Money by itself is not wealth. It is simply a means by which people can exchange goods that do have value. While a pile of banknotes is being kept in an attic by a miser and never exchanged for anything, it is worth less than a heap of old rags. Money is a promise, a piece of trust which is passed from hand to hand and can be easily stored without perishing.
In this article, you will read about many more enlightening facts about money. Are you ready?
Then, dig in!
1. Dear Ladies
In early Central Africa, two U shaped copper “kougas” could buy a male slave. A female slave cost three, and a wife cost ten.
2. Wives for Rods
Among the Palaboroas of South Africa, copper rods of a specific make and type, would be used for barter. One copper rod would buy two cows, but a wife was worth five rods.
3. Paper Money
The use of paper money is believed to have started in China between the 7th and 9th century A.D., to overcome shortages of coins. In Europe, in medieval times, letters of credit, effectively personal banknotes, were exchanged between businessmen who knew and trusted each other. Later, a practice grew in which goldsmiths gave receipts for gold left in their charge, and these receipts were exchanged as money. During the 18th and 19th centuries, first private bankers, and then central banks, took over this role. They issued notes, each of which was a “promise to pay”: words that still appear on many banknotes.
Until 1931, when many countries, including Britain, went off the Gold Standard – the holders of banknotes were usually entitled, in theory, to demand from the issuing bank, that the notes should be redeemed in gold. Since then, however, notes have resumed the status of primitive beads – a means of exchange which had value only if the paper is trusted.
4. Cash Flow
Many of the great personal fortunes of the past have flowed from holes in the ground: oil wells. Once the steam engine had been adapted to drive a drill, and a method of cleaning, or ‘refining’ oil had been developed in the mid-19th century, the way was open for oil products to become an indispensable fuel for modern industry. For those who foresaw this, and had the chance to invest in the new oil business, there were vast riches to be gained.
It was oil which gave American tycoon John D. Rockefeller (1839 – 1937) the opportunity to acquire possibly the biggest personal fortune in modern times. Rockefeller began his business life at 16 as a book-keeper. By the age of 19, he had saved enough to start a small company, and then entered the oil business, backing Samuel Andrews, the inventor of the oil refining process. In 1870, Rockefeller helped found Standard Oil, which swallowed smaller firms and by 1879 controlled 90 per cent of US oil refineries, making Rockefeller master of 75 per cent of the world’s oil production. His huge combine survived until 1911 when the US Supreme Court ordered it to be broken up owing to its overwhelming commercial power.
Arab oil sheikhs were often thought to be the wealthiest in the world, but they were usually rulers of states rather than gatherers of truly personal riches.
5. Half a Billion In a Day
The eccentric American recluse Howard Hughes (1905 – 76) once made half a billion dollars in one day. He received a single banker’s draft for $ 546,594,771 in 1966 in return for 75 per cent holdingi in Trans World Airlines.
6. Big Spender
On inheriting more than $ 1 million in cash and oil wells, one of the fastest fortune losers in modern times, deserted his wife, moved into a smart New York hotel and began offering champagne and oysters to all comers. In one year of riotous living in 1864, John Washington Steel, known as Coal-Oil Johnny, got through his entire inheritance. Then, sober and bankrupt, he went back to his wife, moved west to Nebraska, and found a job as a railway goodsyard supervisor. He died – solvent, but not rich – in 1920.
7. Not Worth The Paper
In Germany, after the First World War, the government printed money frantically as the mark’s value plunged. Wheelbarrow loads of paper notes were needed to buy bread and other household goods. In 1921, the German rate of exchange was 81 marks to one American dollar. By July 1923, a dollar was worth a million German marks.
The world’s worst inflation happened in Hungary in 1946. Hungary, like many other countries, had gone off the Gold Standard in 1931. By June 1946, one 1931 gold pengö was worth 130 million million million paper pengös, and prices in the Hungarian capital of Budapest, were being raised as often as ten times a day. The pengö was later replaced as a unit of currency by the present forint, and by 1980, inflation was down to a modest 4 per cent a year.
8. First Income Tax
Taxes have been collected since ancient times. The earliest – recorded in Mesopotamia and Egypt – were taxes on imported goods (the equivalent of Customs duties) and on houses and land. Income tax, however, is a relatively recent invention. It was introduced in Britain in 1799 – by Prime Minister William Pitt – with a top rate of just 10 per cent – to help pay for the Napoleonic Wars. Progressive income tax – increasing in proportion as earnings rise – was developed in Prussia in 1853, and has been used in Britain since 1907, in the United States since 1914, and in France since 1917.
9. Dial M For Money
Guests at the country home of one of the 20th century’s richest men, J. Paul Getty, had to pay for any telephone calls they made. Getty (1892 – 1976) had coin operated telephones installed in the bedrooms of his 16th century Tudor mansion, Sutton Place, in Surrey, England. The American financier and art collector was estimated to be worth about $ 3000 million at the time of his death.