5 Things You Never Knew About U.S. Currency
Tracing the development of a nation’s currency can provide a unique glimpse into the nation itself. But currency is complicated — its history often defies a simple straight-line narrative, and there are countless technicalities along the way that threaten to glaze over the eyes of anyone without a degree in economics. So let’s take a look at some of the most interesting moments in the history of U.S. currency, and leave the rest to the economists.
The First National Bills Were Called “Continentals”
The first national paper currency for what would become the United States of America was issued by the Continental Congress in 1775. Known as Continental currency, it was intended as a way to fund the Revolutionary War. Though the currency started strong, a lack of adequate revenue sources (and mismanagement by the government) resulted in its quick depreciation. To make matters worse, Great Britain counterfeited the 1777 and 1778 issues of Continental currency in an act of wartime economic sabotage, and did so to such an extent that Congress was forced to recall both printings. As the currency’s value continued to plummet, Congress stopped printing new Continentals altogether in 1779; though the bills continued to circulate, they were worth only 1% of their face value by 1781.
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New Coins Were Minted Under Alexander Hamilton
By the end of the 18th century, the United States needed a currency do-over. In 1791, Alexander Hamilton, the nation’s first treasury secretary, established the Bank of the United States in order to create a stable system of credit for the government. The following year, Congress passed the Coinage Act of 1792, which called for a standard national mint in Philadelphia that would produce coins made of copper, silver, and gold. These coins included the very same denominations we use today, but there was also a broader range of values. Coins made of copper included the half cent and cent; coins made of silver included the half dime, dime, quarter, half dollar, and dollar; and coins made of gold included the quarter eagle ($2.50), half eagle ($5), and eagle ($10).
The U.S. Dollar Was Based on the Spanish Peso
The U.S. dollar originated as a coin based on the Spanish milled dollar, known in Spain as the peso, mimicking both its weight and value in silver. The origins of the dollar sign, however, are unclear. One common theory is that because the U.S. dollar and the Spanish peso were so similar, the symbol evolved from the superimposition of the “S” and “P” from the old shorthand for peso (“ps”), which was then simplified into the dollar sign. Another theory is that the dollar sign is a similar refinement of superimposing the United States’ initials. A variation of that theory suggests it originated as a superimposed “U” and “S,” but the initials stood for “units of silver.” Plausibility aside, there is no substantive evidence for these (or any other) theories. Despite the iconic status of the dollar sign today, its exact origin remains a mystery.
George Washington Wasn’t on the First Dollar Bill
The very first United States $1 note was printed in 1862, as part of the legal tender nicknamed “greenbacks” for their color. This first dollar bill didn’t include an image of George Washington anywhere on it; instead, on the front of the note was the likeness of then-Treasury Secretary Salmon P. Chase. Yes, the official in charge of creating the currency opted to put his own image on it. Chase later described how that came to be during a speech: “I went to work and made ‘greenbacks’ and a good many of them. I had some handsome pictures put on them; and as I like to be among the people… and as the engravers thought me rather good looking, I told them they might put me on the end of the one-dollar bills.”
Aside from Chase’s face, the greenbacks also included anti-counterfeiting measures such as the U.S. Treasury seal, engraved signatures, and complex patterns and shapes made by geometric lathe. These early anti-counterfeiting measures are the root of techniques still in use today (though today they are augmented by other identifying factors). As for George Washington, his image replaced Chase’s on the dollar bill for good in 1869 — a recurrent provision in Section 116 of the annual Financial Services and General Government Appropriations Act prevents any redesign of the $1 note.
There Used To Be a $10,000 Bill
The $100 bill is now the largest denomination of American currency, but there were once much larger notes printed. Until their discontinuation in 1969, notes in $500, $1,000, $5,000, and $10,000 denominations were issued (though not widely circulated for reasons that are self-evident). With the exception of the $5,000 bill, each note had “blue seal” and “green seal” versions. Pictured on the blue seal $500 was former Secretary of State John Marshall, while President William McKinley appeared on the green seal version. The blue seal $1,000 depicted Alexander Hamilton, while its green seal counterpart featured Grover Cleveland. Founding father James Madison was pictured on the $5,000 note. And the $10,000 note — the highest value of American currency ever circulated — was the only one to have the same person pictured on both versions. Who else could that honor have gone to but Salmon P. Chase?
Just one piece of U.S. currency surpasses the $10,000 note as the largest denomination ever printed, though it was not circulated: the $100,000 gold certificate. Only printed for three weeks between 1934 and 1935, the gold certificate was exclusively intended for transactions between Federal Reserve Banks. Woodrow Wilson is portrayed on the front of the note. Possession of the $100,000 gold certificate by a civilian is illegal, an infraction that might be a contender for the strangest possible financial crime.
