Choron money; everything you never knew about your favorite thing to covet, save spend (2011)

MONEY

EVERYTHING YOU NEVER KNEW
ABOUT YOUR FAVORITE THING

TO COVET, SAVE & SPEND
Sandra & Harry Choron


For our parents,
Kalman & Fay Samelson and
Morris & Sonia Choron,
who taught us values


INTRODUCTION
The love of it is the root of all evil, yet it makes the world go ‘round. Most of us never seem to have
enough of it, and we disdain those who do. (“If you want to know what God thinks of money,”
quipped Dorothy Parker, “just look at who he gave it to.”) It permeates every aspect of our existence,
yet it’s considered an inappropriate subject in polite conversation. We claim that it can’t buy
happiness, but Donald Trump’s perpetual smirk belies the point, and of the 685,000 books available
on the subject, just about all of them pretty much focus on how to get your hands on more of it. This
book is the exception.
Instead, we’re looking at money from all of its angles—the historical, the cultural, the personal,
and the off-the-wall. Money is at the center of our lives. We spend more time pursuing money than we
spend on any other activity. It keeps us up at night, busy during the day, and (too) often accounts for
how we define ourselves. Yet the fact is that most of us fear money for the simple reason that we
don’t understand it.
“Money is…a hugely emotional, psychological, and symbolic entity in our lives,” says
psychotherapist Kate Levinson, Ph.D., in her “Emotional Currency” workshops. “We each bring our

own meanings, emotions, and experiences to our relationship with it.” Yet facing our fears of it and
learning how it works can reveal more to us than the mechanics of money. “It’s an incredibly good
vehicle for seeing our issues and vulnerabilities because it touches on almost all aspects of life and it
reveals deep parts of our psyches, including our needs, fears, and desires,” says Levinson. Thus, in
learning about money, we learn about ourselves.
The lessons come not a moment too soon. At the time of this writing, the world has been plunged
into an economic recession that has affected every aspect of our society. As faith in the workings of
the government are eroded, now more than ever we each need to take responsibility for our wellbeing and for our futures. At the very least, we need to make peace with money. Learning about how it
came to be, what it means, how it works, and what happens when it doesn’t is a good first step in that
direction.
“Information about money has become almost as important as money itself.”—Walter Wriston, former
chair and CEO of Citicorp/Citibank


Table of Contents
Cover Page
Title Page
Dedication
INTRODUCTION
1 OLD MONEY
BEYOND BARTER: A MONEY TIMELINE
32 THINGS THAT HAVE BEEN USED AS MONEY
14 WAYS IN WHICH MONEY CHANGED THE WORLD
7 ANCIENT ECONOMISTS
12 GODS OF MONEY
GREEK PHILOSOPHERS ON THE SUBJECT OF MONEY
LYDIA, OH LYDIA (WHAT WE OWE THE LYDIANS)
THE EARLIEST COINS
HAMMURABI’S CODE: PENALTIES AND REWARDS IN ANCIENT MESOPOTAMIA
BIBLE VERSES ABOUT MONEY AND FINANCES

A SHORT HISTORY OF BANKING
THE RISE OF THE HOUSE OF ROTHSCHILD
A MEDIEVAL PRICE GUIDE
WEIRD TAXES IN HISTORY
CATCH ME IF YOU CAN: THE 10 MOST FAMOUS COUNTERFEITING SCANDALS
“THIS IS A STICKUP!”: 8 BANK ROBBERY FIRSTS
WANTED: THE HIGHEST REWARDS POSTED FOR OUTLAWS OF THE WILD WEST
MONEY TALKS: 94 MONEY IDIOMS
38 PROVERBS ABOUT MONEY
CLASSICAL WRITERS AND MONEY
INVESTING IN LITERATURE: 11 CLASSIC WORKS
28 FICTIONAL MISERS
4 AESOP’S FABLES ABOUT MONEY
A HISTORY OF THE PIGGY BANK
SHAKESPEARE ON MONEY
10 POSSIBLE ORIGINS OF THE DOLLAR $IGN
ALL THAT GLITTERS: THE LURE OF GOLD
DEBT BE NOT PROUD: THE HISTORY OF BANKRUPTCY
BENJAMIN FRANKLIN ON MONEY
THE GOLD STANDARD
A HISTORY OF THE STOCK MARKET


WALL STREET TRIVIA
WHERE CREDIT IS DUE
Watchdogs of the Treasury
All about Fort Knox
The Art of Money
Face Value
How “In God We Trust” Came to Appear on U.S. Currency

The High Cost of War
8 OF THE Most Expensive Catastrophes in History
The Cost of Living in the Twentieth Century
A History of the U.S. Federal Hourly Minimum Wage
The Story of the U.S. Mint
What We Learned from the Fall of the Roman Empire
2 NEW MONEY
A Glossary of Monetary Terms
How the Government Affects the Economy
6 Modern-Day Economists
WORLD CURRENCIES
18 British Slang Words for Money
23 American Slang terms for Money
34 Slang Terms for Currency Notes
25 Countries with the Highest GDI
The History of the Euro
Top 10 Richest Countries in the World
Today’s Stock Market Report
A Financial Glossary
World Stock Exchanges
Burgernomics: Profiting from the Big Mac Index
Economic and Corporate Structures
The 10 Most Expensive Cities in the World
16 of the Worst Business Failures in History
A Dollar Is a Terrible Thing to Waste
The Immediate Economic Effects of 9/11
Silver Linings: 9 Good Things about Bad EconomieS
The 10 Best Movies About Money
8 Simpsons Episodes About Money
For a Song: 101 Songs About Money

TOTAL COST OF THE 12 DAYS OF CHRISTMAS


Do Not Pass Go: All About Monopoly
Fun Facts about Las Vegas
The Good Life: 19 Expensive Luxuries
Forking It Over: 10 Really Rich Foods
The 13 Most Expensive Medical Procedures
The 11 Most Expensive Movies of All Time
9 Very Expensive Toys
The 10 Most Expensive Paintings
6 Wedding Extravagances
Introduction to Coin Collecting
Unusually Shaped Coins
How Coins Are Made
The Top 10 Rare Coins
The Pocket Change Lottery
Top 10 American Pennies
The Most Valuable Notes, by Denomination
Penny Wise
The Great Penny Debate
The Nickel
Nickel Lexicon
The Dime
Dime Lexicon
The 50 State Quarters Program Act
QUARTER NOTES
The Half-Dollar Coin
The Dollar Coin
How to Collect Paper Money

6 Kinds of U. S. Paper Currency
19 Fun Facts about Paper Money
Money to Burn
How To Detect Counterfeit Money
8 Interesting Facts about the One-Dollar Bill
How to Read a One-Dollar Bill
8 Interesting Facts About the Two-Dollar Bill
The Five-Dollar Bill
The Ten-Dollar Bill
The Twenty-Dollar Bill
The Fifty-Dollar Bill


The Hundred-Dollar Bill
The Thousand-Dollar Bill
THE TEN-Thousand-DOLLAR BILL
THE Hundred-thousand-DOLLAR BILL
Paper Money Trivia
The Future of Money
3 OTHER PEOPLE’S MONEY
HIGHEST PAID PRESIDENTS AND PRIME MINISTERS
Famous American Bank Robbers
All about Ponzi Schemes
19 of Bernard Madoff’s High-Profile Victims
8 Rags-to-Riches Stories
The World’s Top 40 Billionaires
25 Highest Paid Sports Stars
Spending Habits of College Students
Top 10 U.S. Business Schools
How 16 Wealthy Young Entrepreneurs

13 of the World’s Wealthiest College Dropouts
THE ART OF THE DEAL
21 Really Gross Things People Have Done
Top 10 Game Show Winners of All Time
Found Money
14 Lottery Winners Who Went Bust
11 Top-Earning Dead Celebrities
8 Very Wealthy Cats
The World’s 7 Wealthiest Dogs
9 Rich Parents Who Aren’t Leaving Their Money
8 Famous Inheritances
Spending Habits of the Ultra-Wealthy
7 Famous Misers
12 Self-Proclaimed Frugal Celebrities
Trump Trivia
Famous People Who Have Declared Bankruptcy
100 High-Profile Entertainers
Who Have Insured Their Body Parts
Celebrity Victims of Identity Theft
20 Wacky Wills
Famous Philanthropists


Athletes
Singers and Musicians
Actors, Directors, TV Celebrities, and Authors
Wealthy Individuals
4 MORE MONEY
The Urge to Splurge: 14 Reasons We Overspend
Why We Buy: The Psychology of Spending

15 Ways to Avoid Overspending
23 Signs That You Are Really Broke
Top 10 Money Wasters
The Cheapskate Hall of Fame
Money Etiquette
In restaurants…
The Ten Commandments of Money
8 Steps on the Path to Abundance
9 Signs That You Will Soon Be Receiving Money
11 Signs That You Are About To Lose Money
7 Spells to Bring Money and Wealth
9 More Talismans for Wealth
17 Money Dreams and What They Really Mean
21 Secrets of Self-Made Millionaires
17 Things Millionaires Won’t Admit They Do
All About Identity Theft
How long can the effects of identity theft last?
Pros and Cons of Online Banking
10 Ways To Go Green and Save Money
The High Cost of Raising Kids
6 Guiding Principles
16 Great Web sites for Bartering
How to Bargain Like a Pro
Scamology
12 Money-Saving Tips for the Truly Desperate
How to Overcome Chrometophobia
TOP Celebrity Money Mistakes
Advice from Rich People
Why Women (Especially) Should Embrace
Credit Card Statistics

Most Unusual Credit Card Deals


9 Weird Taxes
32 Great Hiding Places for Money
How To Ask For a Raise
13 Recession-Proof Jobs
The 10 Worst Jobs You Can Get Today
The 10 Best Jobs You Can Get Today
10 Original Ideas for Online Businesses
Financial Job Descriptions
The Height Report
Best Careers for Your Zodiac Sign
35 Things Money Can’t Buy
TEXT PERMISSIONS
INDEX
Selected Bibliography
Useful Web Sites
ACKNOWLEDGMENTS
Copyright


1
OLD MONEY
Before there was money, there was chocolate—and corn kernels and knives and even pigs’ feet. It
was from these early forms that money as we know it was born, and it was from these humble
beginnings that money changed the world—by making commerce, wars, religion, and even
civilization possible. The centerpiece of this chapter is a timeline that follows money from the lumps
of metal that were once used as currency to the sophisticated works of art produced by so many
countries today. The economists who created theories that are still useful today, the first bankers, and

the scoundrels who spawned the counterfeiting industry are just some of the characters we will meet
along the way. The body of art and literature, as well as proverbs and superstitions, that grew up
around the subject of money, is represented here as well.
What’s notable is that despite the trouble that money has caused—the wars, the greed, the class
struggles, and human suffering—we nonetheless pursue it at all costs. “Humans have found many
ways to bring order to the…flow of our existence,” says Jack Weatherford in his classic work The
History of Money, “and money is one of the most important.”
This chapter proves, beyond a shadow of doubt, that money does indeed change everything.


BEYOND BARTER: A MONEY TIMELINE
We can only imagine the origins of a barter system and the problems it presented. At its best,
someone with more chickens than he knew what to do with could make a trade with someone down
the road who had too many cows. Before money was created, the system was useful. But what if the
whole county was overrun with chickens and you found that you couldn’t even give the damn things
away? Even if you did manage to locate a buyer, how did you go about making change if all he had
was one measly blanket to trade? Our entire system of money was invented to solve these and other
problems. This timeline shows how these were solved—and how many other difficulties were
created by the development of money.

C. 3000-C. 2000 B.C.
Even before money is invented, banking originates in Babylonia out of the activities of temples and
palaces, which provide safe places for the storage of valuables. Initially, deposits of grain are
accepted and later other goods, including cattle, agricultural implements, and precious metals, are
stored in banks.

1792-1750 B.C.
A code of law is issued by Hammurabi, who rules Babylon during this period. For the first time,
specific values are ascribed to property, as the code addresses the subjects of loans, theft, landleasing, and debt.

1200 B.C.
The earliest record of cowrie shells being used as money. The practice began in China, where the
shells were found in the Pacific and Indian Oceans. Their use spreads as the Chinese begin to trade
with other countries. Cowries were still in use in Nigeria until World War II.

1000 B.C.
China points the way to metal money by instituting the use of metal knives and spades as money. They
also begin to make metal copies of the cowrie shells but soon discover that lumps of metal are easier
to produce than the faux shells. Thus the first “coins” are produced. They are round, with holes in the
middle so that they can be strung and easily carried to market.

600 B.C.
As people begin to travel more widely and trade with other countries, the idea of money begins to
spread. The earliest coins, found in Lydia, part of present-day Turkey, are round pieces of metal that


are stamped with the faces of gods and emperors. By 550 B.C., they are made of gold and silver.
Greeks and Romans, who also use bronze for minting, soon follow suit, and coins appear in different
values.

390 B.C.
The Gauls attack Rome, but the cackling of geese in the capitol, where the city’s reserves of money
are kept, alerts the Romans, who later build a shrine to Juno Moneta, the protector of funds. The
words money and mint are derived from her name.

269 B.C.
The Romans finally adopt coinage to replace the cumbersome bronze bars (called aes signatum) that
have been commonly used as currency.

218-201 B.C.

To fund the Second Punic War between Rome and Carthage, Roman rulers reduce the weight and
purity of their coins, and one of the earliest periods of inflation ensues.

A bracelet of cowrie shells

118 B.C.
China is the first to use paper money, in the form of a 30-centimeter square of white deerskin. Society
soon learns that the value of money depends on how much of it is available, as those in financial need
simply “manufacture” more by killing more deer. This lesson in inflation leads to the greater
popularity of gold and silver coins.

30 B.C.-A.D. 14
Augustus Caesar reforms the Roman monetary system by introducing coins made of almost-pure gold,
silver, copper, and brass.

A.D. 54-68


Nero copies the practice of other emperors by debasing gold and silver coinage, and prolonged
inflation results. By A.D. 250, the silver in Roman coins is down to 40 percent of its original silver
content; by 270, it has fallen to 4 percent.

A.D. 300
The Roman denarius has been devalued by 50 percent.

A.D. 313
Constantine adopts Christianity and confiscates the treasures that lie within pagan temples throughout
the empire, but nevertheless produces debased coins, leaving most of the population with inflated
currency.

A.D. 400
The Roman Empire collapses, taking Western Europe’s banking system with it. Banking will not
develop again until the Crusades.

A.D. 435
The Anglo-Saxons invade Britain, and the use of coins there disappears for some two hundred years,
during which time precious metals and other commodities are used as money. Although some coins
are manufactured, they are used only as ornaments. By A.D. 630, they are back in fashion due to the
influences of French and Spanish traders, and coins remain in circulation until the present day.

A.D. 650
Paper money is in popular use in China. When Marco Polo returns from his trip there in 1275, he will
tell all his friends back home about this odd “paper money”: “I tell you that people are glad to take
these tokens, because wherever they go in the empire of the great Khan, they can use them to buy and
sell as if they were pure gold.”

Cowrie shells

A.D. 925-940
King Athelstan of England establishes a single national currency and decrees that the amount of silver


in a coin must be uniform for that denomination.

A.D. 959-975
King Edgar of England further refines the law by designating exact sizes for coins. Recognizing that
coins passed from hand to hand become grubby and worn, he introduces the idea of recycling money.

1095-1270
The large sum of money needed to fund the Crusades leads to the re-emergence of banking in Western

Europe.

1124
The mint masters of Winchester, England, accused of producing substandard coinage, are punished by
having their right hands cut off. The quality of coins immediately improves.

1149
Hung Tsun’s Chhuan Chih (A Treatise on Coinage), the first book on numismatics in any language, is
published.

1232-1253
Gold coins are issued by several Italian states, and the florin, made in Florence, is copied throughout
Europe.
“In prehistoric times, there was no such thing as money. When people needed to buy something, they
had to charge it. And then when the bills came, nobody could understand them, because there was
also no such thing as reading. This led to a lot of misunderstandings and hitting with rocks.”—Dave
Barry

1319-1331
Paper currency appears in parts of India and Japan.

Early Japanese coins; these could be strung together for convenience


1360
The French franc is first issued, as a gold coin. Prior to this date, Greek and Roman coins were in
use. In 1577, a silver franc will be introduced, but the franc won’t become the main unit of French
currency until 1795.

1452-1519

In Italy, one of Leonardo da Vinci’s many inventions is a water-powered press that can produce
nearly identical coins.

1492
Christopher Columbus and, six years later, Vasco da Gama, sail from Portugal and dramatically
change the course of history by discovering new trade routes, along which vast amounts of gold and
silver may now be transported from one continent to another. Pooling resources to fund trade
expeditions will evolve into the concept of joint-stock companies. A global economy is born.

1601
England establishes laws for dealing with the problems of the destitute. These are the first “poor
laws.”

1619
Tobacco is first used as currency in Virginia, and will remain in use for the next two hundred years.

1637-1638
Holland is gripped by “tulipmania,” a period during which prices for the newly introduced tulip bulb
reach a peak level and then suddenly collapse. This is generally considered to be the first speculative
bubble, and when it bursts, it takes an entire economy with it. At the peak of tulipmania, a single tulip
could be traded for an entire estate; at the bottom, a tulip costs the same as a common onion.
Alexandre Dumas (père)’s 1850 tale of financial corruption, Black Tulip, is based on the story of
Johan de Witt and his brother Cornelis, who were executed in 1672 for their role in the event. Little
is learned from the debacle, and it will serve as a template for similar commodity disasters
throughout history.

The belt of wampum that was delivered to William Penn by the Indians upon the signing of the Great Treaty of 1682


1637

Wampum—strings of beads or disks made from shells—becomes legal tender in Massachusetts.
Although it will be declared illegal in 1661, wampum will remain in use in parts of America for the
next two hundred years.

1652
The General Court of England passes the Massachusetts Bay Mint Act, establishing the only colonial
mint. It is denied reestablishment by King James II on October 27, 1686.

1690
The Massachusetts Bay Colony issues the first paper money to replace the English, Spanish, and
French currencies that have been in use in colonial America.

1694
The Bank of England is founded, and it establishes what is being called the “interest rate” on
borrowed money. The first banknotes are issued. They are printed in black on one side only and are
very easy to copy. Special watermarked paper from Sweden is imported to curb counterfeiting.

1715
Suffering from a shortage of British coinage, the colonists use various substitutes, including tobacco,
and Spanish and Portuguese coins. At this time, seventeen different forms of money are legal tender
here.

1719-1720
The Mississippi Company had been set up by a businessman named John Law to exploit the wealth of
French colonies, especially in Louisiana. In 1719, it is also given a monopoly on trade with the East
Indies and China, and a speculative boom in the value of its shares ensues. The boom, combined with
the over-issue of notes by the Banque Royale, leads to a drain of precious metals from France to
London. Law’s enemies persuade the Regent to dismiss him from his post, the bank stops payment,
and the boom collapses. The debacle sets back the development of banking in France by about a
hundred years.

1720
In London, speculators invest in the South Sea Company, which has an exclusive trading monopoly
with South America and the Pacific. This artificially inflates prices of stock, and the “South Sea
Bubble” bursts. It takes more than a hundred years for the market to recover from the fiasco.


1764
Britain forbids the colonies to issue paper money.

1769
The Rhode Island Militia sinks the British ship HMS Liberty off the coast of Newport, Rhode Island,
in the first major act of defiance by colonists against British taxation, which eventually sparks the
American Revolution.

1775-1783
The colonists issue paper money to finance the Revolutionary War. (The paper money issued by the
state of Maryland depicts George III trampling the Magna Carta.) The notes are backed by anticipated
tax revenues that never materialize, and they quickly lose their value. Hyperinflation renders the
continentals, as they are called, worthless.

1780-1810
Banking has flourished throughout England and Wales. By the end of this period, there are more than
eight hundred banks. Most of these have ties to specific trades, and it is these bankers who make the
Industrial Revolution possible.

1781
The first real bank on this side of the Atlantic—the Bank of North America, in Philadelphia—is
established by the Continental Congress and the dollar is adopted as the national unit of currency. At
this time, private banking companies as well as the individual states are still issuing their own

currencies, called State Bank Notes.

1785
A decimal coinage system is adopted, although this does not have any practical meaning until the
passage of the Mint Act of 1792, when coins are first produced.

1789
Upon adoption of the Constitution, Congress charters the First Bank of the United States, which is
headed by Alexander Hamilton and serves as the fiscal agent of the U.S. Treasury. Henceforth, the
individual states will not be allowed to coin money or designate anything other than gold or silver as
legal tender.
“Gold is too heavy to be constantly lugged around. So, to make it easier for everybody, governments
began to issue pieces of paper to represent gold. The deal was, whenever you wanted, you could


redeem the paper for gold. The government was just holding your gold for you. But it was YOUR
gold! You could get it anytime! That was the sacred promise that the government made to the people.
That’s why the people trusted paper money. And that’s why, to this very day, if you—an ordinary
citizen—go to Fort Knox and ask to exchange your U.S. dollars for gold, you will be used as a human
chew toy by large federal dogs.”—Dave Barry

1792
The Federal Monetary System is established with the creation of the U.S. Mint in Philadelphia, and
the first coins are struck the following year. Within three years, all foreign coins will lose their status
as American legal tender.

1792
An American merchant ship arrives in Sydney Cove, Australia, with a new form of currency: rum. It
is used as money in New South Wales until 1813.

1797
The Bank of England issues the first £1 note.

1800
There are now twenty banks in the United States, up from four in 1790. Fears that the Bank of the
United States would have monopoly powers, and therefore discourage the founding of more banks,
subside.

1800-1860
Cowrie shells, still in use in Uganda, suffer from inflation. At the end of the eighteenth century, it
costs only two cowries to purchase a woman. After 1860, a woman will cost more than a thousand.

1801
The London Stock Exchange is established.

1825
Gregor MacGregor, a Scottish soldier and adventurer, convinces British investors to fork over money
to fund the economy of the Republic of Poyais in South America. So attractive are the prospects that
even the colonists clamor to get in on the action. But Poyais is a figment of MacGregor’s imagination,
and when the scam is uncovered, almost seventy banks fail.


1832
While the drachma has been applied to various forms of Greek currency as far back as 1100 B.C., it
is not until now that the modern drachma, subdivisible into 100 lepta, is adopted as the official
monetary unit of Greece.

1834
An Act of Congress redefines the amount of gold in a dollar, making coins minted prior to July 31,
1834, worth 5.2 percent less than their stated value.

1837
The Panic of 1837 begins when all the banks in New York City suspend specie payments. The panic
is the second worst depression in the history of the United States and lasts until 1843.

1857
A financial panic is sparked by the failure of the Ohio Life Insurance and Trust Company, fed also by
overspeculation in real estate and railroad securities. The market recovers in less than a year.

1861
To finance the Civil War, Congress authorizes the U.S. Treasury to issue paper money called Demand
Notes, which are not redeemable for gold or silver but still are used for legal tender. Called
“greenbacks” for their green hue, they are also referred to as Treasury Notes. In addition, the
individual Confederate states, as well as railway and insurance companies, issue notes; the
Confederate States of America authorizes the printing of $50, $100, $500, and $1,000 notes.
Hyperinflation results and Confederate paper notes become worthless.
The first U.S. income tax is imposed: Everyone who earns more than $800 must pay a 3 percent tax.


Property owners suffer while ministers of finance vomit taxes into a bag labeled “budget.” From the nineteenth
century.

1862
The first U.S. paper money is issued in denominations of $5, $10, $20, $50, $100, and $500.

1863
The design of U.S. currency now incorporates a Treasury seal, fine-line engraving necessary for
intaglio printing, intricate lathe-work patterns, and distinctive cotton and linen paper embedded with
red and blue fibers. Counterfeiters respond with better equipment and more sophisticated materials.

1864
Congress first authorizes the use of the phrase “In God We Trust,” on a two-cent coin.

1865
The Secret Service is established specifically to control counterfeiting. At this time, it is estimated
that approximately one-third of all circulating currency is counterfeit. The Treasury issues Gold
Certificates against gold coin and bullion deposits, and these are circulated until 1933.

A bulletin board from the New York Stock Exchange photographed on September 24, 1870, during a gold panic

1869
An attempt to corner the gold market causes the Black Friday financial panic.

1869
Spain adopts the peseta as its official unit of currency. It is subdivided into 100 céntimos or 4 reales.


1872
The yen becomes the official monetary unit of Japan, replacing a complex system of coinage. It can be
sub-divided into 100 sen or 1,000 rin, but these are taken out of circulation in 1953.

1879
To deter dishonest bartenders, the cash register is invented. James Ritty and John Birch eventually
sell their patent to the National Cash Register Company.

1890
The Sherman Silver Purchase Act is enacted, requiring the government to purchase 4.5 million ounces
of silver bullion every month with currency that is backed by both gold and silver. This causes people
to sell their silver and then demand gold for the notes they receive, depleting the U.S. gold reserves.
“Money speaks sense in a language all nations understand.”—Aphra Behn (1640-1689), English

dramatist

1891
The first traveler’s checks are issued by American Express.

1893
A worldwide financial panic occurs after a series of economic setbacks: the Reading Railroad, a
major Eastern line, goes bankrupt, and the hundreds of banks and businesses dependent on the
railroad suffer. European investors fearing the worst pull their funds out of the United States, but it’s
too late, and the depression reaches across the Atlantic.

A $20 gold certificate from 1905

1900
The Gold Standard Act officially places the United States on the gold standard.

1907
A financial crisis follows when the New York Stock Exchange falls close to 50 percent from its peak


the previous year. Numerous banks and trust companies enter into bankruptcy when a nervous public
rushes to withdraw funds after a failed speculation causes the fall of two major brokerage firms. J. P.
Morgan saves the day by loaning the government enough money to shore up the banks.

1909
The first Lincoln pennies are minted—the first coins to bear the likeness of a president.

1910
In Central Asia, the Kirghiz people continue to use horses as money. Sheep are used as smaller units
of currency, and change is made in sheepskins.

1913
To deter future economic disasters, the Federal Reserve Act is passed and creates the Federal
Reserve System, which will be the nation’s central bank through which all money and credit will
flow. Federal Reserve Notes are issued, and are now the only currency produced.

1913
The first buffalo-head, also known as Indian-head, nickels, are circulated.

1917
The U.S. enters World War I, and the national debt rises from about $1 billion in 1916 to $25 billion
in 1920.

1921
In the United States, the number of banks has reached 30,000.

1927
The first image ever to be transmitted via television is a dollar sign.

1928-1929
The U.S. stock market enjoys a boom that goes unchecked by government, until the market crashes in
October of 1929. Widespread bank failures result and businesses fail. The Great Depression, as it is
called, finds thousands of investors flooding the stock market with some 13 million shares. Banks that
have invested in the market fail when they are unable to produce enough money for angry depositors.
Some $30 billion in paper money becomes worthless overnight.


1932
The Reconstruction Finance Corporation is established and distributes $9.465 billion in loans from
1932 to 1941.

1933
Franklin Roosevelt institutes the New Deal program, restoring the failed banking system and
confidence in the country’s financial system. The U.S. Federal Deposit Insurance Corporation (FDIC)
is established and will insure bank deposits up to $2,500 (by 2009, this limit will have been raised to
$100,000). The United States is taken off the gold standard, and all but ten of the 445,000 newly
minted $20 “Double Eagle” coins are destroyed (in 2002, one of these coins will be sold for $7.59
million). It is now illegal to hoard gold coin, gold bullion, or gold certificates. Eventually, gold coins
from 1933 and earlier are exempted from this rule so that coin collectors can avoid prosecution.
“We don’t have the gold standard anymore. Nobody does. Over the years, all the governments in the
world, having discovered that gold is, like, rare, decided that it would be more convenient to back
their money with something that is easier to come by, namely: nothing. So even though the U.S.
government still allegedly holds tons of gold in “reserve,” you can no longer exchange your dollars
for it. You can’t even see it, because visitors are not allowed. For all you know, Fort Knox is filled
with Cheez Whiz.”—Dave Barry

1934
The U.S. Gold Reserve Act is passed, withdrawing gold coins from circulation and raising the
official price of gold from $20.67 to $35 per ounce, a substantial devaluation of the dollar.

1937
The first deposit of gold bullion is shipped to the United States Bullion Depository at Fort Knox.

1938
The Federal National Mortgage Association (Fannie Mae) is created to expand the flow of money to
mortgage lenders.

1939-1945
The U.S. national debt, which was only $16 billion in 1930, reaches a peak of $269 billion in 1946
but because the money was borrowed at very low interest rates, the U.S. economy thrives while those

of European countries are devastated.

1944


Delegates from forty-four countries attend a meeting at Bretton Woods, New Hampshire, where they
agree to establish the International Monetary Fund and what is now the World Bank to promote
international trade. The countries all agree on a gold standard, and only the United States is required
to convert its currency into gold at a fixed rate.

1950
A businessman named Frank McNamara pays for his meal at Major’s Cabin Grill in New York City
using the newly invented Diner’s Club card. It is made of cardboard and is the first such device to be
usable at multiple establishments.

1955
In September, following President Dwight Eisenhower’s heart attack, the New York Stock Exchange
suffers a $44 million loss, its most devastating setback since 1929.

1957
“In God We Trust” appears on paper currency for the first time.

1958
American Express begins issuing credit cards.

1964
Secretary C. Douglas Dillon announces that Silver Certificates will be redeemable only for silver
dollars.

1965

Because older silver quarters are worth more than face value and are being melted down for profit,
the Coinage Act of 1965 is passed, authorizing the removal of silver from circulating coins and
providing that cupronickel-clad coins, made of copper and nickel, be used instead for the half-dollar,
quarter, and dime.

1967
The first modern automatic teller machine (ATM) is installed in London outside a Barclays bank.

1968
President Lyndon Johnson signs a bill removing gold backing from U.S. paper money.