2

Money, Money, Money LEVELED BOOK • Z

Money,
A Reading A–Z Level Z2 Leveled Book
Word Count: 2,635

Connections Money,
Writing
Write a report summarizing the different
forms of money that have been used
throughout history.
Money
Social Studies
Research one historical figure or landmark
depicted on money. Create a trading card
for the figure or landmark with a picture and
label on the front and at least five fun facts
on the back.

Z
2
1•
X• Z
Written by Lisa Ing

Visit www.readinga-z.com www.readinga-z.com

for thousands of books and materials.
 Money, barter
Words to Know
fiat money

Money, Money
bullion hyperinflation
circulation incised
coinage intrinsically
counterfeit malleable
currency mint
denomination mutilated
dichroic oxidizes
encoded viable
Photo Credits:
Front cover, pages 4, 17, 20: © Learning A-Z; back cover: © Photodisc; title page,
page 14: © Digital Vision/PictureQuest; page 8: © The Granger Collection,
NYC; page 9: PjrStudio/Alamy; page 10: © AStock/Corbis; page 11: Kublai Khan,
Emperor of China: banknote from the Khan’s first issue of bank-notes,
1260-87, from ‘The Book of Ser Marco Polo’/Private Collection/Bridgeman
Images; page 18: Anders Ryman/Alamy Stock Photo; page 21: © Antonio M.
Rosario/Brand X Pictures/PictureQuest; page 22: Eightfish/Alamy

Written by Lisa Ing

Money, Money, Money
www.readinga-z.com Level Z2 Leveled Book
© Learning A–Z Correlation
Focus Question Written by Lisa Ing
Illustrated by Cende Hill
LEVEL Z2
Fountas & Pinnell Y–Z
How has money changed over time? All rights reserved. Reading Recovery N/A
www.readinga-z.com
DRA 70+
 Money is
worth much
more than
the paper it’s
printed on.

Introduction
Table of Contents An ordinary piece of paper isn’t worth much
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 at all, but a piece of paper money can be worth
Bartering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 several thousand dollars . A check can be worth
millions . Each printed bill is worth much more
Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 than the paper it’s printed on . But why? Where
Coins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 did money come from, what makes money so
valuable, and why do people want it?
Paper Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Money is valuable because the people who
The Value of Money . . . . . . . . . . . . . . . . . . . . . . . 14 make and use it agree on its determined value .
Keeping Money Real . . . . . . . . . . . . . . . . . . . . . . 16 The government that issues it, the engraving
agency that designs it, the mint that strikes or
Invisible Money: prints it, the banks that hold it, and the people
Checks and Credit Cards . . . . . . . . . . . . . . . . 19 who buy and sell things with it all agree that the
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 money they accept is worth a specific amount .

Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 The history of money is the fascinating story

of how people who traded valuable objects began
to trade items that represented their valuables .
The story also explains how technology creates
“invisible money” that allows people to trade
goods and services around the world without
being in the same place as each other .

Money, Money, Money • Level Z2 3 4

 Bartering
Several thousand years ago, people used to
barter in order to get what they didn’t have or
couldn’t make . People living near the ocean had
fish, salt, and shells, which they traded with
people living near the mountains who had
fruits, wood, and furs . People still barter with
each other today . If you trade an apple from your
lunch for the candy bar in someone else’s lunch,
Currency allowed people to trade objects without carrying them around.
you are bartering .

However, there are several problems with Currency

bartering because not everyone has the same To solve the problems of bartering, people
wants or needs . You might want some goods or invented currency—objects that represented
valuable objects from someone, but they might certain values . For example, a group of people
not want the goods that you have, or vice versa . might agree that a cow was worth twenty shells
Additionally, many items are heavy, hard to carry, and a large fish was worth two shells . People
or don’t last long . Figuring out how many of one could trade goods for currency and vice versa as
item equals a certain number of another item can long as everyone in the transaction agreed upon
be difficult . It can also be difficult to determine the value of the currency being traded .
the value of raw materials versus that of finished
Each culture around the world chose a
goods . Is a stack of
different type of currency to represent the value
logs worth the same
of its goods . The objects people used were usually
amount as the table
light enough to carry, but rare enough that people
and chairs made from
couldn’t just pick them up off the ground . The
those logs?
rarer the item used for currency and the more
Bartering allowed people to trade
for products they could not get on
work it took to find it, the more valuable people
their own. decided it was .

Money, Money, Money • Level Z2 5 6

 Some of the items used as currency in ancient
times were bright or colorful stones, striped or
spotted shells, particular leaves, certain birds’
feathers, lumps of silver and gold, salt, honey,
bread, spices, and gems or pieces of glass . In
ancient Rome, a soldier’s salary was paid in bags
of salt . From Africa to Asia, people traded with
rare speckled shells that were only found on a few
islands in the Indian Ocean . The ancient Egyptian
government paid its workforce in quantities of
honey and bread . Some Native Americans used These ancient coins were stamped with the king’s picture.
wampum—beads made from clam shells—to
trade and make treaties . Other Native Americans Coins
used eagle feathers . The Chinese used bundles One solution to the problems of using ordinary
of tea leaves, and European colonists in North objects as currency was to create coins out of
America used tobacco leaves as their currency . precious metals . Precious metals, especially gold,
silver, and copper, are rare and valuable across
The problem with currency of this type was
many cultures, and they are easier to shape and
that it was hard to decide how much a particular
weigh than shells or feathers . Metals are heavier
object was worth . If one shell was much larger
than shells and feathers but last longer and don’t
than another shell, shouldn’t it be worth more?
readily react with the elements, although copper
Did the different stripes or dots on the shells
oxidizes when exposed to extreme moisture .
mean something different? And what if you met
These metals are chosen for coinage because they
somebody who didn’t think your shells were
are malleable and durable .
worth anything at all? For trade to be viable,
both parties had to want what the other had The first coins were minted, or produced, 2,600
and agree on its value . years ago in Sardis, Lydia, now part of Turkey .
Some of these coins had the head of a lion on
them and were called trites . From Lydia, coins

Money, Money, Money • Level Z2 7 8

quickly spread into the neighboring countries Early European coins usually had a god’s head
of Persia (now known as Iran) and Greece . The or symbol on one side and a seal from the maker
earliest coins were struck or cast in a natural on the other . Later coins pictured the heads
combination of gold and silver called electrum . of rulers on one side and elaborate symbols
These coins were very rough and crude, with of the empire on the other . These pictures helped
no patterns on the sides or standard sizes and establish when, where, and by whom the coins
weights . Later, coins were made from pure metals were made . Even today, you can see the faces
such as copper, silver, and gold . Mixed metals of presidents, kings, and queens on modern coins,
such as bronze, an alloy of copper and tin, were and sometimes even the particular mint where the
also used for coinage . The coins had standard coins were struck .
weights, and the ruler’s seal was stamped on one
The Chinese made coins by melting copper
side to confirm the coin’s quality .
and pouring it into molds . This process is called
casting . Chinese coins were cast with square holes
in the centers, so that thousands could be carried
on a ribbon or stick . Instead of pictures, the
Chinese coins, called cash, had words telling their
worth, or denomination . The Chinese also made
coins using bronze, silver, or gold . Only the
government could produce coins .

These Greek coins had words, a picture of an owl, and a portrait of the
goddess Athena.

In addition, to stop people from shaving the

edges of coins to collect enough metal to make
more coins, ridges were incised on the outer
edges . This technique made it easier to determine
when coins had been altered . Chinese cash could be held on a string or stick for easy carrying.

Money, Money, Money • Level Z2 9 10

 Paper Money
A Chinese man named Ts’ai Lun invented
paper 1,900 years ago . But it wasn’t used for money
until 700 years later when the Chinese government
began to print paper money . The earliest paper
money was created using a woodcut printing
method . The specific designs and denominations 1
were drawn on wooden blocks, and the background
was carved away . Then the block was covered with
ink and pressed onto uniformly sized rectangles of
paper . Red and black inks were used, and the seals
of the issuing banks were applied to parts of the
bills . The officials who issued the currency put
their names and seals on them . Although coins 3
were still available, the lighter paper money quickly
became more popular . The Chinese called it flying
cash because it could blow away in a breeze .

In Europe, another invention changed the

shape and widespread usage of currency . Johannes 7
Gutenberg invented the movable-type printing
press in the mid-1400s . This press,
which used metal type blocks, trans-
ferred images onto paper faster and
better than the much older wooden-
block presses . Gutenberg’s press 8
allowed people to print paper money
Early Chinese
paper money by machine rather than by hand .

Money, Money, Money • Level Z2 11 12

Minting Coins
Coins are harder to make than you might think. Once the
government decides to produce new coins, these are just some
of the steps that must happen.

1 A designer draws a picture of the coin’s two sides on

a large piece of paper.

2 Sculptors make a large, three-dimensional model of the

coin. An engraving machine uses the model to make a die,
or coin stamp. The die is sent to mints, or factories that
produce coins.

3 Mints cut blank coins, called blanks, from a rolled-up sheet Banks used to keep bars of gold that represented the sum
of the right kind of metal. The sheet can be as long as five of everyone’s money.
football fields.

4 The blanks are heated, cooled, washed, and dried.

The Value of Money
Unlike metallic coinage, paper money is worth
5 A machine called an upsetting mill creates the raised edge little by itself, mainly because people agree that
of the coin.
metal is worth more than paper and ink . It costs
6 The coin press stamps the pattern from the die into the only four U .S . cents to print a bill, including the
coin. cost of the paper, ink, and the printer’s pay . So
why is one bill worth a hundred dollars while
7 Inspectors make sure that there are no mistakes in
another is worth only one?
the coin. Incorrectly made coins get melted down
and recycled. The simple answer is that the government says
8 The coins are sent out to banks in armored trucks. so . In 1900, the U .S . Congress passed the Gold
Standard Act requiring that for each dollar in
circulation, there was one dollar’s worth of gold

Money, Money, Money • Level Z2 13 14

in a bank . The U .S . government used specific
Keeping Money Real
collection facilities, including the bullion
Many agree that only governments can create
depositories at Fort Knox, Kentucky, and West
currency because they keep track of the actual
Point, New York, to store the nation’s gold . Other
goods and resources that the currency represents .
collection facilities under the United States Mint
Governments usually collect mutilated bills and
are the Philadelphia Mint, the Denver Mint, and
replace them with new bills to keep the correct
the San Francisco Assay Office .
ratio between the amount of currency in
Most countries have not participated in the circulation and the country’s gross domestic
gold standard since 1971 . There is simply too product (GDP)—the amount of finished goods
much currency needed in circulation . The bills and services available within a country .
represent more wealth, goods, and valuables Sometimes governments print more currency
than there is gold in the world . Britain officially than their GDP can support, which results in
stopped using the gold standard in 1931, and the hyperinflation . During periods of hyperinflation,
United States stopped forty years later . Today, prices can more than triple in a single day .
governments keep track of how many goods
But what if people try to produce money on
and resources there are in a country and circulate
their own? Fake money, called counterfeit, isn’t
enough currency to represent those goods and
worth anything because it isn’t backed up by
resources . Depending on how many goods and
goods or resources and is not created by a
resources a country produces and how successful
government . Banks, stores, restaurants, and other
its businesses are, the value of a country’s money
companies do not allow anyone to use counterfeit
can rise or fall compared to other countries’
money . Worse, having counterfeit money in
currencies . This is called a floating currency system .
circulation devalues the genuine currency in
The currencies themselves are called fiat money
circulation—if there is fake money around, how
because they are intrinsically worthless and
do you know whether or not your money is real?
are used only as a method of exchange . Those
currencies have only the values that their issuing In order to defeat counterfeiters, most countries
governments say they have . make their currency using special hard-to-copy
techniques . Since 1879, the paper for all U .S .

Money, Money, Money • Level Z2 15 16

 currency has been made by one company, Crane
& Co ., in Dalton, Massachusetts . Bills are printed
Do You Know?
The biggest currency in
on paper that is made using a secret formula . the world is used by the Yap
U .S . dollars are made of a mixture of about Islanders, who live on an
one-quarter linen and three-quarters cotton, equatorial island near Indonesia.
with some red and blue silk fibers sprinkled They make coins of giant stones
throughout . However, the Bureau of Engraving that weigh as much as full-
grown Asian elephants. The
and Printing (BEP) keeps the exact formula a stones have holes in them, and
secret, the way Coca-Cola protects the secret the Yap Islanders move the
recipe for its famous soda pop . A special thread stones by putting sticks through
below the portrait glows in ultraviolet, or “black,” the holes and rolling the coins.
light . The ink on genuine bills is slightly raised
so you can feel it when you run your finger over The pictures and print on bills are designed
the printing . Raised printing is called intaglio to prevent easy copying . The portrait is large and
(in-TAL-ee-o) printing, from the Italian word detailed, placed slightly off-center, and made of
meaning “to cut,” because the image is cut into the fine dashed lines . The patterns on the bill are
background of the printing plate . Banks and some small and complicated; they are difficult to see
stores use special pens with ink that turns from and even more difficult to reproduce . Each bill has
black to yellow on real cotton and linen bills, but a serial number that appears twice on the face of
stays black on fake bills copied on cellulose, or the bill, showing when and where it was printed .
wood-based, paper .
In addition, many bills are printed with
various ink colors, magnetic inks, and dichroic
Do You Know?
It can be a bother to change currency inks that change color depending on the angle
every time you travel from one country to another. Most of Europe’s you look at them . Just as the paper has a special
nations have joined together to form the European Union. Many of formula, the ink formulas are kept secret by
them standardized their money so that the euro is worth the same the government . Some bills have holograms or
amount in each nation. Each country mints euros. The tail side of
watermarks that reveal other images only when
the euro has a picture that symbolizes the country that made it.
you hold the bills up to a light source .

Money, Money, Money • Level Z2 17 18

 Invisible Money: Checks and Credit Cards assigned number are stamped
onto one side, along with
Most adults have a checking account . Banks
the name of the bank
keep track of how much money a person has
that issued the account .
in his or her account . When the person writes
A magnetic strip across
checks—official notes that stand for a certain
the back has special encoded
amount—the bank reduces the total in the Debit and credit cards
information about the person’s
person’s account by that same amount . Checks
bank account . Newer debit and credit cards have
can represent a large amount of money on a
microchip technology, called radio frequency
single piece of paper . Many checking accounts
identification (RFID) chips, embedded into the
are connected to debit cards that people can use
cards . These chips carry personal information
to take cash from their accounts at automatic teller
about the cardholder’s account in addition to what
machines (ATMs) or pay for things at shops and
is on the magnetic strips . When the card is swiped
restaurants .
through a card-reading machine, the machine
Credit cards work like debit cards and electronically contacts the bank to verify that the
checking accounts except that instead of drawing account has enough money or enough available
from their deposit accounts, people borrow money credit . If the money or credit is there, the money
from the bank . People can use credit cards to buy is withdrawn from the person’s account and
items that cost more than they have saved in the deposited into the store’s, restaurant’s, or company’s
bank . Then, when they pay back the money, they account . It is easier to carry around one piece of
have to pay an additional fee called interest . If plastic than it is to carry many bills . Since cards
someone takes a long time to pay back the money, have the account holder’s name and information
the interest can accumulate into larger amounts . It on them, the money is harder to steal than bills
can become expensive if you regularly borrow on are . Credit and debit cards make a person’s money
a credit card and don’t pay off the balance in a more secure . If the cards are lost or stolen, a phone
relatively short period of time . call to the bank can cancel them and new cards
can be issued . That system is impossible with cash .
Debit and credit cards are made of durable
plastic . The person’s name and an individually

Money, Money, Money • Level Z2 19 20

 However, credit cards can be dangerous
Conclusion
because people forget that they must pay back
Three thousand years ago, people bartered
the money they borrowed . Many people who use
to trade goods or services with each other . Today,
credit cards irresponsibly owe so much money to
people trade with each other using bills, coins,
the banks that the banks take back, or repossess,
checks, and even invisible money such as debit
the things the person bought . If that happens,
and credit cards . What sort of money do you think
a negative note is made on the person’s credit
we’ll have in another three thousand years?
history, and he or she may not be able to borrow
again for a long time .

Plastic cards are less visible than money, but

they can buy the same goods . Our invisible money
allows us to trade with people around the world .
With the help
of catalogs and
the Internet, people
can use credit
cards to buy goods
from a person or
company in another
country . The money
is automatically
changed into a
currency the other
person can use .

Shopping online with At a stock market, people buy and sell stock, or pieces of companies.
a credit card can instantly Stock costs more or less depending on the value of the company.
send money across oceans. But until the stock is sold, the money in it is not real.

Money, Money, Money • Level Z2 21 22

 Glossary encoded (adj.) communicated in a special
code (p . 20)
barter (v.) to exchange goods or services
without using money (p . 5) fiat money (n.) paper currency that cannot
be traded for coins or has no
bullion (n.) bars of gold, silver, or another
value except that determined
metal not yet made into coins
by the issuing government
(p . 15)
(p . 15)
circulation (n.) the condition of being in use
hyperinflation (n.) a general price increase
and passed from person to
occurring at a high rate over
person (p . 14)
a short period of time (p . 16)
coinage (n.) money in coin form; the
incised (v.) cut a surface to leave marks
process of making coins (p . 8)
or decorations (p . 9)
counterfeit (n.) a copy of something,
intrinsically (adv.) in a natural or essential way;
especially money, that is made
inherently (p . 15)
to look like the real thing
(p . 16) malleable (adj.) able to be shaped or changed
by stretching, bending,
currency (n.) money, in any acceptable
or pounding (p . 8)
form, used to represent the
value of goods and resources mint (n.) a facility where coins are
(p . 6) made (p . 4)

denomination (n.) the face value of a type mutilated (adj.) badly damaged (p . 16)
of currency (p . 10) oxidizes (v.) combines with oxygen and
dichroic (adj.) showing different colors from creates a chemical change,
reflected or transmitted light; such as rust (p . 8)
displaying color-changing viable (adj.) able to be done, used, or
properties (p . 18) completed successfully (p . 7)

Money, Money, Money • Level Z2 23 24