Paper Money

International trade, loans, monopolies; all the markings of a story in the Wall Street Journal except that this post begins in ancient Babylon.

As early as two thousand BC, the priests who oversaw the temples decided to branch out. They became the world's first bankers, accepting deposits, granting credit and allowing no competition. It was a monopoly the priests held for generations.

Banking was carried to the rest of the world, sometimes by the traveling priests, but often by invading armies, but when civilization tumbled into the dark ages, banking fell with it.

History took some time in repeating itself and when it did, again the priests were the first to re-establish a banking system. Ecclesiastical orders found it placed them at the center of political power.

Some 14-hundred years passed before private bankers became the dominant force in finance.

For many of these years, not just anyone could be a bank customer.

There were no elaborate credit checks. No Dun and Bradstreet ratings of your worth. The people who ran the bank knew anyone worthy of being a customer personally.

It was a tight knit, elite, circle. There was no standing in line for the teller. Transactions were by appointment, often conducted in secret with most medieval banks cutting their deals with royalty or with the most powerful landowners.

Eventually controls became tight, circulation restricted and caution was the watchword, for only a select few could be trusted to handle what was becoming one of the great innovations of the time.

Paper money.