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The Origins of Credit Cards, Checks, Coins and Bills

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With the financial world in a state of flux, we thought now was a good time to explore the early history of credit cards, checks, coins and paper money.

Credit Cards

In the 1800s, you could pick your poison if you needed money: pawnbroker, realtor, friend, family member, illegal small loan lender, or mortgage lender. By 1858, consumer debt measured as high as $1.5 billion in the U.S., and it rose to $11 trillion just 32 years later.

At first, credit cards were really just substitute markers for payment. Rather than deal with looking up account numbers for each transaction, stores started issuing credit cards or tokens instead. After getting the bill, the customer simply had to pay or would likely lose credit with the store. John Biggins of the Flatbush National Bank of Brooklyn, New York, invented the first actual bank credit cards in 1946. Through his "Charge-It" program, merchants could deposit their sales slips in the bank, and the bank would bill the customer.

Another key moment in the development of credit cards started with Frank McNamara, a New York businessman who faced embarrassment when he realized he'd forgotten his cash while entertaining a client at Major's Cabin Grill. His wife covered the bill, but McNamara didn't forget the event. A few weeks later, he discussed an idea for a diner's club with his lawyer, Frank Schneider. Using the Diner's Club card, people could eat in a variety of restaurants and pay their tabs at the end of the month.

The card became so popular that other financial organizations mimicked the idea. Franklin National Bank issued the first revolving charge card in 1951, allowing customers to borrow and repay money without approval as long as they stayed under their credit limit—and didn't mind accruing interest charges. Bank of America (which became VISA) and MasterCard took the idea one huge step further in 1967, creating Interchange, a system that allowed banks to settle credit transactions throughout the U.S., rather than just locally.

Checks

office-oversized-check-science.jpgUnlike bills (which represent actual money that banks hope you'll never ask for), the check started as the Persian Sakks—a written promise to pay when the goods were delivered. The idea was to avoid money being transported, so starting in the first century CE, banks issued letters of credit through a bill of exchange, meaning that money would be paid to the person whose name was on the bill. Plus, a check written in, say, Baghdad, could be cashed in China.

The check didn't come into widespread use, however, until Holland in the 1500s. Around that time, Amsterdam was a major international hub of shipping and trading, and people began to deposit their cash with Dutch cashiers for a fee, rather than keeping the money at home. Those cashiers would pay their depositors' debts directly upon written notice (almost as good as online bill-paying), but there was a small problem: the little pieces of paper could easily be forged or copied.

A British banker named Lawrence Childs developed the first printed checks, which led to today's elaborate system of routing and account numbers, watermarks, and other identifiers. Indeed, the modern word check originated simply from the need to examine, or check, the bill of exchange, and the name stuck.

Coins

Nowadays, a pocketful of jangling silver and copper wouldn't impress most folk, but the original coins marked the wealth of the nearly forgotten empire of Lydia. In the western part of Asia Minor, Lydia became celebrated for its deposits of gold and silver and entered its golden age under the rule of King Croesus in the sixth century BCE. The Lydians were the first in history to mint gold, silver, and electrum (a mixture of gold and silver). The early coin designers were also gem carvers who used a furnace to melt the metal until it was pliable, a balance to weigh coins, and a mint—made of an anvil and a die press. Even though the first coins weren't always perfectly uniform, they're awfully close to what we still use today.

Once the Lydians were assimilated by the Greeks, the coin-making tradition truly took hold. The first coin patterns were coats of arms, which were soon followed by symbols of ruling leaders. By the fourth century BCE, the possession of the mint (and all of its wealth) was considered sacred, often protected within a temple. Athens claimed authority over all coin minting, including standardized weights and measures, but rival areas were quick to form their own systems.

Even coin denominations appeared during the early development of coins. A gold stater coin could be issued in halves, thirds, or sixths, for example, while some coins were worth exactly twice another. Looking for the origin of the copper penny? The first bronze coins were developed in the fifth century BCE, but they weren't widely used for another 100 years. Copper has always been considered the least precious of the coin metals—even then, a bronze coin was worth a fraction of a silver one.

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Bills

There were three big advancements in banknotes that helped put Andrew Jackson's face in your pocket. The first documented banknotes were one-foot square pieces of white deerskin with colorful borders, used in China in 118 BCE. You can also thank China that you're not carrying around Bambi today—in the ninth century CE, the Chinese invented paper banknotes as well. Over the course of 500 years, China experimented with paper money and soon realized that printing too much money caused inflation (still true). Probably for this reason, the Chinese ditched paper money in 1455, and it didn't reappear for another 250 years, this time in Europe.

1000-bill-front.jpgIn 1705, John Law of Scotland published "Money and Trade Considered: With a Proposal for Supplying the Nation with Money." He considered metal money to be unreliable and believed that the more money in circulation, the richer the country. Whiel most governments weren't buying the get-rich-quick scheme, Louis XV of France decided to give Law a chance because the country was strapped for cash. In 1716, Law created the Banque Generale, which carried only one quarter of its money in actual cash. The rest was in billets d'etat—a fancy way of saying government debt.

Law's process of issuing interest-paying bank notes (payable in silver on demand) was extremely popular, but the system was volatile. All it took was a few wealthy investors pulling their funds to create a panic. Though Law eventually fled to Holland in 1720 to avoid the collapse, his idea of paper money stuck around, and future governments figured out how to manage the system better.

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This article was written by Liz Hunt and excerpted from the mental_floss book In the Beginning: The Origins of Everything. You can pick up a copy in our store.

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10 Memorable Neil deGrasse Tyson Quotes
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Michael Campanella/Getty Images

Neil deGrasse Tyson is America's preeminent badass astrophysicist. He's a passionate advocate for science, NASA, and education. He's also well-known for a little incident involving Pluto. And the man holds nearly 20 honorary doctorates (in addition to his real one). In honor of his 59th birthday, here are 10 of our favorite Neil deGrasse Tyson quotes.

1. ON SCIENCE

"The good thing about science is that it's true whether or not you believe in it."
—From Real Time with Bill Maher.

2. ON NASA FUNDING

"As a fraction of your tax dollar today, what is the total cost of all spaceborne telescopes, planetary probes, the rovers on Mars, the International Space Station, the space shuttle, telescopes yet to orbit, and missions yet to fly?' Answer: one-half of one percent of each tax dollar. Half a penny. I’d prefer it were more: perhaps two cents on the dollar. Even during the storied Apollo era, peak NASA spending amounted to little more than four cents on the tax dollar." 
—From Space Chronicles

3. ON GOD AND HURRICANES

"Once upon a time, people identified the god Neptune as the source of storms at sea. Today we call these storms hurricanes ... The only people who still call hurricanes acts of God are the people who write insurance forms."
—From Death by Black Hole

4. ON THE BENEFITS OF TECHNOLOGY INVENTED FOR USE IN SPACE

"Countless women are alive today because of ideas stimulated by a design flaw in the Hubble Space Telescope." (Editor's note: technology used to repair the Hubble Space Telescope's optical problems led to improved technology for breast cancer detection.)
—From Space Chronicles

5. ON THE DEMOTION OF PLUTO FROM PLANET STATUS 


PBS

"I knew Pluto was popular among elementary schoolkids, but I had no idea they would mobilize into a 'Save Pluto' campaign. I now have a drawer full of hate letters from hundreds of elementary schoolchildren (with supportive cover letters from their science teachers) pleading with me to reverse my stance on Pluto. The file includes a photograph of the entire third grade of a school posing on their front steps and holding up a banner proclaiming, 'Dr. Tyson—Pluto is a Planet!'"
—From The Sky Is Not the Limit

6. ON JAMES CAMERON'S TITANIC

"In [Titanic], the stars above the ship bear no correspondence to any constellations in a real sky. Worse yet, while the heroine bobs ... we are treated to her view of this Hollywood sky—one where the stars on the right half of the scene trace the mirror image of the stars in the left half. How lazy can you get?"
—From Death by Black Hole

7. ON DEATH BY ASTEROID

"On Friday the 13th, April 2029, an asteroid large enough to fill the Rose Bowl as though it were an egg cup will fly so close to Earth that it will dip below the altitude of our communication satellites. We did not name this asteroid Bambi. Instead, we named it Apophis, after the Egyptian god of darkness and death."
—From Space Chronicles

8. ON THE MOTIVATIONS BEHIND AMERICA'S MOONSHOT

"[L]et us not fool ourselves into thinking we went to the Moon because we are pioneers, or discoverers, or adventurers. We went to the Moon because it was the militaristically expedient thing to do."
—From The Sky Is Not the Limit

9. ON INTELLIGENT LIFE (OR THE LACK THEREOF)

Perhaps we've never been visited by aliens because they have looked upon Earth and decided there's no sign of intelligent life.
Read more at: https://www.brainyquote.com/quotes/quotes/n/neildegras615117.html
Perhaps we've never been visited by aliens because they have looked upon Earth and decided there's no sign of intelligent life.
Read more at: https://www.brainyquote.com/quotes/quotes/n/neildegras615117.html

"Perhaps we've never been visited by aliens because they have looked upon Earth and decided there's no sign of intelligent life."

10. PRACTICAL ADVICE IN THE EVENT OF ALIEN CONTACT 

A still from Steven Spielberg's E.T. the Extra-Terrestrial
Universal Studios

"[I]f an alien lands on your front lawn and extends an appendage as a gesture of greeting, before you get friendly, toss it an eightball. If the appendage explodes, then the alien was probably made of antimatter. If not, then you can proceed to take it to your leader."
—From Death by Black Hole

How Apple's '1984' Super Bowl Ad Was Almost Canceled

More than 30 years ago, Apple defined the Super Bowl commercial as a cultural phenomenon. Prior to Super Bowl XVIII, nobody watched the game "just for the commercials"—but one epic TV spot, directed by sci-fi legend Ridley Scott, changed all that. Read on for the inside story of the commercial that rocked the world of advertising, even though Apple's Board of Directors didn't want to run it at all.

THE AD

If you haven't seen it, here's a fuzzy YouTube version:

"WHY 1984 WON'T BE LIKE 1984"

The tagline "Why 1984 Won't Be Like '1984'" references George Orwell's 1949 novel 1984, which envisioned a dystopian future, controlled by a televised "Big Brother." The tagline was written by Brent Thomas and Steve Hayden of the ad firm Chiat\Day in 1982, and the pair tried to sell it to various companies (including Apple, for the Apple II computer) but were turned down repeatedly. When Steve Jobs heard the pitch in 1983, he was sold—he saw the Macintosh as a "revolutionary" product, and wanted advertising to match. Jobs saw IBM as Big Brother, and wanted to position Apple as the world's last chance to escape IBM's domination of the personal computer industry. The Mac was scheduled to launch in late January of 1984, a week after the Super Bowl. IBM already held the nickname "Big Blue," so the parallels, at least to Jobs, were too delicious to miss.

Thomas and Hayden wrote up the story of the ad: we see a world of mind-controlled, shuffling men all in gray, staring at a video screen showing the face of Big Brother droning on about "information purification directives." A lone woman clad in vibrant red shorts and a white tank-top (bearing a Mac logo) runs from riot police, dashing up an aisle towards Big Brother. Just before being snatched by the police, she flings a sledgehammer at Big Brother's screen, smashing him just after he intones "We shall prevail!" Big Brother's destruction frees the minds of the throng, who quite literally see the light, flooding their faces now that the screen is gone. A mere eight seconds before the one-minute ad concludes, a narrator briefly mentions the word "Macintosh," in a restatement of that original tagline: "On January 24th, Apple Computer will introduce Macintosh. And you'll see why 1984 won't be like '1984.'" An Apple logo is shown, and then we're out—back to the game.

In 1983, in a presentation about the Mac, Jobs introduced the ad to a cheering audience of Apple employees:

"... It is now 1984. It appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money. Dealers, initially welcoming IBM with open arms, now fear an IBM-dominated and -controlled future. They are increasingly turning back to Apple as the only force that can ensure their future freedom. IBM wants it all and is aiming its guns on its last obstacle to industry control: Apple. Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?"

After seeing the ad for the first time, the Apple audience totally freaked out (jump to about the 5-minute mark to witness the riotous cheering).

SKINHEADS, A DISCUS THROWER, AND A SCI-FI DIRECTOR

Chiat\Day hired Ridley Scott, whose 1982 sci-fi film Blade Runner had the dystopian tone they were looking for (and Alien wasn't so bad either). Scott filmed the ad in London, using actual skinheads playing the mute bald men—they were paid $125 a day to sit and stare at Big Brother; those who still had hair were paid to shave their heads for the shoot. Anya Major, a discus thrower and actress, was cast as the woman with the sledgehammer largely because she was actually capable of wielding the thing.

Mac programmer Andy Hertzfeld wrote an Apple II program "to flash impressive looking numbers and graphs on [Big Brother's] screen," but it's unclear whether his program was used for the final film. The ad cost a shocking $900,000 to film, plus Apple booked two premium slots during the Super Bowl to air it—carrying an airtime cost of more than $1 million.

WHAT EXECUTIVES AT APPLE THOUGHT

Although Jobs and his marketing team (plus the assembled throng at his 1983 internal presentation) loved the ad, Apple's Board of Directors hated it. After seeing the ad for the first time, board member Mike Markkula suggested that Chiat\Day be fired, and the remainder of the board were similarly unimpressed. Then-CEO John Sculley recalled the reaction after the ad was screened for the group: "The others just looked at each other, dazed expressions on their faces ... Most of them felt it was the worst commercial they had ever seen. Not a single outside board member liked it." Sculley instructed Chiat\Day to sell off the Super Bowl airtime they had purchased, but Chiat\Day principal Jay Chiat quietly resisted. Chiat had purchased two slots—a 60-second slot in the third quarter to show the full ad, plus a 30-second slot later on to repeat an edited-down version. Chiat sold only the 30-second slot and claimed it was too late to sell the longer one. By disobeying his client's instructions, Chiat cemented Apple's place in advertising history.

When Apple co-founder Steve Wozniak heard that the ad was in trouble, he offered to pony up half the airtime costs himself, saying, "I asked how much it was going to cost, and [Steve Jobs] told me $800,000. I said, 'Well, I'll pay half of it if you will.' I figured it was a problem with the company justifying the expenditure. I thought an ad that was so great a piece of science fiction should have its chance to be seen."

But Woz didn't have to shell out the money; the executive team finally decided to run a 100-day advertising extravaganza for the Mac's launch, starting with the Super Bowl ad—after all, they had already paid to shoot it and were stuck with the airtime.

1984 - Big Brother

WHAT EVERYBODY ELSE THOUGHT

When the ad aired, controversy erupted—viewers either loved or hated the ad, and it spurred a wave of media coverage that involved news shows replaying the ad as part of covering it, leading to estimates of an additional $5 million in "free" airtime for the ad. All three national networks, plus countless local markets, ran news stories about the ad. "1984" become a cultural event, and served as a blueprint for future Apple product launches. The marketing logic was brilliantly simple: create an ad campaign that sparked controversy (for example, by insinuating that IBM was like Big Brother), and the media will cover your launch for free, amplifying the message.

The full ad famously ran once during the Super Bowl XVIII (on January 22, 1984), but it also ran the month prior—on December 31, 1983, TV station operator Tom Frank ran the ad on KMVT at the last possible time slot before midnight, in order to qualify for 1983's advertising awards.* (Any awards the ad won would mean more media coverage.) Apple paid to screen the ad in movie theaters before movie trailers, further heightening anticipation for the Mac launch. In addition to all that, the 30-second version was aired across the country after its debut on the Super Bowl.

Chiat\Day adman Steve Hayden recalled: "We ran a 30- second version of '1984' in the top 10 U.S. markets, plus, in an admittedly childish move, in an 11th market—Boca Raton, Florida, headquarters for IBM's PC division." Mac team member Andy Hertzfeld ended his remembrance of the ad by saying:

"A week after the Macintosh launch, Apple held its January board meeting. The Macintosh executive staff was invited to attend, not knowing what to expect. When the Mac people entered the room, everyone on the board rose and gave them a standing ovation, acknowledging that they were wrong about the commercial and congratulating the team for pulling off a fantastic launch.

Chiat\Day wanted the commercial to qualify for upcoming advertising awards, so they ran it once at 1 AM at a small television station in Twin Falls, Idaho, KMVT, on December 15, 1983 [incorrect; see below for an update on this -ed]. And sure enough it won just about every possible award, including best commercial of the decade. Twenty years later it's considered one of the most memorable television commercials ever made."

THE AWFUL 1985 FOLLOW-UP

A year later, Apple again employed Chiat\Day to make a blockbuster ad for their Macintosh Office product line, which was basically a file server, networking gear, and a laser printer. Directed by Ridley Scott's brother Tony, the new ad was called "Lemmings," and featured blindfolded businesspeople whistling an out-of-tune version of Snow White's "Heigh-Ho" as they followed each other off a cliff (referencing the myth of lemming suicide).

Jobs and Sculley didn't like the ad, but Chiat\Day convinced them to run it, pointing out that the board hadn't liked the last ad either. But unlike the rousing, empowering message of the "1984" ad, "Lemmings" directly insulted business customers who had already bought IBM computers. It was also weirdly boring—when it was aired at the Super Bowl (with Jobs and Sculley in attendance), nobody really reacted. The ad was a flop, and Apple even proposed running a printed apology in The Wall Street Journal. Jay Chiat shot back, saying that if Apple apologized, Chiat would buy an ad on the next page, apologizing for the apology. It was a mess:

20-YEAR ANNIVERSARY

In 2004, the ad was updated for the launch of the iPod. The only change was that the woman with the hammer was now listening to an iPod, which remained clipped to her belt as she ran. You can watch that version too:

FURTHER READING

Chiat\Day adman Lee Clow gave an interview about the ad, covering some of this material.

Check out Mac team member Andy Hertzfeld's excellent first-person account of the ad. A similar account (but with more from Jobs's point of view) can found in the Steve Jobs biography, and an even more in-depth account is in The Mac Bathroom Reader. The Mac Bathroom Reader is out of print; you can read an excerpt online, including QuickTime movies of the two versions of the ad, plus a behind-the-scenes video. Finally, you might enjoy this 2004 USA Today article about the ad, pointing out that ads for other computers (including Atari, Radio Shack, and IBM's new PCjr) also ran during that Super Bowl.

* = A Note on the Airing in 1983

Update: Thanks to Tom Frank for writing in to correct my earlier mis-statement about the first air date of this commercial. As you can see in his comment below, Hertzfeld's comments above (and the dates cited in other accounts I've seen) are incorrect. Stay tuned for an upcoming interview with Frank, in which we discuss what it was like running both "1984" and "Lemmings" before they were on the Super Bowl!

Update 2: You can read the story behind this post in Chris's book The Blogger Abides.

This post originally appeared in 2012.

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