American currency has shifted dramatically from its initial forms in the colonial era, evolving to become a primarily federally-backed paper and coin currency system. When the country created a new iteration of its currency, it was usually in response to a significant economic crisis or war. From silver coins to check printing services, America’s monetary systems have transformed over the course of the last two hundred years to create the modern, secure, and stable currency that belongs to one of the world’s greatest economic powerhouses.
Colonial Currency: Pre 1776
Before the American Revolution and the official foundation of the United States, citizens of the colonies used a mixture of English, French, and Spanish currency. Payments were frequently inconsistent without an official currency or economic structure, and trades were significantly more common. The exception to this rule was the Colonial note, which was originally printed exclusively for use in the Massachusetts Bay colony earlier in the 18th century. In 1775, the continental congress implemented a currency for use in the colonies, but the lack of financial backing and ease of creating counterfeit currency quickly made the notes essentially obsolete.
Early Check Printing: 17th and 18th Century
The first check printing business in the United States began operations in 1762, run by a man named Lawrence Childs. He aimed to make sending and receiving money more accessible, given the fluctuations between multiple currencies and their changing value. These first American checks used a serial numbering system to keep track of each item for bookkeeping purposes.
Once the payee received the check, they would take it to the bank, which would then check the serial number to ensure that the dispensation was non-fraudulent. Most checks in this early American era were hand-written from scratch and in use only for the reasonably wealthy. Checks today use significantly more security protocols, but they remain one of the most convenient, conventional payment methods for both individuals and businesses.
Gold and Silver Coins: 1790s
In the mid-1790s, Congress approved the creation of America’s first coinage system. Silver coins, which were the first minted, were a mixture of copper and silver metals, with denominations beginning at a half-cent. While the dollar and cent value of these gold and silver coins might sound low at first glance, they were actually reasonably valuable. Around this time, the United States also began using the “$” symbol with respect to the country’s new monetary systems.
The gold dollar was a rare find even amongst the American upper class at its creation as it used actual gold in its construction. Because modern American coins have such low value, they are usually made primarily of copper or nickel rather than silver or gold. Gold coins are still in circulation today, though they are more of a collector item than a spendable currency, mainly if they date back to the 18th and 19th centuries.
State Bank Notes and Confederate Currency: 1830s-1864
State banknotes entered circulation in the mid-1830s to provide a reasonable paper currency for the Early United States, inexpensive printing. Unfortunately, it was easy to counterfeit because the currency used such a wide range of colors, denominations, and design styles. It was often not accepted in stores or marketplaces. During the civil war, the Confederacy voted into action a new currency for its states, though, of course, its monetary value was short-lived.
Fractional Currency: 1862-1872
In response to Americans hoarding gold and silver during the Civil war, the United States Congress voted a new paper currency in lower denominations to adjust for war-time inflation and ensure that people didn’t have to pay in exact change. These paper notes started at a five-cent value and ran upwards towards 50 cents. Gold coins were still a valuable form of currency at the time, though their uses were limited.
National Bank Notes, Gold and Silver Certificates: 1863-1963
When the United States created a new national banking system near the end of the civil war, it also created a new form of paper currency known as National Bank Notes. These notes carried significantly higher currency value than the fractional currency notes and came with financial backing from the government. These banknotes were still in circulation until the 1930s when Federal Reserve notes were the new dominant form of currency.
Gold certificates created a new paper currency system in 1865 that continued with silver certificates, built-in 1878, until the mid-1960s. These paper notes were made almost exclusively for use in bank transactions and were backed by the gold and silver holdings of the Federal Reserve. Both the gold and silver certificates carry significant value today as collector’s items, in part due to their limited printings.
Federal Reserve Bank Notes: 1913-1935
Federal Reserve banknotes were an early version of the modern American currency system, with dollar values between $1 and $100. Each note was backed by a particular federal reserve bank rather than the entire system of banks. They were discontinued in 1935 because they didn’t hold as much value as the national reserve notes backed by the collective of federal banks.
Federal Reserve Notes: Current American Currency System
Federal Reserve notes are the modern form of American currency. They were first printed in 1913, with the same denominations of the Federal Reserve banknotes. At a few points in the mid-20th century, a few notes were built-in valued higher than $100, but they left circulation because the vast majority of people couldn’t afford them. With current inflation, it’s entirely possible that we could see this type of domination in print again. However, given the security and convenience of making payments online, it’s also possible that the United States could move entirely away from a physical cash system.
So the history of American Currency notes has been expansive. It evolved through many years of changes and alterations. And then it came to be what it is presently. The rich history of it really makes it worth knowing.
