History of Money in the US

The history of money in the US can be traced back to more than 200 years ago when the authority to issue dollars was given by the Continental Congress of the United States. In fact, the initial currencies were issued to finance the revolutionary war. However, since these currencies had no real backing, they were susceptible to counterfeiting and quickly lost their value.

The year 1781 saw the Nation's first 'real' bank in Philadelphia which was chartered by the Continental Congress to support the Revolutionary War. In 1785, the dollar was adopted as the unit of national currency while in 1789, after the adoption of constitution, the First Bank of the United States was authorized to issue paper notes. It started to perform as the central bank for the first time because it was also serving the United States Treasury as its Fiscal agent.

The outbreak of the Civil War in 1861 forced Congress to authorize the US treasury to issue paper money, called Demand Notes, which were a form of non-interest bearing treasury notes. On March 10, 1862, the first paper money was issued. The denominations were $5, $10, and $20. These were the first United States Notes and were referred to as 'Greenbacks' due to the green tint that was added to the notes to counter forgery. These notes were engraved with signatures and seals by at least 6 employees from the Treasury Department.

Unlike older times, when money was backed by physical assets, the modern US dollar is Fiat money, which means it is not backed by any physical asset. Today, the US has $1, $5, $10, $20, $50 and $100 notes in circulation. Modern US dollars are secure and extremely difficult to counterfeit due to added security features on the notes.