rapidly deflated in value.
With the ratification of the Constitution in 1789, the American government established a permanent Treasury Department in hopes of controlling the nation’s debt.
Beginnings of Wall Street
To most people, the name Wall Street is synonymous with stock exchange.
The market on Wall Street opened May 17, 1792 on the corner of Wall Street and Broadway.
Twenty-four supply brokers signed the Buttonwood Agreement outside 68 Wall St,
in New York, underneath a buttonwood tree.
On March 8, 1817 the group renamed itself the New York Stock and Exchange Board and moved off the street into 40 Wall St. The organization that would define the world’s economic future was born.
Today, there are many stock exchanges worldwide, each supplying the capital necessary to support industry growth.
Without these vital funds, many revolutionary ideas would never become a reality, nor would fundamental improvements be made to existing products.
In addition, the stock market creates personal wealth and financial stability through private investment, allowing individuals to fund their retirement and or other ventures.
1791-1811: First Attempt at Central Banking
At the urging of then Treasury Secretary Alexander Hamilton, Congress established the First Bank of the United States, headquartered in Philadelphia, in 1791.
It was the largest corporation in the country and was dominated by big banking and money interests.
The Commonwealth Of Australia Treasury was established in Melbourne in January 1901, after the federation of the six Australian colonies.
In 1910, the federal government passed the “Australian Notes Act” which gave control over the issue of Australian bank notes to the Commonwealth Treasury, and prohibited the circulation of state notes and withdrew their status as legal tender.
1913: The Federal Reserve System is Born
From December 1912 to December 1913, the Glass-Willis proposal was hotly debated, molded and reshaped.
By December 23, 1913, when President Woodrow Wilson signed the Federal Reserve Act into law, it stood as a classic example of compromise—a decentralized central bank that balanced the competing interests of private banks and populist sentiment.
1914: Open for Business
Before the new central bank could begin operations, the Reserve Bank Operating Committee, comprised of Treasury Secretary William McAdoo, Secretary of Agriculture David Houston, and Comptroller of the Currency John Skelton Williams, had the arduous task of building a working institution around the bare bones of the new law. But, by November 16, 1914, the 12 cities chosen as sites for regional Reserve Banks were open for business, just as hostilities in Europe erupted into World War I.
1914-1919: Fed Policy During the War
When World War I broke out in mid-1914, U.S. banks continued to operate normally, thanks to the emergency currency issued under the Aldrich-Vreeland Act of 1908.
But the greater impact in the United States came from the Reserve Banks’ ability to discount bankers acceptances.
Through this mechanism, the United States aided the flow of trade goods to Europe, indirectly helping to finance the war until 1917, when the United States officially declared war on Germany and financing our own war effort became paramount.
1920s: The Beginning of Open Market Operations
Following World War I, Benjamin Strong, head of the New York Fed from 1914 to his death in 1928, recognized that gold no longer served as the central factor in controlling credit. Strong’s aggressive action to stem a recession in 1923 through a large purchase of government securities gave clear evidence of the power of open market operations to influence the availability of credit in the banking system.
During the 1920s, the Fed began using open market operations as a monetary policy tool. During his tenure, Strong also elevated the stature of the Fed by promoting relations with other central banks, especially the Bank of England.
1929-1933: The Market Crash and the Great Depression
During the 1920s, Virginia Representative Carter Glass warned that stock market speculation would lead to dire consequences. In October 1929, his predictions seemed to be realized when the stock market crashed, and the nation fell into the worst depression in its history.
From 1930 to 1933, nearly 10,000 banks failed, and by March 1933, newly inaugurated President Franklin Delano Roosevelt declared a bank holiday, while government officials grappled with ways to remedy the nation’s economic woes.
Many people blamed the Fed for failing to stem speculative lending that led to the crash, and some also argued that inadequate understanding of monetary economics kept the Fed from pursuing policies that could have lessened the depth of the Depression.
1933: The Depression Aftermath
In reaction to the Great Depression, Congress passed the Banking Act of 1933, better known as the Glass-Steagall Act, calling for the separation of commercial and investment banking and requiring use of government securities as collateral for Federal Reserve notes.
The Act also established the Federal Deposit Insurance Corporation (FDIC), placed open market operations under the Fed and required bank holding companies to be examined by the Fed, a practice that was to have profound future implications, as holding companies became a prevalent structure for banks over time.
Also, as part of the massive reforms taking place, Roosevelt recalled all gold and silver certificates, effectively ending the gold and any other metallic standard.
Meanwhile In the Commonwealth of Australia The Treasury issued notes until 1924, when the responsibility was transferred to the Commonwealth Bank.
The Treasury still monitors and assesses economic conditions and prospects, both in Australia and overseas, and provides advice on the formulation and implementation of effective macroeconomic policy.
The Treasury Department is still the executive agency responsible for promoting economic prosperity and ensuring the financial security As the Government’s pre-eminent economic adviser, Treasury seeks to support Australia’s economic outcomes in a dynamic global environment.
The international context is one of volatility and change, and Australia is not immune to this.
It comes as no surprise that many of the drivers affecting Treasury’s environment are economic.
What many fail to remember is that the treasurys main role is to keep the tank half full.
To much cash in circulation causes issues and to little cash in circulation causes issues ,its a fine balancing act to say the least
Security and Exchange.
The Securities and Exchange Commission, or SEC, is an independent federal regulatory agency tasked with protecting investors and capital, overseeing the stock market and proposing and enforcing federal securities laws.
Prior to the SEC’s creation, oversight of the trade in stocks, bonds and other securities was virtually nonexistent, which led to widespread fraud, insider trading and other abuses.
The SEC was created in 1934 as one of President Franklin Roosevelt’s New Deal programs to help fight the devastating economic effects of the Great Depression and prevent any future market calamities.
The Commonwealth Of Australia is a signatory to this a quick internet search will show you this fact.
Stock Market Crash Sparks Criticism
After World War I, during the “Roaring 20s,” there was an unprecedented economic boom, during which prosperity, consumerism, overproduction and debt increased.
Hoping to strike it rich, people invested in the stock market and often bought stocks on margin at huge risk without federal oversight.
But on October 29, 1929 — “Black Tuesday” — the stock market crashed, along with public confidence as investors and banks lost billions of dollars in just one day.
The stock market crash caused nearly 5,000 banks to close and led to bankruptcies, rampant unemployment, wage cuts and homelessness which triggered the Great Depression.
To help determine the cause of the Great Depression and prevent a future stock market crash, the U.S. Senate Banking Committee held hearings in 1932, known as the Pecora hearings, named for the committee’s lead counsel, Ferdinand Pecora.
The hearings determined that numerous financial institutions had misled investors, acted irresponsibly and participated in widespread insider trading.
Securities Act of 1933
Prior to the creation of the SEC, so-called Blue Sky Laws were on the books at the state level to help regulate securities sales and prevent fraud; however, they were mostly ineffective. After the Pecora hearings, Congress passed the Securities Act of 1933, which required registration of most securities sales in the United States.
The Securities Act aimed to help prevent securities fraud and stated that investors must receive truthful financial data about public securities for sale.
It also gave the Federal Trade Commission the power to block securities sales.
The Pecora hearings also led to the passing of the Glass-Steagall Act in June 1933, which helped to restore the economy and public confidence by separating investment banking from commercial banking.
The Glass-Steagall Act created the Federal Deposit Insurance Corporation (FDIC) to oversee banks, protect consumers’ bank deposits and manage consumer complaints.
Securities Exchange Act of 1934
On June 6, 1934, President Franklin D. Roosevelt signed the Securities Exchange Act, which created the SEC.
This Act gave the SEC extensive power to regulate the securities industry, including the New York Stock Exchange.
It also allowed them to bring civil charges against individuals and companies who violated securities laws.
President Roosevelt appointed Wall Street investor and businessman Joseph P. Kennedy — father of future president John F. Kennedy — as the SEC’s first chairman.
The World Bank
The world bank was created at the 1944 Bretton Woods Conference, along with the International Monetary Fund (IMF).
The president of the World Bank is, traditionally, an American.
The World Bank and the IMF are both based in Washington, D.C., and work closely with each other.
Conceived in 1944 at the Bretton Woods Monetary Conference in Bretton Woods, New Hampshire, the World Bank’s initial aim was to help rebuild European countries devastated by World War II.
Its first loan was to France in 1947 for post-war reconstruction.
Soon, however, other actors began to take over the role of reconstruction support and the Bank shifted its attention to the needs of its members in Latin America, Africa, and Asia.
In the 1950s and 60s, the funding of large infrastructure projects, such as dams, electrical grids, irrigation systems, and roads was the Bank’s primary focus.
The Bank’s technical assistance work, which provided countries with technical resources and training necessary to use the Bank’s loans effectively, was increasingly requested by member countries.
The agriculture sector became a major focus in the 1970s.
In the 1970s, the Bank shifted its attention to poverty eradication.
Development projects reflected people-oriented objectives rather than exclusively the construction of material structures.
Projects related to food production, rural and urban development, and population, health and nutrition were designed to reach the poor directly.
Bank operations also expanded to identify and encourage policies, strategies, and institutions that helped countries succeed. The Bank initiated sectoral and structural adjustment loans deemed necessary for the success of its projects.
Gloria Davis, the first anthropologist hired by the World Bank.
In the 1980s, the Bank continued to enlarge its focus on issues of social development. Issues of social life, including education, communications, cultural heritage, and good governance came to the fore.
As a result of this expanding purview, Bank staff, who had originally consisted of engineers, economists and financial analysts, had, by the early 1980s, come to include experts from a variety of disciplines, including economists, public policy experts, sectoral experts, and social scientists.
During this period, the Bank also faced an increasing number of challenges: early in the decade, the Bank was brought face to face with macroeconomic and debt rescheduling issues.
Later the social and environmental effects of Bank-funded projects assumed center stage, and an increasingly vocal civil society accused the Bank of not observing its own policies in some high-profile projects. In response, Bank officials turned their attention inward in order to investigate and respond to the claims made against it.
The Australian economy has coped remarkably well with the decline in commodity prices and the associated decline in mining investment over recent years.
Growth in the domestic economy is becoming increasingly broad-based, and is expected to remain .
Now we hear many say Australia should just print more money for our people.
That would be fine if Australia was the only land mass on the planet or had a better concept or some kind of new world order we ate sure our people would work something out.
After all Anything can be achieved when we work together.
Unfortunately we are not the only land mass and fortunately we are not under a world order controlled by the corporations at this time on paper however it feels that way more each day.
If Australia cut itself off from the rest of the world and stood 100% independent creating and designing its own tech and so on like we were the only humans around then yeah sure we could make it work and infact before world trade thats sort of how it was done .
It comes back to the perceived value of the currency of another world ,realm,kingdom, country or people.
One thing is sure .
Mankind created all these systems and these systems are not perfect .
In most cases these systems hold us back from the things we truly desire and seperate us all into rich poor or otherwise just existing.
We could build better systems .
Why should we settle for mediocre systems that are past their use by date 🤔
For a more in-depth analysis in regards to one world currency be sure to veiw the links below.