United States Money History Essay
United States Money History
Money is something societies have almost always had, whether it was in the form of trading, shells, or coins. Money is a currency of exchange, and exactly what is used as money doesn’t really matter, as long as the society agrees that it has value. In the United States, money has typically been coins made from precious metals or paper, all of which is backed by gold in the United States treasury. Around 1800 in the United States, the money system that is in place today was just beginning to be formed. At the beginning of the 1800’s, there was only one bank. By 1816, a second bank had begun, and it was chartered for twenty years.
At this time, both coins and paper money were already being issued. When the charter was up on the second bank, about 1600 state-chartered private banks came into existence, and also issued paper currency, which was relatively new still (Pfiester). The “dollar” was already the official US currency, though, which had been issued in the late 1700’s (Factmonster). However, the paper money that the banks produced in the mid-1800’s was not standardized. Banks issued their own variety of money, which resulted in over 30,000 different designs. Money was easily counterfeited, and there was confusion in what was real money and what was not.
By the late 1800’s, as the Civil War was gearing up, Congress was pressed into providing paper money via the US Treasury Department. These stayed in circulation until the 1970’s. This new money was designed with anti-counterfeiting measures, including blue and red fibers embedded in the money and the treasury seal (Pfiester). Until 1853, silver was the United States metal of choice. The silver dollar was the primary currency used. In 1853, the government replaced the silver dollar with the promise of gold. Dollar bills came out around this time, and other notes, with references to gold written on them (Davies).
Until 1857, all foreign coins were considered legal currency in the United States, as most were made of precious metals like gold or silver. In 1857, the government finally decided that it had built enough support for its own currency that it did not need to accept these forms anymore. At this point, coins were only used for smaller exchanges anyway (Davies). In the early 1930’s, most currency had references to gold written on it. Gold was always used to back up money, and could be used instead of money if people owned some. A bank note, or dollar bill, was used as a promise that the government would pay.
In fact, the phrase “Secured By United States Certificates Of Indebtedness Or One-Year Gold Notes, Deposited With The Treasurer Of The United States Of America” was printed on it. Gold continued to be a reference on the money through the printing of the 1928 $100 Gold Certificate. In 1934, the government stopped mentioning gold on all of the money, and made it illegal to own gold as currency (Privateer Market Letter). 1929 saw a standardization in design which, in combination with other measures, helped reduce the counterfeit rate from 25% of currency in circulation to only 1%.
In 1990, microprinting and a security thread were added to further combat counterfeiting (Pfeister). Colors were introduced into the money in the early 2000’s, in addition to creating oversized pictures of presidents and placing them slightly off-center. Also, there was printing on the bills only visible under a microscope, then making it nearly impossible to counterfeit. Counterfeiting was a problem from the beginning of money, and as individuals got more sophisticated in their capabilities, Congress responded by issuing more measures against counterfeiting (Factmonster).
Money has changed over the years, from being purely the trade of precious metals handled by private citizens or small local banks to being a nationally controlled system where bills and coins are backed by gold. The system developed out of necessity, primarily, and is useful still today. Money continues to change as the government issues new bills, different types of bills, and works to phase out the dollar bill, among other changes. The U. S. money history clearly lead to today’s money world.
Davies, Roy (2005). “Money in North American History. ” Accessed December 17, 2006. Website: http://www. ex. ac. uk/~RDavies/arian/northamerica. html. “U. S. Money History (2005). ” Fact Monster. Pearson Education, Inc. Accessed December 17, 2006. Website: http://www. factmonster. com/ipka/A0774856. html. Pfiester, Ron (2001). “History of US Paper Money. ” Ron’s Currency. Accessed December 17, 2006. Website: http://www. ronscurrency. com/rhist. htm. “A History of U. S. Paper Money (2001). ” The Privateer Market Letter. Accessed December 17, 2006. Website: http://www. the-privateer. com/paper. html.
University/College: University of California
Type of paper: Thesis/Dissertation Chapter
Date: 16 February 2017
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