Cash

From Wikipedia, the free encyclopedia

In economics, cash is money in the physical form of currency, such as

banknotes and coins. In bookkeeping and finance, cash is current assets
comprising currency or currency equivalents that can be accessed
immediately or near-immediately (as in the case of money market
accounts). Cash is seen either as a reserve for payments, in case of a
structural or incidental negative cash flow or as a way to avoid a
downturn on financial markets.

A wad of United States currency

Contents
1 Etymology
2 History
3 Cashless society
4 See also
5 References
6 Further reading

Etymology
The English word "cash" originally meant "money box", and later came to have a secondary meaning "money".
This secondary usage became the sole meaning in the 18th century. The word "cash" derives from the Middle
French caisse ("money box"), which derives from the Old Italian cassa, and ultimately from the Latin capsa
("box").[1][2] The root is not related to the colonial British word "cash", which meant "Indian monetary system",
and derived from the Tamil language kasu, Sanskrit karsha and Sinhalese kasi.[2]

"To cash", the verbalization of the noun means "to convert to cash", as in the expression "to cash a cheque".

History
In Western Europe, after the Collapse of the Western Roman Empire,
coins, silver jewelry and hacksilver (silver objects hacked into pieces)
were for centuries the only form of money, until Venetian merchants
started using silver bars for large transactions in the early Middle Ages.
In a separate development, Venetian merchants started using paper bills,
instructing their banker to make payments. Similar marked silver bars
were in use in lands where the Venetian merchants had established
representative offices. The Byzantine empire and several states in the
Balkan area and Kievan Rus also used marked silver bars for large
payments. As the world economy developed and silver supplies Traditional holed Chinese coinage is also
increased, in particular after the colonization of South America, coins known as Cash.
became larger and a standard coin for international payment developed
from the 15th century: the Spanish and Spanish colonial coin of 8
reales. Its counterpart in gold was the Venetian ducat.

Coin types would compete for markets. By conquering foreign markets, the issuing rulers would enjoy extra
income from seigniorage (the difference between the value of the coin and the value of the metal the coin was
made of). Successful coin types of high nobility would be copied by lower nobility for seigniorage. Imitations
were usually of a lower weight, undermining the popularity of the original. As feudal states coalesced into
kingdoms, imitation of silver types abated, but gold coins, in particular the gold ducat and the gold florin were
still issued as trade coins: coins without a fixed value, going by weight. Colonial powers also sought to take
away market share from Spain by issuing trade coin equivalents of silver Spanish coins, without much success.

In the early part of the 17th century, English East India Company coins were minted in England and shipped to
the East. In England over time the word Cash was adopted from Sanskrit karsa, a weight of gold or silver
but akin to Old Persian karsha, unit of weight (83.30 grams). East India Company coinage had both Urdu
and English writing on it, to facilitate its use within trade. In 1671 the directors of The East India Company
ordered a mint to be established at Bombay, known as Bombain. In 1677 this was sanctioned by the Crown, the
coins, having received royal sanction, were struck as silver Rupees; the inscription runs "The Rupee of
Bombaim", by authority of Charles II.

At about this time coins were also being produced for The East India Company at the Madras mint. The
currency at The Companys Bombay and Bengal administrative regions was the Rupee. At Madras, however,
the Company's accounts were reckoned in pagodas, fractions, fanams, faluce and cash. This system
was maintained until 1818 when the rupee was adopted as the unit of currency for the Company's operations,
the relation between the two systems being 1 pagoda = 3-91 rupees and 1 rupee = 12 fanams.

Meanwhile, paper money had been developed. At first, it was thought of for emergency issues, hence were
most popular in the colonies of European powers. In the 18th century, important paper issues were made in
colonies such as Ceylon and the bordering colonies of Essequibo, Demerara and Berbice. John Law did
pioneering work on banknotes with the Banque Royale. However, the relation between money supply and
inflation was still imperfectly understood and the bank went under, while its notes became worthless when they
were over-issued. The lessons learned were applied to the Bank of England, which played a crucial role in
financing Wellington's Peninsular war against French troops, hamstrung by a metallic Franc de Germinal.

The ability to create paper money made nation-states responsible for the management of inflation, through
control of the money supply. It also made a direct relation between the metal of the coin and its denomination
superfluous. From 1816, coins generally became token money, though some large silver and gold coins
remained standard coins until 1927. The World War I saw standard coins disappear to a very large extent.
Afterwards, standard gold coins, mainly British sovereigns, would still be used in colonies and less developed
economies and silver Maria Theresa thalers dated 1780 would be struck as trade coins for countries in East
Asia until 1946 and possibly later locally.

Cash has now become a very small part of the money supply. Its remaining role is to provide a form of currency
storage and payment for those who do not wish to take part in other systems, and make small payments
conveniently and promptly, though this latter role is being replaced more and more frequently by electronic
payment systems. Research has found that the demand for cash decreases as debit card usage increases because
merchants need to make less change for customer purchases.[3]

Cash is increasing in circulation. The value of the United States dollar in circulation increased by 42% from
2007 to 2012.[4] The value of Pound Sterling banknotes in circulation increased by 29% from 2008 to 2013.[5]
The value of the euro in circulation increased by 34% from August 2008 to August 2013 (2% of the increase
was due to the adoption of euro in Slovakia 2009 and in Estonia 2011).[6]

Cashless society
Cashless society is the idea that in the future cash will be redundancy having been replaced by electronic means
of transfer. In the UK it is now reported that 1 in 7 people no longer carries or use cash.[7]

See also
Banknote counter Cash and cash equivalents
Banknote seal (China) Cash management
 Cash register APPSC
Cash transfers Rebate (marketing) (cashback)
Petty cash

References
Current Affairs in telugu

1. "Cash" (https://www.merriam-webster.com/dictionary/cash). Merriam-Webster. Retrieved 2017-08-20.

2. "Cash" (http://www.etymonline.com/index.php?term=case). Online Etymology Dictionary. Retrieved
2017-08-20.
3. "Federal Reserve Bank of Chicago, ''Debit Card and Cash Usage: A Cross-Country Analysis'', March
2007" (http://www.chicagofed.org/digital_assets/publications/working_papers/2007/wp2007_04.pdf)
(PDF). Retrieved 15 November 2013.
4. Williams, John. "Cash Is Dead! Long Live Cash!" (http://www.frbsf.org/our-district/about/annual-report/
annual-report-2012/2012-annual-report-essay-cash-is-dead-long-live-cash/). Federal Reserve Bank of
San Francisco.
5. "Banknote Statistics" (http://www.bankofengland.co.uk/banknotes/Pages/about/stats.aspx). Bank of
England.
6. "Banknotes and coins circulation" (http://www.ecb.europa.eu/stats/policy_and_exchange_rates/banknotes
+coins/circulation/html/index.en.html). European Central Bank.
7. Alex West (23 October 2016). "One in seven Brits no longer carries cash, as we become increasingly
reliant on card and smartphone payments" (https://www.thesun.co.uk/news/2034280/one-in-seven-brits-n
o-longer-carries-cash-as-we-become-increasingly-reliant-on-card-and-smartphone-payments/).
thesun.co.uk. The Sun. Retrieved 12 November 2016.

Further reading
Clyn Davies - A History of Money From Ancient Times to the Present Day (University of Wales Press,
1994) ISBN 0-7083-1351-5
Peter Spufford - How rarely did medieval merchants use coin? (Geldmuseum, Utrecht, 2008) ISBN 978-
90-73882-21-8

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This page was last edited on 20 August 2017, at 17:56.

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