History Of Kedah And Perlis Coins
Not much is known about the types of coins used by ancient Kedah prior to the introduction of her own state coinage in the middle of the seventeenth century. Evidence suggests the there was no standard form of currency in the early days when trade in Kedah was conducted by barter. It appears that cowrie shells (Cypraea moneta), known to have come from the Maldive Islands and Borneo, were the earliest form of currency and medium of exchange in Kedah.

Cowrie shells were used in Kedah for this purpose from about the eighth century. It is likely that they continued in use until the end of the fifteenth century as the fractional denominations required in trade. The cowrie shells which represented the single standard unit, were often cut at the back, or pierced with holes, so that they could be threaded on to strings to form multiples of that unit. Higher denominations were also obtained by the use of bigger shells, of different species, some of which were fastened together in pairs. What values these attained in the Malay Archipelago is not known, but according to Lacouperie, in his Catalogue of Chinese Coins contemporary China, shells were used for denominations as great as 200 times that of the basic unit. The acceptance of such shells as currency probably developed form their widespread use as personal ornaments, fertility charms and amulets to ensure safe childbirth. The cowrie shells were supplemented with uncoined gold (gold dust) and silver, which were normally used by the merchants of the time. From the eighth century, the Chinese began to export substantial quantities of copper cash to the eastern part of the Archipelago where, because of its more convenient size and ready-made central hole, it gradually superseded cowrie shells as the principal market money.
Subsequently, when international trade became an important activity in the Malay Peninsula, Kedah and the rest of the coastal states were introduced to a variety of goods and types of currency by foreign merchants. There was international trade between China, India, South-East Asia, the Middle East and Africa as early as the second century.
Excavations and exploratory work by archaeologists in Kedah since the 1850s have provided evidence of the existence of entrepot trade between the Chinese and the Arabs in Kedah over a period of time from the fifth to the thirteenth century. archaeologists have found artefacts such as T'ang Dynasty ceramics, early Middle Eastern glass and beads in Merbok and near the banks of the Sungai Emas in Kedah. This evidence suggests that the Indians were not Kedah's only early international trading partners. The Chinese, the Arabs and the Persians were also actively involved.
This was said to have resulted from two important factors. The first was the discovery of the inland trade route across the Isthmus of Kra, as a short cut to the trader's destinations or back to their homelands. Kedah and its vicinity became a centre where they converged. The second factor was the existence of powerful empires at both ends of the trade routes: the Omayyad Caliphs (AD 660-749) and later the Abbasids (AD 750-8200) in the Middle East and the T'ang Dynasty in China (AD 618-907). Kedah's entrepot status meant that it functioned as a transhipment centre for Muslim and Chinese traders and became a part of what is popularly known as The Ceramic Trade Link. At first the Chinese paid for spices, aromatic products, pearls and herbs, with gold, silver and copper coins which became the common currency in the Malay Archipelago. Ceramics entered the scene as an important item of exchange in 1219 when the Song government of China decreed that only porcelain, lacquer and textiles were to be used in trading transactions, in order to prevent a drain of Chinese currency.


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