How the US dollar has changed over time
The evolution of America's iconic currency
The mighty US dollar has undergone some major changes over the years. We chart the evolution of America's currency from colonial times to the 21st century, and reveal how the look of the money has transformed through the ages.
Currency chaos
The very first coin struck in America wasn't actually a dollar. The Thirteen Colonies were under the control of the Kingdom of England at the time and lacked their own currencies. Everything from pound sterling to Spanish pieces of eight (pictured) and even wampum – small cylindrical beads – was used as a medium of exchange, as hard cash was in serious short supply.
Massachusetts pound coins
King Charles I was executed in 1649 and a republic was established in England. Taking advantage of the crisis across the pond, the Massachusetts Bay Colony declared independence in 1652 and the Boston Mint began producing simple silver shilling coins marked 'NE' for the breakaway colony that same year. The Massachusetts pound was based on pound sterling with 240 pence to the pound.
First American notes
The monarchy was restored in 1660 and England resumed exerting its authority over the wayward American colonies. The Boston Mint was shut down in around 1682, but the Massachusetts Bay Colony began producing paper money in 1690 in defiance of the English. These Massachusetts pound 20 shilling notes were the first government-issued notes in the Western World.
Colonial currencies
South Carolina produced its first banknote in 1703 and by 1755 all Thirteen Colonies were printing paper money in pounds, which were eventually regulated by London. These colonial currencies paved the way for the first true American money, Continental currency. The currency was created by the Continental Congress at the start of the Revolutionary War in 1775 in order to finance the conflict.
Continental currency
The paper currency, which was based on the Spanish dollar, tanked during the war and was pretty much worthless by the end of hostilities when the famous expression “not worth a Continental” was coined. There were simply too many notes in circulation. Adding to the currency's woes, Continental notes were counterfeited on an industrial scale.
Nova Constellatio
Founding Father Robert Morris was elected Superintendent of Finance in 1781 and oversaw the minting of the Nova Constellatio, the first coins struck under the authority of the United States of America, in 1783. Based on the Spanish dollar decimal system, they provided the inspiration for the US dollar, the creation of which was authorized by the newly independent nation in 1785.
US dollar creation
The US dollar came into being seven years later with the Coinage Act of 1792. The act resulted in the minting of the first US dollar coin, which was made from silver. The act also allowed for the minting of a $10 eagle coin in gold, not to mention lower denomination coins including the copper half cent and cent, and silver half dime and dime.
First US dollar coin
The first coin that rolled off the presses was a half dime or half disme as it was called at the time. Legend has is that the initial batch of coins was minted from Martha Washington's prized silverware. Surviving coins, which are thought to number between 250 and 400, are worth a fortune today. A high-grade specimen sold for $1.5 million in 2007.
Early coins
Apart from a one-off gold eagle featuring George Washington that was minted in 1792 as a memento for the president, these early coins did not feature presidents. The Founding Fathers were keen to distance the republic from the old monarchies of Europe, which depicted kings and queens on their money. Instead, the early dollars had a personification of Liberty on one side and a bald eagle on the other. In fact, presidents didn't appear on US currency until the latter half of the 19th century.
All-new coins
The design of US dollar coins changed in 1836 with the adoption of the Seated Liberty portrait, which was a feature of silver coinage for decades. In 1849, the $20 Double Eagle coin was created to coincide with the Californian Gold Rush. Rising copper prices resulted in the shrinking of the cent coin in 1857 and the demise of the half cent coin.
Paper money
Five years later, US government paper money was introduced. Before that, special treasury notes were issued at times of crisis and notes were produced by as many as 1,600 private banks, with endless varieties in circulation. That particular period of dollar history, which lasted from 1837 to 1862, has been dubbed the Free Banking Era.
Free for all
More than 7,000 varieties of banknotes were in circulation during the period. The notes were super-easy to forge, and Americans soon lost confidence in their paper money, which was largely unregulated. The free for all came to an end with the National Bank Act of 1863, which levied taxes on privately issued notes and set up a system of national banks.
United States Notes
The first $1 United States Note was released in 1862 and featured a portrait of Treasury Secretary Salmon P. Chase. At the same time $2 and $5 notes depicting Founding Father Alexander Hamilton were issued, along with the Lincoln $10, the $20 featuring Lady Liberty, and the bald eagle $50 and $100 note depicting General Winfield Scott. $500 and $1,000 notes were also issued.
Supersized bills
Like the earlier Continental currency, United States Notes were created to finance a conflict – the notes helped bankroll the Union during the Civil War. The notes were legal tender, meaning creditors were compelled to accept them as payment, and were larger than the dollar bills we're familiar with today, measuring 7.4-inch x 3.1-inch a piece.
Gold certificates
Gold certificates, which were backed by the precious metal, were authorized in 1863, and produced two years later in 1865. They were originally certificates of deposit, so you could deposit gold and receive a certificate in exchange. Chartered bank-issued National Bank Notes were also launched, along with other types of notes including the short-lived Interest, Compound Interest and low-denomination Fractional Notes, which were printed on the cheapest possible paper and nicknamed shinplasters.
First nickel
The nickel was introduced in 1866, spelling the end for the half dime. Interestingly, the nickel in your pocket today is made from the exact same combination of metals as the launch coin: 75% copper and 25% nickel. A number of alternatively denominated coins were introduced during the late 19th century, including 2 cent and 20 cent pieces, none of which lasted very long.
Silver certificates
The Coinage Act of 1873 abolished the right of silver bullion holders to have coins minted from the metal, and ended production of the standard silver dollar, effectively putting the US on the Gold Standard. The move was condemned by some as the 'Crime of 73'. To quell the discontent, redeemable silver certificates backed by the metal were created in 1878.
First wheat penny
The first US coin to feature the face of a person rather than an allegorical figure was the wheat penny or cent, which was issued in 1909. The one-cent coin is adorned with a portrait of President Lincoln on the obverse and an Art Nouveau-like image of wheat on the reverse. It was replaced in 1959 by the Lincoln Memorial cent.
Federal Reserve creation
The need for central control of the monetary system became more pressing with the Panic of 1907, the first worldwide global crisis of the 20th century. To help avoid future crises, Congress created the centralized Federal Reserve System in 1913. Two types of notes were released, the Federal Reserve Bank Note and the regular Federal Reserve Note we use today.
Federal Reserve Notes
Federal Reserve Notes were originally printed in denominations of $5, $10, $20, $50, $100, $500, $1,000, $5,000 and $10,000. Yes, there really was a $10,000 bill in circulation during much of the 20th century. The Federal Reserve $1 bill, which replaced the $1 silver certificate, was introduced in 1963, and the elusive $2 bill was launched in 1976.
Small-size notes
Unlike other common currencies, US dollar notes of different denominations are the same size, but the notes, like the coinage, used to be significantly bigger. The large 19th- and early 20th-century bills were shrunk down to 6.1” x 2.6” in 1928 as a cost-cutting measure, and all US dollar notes remain that size to this day.
Six kinds of currency
There were six types of US paper money in circulation on the eve of the Wall Street Crash in 1929. As well as the newer Federal Reserve Notes and Federal Reserve Bank Notes, Americans could still use United States Notes, National Bank Notes, gold certificates and silver certificates. This all changed with the Great Depression.
FDR's gold confiscation
During the Depression, the Federal Reserve was low on gold reserves as the public had taken to squirreling away gold coins, bars, bullion and gold certificates. President Roosevelt responded in 1933 with Executive Order 6102, which banned the hoarding of gold. Gold certificates, gold-backed National Bank Notes and Federal Reserve Bank Notes were withdrawn, and hoarded gold was confiscated.
Dead presidents' portraits
The custom of depicting deceased presidents and Founding Fathers on US coins carried on into the 1930s and 1940s. The Washington quarter made its debut in 1932, followed by the Jefferson nickel in 1938. They were followed by the launch of the Roosevelt dime in 1946, and the half dollar featuring Founding Father Benjamin Franklin in 1948.
So long silver
Silver certificates were last printed in 1963 and their redemption for silver ended in 1968. The final coin to contain the precious metal, the half dollar featuring President Kennedy, was hoarded like crazy and rarely seen in circulation. This prompted the Mint to switch to a base metal composition in 1971, ending the dollar's long association with silver.
Big-money notes pulled
The mega-valuable $500, $1,000, $5,000 and $10,000 bills were last printed in 1945 but weren't discontinued until 1969. In reality, these low-demand, ultra-high denomination notes had all but vanished from circulation well before then. Most of them were incinerated by the Mint, but several hundred thousand are thought to exist, and remain legal tender.
Major changes
Other major changes to the dollar occurred in 1971. The US finally abandoned the Gold Standard once and for all, and United States Notes, which had been issued since 1862, ceased to be distributed in general circulation. The ending of silver redemption had made the notes virtually indistinguishable from the far more common Federal Reserve Notes, and more or less obsolete.
Security tweaks
The design of US dollar notes had changed little since the 1920s and had become relatively easy to counterfeit with the sophisticated equipment available from the 1980s onward. The Fed took action in 1991 by introducing microprinting and security threads, and redesigned the $50 and $100 bills in 1996 to include enhanced security features. Redesigned $5, $10 and $20 bills followed, and a new $100 complete with blue security ribbon was issued in 2013.
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Coin makeovers
The $1 bill, which few fraudsters bother to counterfeit on account of its low value, is the only note to retain the old design. The classic eagle design on the reverse of the Washington quarter was canned in 1999. New nickel designs were introduced in 2004 and the cent got a makeover in 2009 to mark Lincoln's 200th birthday.
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Recent developments
In 2011, the Mint stopped producing the much-maligned dollar coin – Americans just won't let go of their $1 bills. Contrary to popular belief, the rare $2 bill remains in circulation though relatively few are printed. Looking ahead, the $20 bill is set for a major 2020 redesign. However, while it was expected to feature abolitionist Harriet Tubman under the Obama administration, this is now uncertain after President Trump expressed a wish to keep President Andrew Jackson on the bill.
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