UNIT
MONEY VS. WEALTH 4
Lesson D  READING AND WRITING
Banknotes: Facts
About Paper Money
The first kinds of money used in different countries
were gold, silver, and other valuable things. But before
long, new kinds of money were needed. There wasn’t
enough metal to make coins, and people had trouble
buying things. In addition, coins were difficult to carry
around—especially for rich people in China. The coins
there had a hole in the middle, and people put a string
through the coins. These long strings of coins were
extremely heavy.
In about 600 AD, Chinese merchants found a solution
to these problems. The merchants would leave their
strings of coins with a government official and get a
piece of paper that said how many strings of coins they
had left there. They could use this paper to buy things
from a seller, and the seller could take the paper to get
the coins. These papers were the first banknotes, or
paper money.
By about 960 AD, the government of China was printing
pictures on paper to make official banknotes. The first
paper money was used in Europe in 1574, when banks
in Holland made very small paper “coins.” Sweden
printed the first banknotes in Europe in 1660.
30  Unit 4
Today, countries around the world have their own
banknotes. Large countries print their own banknotes,
and a company in England called De La Rue prints
banknotes for many smaller countries like Honduras,
Sri Lanka, and Fiji. Most banknotes are still printed on
very heavy paper, but some countries, like Australia,
use very thin plastic. Because it’s easy to make false
banknotes, countries put many special features in their
banknotes. They use ink that changes color, metal
threads in the paper, and even plastic windows in the
money. These make the banknotes difficult to copy.
But there is still one big problem with banknotes that
hasn’t been solved. Metal coins last for a long time,
but banknotes quickly become dirty and wear out. An
average banknote lasts only a few years. In the United
States, old banknotes are collected by the government,
cut in small pieces, and recycled into other paper
products. In Australia, the plastic banknotes are melted
and made into garbage cans!
A Circle T for true, F for false, or NI for no information (if the answer isn’t in the
reading).
1. Coins were made before banknotes. T F NI
2. Banknotes don’t last as long as metal coins. T F NI
3. Some people don’t like to use banknotes. T F NI
4. Banknote is another name for paper money. T F NI
5. Old banknotes can be recycled and made
into new things. T F NI
6. Sweden made the first banknotes in the world. T F NI
7. People don’t make as many false banknotes now
because they are difficult to copy. T F NI
8. Banknotes were invented in 1574. T F NI
B Answer the questions.
Which country/countries in the article . . .
1. had the first banknotes in Europe? 
2. has a company that prints banknotes for other countries? 
3. makes garbage cans from old money? 
4. had the first paper money? 
5. made coins from paper? 
6. don’t print their own money? 
7. makes old money into paper products? 
C What picture is on the smallest banknote in your country? Why was that
picture used? Imagine your country wants to make a new banknote. What
picture should be on it? Explain your reasons.









Money vs. Wealth  31