Currency notes

Heard the one about the man who wrote a cheque on the side of a cow? Richard Costas takes a light-hearted look at a serious subject: money. Plus more

Some years ago a bank customer in the UK was dissatisfied with the service he was receiving from his bank and in protest he decided to make a payment by cheque.

Paying for something by cheque rather than in cash is not much of a protest, you might think, given that millions of cheques are used as a means of payment every day. In this case, however, the “cheque” in question caused quite a stir (and much amusement). The customer’s protest even became the subject of newspaper articles. If the cheque had been able to speak, it would doubtless have been interviewed on television, because this was a most unusual cheque; it was, in fact, a cow.

The disgruntled customer had written all the details usually written on a cheque — the date, the amount to be paid, the payee’s name, etc — on the side of a cow, signed it, and taken it into his bank. Not surprisingly, the bank manager was unwilling to accept the cheque, but was forced to house the animal at the bank while he tried to find out whether a cow constituted a valid “bill of exchange” — the law on this point, unsurprisingly, being unclear.

As you can imagine, the argument between the bank and its customer grew worse, with the bank reportedly unsure who would pay for the upkeep of the cheque while a decision was made about its validity. I believe the customer eventually cancelled the cheque, and perhaps he was sent a bill for the cow’s upkeep. But he had most certainly succeeded in making his anti-bank protest very public.

Startled as the bank manager may have been, as a financial professional he will doubtless have been aware that once upon a time cows and other livestock were an everyday means of paying for goods and services. In those days, no money (in the sense that we understand the term today) actually changed hands, but cattle performed exactly the same function as money does today (in the form of notes, coins, cheques, and plastic cards).

In fact cattle are said to have been the earliest form of “money”, closely followed by crops, which became popular when human beings moved to a less nomadic, more agricultural way of life. Historians believe that these earliest forms of money were in use as long ago as 9,000 to 6,000 BC. Cattle were still in use as a means of payment in Africa in the middle of the 20th century.

Many things have been used as money in different places and times, according to Glyn Davies. In his book A History of Money from Ancient Times to the Present Day he lists just a few of these, which include amber, beads, cowrie shells, drums, eggs, feathers, gongs, hoes, ivory, jade, kettles, leather, mats, nails, oxen, pigs, quartz, rice, salt, thimbles, vodka, yarns, and zappozats (decorated axes).

Coins came later. According to the British Museum, “the Greek historian Herodotus, writing in the 5th century BC, famously stated that ‘the Lydians were the first people we know to have struck and used coinage of silver and gold’”. The museum says Herodotus was not quite correct, because the “earliest coins were in fact made from electrum, an alloy of gold and silver”. Lydia, by the way, was in what is now Turkey.

Nowadays coins and notes grease the wheels of our world, and we barely notice them. Yet those very notes and coins, which we take almost completely for granted, seem to be passing into history themselves. Credit cards, debit cards, smartcards, and cash cards are used more and more, and coins and notes less and less. Even the cheque, a relatively modern invention, now seems cumbersome and out of date.

By 1995, according to Davies, 90 per cent of all transactions (by value) in the United States were made electronically, and this trend towards “virtual money” continues to gather pace throughout the world.

Before we travel abroad we may buy some “foreign” currency or travellers’ cheques. But nowadays, just as many of us simply use our internationally accepted credit or debit cards to pay for our hotel room or rental car, or to withdraw cash from an ATM while we’re away from home. Yet even “plastic money” is beginning to seem old fashioned. When we buy online or by phone, we don’t even have to present a card, we simply provide the number on the card. Nothing is passed from hand to hand at all; the card number has taken the place of physical money. Money is now a number.

In our increased use of “virtual money” we are really only following in the footsteps of the foreign exchange markets — where billions of US dollars, Swiss francs, Japanese yen, euros, and UK pounds are traded for a profit. Money itself has become something to be bought and sold, not just by numismatists, those collectors of rare or unusual coins and notes, but by people with much larger profits in mind.

Most currency trading is undertaken by banks, but smaller investors are also beginning to take an interest. According to De Haviland Capital Management Limited (, a foreign exchange investment company “opening up the opportunities of investing in the Forex market to the smaller investor”): “The Interbank Foreign Exchange (Forex) is the arena where a nation’s currency is exchanged for that of another. The foreign exchange market is the largest financial market in the world, with over US$1.5 trillion changing hands daily . . . Unlike other financial markets, the Forex market has no physical location, no central exchange. It operates through an electronic network of banks, corporations, and individuals trading one currency for another. The lack of a physical exchange enables the Forex market to operate on a 24-hour basis, spanning from one zone to another across the major financial centres.”

However virtual money may have become, though, it still retains its historical links. Take the dollar, for instance. Not just the US dollar, but all dollars from whatever country. Why are they called dollars?

According to Glyn Davies, “The word dollar is much older than the American [US] unit of currency. It is an Anglicised form of ‘thaler’ (pronounced taler, with a long ‘a’), the name given to coins first minted in 1519 from locally mined silver in Joachimsthal in Bohemia. (Today the town of Joachimsthal lies within the borders of the Czech Republic and its Czech name is Jáchymov). Thaler is a shortened form of the term by which the coin was originally known — Joachimsthaler.”

He says that later the English version of the name, our dollar, was applied to other coins, including the Spanish peso and the Portuguese eight-real piece. “Both these large silver coins were practically identical in weight and fineness. Today we are familiar with the phrase pieces of eight from tales of pirates in the Caribbean.”

It’s a long way from Joachimsthal to the Caribbean, but no further than it is, perhaps, from cows to credit cards.

Readers who would like to know more about the history of money should read Glyn Davies’s A History of Money from Ancient Times to the Present Day, 3rd edition (University of Wales Press, ISBN 0-7083-1717-0, paperback)

Dollars and cents

So you’re an experienced Caribbean traveller. But have you stopped to look closely at the spare change in your pocket, as you make your way through the islands? Test your knowledge of Caribbean coinage with our quick quiz. (Answers below.)

1    Which Caribbean country depicts sugarcane on its five-dollar coin?
2    Which country has former heads of government on its one- and five-dollar coins?
3    Which country’s five-cent coin depicts a bird not native to the Western Hemisphere?
4    What individual appears on the coins of nine Caribbean territories?
5    Which country depicts a pineapple on its five-cent coin?
6    What animal is depicted on the Barbados one-dollar coin?
7    Which country depicts a hawksbill turtle on its ten-cent coin?