The first promisory note Promissory notes Marco Polo described the use of early banknotes in China to Medieval Europe in his book, The Travels of Marco Polo. In the 13th century, Chinese paper money became known in Europe through the accounts of travelers, such as Marco Polo and William of Rubruck.[7][16] Marco Polos account of paper money during the Yuan Dynasty is the subject of a chapter of his book, The Travels of Marco Polo, titled How the Great Kaan Causeth the Bark of Trees, Made Into Something Like Paper, to Pass for Money All Over his Country.[8] All these pieces of paper are, issued with as much solemnity and authority as if they were of pure gold or silver... with these pieces of paper, made as I have described, Kublai Khan causes all payments on his own account to be made; and he makes them to pass current universally over all his kingdoms and provinces and territories, and whithersoever his power and sovereignty extends... and indeed everybody takes them readily, for wheresoever a person may go throughout the Great Kaans dominions he shall find these pieces of paper current, and shall be able to transact all sales and purchases of goods by means of them just as well as if they were coins of pure gold —Marco Polo, The Travels of Marco Polo In medieval Italy and Flanders, because of the insecurity and impracticality of transporting large sums of cash over long distances, money traders started using promissory notes. In the beginning these were personally registered, but they soon became a written order to pay the amount to whoever had it in their possession. These notes can be seen as a predecessor to regular banknotes.[17] The term bank note comes from the notes of the bank (nota di banco) and dates from the 14th century; it originally recognized the right of the holder of the note to collect the precious metal (usually gold or silver) deposited with a banker (via a currency account). In the 14th century, it was used in every part of Europe and in Italian city-state merchants colonies outside of Europe. For international payments, the more efficient and sophisticated bill of exchange (lettera di cambio), that is, a promissory note based on a virtual currency account (usually a coin no longer physically existing), was used more often. All physical currencies were physically related to this virtual currency; this instrument also served as credit.
Posted on: Mon, 28 Jul 2014 23:10:22 +0000
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