Ionia - Riches without strength [700 BC]

This ancient Greek state's money was described by Aristotle. It seems to have been an early attempt, centred on Clazomenae, one of the 12 Ionic cities, at a wholly representative (numerary) money system. It consisted of iron discs which were stamped rather roughly by the state and deemed to pass as value for gold (or possibly silver).

The important point of this early attempt is that it showed the necessity of using advanced technologies in the manufacture of money. The iron discs were widely faked - frequently overseas. And as there was a facility for redemption in gold that is what increasingly happened, causing iron to fall out of favour and gold to return as the currency.

Ionia was a successful maritime trading civilisation and steadily built a great national inventory of gold - which ultimately showed one of the disadvantages of owning too much of the stuff in a world where not all states can share. Through its riches Ionia became a target, and Croesus (still idiomatically famous for the colossal wealth he acquired - much of it militarily) invaded successfully from the east.

The Ionian system shows a representative money being corrupted by counterfeiting, and supplanted by gold, with the gold system being plundered by a neighbouring state.  Both of these fates have befallen monetary systems many times since.

Paul Sustain