ple called the Lydians became the first in the Western world to make coins. The Lydians used coins to expand their vast trading empire. The Greeks and Romans continued the coining tradition and passed it on to later Western civilizations. Coins were appealing since they were durable, easy to carry and contained valuable metals. During the 18th century, coins became popular throughout Europe as trading grew. One of the most widely used coins was the Spanish 8-reale. It was often split into pieces or bits to make change. Half a coin was 4 bits, a quarter was 2 bits, a term still used today. Coins containing precious metals are an example of "commodity money." The item was traded because it held value. For example, the value of the coin depended upon the amount of gold and silver it contained. The Chinese were the first to use paper money, beginning in the T'ang Dynasty (618-907 A.D.). During the Ming Dynasty in 1300 A.D., the Chinese placed the emperor's seal and signatures of the treasurers on a crude paper made from mulberry bark. Representative money is tokens or pieces of paper that are not intrinsically valuable themselves, but can be exchanged for a specific commodity, such as gold or silver. In 1715 Maryland, North Carolina and Virginia issued a "tobacco note" which could be converted to a certain amount of tobacco. This type of money was easier to make large payments and carry than coin or tobacco leaves. Fiat money is similar to representative money except it can't be redeemed for a commodity, such as gold or silver. The Federal Reserve notes we use today are an example of fiat money. In 1967 Congress authorized the U.S. Treasury to stop redeeming silver certificates in silver dollars or bullion beginning the following year. By 1970 silver was removed from the production of coins. The old coins were gradually removed from circulation and replaced with new copper-cored coins that were faced or "clad" with layers of an alloy of 75 ...
