Listening Topic: Money – Informal lecture about the history of money

A. Listen to the lecture. As you listen, check the four main topics that are discussed.

___ A common currency

___ Examples of a common currency

___ How credit cards came about

___ The first coins, banks, and paper money

___ The gold standard

___ Investing in the stock market

B. Listen to the lecture again. As you listen, choose the correct answer to complete each statement. Listen again if necessary.

 It’s not always convenient to trade by exchanging goods because ____.

      a   you can’t always get what you want when you want it

      b   you can’t always trust the other person

 A common currency is something that ____.

      a   is made of gold or precious metal

      b   has value for everybody in a society

 Beads, shells, tools, and grain were all ____.

      a   used as currency

      b   used for decoration

 The English currency is called the pound because ____.

      a   it is very heavy

      b   grain was used as currency

 the first coins appeared ____.

      a   around 600 B.C.

      b   after the first banks

 The first banks were ____.

      a   places where people changed money

      b   places where people kept grain or gold

 Banknotes were originally ____.

      a   made of gold

      b   receipts

 The U.S. Government backed the dollar with real gold ____.

      a   after 1971

      b   until 1971



__ A common currency

__ Examples of a common currency

___ How credit cards came about

__ The first coins, banks, and paper money

__ The gold standard

___ Investing in the stock market


1 a   2 b   3 a   4 b   5 a   6 b   7 b   8 b


A = Lecturer, B = Student 1, C = Student 2, D = Student 3

A:   Today we’re going to talk about the history of money and banking. First of all, does anyone know how people shopped for the things they needed before money was invented?

B:   They traded things that they had for the things they needed?

A:   Right. One of the oldest types of trading between people was barter: I give you this animal skin, you give me that necklace. That’s a straight exchange. But that system isn’t always very convenient. Why do you think?

C:   You have to have something that the other guy wants, and he has to have something that you want. And that doesn’t always happen.

A:   Exactly. Let’s say you have lots of umbrellas, and you want to exchange your umbrellas for food. Well, if it’s not raining no one is going to want your umbrellas. So you won’t be able to eat because no one wants what you have to rade. On the other hand, if you have umbrellas to sell, and it’s a rainy day, well, everyone will want your umbrellas. You’ll exchange all your umbrellas for food, but then you’ll probably have too much food. See what I mean? So what you need, in that situation, is a common currency. A common currency is something that is valuable for everybody, no matter what the reason is, and preferably something what will last, that won’t spoil. That way, you can sell your umbrellas in the rainy season, get currency, and spend that currency later when you need it. OK, now, what kind of things did people use as currency before they had money? Any ideas?

D:   Beads, shells?

C:   Jewelry?

A:   Yes, exactly. Decorative objects: shells, beads, teeth and feathers. They were all common currencies. Just about anything can be a common currency, as long as everyone in the community agrees that it has value. The Chinese used metal tools, like spades and knives. The Greeks used grain. They used grain in England too. How can you tell? How can you tell that the English used to use grain as money? What is their money called?

B:   Oh, the pound!

A:   Exactly. The English pound used to refer to a pound of grain.

D:   What about coins? When did people start to use coins?

A:   The first coins appeared in about 600 BC in Lydia. That’s about where Turkey is today. You also had coins appearing in China at about the same time.

D:   Is that when banks started up too?

A:   Actually no. Banks came about later. The first banks were actually warehouses, or depositories, for grain or gold. Let’s use gold as an example. People would keep their gold in this place – this warehouse – and they’d get a receipt. The receipt said something like, “You have so much gold on deposit with us.” That receipt could then be used to get the gold out of the warehouse. But eventually, when people had to make payments or to pay debts or whatever, instead of going all the way to the bank to get the gold, they started to use the receipts instead. Every receipt was connected to a certain amount of gold in the bank. The banknote really meant, “If you bring this to the bank, we’ll give you this amount of gold, anytime you want.” And that’s how paper money came about.

D:   Isn’t it the same now? Don’t banknotes represent an amount of gold that the country has? Could you tell us a little more about that?

A:   Yes, that was called the gold standard. That used to be the case, but not anymore. At one time, every dollar … represented an equivalent amount of real gold from the US gold supply. But the US left the gold standard in 1971. We don’t back our currency with gold any more.

B:   Can you tell us about that? What is our money backed by now? I mean, where does the value come from?

A:   Nothing! Absolutely nothing backs our money, except people’s trust in it. What keeps the value of our money up is simply the fact that people believe our money has value. So it does. Any other questions before we move on?

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