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The History of American Currency
By tracing our currency back to the colonial era, we can explore how U.S. history has helped shape the way we design, issue, and process modern U.S. banknotes.
U.S. Currency: Then and Now
Paper currency in the United States is born, issued by the Massachusetts Bay Colony to fund military expeditions. Other colonies quickly take up the practice of issuing paper notes.
The phrase “not worth a Continental” is coined after the Continental Congress issues paper currency to finance the Revolutionary War, currency that quickly loses its value because of a lack of solid backing and the rise of counterfeiting.
The First $2 Note
The first $2 notes are Continentals and are nine days older than America. On June 25, 1776, the Continental Congress authorizes issuance of the $2 denominations in “bills of credit” for the defense of America.
The First $10 Notes
The first $10 notes are Demand Notes, featuring President Abraham Lincoln’s portrait and issued by the U.S. Department of the Treasury in 1861.
United States Notes
Congress authorizes a new class of currency, known as “United States notes,” or “Legal Tender notes.” These notes are characterized by a red seal and serial number. They continue to circulate until 1971.
The Foundation of Modern Design
By 1862, the Demand Notes incorporate fine-line engraving, intricate geometric lathe work patterns, a U.S. Department of the Treasury seal, and engraved signatures to aid in counterfeit deterrence. To this day, U.S. currency continues to add features to deter counterfeiting.
A National Banking System
Congress establishes a national banking system and authorizes the U.S. Department of the Treasury to oversee the issuance of National Banknotes. This system sets Federal guidelines for chartering and regulating "national" banks and authorizes those banks to issue national currency secured by the purchase of United States bonds.
The Secret Service
The United States Secret Service is established to deter counterfeiters, whose activities diminish the public’s confidence in the nation's currency.
Centralized Printing of United States Notes
The Bureau of Engraving and Printing begins engraving and printing the faces and seals of U.S. banknotes. Before this, U.S. banknotes were produced by private banknote companies and then sent to the Bureau of Engraving and Printing for sealing, trimming, and cutting.
Names Added to Portraits
Legislation mandates that all banknotes and other securities containing portraits include the name of the individual below the portrait. This is why you see names below the portraits on banknotes to this day.
The First $10 Federal Reserve Notes
The first $10 Federal Reserve notes are issued. These notes are larger than today’s notes and feature a portrait of President Andrew Jackson on the face.
Introduction of “Large Denomination” Banknotes
In 1918, the Federal Reserve Board begins issuing currency in $500, $1,000, $5,000, and $10,000 denominations.
Standardization of Design
The appearance of U.S. banknotes changes greatly in 1929. In an effort to lower manufacturing costs, all Federal Reserve notes are made about 30 percent smaller—measuring 6.14 x 2.61 inches, rather than 7.375 x 3.125 inches. In addition, standardized designs are instituted for each denomination, decreasing the number of designs in circulation and making it easier for the public to distinguish between genuine and counterfeit notes.
“In God We Trust”
Following a 1955 law requiring “In God We Trust” on all currency, the motto first appears on banknotes on series 1957 $1 silver certificates, then on 1963 series Federal Reserve notes.
End of Large Denomination Bills
On July 14, 1969, the Federal Reserve and the U.S. Department of the Treasury announced that banknotes in denominations of $500, $1,000, $5,000, and $10,000 would be discontinued due to lack of use. Although they were issued until 1969, they were last printed in 1945.
United States Notes Discontinued
Because United States notes no longer served any function not already adequately met by Federal Reserve notes, their issuance was discontinued and, beginning in 1971, no new United States notes were placed into circulation.
Reintroduction of the $2 Note
On the 233rd anniversary of Thomas Jefferson’s birth, the $2 Federal Reserve note is re-introduced featuring a new vignette: Trumbull's painting, “The Signing of the Declaration of Independence.” The previous vignette featured an image of Monticello.
Western Currency Facility
The Bureau of Engraving and Printing’s Western Currency Facility in Fort Worth, Texas, begins producing currency. It is the first government facility outside Washington, D.C., to print Federal Reserve notes.
In the first significant design change since the 1920s, U.S. currency is redesigned to incorporate a series of new counterfeit deterrents. Issuance of the new banknotes begins with the $100 note in 1996, followed by the $50 note in 1997, the $20 note in 1998, and the $10 and $5 notes in 2000.
The Redesigned $50 Note
The currency redesigns continue with the $50 note, which features subtle background colors of blue and red. The $50 note includes an embedded security thread that glows yellow when illuminated by UV light. When held to light, a portrait watermark of President Grant is visible from both sides of the note. In addition, the note includes a color-shifting numeral 50 in the lower right corner of the note.
The Redesigned $10 Note
The new-design $10 note features subtle background colors of orange, yellow, and red. The $10 note includes an embedded security thread that glows orange when illuminated by UV light. When held to light, a portrait watermark of Treasury Secretary Alexander Hamilton is visible from both sides of the note. In addition, the note includes a color-shifting numeral 10 in the lower right corner of the note.
The Redesigned $5 Note
The new-design $5 note features subtle background colors of light purple and gray. The $5 note includes an embedded security thread that glows blue when illuminated by UV light. Two watermarks are featured in the $5 note, which are visible from both sides of the note when held to light. A vertical pattern of three numeral 5s is situated to the left of the portrait and a large numeral 5 is located in the blank space to the right of the portrait.
The Redesigned $100 Note
In its first redesign since 1996, the new-design $100 note features additional security features including a 3-D Security Ribbon and color-shifting Bell in the Inkwell. The new-design $100 note also includes a portrait watermark of Benjamin Franklin that is visible from both sides of the note when held to light.
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