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Sunday, September 24, 2023
Sept. 24, 2023

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Born in 1792, the U.S. dollar has rich history

Silver dollar was first official currency; $1 bill began in 1862

4 Photos
A copper $1 coin minted two years after the dollar was established.
A copper $1 coin minted two years after the dollar was established. Jaclyn Nash/National Museum of American History Photo Gallery

Before 1792, most Americans had money troubles. Goods and services could be exchanged for pieces of gold or silver if people had them. Some would use British or Spanish coins. Tobacco leaves, shells and pieces of land were other options. Colonies issued their own type of paper currency, but it wasn’t reliable to use when trading and traveling. But on April 2, 1792, Congress established what is now one of the most widely recognized symbols in the world: the dollar.

“In America, they used whatever they could get their hands on,” said Frank Noll, a historical consultant for the U.S. Bureau of Engraving and Printing. “But the Coinage Act established the dollar as a unit of currency for the United States.”

The Coinage Act of 1792 created the U.S. Mint, an institution dedicated to producing coins and controlling their movement around the world. The first official American currency was a silver dollar. People had to bring their own silver to the Mint to be coined.

“The coins had to have a portrayal of ‘Liberty’ on them. And so you have these busts or portraits of female Liberty on all coins,” Noll said.

While the act was meant to simplify purchases, buying things was still complicated. It was rare for people to find these silver coins, because not many were produced. So local banks made their own currency that could be exchanged for gold or silver.

In 1861, Congress needed to find a practical way — a currency that didn’t rely on gold or silver — to pay for the Civil War and its soldiers. So the United States was introduced to the first government-regulated paper bills, also called “demand notes.”

Many would think the $1 would be the first paper bill, but the first bills were the $5, $10 and $20.

The bills were also called “greenbacks,” a name Civil War soldiers came up with. The color — used to print the back of the bill — had a purpose. To prevent people from counterfeiting, or printing fake money, the government turned to science.

“What chemists were looking for was a way to create an ink that could not be erased,” Noll said. “And so one chemist in the 1840s came up with this ink that couldn’t be removed and has a special chemical layer. It happened to be green.”

In 1862, the $1 bill was created, and the Treasury Department was in charge of designing it. Treasury Secretary Salmon Chase used that opportunity to put his face on the first dollar. Chase left the Treasury Department in 1864, and officials replaced his face with George Washington’s five years later.

Throughout history, paper bills have been redesigned primarily to protect them. The last redesign was the $100 bill in 2013. A 3D ribbon was added. If you tilt the bill back and forth you can see bells change to 100s.

The next expected change is the $10 bill in 2026.