Metal as money
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Throughout history, various metals, some of which are considered precious today, appear to have been used as a form of currency. The Bretton Woods system, under which all major currencies were theoretically exchangeable for gold, was abolished in 1971.
Other metals to have been used as money include silver, copper, and platinum.
[edit] Commodity money and coins
Gold has been considered valuable since prehistoric times, and may have been the first metal used by humans. While it might originally have been used in barter for its value in ornamentation and rituals, gold and silver became established as a form of commodity money and were first minted by the Lydian king Croesus around 560 BC.
Around 500 BC, the touchstone became available, allowing relatively easy detection of forgeries, and in the third century BC, Archimedes invented a method of determining an object's density. Since gold was the densest substance then known, this could be used to verify an object was made of pure gold without destroying it..
[edit] Representative money
Drafts for metal held on account were first issued in the first century BC in Egypt.
In modern times, it was Stockholms Banco that in 1661 first issued banknotes that were intended to be fully redeemable for copper coins; while initially popular, the bank eventually could not redeem all the notes it had printed, and ceased operations in 1664 after a bank run.
National banks later guaranteed the redeemability of representative banknotes put into circulation, though rarely to the extent of having the promised amount of metal on hand for all currency in circulation.
By 1865, however, the system appeared sufficiently stable to create the Latin Monetary Union, establishing a common system for gold and silver coins used in several European countries.
[edit] Gold standard
Main article: gold standard
The newly unified German Empire introduced a common currency, the German Goldmark, beginning in 1873; this currency was based on a strict gold standard, with banknotes redeemable for gold coins. Other countries rapidly followed suit, and by 1900 was accepted by all major economies.