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Numbers, Part 15: 10 facts about money

Time Magazine regularly produce lists of interesting trivia, and recently had two that are worth noting: "the top 10 things you didn't know about money" and "the top 10 things you didn't know about the penny".  The 'penny' is the American one cent coin. 

Combining and editing these into an easily digestible list that works for me with the most interesting bits, gives you the following list:

#1 Paper money was invented by the Chinese

Paper bills were first used by the Chinese, who started carrying folding money during the Tang Dynasty (A.D. 618-907) — mostly in the form of privately issued bills of credit or exchange notes — and used it for more than 500 years before the practice began to catch on in Europe in the 17th century. While it took another century or two for paper money to spread to the rest of the world, China was already going through a fairly advanced financial crisis: the production of paper notes had grown until their value plummeted, prompting inflation to soar. As a result, China eliminated paper money entirely in 1455 and wouldn't adopt it again for several hundred years. Another not-so-well-known fact: the word cash was originally used to describe the type of round bronze coins with square holes commonly used in the Tang Dynasty, called kai-yuans.

#2 The $ sign came from Mexico

The U.S. Bureau of Engraving and Printing responsible for designing and printing dollar bills says the design of the $ symbol came from the Spanish and Mexican pesos sign, "P S ", which came to be written such that the S was on top of the P. The symbol was widely used before the 1875 issue of the first U.S. paper dollar. And in case you never noticed, it doesn't actually appear on U.S. currency at all.

#3 The Secret Service was invented because of money

Following the Civil War, counterfeit currency became such a rampant problem in the U.S. — more than a third of all bills were believed to be fakes — that the government was forced to act. In 1865, a special division of the Treasury Department was created to crack down on counterfeiting before it completely undermined the nation's economic system. That agency still fights bogus money today, but it's better known for its dark-suited agents and intimidating SUVs — it's the United States Secret Service.

#4 Paper money is dirty money

A $1 bill lasts a measly 21 months in circulation on average, while a Ben Franklin can last more than seven years. Part of the reason may be due to studies showing that a solid majority of U.S. bills are contaminated by cocaine. Drug traffickers often use coke-sullied hands to move cash, and many users roll bills into sniffing straws; the brushes and rollers in ATMs may distribute the nose candy through the rest of the money supply. Also found on bills: fecal matter. A 2002 report in the Southern Medical Journal showed found pathogens — including staphylococcus — on 94% of dollar bills tested. Paper money can reportedly carry more germs than a household toilet. And bills are a hospitable environment for gross microbes: viruses and bacteria can live on most surfaces for about 48 hours, but paper money can reportedly transport a live flu virus for up to 17 days. It's enough to make you switch to credit.

#5 A Queen of note

From Australia to Trinidad and Tobago, Queen Elizabeth II's portrait has graced the currencies of 33 different countries — more than that of any other individual. Canada was the first to use the British monarch's image, in 1935, when it printed the 9-year-old Princess on its $20 notes. Over the years, 26 different portraits of Elizabeth have been used in the U.K. and its current and former colonies, dominions and territories.

#6 Who wants to be a millionaire?

The largest banknote ever issued by the Bank of England was the £1,000,000 note, issued in 1948 as a temporary measure during the postwar reconstruction in the Marshall Plan. Designed for use by the U.S. government only, the notes were canceled after just a few months, allowing very few to escape into private hands. But just because the notes are out of service doesn't mean they're valueless — in 2008, one of two known surviving notes fetched almost $120,000 at auction.

#7 A note of note

Measuring in at roughly the size of a sheet of legal paper, the world's largest single banknote is the 100,000-peso note created by the government of the Philippines in 1998. Designed to celebrate a century of independence from Spanish rule, the note was offered only to collectors, who could purchase one of the limited-edition notes for 180,000 pesos, or about $3,700.

#8 $54 million a year in pennies

The penny (one cent) is still the U.S.'s most popular coin. Last year 5.4 billion pennies were produced. That's more than twice the number of quarters minted, and five times as many dimes. The Lincoln penny accounts for roughly half of all coins minted within a year. About 1,000 pennies are made per second and the U.S. Mint took more than two years to produce its first million coins, but today the Philadelphia Mint can make that many in about 45 minutes.

#9 Cents cost more to produce than they are worth

The U.S. Mint spends 1.4 cents on every penny it produces so why does the government keep the penny around? The answer is simple: sales tax. Sales tax raises the price of an item to an uneven amount, requiring pennies to be given in change. Retailers need pennies to return to customers, banks need pennies to give to the retailers, and the Fed needs pennies to give to the bank. All so you can drop one on the sidewalk on your way out.

#10 Money is only legal tender because we say so

While federal law states that coins are legal tender, it does not compel anyone to accept them. If a business doesn't want to take pennies — or a $100 bill, for that matter — it has a legal right to refuse them.

Great facts and the last point relates to the concept of fiat money, as discussed in Mint’s blog about the History of Money.

Combine this with our own discussion of the origins of money, and it makes for great reading.


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About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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