Starting from 600-300. BC e. Commodity money is being replaced by full-fledged money.
Full-value money is a type of money that represents banknotes whose purchasing power is directly or indirectly based on the value of a precious metal, such as gold or silver.
Banknotes, the purchasing power of which is directly based on the value of the precious metal, are1 full-fledged money in exact accordance with the value this term. Banknotes, the purchasing power of which is indirectly based on the value of the precious metal, are representatives of full-fledged money or exchange money.
U full money the denomination indicated on the front side must coincide with their market value. Representatives of full-fledged money have a denomination significantly higher than their commodity value, but they provide for mandatory exchange at a fixed rate for full-fledged money.
The main forms of full-fledged money are: (1) bullion; (2) coins; (3) banknotes. In Fig. 2.3 presents the classification of full-fledged money.
Rice. 2.3. Classification of full-fledged money
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Starting from 600-300. BC. Commodity money is being replaced by full-fledged money.
Full money is a type of money that is a form of currency whose purchasing power is directly or indirectly based on the value of a precious metal, such as gold or silver.
Banknotes whose purchasing power is directly based on the value of the precious metal are full-fledged money in strict accordance with the meaning of this term. Banknotes whose purchasing power is indirectly based on the value of the precious metal are representatives of full-fledged money or change money.
For full-value money, the denomination indicated on the front side must coincide with its commodity value. Representatives of full-fledged money have a denomination significantly higher than their commodity value, but they provide for mandatory exchange at a fixed rate for full-fledged money.
The main forms of full-fledged money are:
(1) ingots;
(2) coins (full-value, change);
(3) banknotes.
In Fig. 3.2 presents the classification of full-fledged money.
Rice. 3.2. Classification of full-fledged money
Ingots. The first full-fledged money was issued in the form of bars. To certify the purity of the metal and its weight, the supreme rulers branded the ingots, trying to overcome the inconvenience of determining the quantity and quality of the metal contained in the ingot. IN various sources According to the history of money, there is information that the first metal ingots, confirmed by a certain mark, were widely used in Ancient Babylon and Egypt. The disadvantages of metallic full-fledged money in bullions were their weak divisibility and limited transportability.
Coins. Unlike commodity money and unmarked metal bars, coins were the first fairly universal means of payment. Because their quality and weight were verified by testing. They were recognizable, durable, divisible and transportable.
It is believed that the first coins were put into circulation in the Lydian kingdom in 640-630. BC. They were minted from a natural alloy of gold and silver. And they were square. In 550 BC. In the Lydian kingdom, full-fledged gold and silver coins began to be produced. Around the same time, the first coins were minted in Ancient Greece. Later, in 600-300. BC, the first round coins were issued in China. And in 275-269. BC. silver coins came into use in the Roman Empire and then spread throughout its colonies.
Starting from 800-900. AD in most European countries, including Rus', their own coinage appears, and coins actively begin to circulate throughout Europe.
Since the weight content of the first coins coincided with the denomination minted on them, the name of the weight unit was often repeated in the monetary unit, for example, hryvnia, pound, etc.
In addition to full-fledged coins, small change coins were in circulation. They were fractional parts of full-fledged coins. Typically, the minting of small change coins took place in a closed manner from state-owned metal at the state mint.
When full-value coins wore out during use, or when coins were damaged by private or state issuers, their weight content decreased. At the same time, the coins continued to circulate at the same denomination. This quickly led to the idea of the possibility of counterfeiting coins, i.e. targeted minting bad money. Defective coins have a face value higher than their marketable (intrinsic) value. However, unlike full-value money, defective coins did not provide for any exchange for Full-value money.
Coin income. The minting of inferior coins brought in coin income. Coin income is the difference between the face value of a coin and the market value of the metal that was spent on its production. As nation states formed, coinage became the exclusive privilege of governments and was called coin regalia. Coin regalia is the state's monopoly right to mint inferior coins. This prerogative of the government was never subsequently ceded, arguing that it was necessary for the common good. The profit from the monopoly issue of money is called share premium or seigniorage.
Banknotes. The expansion of commodity production volumes entailed an increase in exchange transactions. Full-fledged money was not able to meet the growing needs of the economy for means of circulation, so there was a need to introduce new form money - banknotes that were representatives of full-fledged money.
From the history of money it is known that the first European banknotes were issued by the Bank of Sweden in 1661. Banknotes, the issue of which was regulated by the state, appeared in England in 1694.
First Russian banknotes appeared in circulation under Catherine II in 1769 and, by analogy with the French ones, were called banknotes.
Banknotes served as a means of payment in the sphere of wholesale trade; retail served by coin money.
Banknotes were representatives of full-fledged money. They did not have a forced exchange rate, but were necessarily exchanged for coins at the market rate. Thus, the banknote was a receipt containing a requirement for the issuing bank to issue to its bearer the number of coins indicated on it.
In 1844, in England, according to the R. Peel Act, the institution of emission law appeared. The right of emission is the right of a central (state) bank to issue banknotes without monetary backing and without special permission from legislative bodies. Its scale was measured as a percentage of the volume of issue of coated banknotes. In France, the institution of emission law was introduced in 1848, in Russia - in 1897, in the USA - in 1916. Thus, the government monopoly on the issue of money, initially extending only to coins (since this was the only form of money used) , began to spread to banknotes.
Since banknotes were representatives of full-fledged money, they provided for a certain procedure for ensuring their issue, which could be direct or indirect. Direct security includes the provision of coins minted from precious metals or bills of exchange. Indirect security includes the provision of banknotes by the state’s obligation to accept them in payment of taxes and other payments. Depending on the security, three types of banknotes were distinguished: with full covering, with partial covering and without covering.
Full Cover Banknotes had full direct coverage, were exchanged for gold in unlimited quantities (the exchange rate was market), issued by private and state banks in unlimited quantities; the built-in limit on such emission was the official gold reserve.
Partially coated banknotes had direct collateral, which consisted of precious metals and bills, were exchanged for gold in unlimited quantities (the exchange rate was below par), and were issued by a state bank, whose activities were limited by the institution of emission law.
Uncoated banknotes did not have direct security, they were not exchanged for coins, they were recognized as a state debt; the right to issue additional banknotes was retained by the state bank and was periodically revised upward.
Over time, banknotes evolved from the first form to the third. Their gradual change was a consequence of continuous emission, which, given the limited official gold reserves, led to the impossibility of exchanging all issued banknotes for gold. In 1976, the demonetization of gold was secured by international agreements. Banknotes were finally transformed into irredeemable paper money.
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Full money |
Bad money |
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1. Have intrinsic value |
1. They are signs of value |
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2. Arise as a result of the historical development of commodity production |
2. Issued by the state to cover its expenses. |
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3. The amount of money is determined by the reserves of monetary metal |
3. The amount of money is determined by government spending |
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4. Forms of money are gold bars, coins and paper bills redeemable for gold at par |
4. The forms of money are paper bills with a forced denomination - treasury notes, billon coins. |
In modern conditions, there is almost no inferior money issued by the state treasury in circulation in industrialized countries. In most countries, credit money circulates.
Credit money- this is money that is issued in the country as a result of credit transactions of banks in the form of paper banknotes - banknotes (cash) and in the form of deposits (non-cash funds).
The condition for the emergence and functioning of credit money is a credit transaction. A credit transaction can be carried out in two directions: through bank and commercial loans.
In historical terms, the process of the emergence of credit money through a bank loan can be illustrated by the following situation.
Back in the Middle Ages, owners of gold and silver began to store their precious metals in the fortified premises of goldsmiths (jewelers). For the services provided, jewelers charged a fee and gave receipts confirming that they had accepted precious metals for storage. These receipts (bills) could be exchanged for gold (silver) at any time. Soon, bills began to be recognized by society as a form of money, as a more convenient means of circulation than gold.
In this case, the jeweler's balance sheet will look like this.
table 2
Jeweler's balance
Analyzing the described situation, we can draw the following conclusion: goldsmiths do not issue money, people simply exchange one form of full-fledged money (coins, bars) for another - paper receipts with 100% backing in precious metals. These paper receipts (bills) were the prototype of modern banknotes. They began to be used as money, and people could at any time exchange them for gold, stored in the jeweler's safes.
A new stage in the development of money began when more and more people began to use receipts and less and less gold to make payments. Even when some people paid off the bills and took the gold, others brought the gold for safekeeping.
It was obvious that good benefits could be derived from this circumstance. Goldsmiths could make loans either by using part of the stock of gold coins in their custody, or by resorting to the more complex method of issuing bills of exchange in quantities exceeding the value of the gold in their possession. From practical experience, goldsmiths have found that if they maintain in their vaults an amount of gold equal to approximately 10-15% of the amount of their outstanding obligations, then they will always have enough money to meet the normal daily requirements for the payment of coins. The relationship between the supply of accepted coins and the obligations to pay them is called norm of cash reserves. In table Figure 1.2 shows what the jeweler’s balance sheet would look like if he accepted CU 2,000 for storage. coins and, using them as cash reserves in the amount of 10%, issued a loan for CU 18,000. in the form of receipts (bills).
Full-value money is a type of money, the internal (real) value of which, as a rule, coincides with its exchange (nominal) value, expressed by its face value.
The first full-fledged money were goods as universal equivalents, made of precious metals - gold and silver. It was metallic money (real money). The nominal value of such money corresponded to its real value, i.e. the value of the precious metal itself. They had absolute resistance to depreciation and the possibility of hoarding (use for other purposes and as treasure). Along with coins made of precious metals, coins made of less valuable metals or their alloys, but which were exchangeable for gold and silver, circulated. They were representatives of full-fledged money or change money. For some time, gold and silver coins circulated in parallel (bimetallism). Further, gold coins replaced silver coins (monometallism). However, over time, gold coin money began to be replaced by banknotes on paper. A number of reasons contributed to this.
The circulation of full-fledged gold coin money was highly elastic under the conditions of compression of production and trade turnover with a decrease in volumes commodity turnover the excess money supply left the sphere of monetary circulation and accumulated in the form of treasure. At the same time, with the growth of production and commodity exchange, full-fledged money arose in circulation serious problems. The increase in the money supply was limited both by the size of the accumulated gold reserves and by the volume of production. Not all countries were gold-mining countries. The insufficient elasticity of full-fledged money under the conditions of expanded reproduction and commodity exchange hampered the development of the countries' economies. In addition, accompanying factors in the displacement of full-fledged money were the development of credit relations and the strengthening of the state, which uses paper money to cover its expenses and legitimizes them with the power of power.
During the transition from the use of gold coin money to banknotes, credit notes exchanged for gold first appeared in circulation - signs of gold. The latter circulated in parallel with gold and silver money. Moreover, their exchange for gold (silver) was guaranteed. Further, the connection between paper money and gold weakened, and their exchange for gold by banks was completely stopped.
Thus, banknotes, the purchasing power of which is directly based on the value of the precious metal, can also be considered full-fledged money. Banknotes, the purchasing power of which is indirectly based on the value of the precious metal (have incomplete, partial coverage with gold from state reserves) are, as noted, representatives of full-fledged money or change money.
The main forms of full-fledged money are˸
Full-value money is a type of money, the internal (real) value of which, as a rule, coincides with its exchange (nominal) value, expressed by its face value. - concept and types. Classification and features of the category “Full-valued money is a type of money, the internal (real) value of which, as a rule, coincides with its exchange (nominal) value, expressed at face value.” 2015, 2017-2018.
The history of the development of money is the history of the development of commodity exchange. As the social production The forms and types of money are changing. In the process of its evolution, money took various shapes depending on one or another level of development of commodity relations.
At certain stages historical development its own form of money prevailed, the one most consistent with the economic mechanism.
Historically, there were two forms of money: full-fledged and inferior.
The first form of money is full-fledged money. Full-fledged money had a commodity nature and had its own internal value. Full-fledged money included metal money: bars and coins made of silver and gold. The peculiarity of full-fledged money was that its face value basically corresponded to the value of the metal it contained. It was the presence of intrinsic value in metallic money that ensured its universal acceptance.
The embryonic form of full-fledged money (the goods that were in greatest demand on the local market due to their special usefulness: grain, livestock, furs, salt, ivory, shells, etc.) appeared in a subsistence economy. The separation of crafts from agriculture leads to the fact that metals, initially in the form of ingots (rods, wires, plates), begin to be used as money a certain weight). In the X111th century. BC e. In circulation there are ingots with a stamp indicating their purity and weight.
Subsequently, there was a transition to minting coins from precious metals (silver and gold). The first metal coins appeared around the 11th century. BC e. in the Mediterranean states of Lydia and Aegina.
The purchasing power of full-fledged money (their ability to be exchanged for a certain amount of goods and services) depended on the value of the metal it contained. The more a gold (silver) coin weighed, the higher its purchasing power. As the value of gold changed, the purchasing power of gold money also changed.
The highest form of full-fledged money was gold. Since gold coins had their own intrinsic value, they functioned as a means of creating treasures. Gold treasures acted as an automatic spontaneous regulator of monetary circulation: when the needs of commodity circulation for money decreased, the coins that became surplus went out of circulation into the treasure, and when they increased, the coins came into circulation from the treasures. Therefore, the amount of gold money in circulation always corresponded to the need for trade in money.