History of Money

This history of money in the American culture dates back before the time of the American Revolution. The early colonists used a mixture of English, Spanish and French money as they had no set denominations of their own. The first American money was made for the Continental Congress to help finance the war against the British. These notes weren’t worth much of value, but by 1781, the Bank of North America, the first bank in our nation, was created. It would be four more years before the Continental Congress named the dollar the official unit of currency for the country. Once the Constitution was written, the Continental Congress set a new standard in the history of money in the US when it created the First Bank of the United States. By 1792, the government saw the need for a federal monetary system to oversee the creation of currency and the U.S. Mint was founded in Philadelphia.

During the Civil War, a new phase in the history of money began when the Confederacy began making its own currency. Some Northerners, in an attempt to devalue the Confederate currency, began making Confederate money and circulating it. To finance the war, the US Treasury issued paper money called Demand Notes. By the end of the war, the Confederate money was worthless and Demand Notes were replaced with the Greenback Dollar. It was referred to this because of the green background used in hopes of deterring counterfeiters. The Greenback Dollar was also signed and had the seal of the Treasury Department. Later the Treasury had red and blue fibers inserted to try to further prevent forgeries.

The Federal Reserve System was created in 1913 to regulate money and credit in order to maintain economic stability and growth. Other changes have been made in our currency since the early 1900s. Currency made after 1963 contain the phrase “In God We Trust.” Newly designed one hundred dollar bills were introduced in 1995, quickly followed by new fifty dollar bills in 1997 and new twenty dollar bills in 1998. One of the newest points in the history of money was when the State Quarters Program Act was developed. Each state received a quarter with a design that honors its state and its resources. Finally, in the year 2000, the five and ten dollar bills received new designs.