Historical Context
US Congress choose the dollar as the monetary unit of the United States in 1786 and it was first minted by the United States Mint in 1792. Initially as a local version of the Spanish dollar, which was popular in the Americas up until the 19th century.
It was not until the American Civil War that the US had paper money in circulation as we think of it today. During the early phase of the conflict, the government issued Demand Notes. These were slightly different to the legal tender we know today, as they were paid directly to creditors who had to redeem them for coin currency.
To meet financial obligations imposed by the civil war, the government introduced the First Legal Tender Act in 1862. Abraham Lincoln signed the bill, creating the United States Notes, the first legal tender fiat paper money in America.
The bill was not without controversy - some in Congress believed the Constitution did not give the federal government the right to issue a paper currency, but the bill was passed and signed by President Lincoln.
They became known as 'greenbacks' due to their distinctive green design on the reverse of the notes. United States Notes are still legal tender in American and are still in circulation although originals are extremely rare, and no new Notes have been issued since 1971. The currency used at the moment are Federal Reserve Notes, which were authorized in 1913.
Photo Info
Photographer: National Banknote Company
Location taken: USA
Source: Wikimedia Commons
Related Events
- 1786-08-08 US Congress unanimously chooses the dollar as the monetary unit for the United States of America
- 1862-02-25 First Legal Tender Act 1862 is passed by the US Congress, authorizing the United States note (greenback) into circulation, the first fiat paper money that was legal tender in America
- 1862-08-29 US Department of the Treasury forms division now known as US Bureau of Engraving and Printing to print newly issued paper currency
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