China, 1024 A.D.

On April 1, 1024 the imperial Sung treasury began to print and circulate chiao-tzu notes in the province of Szechwan. For the first time, a government had issued paper money. ... But by the close of the century, the first government "printing-press" inflation was well underway. (Chapter 2)

China, 1278

Marco Polo's book was an exciting account of lands never before described, of things never before seen. ... Europeans reacted with fascination and disbelief. One of the more incredible narratives described how the Chinese used paper to purchase everything they wanted. ... But what really captured Polo's attention was how all the gold and silver went to the imperial treasury, while the population got paper. (Chapter 3)

Sweden, 1644

Throughout Sweden, wagons and carts full of copper money cluttered the roads. Collection of taxes became a nightmare. ... With government consent, in 1661, Palmstruch issued the first official paper currency in the West. A miracle had been accomplished. The unmanageable copper coins had been transformed into lightweight, portable paper. Denominated in copper dalers, and sometimes in silver, the notes were immediately popular with the Swedes. At last there was a way to get rid of their heavy copper money. (Chapter 4)

France, 1729

Within a few hours of the great financier's death in 1729, the French ambassador arrived at Law's quarters; confident that written evidence of the secret would be found. He searched the room in vain. Law's secret was nothing more than the magic multiplier of credit, where a piece of paper could command a value far greater than any commodity. (Chapter 5)

United States, 1779

In 1779, George Washington wrote that he had tried to set a good example for others by accepting paper money, but that it defied common sense to continue doing so. He observed that the value lost by the Continental was not felt uniformly among the colonistsÑso many refused paper or speculated in it, to the ruin of those who believed in it. Washington wrote that his own ruin would accomplish nothing to advance the cause of patriotism. (Chapter 7)

United States, 1863

The standards of banking changed with the introduction of a national paper money backed and protected by the authority of the United States of America. But there was still one powerful obstacle to national paper money: the Constitution. (Chapter 9)

Europe, 1920s

Political economist Georg F. Knapp explained how the small silver coin had an independent commodity value. During the Austrian hyperinflation, it was worth thousands of paper gulden, though its face value was still "one gulden." (Chapter 11)

Berkeley, California, 1993

Recounting his personal experience with worthless paper money, Professor Riesenfeld reflected, "No nation is sacrosanct from this devil ... frankly, I'd like to forget the whole situation. ... But you can't." (Chapter 11)