How The Origin And Growth Of Metallic Money Is Possible?

Second stage in the course of evolution of money is thus the use of metals as unit of account. The use of uncoined metals as a medium of exchange created further difficulties. It became difficult for the people to know the weight and the value of the pieces of bullion at sight.

The discovery of mines of gold and silver and their exhaustion caused fluctuation in the supply of money. Transportation and storage of precious metal also became dangerous. Debasement of metal further caused inconvenience and complications in exchange. Further advancement in the evolution of money was the replacement of standardized metal ingots with a standardized coinage. The metallic coins had a guaranteed weight and value by a competent authority. They had also the intrinsic value and so commanded a universal respect. With the passage of time these full bodies' coins also proved a failure as a good medium of exchange.

Coins were clipped, abraded and melted down. They were also debased. With the discovery of exhaustion of mines, the intrinsic worth of the coins began to depart from their face value. Transportation and storage of metals also become inconvenient and dangerous. Efforts were made to find out a better unit of account.