I would assume it is more expensive to mint coins from metal than to print bills on "paper". There's an issue of coins being smuggled from the Philippines, because the actual cost of a one peso coin is one-and-a-half pesos.
2006-10-14 14:11:14 · 5 answers · asked by headaches abound 2 in Arts & Humanities ➔ History
coins last longer than paper money. actually, coins came first and they were even made back into antiquity. in fact, we still have coins from then in museums. paper money only lasts a few years- if that.
2006-10-14 17:37:14 · answer #1 · answered by christy 6 · 0⤊ 0⤋
Money started out as a store of value that had some certification of purity and value. Coins were the first money, and were back not only by the local government's seal, (no one really cared), and also by the value of the metal in was stamped on. All money was coins, bronze for small denominations, silver for medium, and gold for large.
The Chinese started paper money in the Sung Dynasty. Paper money would work as long as the people trusted that for every piece of paper there was metal to back it up. Governments being how they are, they quickly broke this promise. When the trust of the people accepting paper money fails, then the paper money becomes valueless, (since the paper isn't innately valuable). This was done many times in Chinese history, (and later world history). Trust is what gets people to accept paper money.
The situation in the Phillipines is like what happened to the US in 1965. Old silver coins had been devalued by the overprinting of paper money to the point that the face value was less than the metal in the coin. When that happens, people melt the coins, (Gresham's Law at work). The US is again facing this problem with 1 cent and 5 cent coins. Both are now worth more to melt than face value, ignoring the cost of striking them. Pretty soon nickels will start disappearing in this country.
2006-10-18 10:23:38 · answer #2 · answered by medoraman 3 · 0⤊ 0⤋
Governments use metal coins for fractions of bills because they are handled 10 times more often than a paper bill. However, this useage can also be negatively affected by inflation such as is now the case with our U.S. penny! In many countries coins also represent low denomination bills such as two, five and ten (dollars or pounds or marks etc.) for the same reason. Another reason is that (with earlier technology) vending machines could handle metal coins but not bills! Their usage is also a carryover from when the metallic value of the coin represented the exchange value of the coin--i.e. five or ten dollar gold pieces were represented by a coins containing five or ten dollars worth of gold. People could physically assay a coin by its weight, or hardness, or sound or all three but there was no way to assay a paper bill!
2006-10-14 15:08:50 · answer #3 · answered by Anonymous · 0⤊ 1⤋
Coins start out "being worth more," but then when inflation makes coins worth less, paper is used instead, to represent the heavy pile of metal you'd have to carry around to actually buy something.
2006-10-14 14:16:09 · answer #4 · answered by shirleykins 7 · 0⤊ 0⤋
Because they are harder to counterfit!... And not worth the paper they are printed on!
2006-10-14 14:20:13 · answer #5 · answered by Anonymous · 0⤊ 0⤋