Gold’s monetary role
In ancient China’s Zhou dynasty
The currency history of early China is not well understood, however it is believed that the 700 year reigning Zhou dynasty (c. 1056-256 B.C.) was the first to mint coins.
These coins are acknowledged as the earliest forms of currency as they filled three criteria; they bared the mark of the issuing authority, they held an intrinsic value and they had a denomination which was understood so as not require weighing before every transaction.
The coins minted by the Zhou dynasty are often referred to as square coins, but they were instead shaped in the form of miniature spades, hoes and even knives. There were also some early round coins as well as imitation cowrie coins.
The original ‘hollow handled spade’ coins were not considered proper coins as no value was denoted on them, but they operated as a decent transition from primitive (cowrie shells) forms of money to a coin based system.
The coins were made from bronze and copper and became the standard for coins right through until the 19th century.
The manner in which the coins were cast made weight precision of individual coins tricky so the average weight of a large number of coins was the concern instead.
The Zhou dynasty is credited with ruling over a (mostly) united China. This, as well as other developments such as the introduction of iron and the development of writing, contributed to the success of the Zhou coins. It was most likely during the final period, of the Zhou dynasty, known as Eastern Zhou (770- 256 BC) that huge social and economic developments were made, and when the unified circulation of coins most likely occurred. This was also when the first round coins with holes in the centre are thought to have been minted.
It is in the first period of the dynasty that primitive coins most likely dominated trade in China, and there is little evidence to suggest they were ever fully replaced by the more advanced coins.
In the second period, they dynasty had lost a large proportion of their power. Therefore coins issued by individual states fairly unique to those regions, for instance Shantung Peninsula made spade money, knife money was from the Yellow River Valley, whilst the Cowry imitation money came from the north of the Yangtze river.