The Goldsmiths | Things You Didn't Know about Money

Things You Didn't Know about Money

The Goldsmiths
Around 1000 CE, goldsmiths started diversifying their trade by offering to keep other people's gold and silver safe in their vaults, giving their customers a receipt for their stored valuables. The advantages of paper receipts over heavy gold and silver coins were soon recognized and were soon used for trade. After a while, goldsmiths noticed that only a small percentage of their depositors ever came in to demand their gold at any one time, and started to make out receipts for non-existent gold, thus effectively commencing the lending business at a profit.