Cash

Lore & Background

The English word cash originally meant a secondary meaning, and later came to have that sole meaning in the 18th century. It comes from Middle French, Old Italian, and ultimately Latin. In Western Europe after the fall of the Western Roman Empire, coins, silver jewelry, and hacksilver were the only form of money until Venetian merchants used silver bars and later paper bills. The Spanish coin of 8 reales became a standard international coin from the 15th century.

In the 17th century, the English East India Company minted coins in England and later at Bombay and Madras. The Tamil word for money is kaasu, which may have been modified into 'cash'. Paper money was first used in China during the Tang dynasty, 500 years before Europe. In the 17th century, European countries started using paper money due to a shortage of precious metals. From 1816, coins generally became token money. Cash has now become a very small part of the money supply.

Reader's Guide

Cash is used for anonymous payment, trust in the central bank, activation of a reward center in the brain, expenditure control, tradition, inclusion, identification, as an educational tool for children, and for paying tips. In economic theory, cash holding is attributed to three motives: transactions motive, precautionary motive, and speculative motive. Cash in circulation shows strong seasonal fluctuations due to wage payment dates, tax dates, or holidays.

Did You Know?

• The amount of United States dollar in circulation increased by 42% from 2007 to 2012.
• The amount of pound sterling banknotes in circulation increased by 29% from 2008 to 2013.
• The amount of euro in circulation increased by 34% from August 2008 to August 2013.
• Marco Polo wrote about paper money in China, noting that forgery was punished by death.