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The history of money

17 September 2013

People have traded goods and services since the beginning of time, but they haven't always paid with money – or at least, not in the conventional form that we use today.

Salt was one of the earliest forms of payment. Although the ancient Romans did use coins, many people in those days preferred to trade with simpler commodities including salt. Indeed, the Latin word 'salarium' – from which we derive today's salary - referred to the money paid to Roman soldiers to buy salt. They would typically purchase blocks of salt from which they would break off pieces to buy goods from merchants.

Hard cheese

Italy also gave birth to another edible, unconventional currency - Parmigiano Reggiano. It is hard to believe that the cheese we have all become accustomed to sprinkling on our pasta was so highly regarded that it was used both as currency and bank collateral in Italy.

Other edible currencies include cacao which was widely used for trade in South America. Although inhabitants of the early Aztec civilisation are renowned for the way they were able to work gold into jewellery, they still preferred to pay with chocolate beans.

Flower power

During the 17th century the tulip bulb became a widely accepted form of currency in the Netherlands. People would use them as collateral for loans and borrow such large sums of money against them that tulips ultimately caused one of the world's first global financial crises.

At the height of the tulip 'bubble', a single bulb could fetch the equivalent of R10 000. In one documented deal, a trader exchanged a bed, a complete suit of clothes, and a thousand pounds of cheese for one bulb. In 1636 when the price of tulips hit its peak, a good trader could earn up to 60,000 florins in a month – in today's currency, that's the equivalent of almost R500 000.

Closer to home, cowrie shells have been used as an alternative to currency in many African countries. Trade routes with Asia meant that cowries eventually reached China. Even today, the Chinese symbol for money resembles a cowrie.

It's quite something to think that even today, in the darkest reaches of the Amazon jungle people are exchanging beans, bulbs and seeds for goods and services. Maybe money does grow on trees after all.

At DirectAxis we want to encourage people to manage their finances responsibly. While we can't accept food in exchange for personal loans or car insurance premiums, with tools like our budget planner, we can make it easier for you to handle your monthly expenses.