history of us currency

What is the story behind the world’s most powerful economy, anyway?

Let’s take a quick look at the timeline with the help of our friends at moneyfactory.gov.

1690 – Colonial Notes

One of the original 13 colonies, the Massachusetts Bay Colony to be exact, issued the first paper money in order to cover costs of military expeditions. This practice of using paper currency, of course spread to other colonies.United States 20 Schillings | P-S1053 | 1690
Source: Banknote World Educational

1775 – Continental Currency

This is the currency issued to finance the Revolutionary War. This currency was denominated in Spanish milled dollars. However, the Continental Currency quickly lost their value due to the fact that they were easily able to counterfeit the money. 

1792 – Monetary System

The Coinage Act of 1792 created the U.S. Mint and established a federal money system. This included setting specific values for each coin in use: gold, silver, or copper.

1861 – Greenbacks

This is when the first circulation of paper money by the federal government happens. This includes the issuance of the first $10 bills or Demand Notes. It was passed to finance the Civil War. Congress authorized the U.S. Treasury to issue non-interest-bearing Demand Notes. Any U.S. currency issued in 1861 onward is valid and redeemable at face value.

United States 500 Dollars | P-62 | 1861
Source: Banknote World Educational

1862 – Treasury Department Authorization

In order to fight counterfeiters, the Treasury Secretary is authorized to engrave and print notes at the Treasury Department. The designs on the notes were intricate and included a Treasury seal and engraved signatures.

The Bureau of Engraving and Printing (BEP) is established.

1863 – National Banknotes

Congress establishes a national banking system as well as authorizes the U.S. Treasury to oversee the issuance of National Banknotes. This national system sets federal guidelines for chartering and regulating “national” banks. This system also allows for the national banks to issue national currency secured by the purchase of the United States bonds.

Also established within the national banking system came our “fractional currency” notes! We know these denominations of 5, 10, 25, and 50 cents. Only, they were in notes.

1864 – Spencer Clark On Currency

The 5-cent note of the second issuance of the Fractional Currency featured a portrait of Spencer Clark. This print causes a public uproar. In response to the public uproar, in 1866 Congress prohibits the portrait or likeness of any living person on currency notes, bonds, or securities.

1865 – Secret Service

The United States Secret Service came into being to deter counterfeiters. Now the United States Secret Service is part of the Department of Homeland Security as we know them today.

1869 – United States Notes

The BEP began to engrave and print the faces and seals of United States Notes. Prior to this, all U.S. Notes were produced by private banknote companies and then sent to the BEP for sealing and finalizing.

United States 20 Dollars | P-161 | 1875
Source: Banknote World Educational

1877 – The BEP

In 1877 the BEP begins printing all United States currency.

1880 – The First BEP Facility

The first building just for the BEP was constructed on Independence Avenue (known then as 14th Street and B Street).

1890 – Treasury Notes (Coin Notes)

A type of currency issued by the U.S. government until 1893 under the authority of the Sherman Silver Purchase Act. Denominations included: $1, $2, $5, $10, $20, $50, $100, and $1000.

1905 – No More Paper Currency With Color

The last U.S. paper money printed with background color was the $20 gold certificate, series 1905, which had a golden tint and a red seal and serial number.

1913 – Federal Reserve Act

This act establishes the Federal Reserve as the nation’s central bank and provides a national banking system that is more responsive to the fluctuating finances of the country. For example, Federal Reserve Bank Notes are authorized by the Federal Reserve Act and used as a form of emergency currency in the early 20th century.

1914 – The First $10 Federal Reserve Notes and New DC Facility

The first $10 Federal Reserve notes are issued.

The BEP also moves into a new, larger facility which became known as the “main” building.

United States 10 Dollars | P-360aj | 1914
Source: Banknote World Educational

1929 – Standard Design

The first large change to affect the appearance of all paper money occurs this year. To lower manufacturing costs, all Federal Reserve notes became about 30% smaller. Standardized designs were incorporated on all classes of currency to make it easier for the public to distinguish between genuine and counterfeit notes.

1957 – “In God We Trust”

“In God We Trust” is added onto all currency following a 1955 law passed. The motto first appeared on paper money on 1957 series $1 silver certificates and then becomes implemented on Federal Reserve notes in 1963.

1966 – Phasing Out $2 Notes

Issuance had been halted of $2 notes as the U.S. notes were being phased out of existence during this time.

1969 – Higher Denomination Notes No Longer Issued

Notes larger than $100 in denomination are no longer issued. Last printed in 1945, these large notes had primarily been used by banking institutions. However with the advancement of banking technology the use of the large notes were no longer needed.

1976 – $2 Federal Reserve Notes Make A Comeback

In commemoration of Thomas Jefferson’s birth, the $2 Federal Reserve note is reintroduced on the 233rd anniversary of his birth.

United States 2 Dollars | P-461C | 1976
Source: Banknote World Educational

1990 – Western Currency BEP Facility

A Western BEP facility opens in Fort Worth, Texas and begins producing currency. It is the first outside of DC and is intended to better serve currency needs of the western half of the United States. It is also to act as a contingency operation in case of emergencies in DC.

1996 – Currency Redesign

The first significant design change to incorporate a series of new counterfeit deterrents. These new notes were issued in descending order with $100 in ’96, $50 in ’97, $20 in ’98, and $10 and $5 in 2000.

2003 – The $20 Is Redesigned

Subtle background colors are introduced on the $20 featuring green, peach, and blue along with images of the American eagle.

2004 – The $50 Is Redesigned

The redesign of the $50 includes subtle background colors and highlights historical symbols of America, specifically red, blue, and images of a waving American flag and a small metallic silver-blue star.

2006 – The $10 Is Redesigned

The redesign of the $20 includes a change in the Treasurer’s signature and subtle colors of orange, yellow, and red, and images of the Statue of Liberty’s torch and the words “We the People” from the U.S. constitution are added to the background.

2006 – The $5 Is Redesigned

The $5 redesign retains the two most important security features that were first introduced in the 1990s: the watermark and the embedded security thread.

United States 2 Dollars | P-461C | 1976
Source: Banknote World Educational

2013 – The $100 Is Redesigned

The redesign of the $100 comes with advanced technology to combat counterfeiting and retains the traditional look of U.S. currency.

And there you have it. A timeline of the history of U.S. currency. A thanks again to moneyfactory.gov. If you would like more information regarding U.S. currency and the history of US currency, check them out.

Photo Credit: Pictures of Money

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