| Michael Newdow, the atheist that has spent four years trying to ban the Pledge of Allegiance from being recited in schools, now has taken to challenging the motto printed on U.S. currency. He wants the words "In God We Trust" from U.S. coins and bills, claiming in a federal lawsuit that he has filed that the motto is an unconstitutional endorsement of religion in violation of the Constitution. Newdow is a California doctor and lawyer and used a similar argument trying to ban the Pledge of Allegiance in public schools because of the words "under God" contained in the Pledge.
Money History: Where were notes invented:
Paper money - the most important contribution of Chinese civilization to the world culture, along with the creation of paper and printing of books with the help of wood blocks. Their method of production has combined both these discoveries. Marco Polo, who contrived to not notice in China hieroglyphic script and the Great Wall of China, was amazed by paper money and narrated in detail about the process of manufacture of them, method of use and value. "Flying currency" appeared in the Tang Dynasty in 800-s AD., when the government reasonably decided that carrying of metal coins over long distances is difficult, and started paying to the local merchants specially printed cash certificates that can be exchanged for "hard" currency in the capital. Merchants quickly realized the convenience of innovations and began to use them in the transactions as a means of payment. People, houses and trees were drawn on this money, officials inscribed on them with colored ink their signatures and put their stamps. Due to extensive printing business, the bank notes thoroughly protected, and punishment by death was proclaimed on for counterfeiting. Paper money to the West came after the Mongols in 1291, published in Iran banknotes in the Chinese style, which immediately led to inflation. Besides, they could be brought to Europe by the travelers returning home from China during the Mongolian Yuan Dynasty (1280-1368 years).
There is another example of medieval society that successfully existed without money. This unique civilization was virtually wiped out by the europeans for 40 years. Meanwhile, mentioning of what this civilization did not have, in particular, the written language, wheels and money, makes to think over how much the economic setup options, quite different from modern ones, can be viable. The talk is about inca - the only nation created on the territory of Ancient American state - Tawantinsuyu. At the time of its heyday in the early XVI century, the state extended along most of the Pacific coast of South America, occupying an area of more than 3 million km2. The Incas did not know the wheel, and the message inside the lands under their control was sent using messengers - "Chaskas" or many-colored smoke signals. Economy as a whole of the diverse country was based on total control and planning: the universal labor conscription - "Summit", barter and taxation of luxury items. Conscription does not necessarily imply "exhausting" the peasant to death. One legend says that the tax collectors were very loyal to the weak and infirm and took several lice from them as contribution. While in some parts of the state, the money had circulation, such as, Chimu – the slave Inca tribe, the vast majority of the population lived on complete state support. In exchange for the work, people got certain amount of food and clothing and shelter if necessary.
History of gold standard:
With the development in Europe, paper money and all sorts of financial instruments - bills, mortgage, bond, and with steep increase in public expenditure, nominal amount of money in circulation has gradually increased to a level, where the precious metals to the Treasuries of the states was not sufficient. Thus, in France at the beginning of XVIII century, this difference was very much noticeable: the state filed a stock of 700 thousand francs, and the deficit was 110 times greater. On the threshold of the Napoleonic wars, the situation threatened to turn into a disaster even for the whole of Europe, and in 1797 the Bank of England adopted the act on limitation of convertibility, which enabled stoppage of free exchange of banknotes in circulation for precious metals. At first thought it was a temporary measure, but it stretched for 24 years. The history of modern legal or fiduciary money started from it.
Gradually during the XIX century, most of the leading countries have set their silver, gold or bimetallic standard. In accordance with which, the cost of the denominations was attributed to some extent, gold, silver, or both, coinage, as well as import and export of precious metals and casting of these bars were allowed. In these standards, there is only one source of legal tender - the central bank, and this is the difference between innovation from the financial systems that our civilization has enjoyed previously. This source produces banknotes and fixes the rate, at which they are convertible into precious metals. |
