History of Money in America
You've probably heard the saying before, “money doesn't grow on trees.” That might be true nowadays, as current US dollars are made from a blend of cotton and linen, but that wasn't always the case. Currency in the United States has gone through many transformations since colonists arrived in America. From sea shells, to coinage, to paper bonds to greenbacks, money in the United States has seen a lot of change. Below you'll find a time-line explaining the changes money has gone through in the United States, both physically and structurally, as the nation has grown.
1400's-1600's: Wampum, white beads carved from shells, was used by Native Americans as jewelry and was exchanged as gifts. Following the arrival of European settlers wampum was used as a form of currency both among the Europeans, who did not have access to the metals needed for coinage, as well as the local natives.
September 27th, 1642: As the New England colonies began extensive trade with the Dutch, English and Spanish a number of different types of coinage began circulating. On this date the General Court of Massachusetts passed an act establishing the exchange rate between English shillings, Dutch ducatours and Spanish reales.
May 26th, 1652: The Massachusetts House of Magistrates passes the mint act, establishing a mint where the Spanish and Dutch coinage could be melted into the local currency of pence and shillings.
February 3rd, 1690: The Massachusetts Colony creates the first piece of paper money in the Western world in response to the British request that the colony help fight in Canada against the French. Because the British promised to reimburse the colony, and because of a shortage in coinage, it was decided to try using temporary paper certificates.
May 10th, 1775: The Continental Congress authorized the creation of paper money in response to the start of the Revolutionary War. The currency was referred to as “continentals,” and were without value until after the colonies won the war. Following their victory the value of the continentals dropped significantly.
December 31st, 1781: The Bank of North America was founded by the Congress of the Confederation as a means to help fund the Revolutionary War.
February 25th, 1791: The First Bank of the United States, proposed by Alexander Hamilton, was chartered by the United States Congress, establishing a national mint and excise tax and solving the currency problem left over from the use of continentals.
April 2nd, 1792: On this date the Coinage Act was passed, establishing the United States Mint to regulate the country's currency, a currency to be shared by all the states. The original coins were called Eagles, Half Eagles, Quarter Eagles, Dollars, Half Dollars, Quarter Dollars, Dismes, Half Dismes, Cents, and Half Cents.
Summer, 1861: The United States, in the middle of the Civil War, issued paper money or “demand notes” as a means to finance the war amidst widespread hoarding of gold and silver coins. Demand notes could be turned in “on demand” for their value in gold coin.
February 25th, 1863: President Abraham Lincoln passed the National Bank Act, which created universal charters for national banks, helping to unify the nation's currency regulations.
July 5th, 1865: The Secret Service Division was created as a part of the Department of Treasury to help reduce the circulation of counterfeit bills, which, according to some reports, accounted for one third of the currency being used.
Dec 23rd, 1913: President Woodrow Wilson signed the Federal Reserve Act, which created Federal reserve banks headed by government officials. The Federal Reserve Act also created a single currency for the United states called the Federal Reserve Note.
1929: In 1929 all United States dollars were designed to be the same size, with monuments and designs on the back of the bill and portraits of United States presidents on the front.
July 11th, 1955: President Eisenhower approved a bill requiring “In God We Trust” to be printed on all United States currency and coinage.
1990-1995: Anti-counterfeiting measures were adopted on denominations of five dollar through one hundred dollar bills, which included security thread imbedded in the paper and microprinting- readable only with the help of magnification.
1996-1998: To reduce counterfeiting a newly designed one hundred dollar bill was introduced in 1996, a new fifty dollar bill in 1997, and a new twenty dollar bill in 1998.
December 1st, 1997: President Bill Clinton enacts the 50 State Quarters program, creating commemorative quarters for each of the fifty states from 1999 to 2008.
2000: To reduce counterfeiting the United States Treasury creates new five and ten dollar bills.
More money resources:
Continental Currency: One Third Dollar
The First Bank of the United States
Money Law: The Coinage Act of 1792
