The History of U.S. Currency

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.

Benjamin Franklin takes on counterfeiting, using his Philadelphia printing firm to produce colonial notes with nature prints—unique raised patterns cast from actual leaves. This process adds an innovative and effective counterfeit deterrent to notes.

Certain designs of Continental Currency feature illustrations inspired by the thirteen colonies fighting and defeating Great Britain in the American Revolution. These illustrations signify the colonies’ values and virtues.

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 notes are Continentals and are nine days older than America. On June 25, 1775, the Continental Congress authorizes issuance of the $2 denominations in “bills of credit” for the defense of America.

The United States officially adopts the dollar sign in 1785. The symbol evolves from the Spanish American figure for pesos. From colonial to modern times, the United States has issued several types of banknotes with unique purposes, like paying taxes, earning interest on an investment, or buying goods.

Alexander Hamilton establishes the Bank of the United States to create a system of credit for the government. The bank is the first of several in the country to issue private currencies facilitating borrowing and lending.

On April 2nd, 1792, Congress establishes the coinage system of the United States by passing “The Mint Act.” The U.S. adopts the decimal system for currency.

In order to finance the Civil War, Congress authorizes the U.S. Department of the Treasury to issue non-interest-bearing Demand Notes. These notes earn the nickname “greenbacks” because of the green ink on the back. All U.S. currency issued since 1861 remains valid and redeemable at full face value.

The first $10 notes issued by the U.S. federal government are Demand Notes, featuring President Abraham Lincoln’s portrait, fine-line engraving, and intricate geometric lathe patterns. Each Demand Note was immediately redeemable in gold or silver “upon demand” at seven specific banks around the nation. The Treasury issued Demand Notes in 1861 and 1862.

The Treasury seal first appears on currency during the Civil War. While the color and style of the seal changes over the years, the internal seal remains essentially the same to modern day with a key, scales, and stars.

After the Treasury issued Demand Notes, Congress authorizes a new class of currency known as “United States notes” or “Legal Tender notes.” These notes replace Demand Notes. They continue to circulate until 1971. Similar to Demand Notes, they are nicknamed "greenbacks."

The Treasury seal first appears on currency during the Civil War. The federal government issues the first $1 Legal Tender" notes. These banknotes feature a portrait of Secretary of the Treasury Salmon P. Chase.

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.

Congress creates the Office of the Comptroller of the Currency (OCC) and National Currency Bureau to handle the newly created National Bank Notes.

American money has depicted Liberty and Justice as allergorical figures. On interest-bearing notes of 1863, Justice can be seen holding her scales. She appears on the right side of a $50 bill from 1880 holding a sword and shield.

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 first $100 and $500 national bank notes feature John Trumbull’s paintings “Declaration of Independence” and “Surrender of General Burgoyne.” Both paintings now hang in the U.S. Capitol Building.

The United States Secret Service is established to deter counterfeiters, whose activities diminish the public’s confidence in the nation's currency.

The 1869 series of United States notes features the first use of George Washington’s portrait.

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.

Congressional legislation recognizes the U.S. Department of the Treasury’s Bureau of Engraving and Printing (BEP) with specific allocation of operating funds for fiscal year 1875.

Congress mandates that the U.S. Department of the Treasury solely performs the engraving and printing of notes, bonds, and other securities of the United States. 

The U.S. Department of the Treasury issues silver certificates. Legislation directing an increase in the purchase and coinage of silver authorizes the creation of the certificates.

Former United States Senator Blanche Kelso Bruce is the first African-American to have his signature on American paper currency. He becomes the Register of the United States Treasury in 1881.

$1 silver certificates feature Martha Washington in their 1886 and 1896 series.

The U.S. Department of the Treasury begins issuing Treasury notes.

Emmanuel Ninger is arrested for counterfeiting banknotes. Nicknamed “Jim the Penman” by the U.S. Secret Service, Ninger uses only a pen and a brush to counterfeit money. While his work is convincing, he is caught because the ink dissolved on one of his counterfeits.

In 1896 US released a series of silver certificates with neoclassical designs. They were referred to as the "Educational Series". The $1 note had allegorical figures of history instructing the youth. Two dollar notes had figures of science presenting the children, Steam and Electricity, to adults, Commerce and Manufacture.

The Federal Reserve Act of 1913 establishes the Federal Reserve as the nation’s central bank and provides for a national banking system that is more responsive to the fluctuating financial needs of the country. The Federal Reserve Board issues new currency called Federal Reserve notes.

The Federal Reserve Board, which is separate from the Treasury Department, issues $10 Federal Reserve notes featuring Andrew Jackson's portrait. These notes are physically larger than $10 bills currently in circulation.

In 1918, the Federal Reserve Board begins issuing currency in $500, $1,000, $5,000, and $10,000 denominations.

The Federal Reserve Board issues $1,000 notes featuring Alexander Hamilton’s portrait. This bill is discontinued in 1969.

The Federal Reserve Board issues $10,000 notes featuring Salmon P. Chase’s portrait. This note is intended for bank-to-bank large value transfers, not public circulation.

BEP engraver Louis S. Schofield added an automobile in front of the Treasury building image on the back of the $10 notes issued between 1928 and 1996. The car was based on a number of different models and brands that were available in the 1920s.

The United States adds unique serial numbers to banknotes.

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.

The Treasurer of the United States issues $100,000 gold certificates to Federal Reserve Banks to settle large value transactions. The gold certificate features Woodrow Wilson and do not circulate amongst the public.

$1 Federal Reserve notes feature the obverse and reverse of the Great Seal of the United States. The Seal dates to 1782. Its reverse side depicts the Eye of Providence and an unfinished pyramid symbolizing the nation’s strength and duration. The Seal’s obverse side shows an eagle bearing a shield and clutching both an olive branch and arrows in its talons.

Victor Lustig is arrested for using a “money-making machine” to produce counterfeit currency.

The Secret Service prints “Know Your Money” booklets to educate the public on designs and features of genuine currency. It features cartoons and displays images of counterfeit bills next to genuine bills.

The BEP prints Silver Certificates and Federal Reserve notes bearing a “Hawaii” overprint. These items only circulate in Hawaii, and their brown seals and serial numbers differentiate from other certificates. They are easily identifiable and can be declared valueless if Hawaii is overran by enemy forces.

The BEP prints Allied Military Currency for the use by Allied invasion forces in Italy. AMC helped prevent inflation after an Allied forces landed in Sicily. Soldiers used similar AMC in Austria, Germany, France and Japan.

The Federal Reserve Board issues $500 bills that feature President William McKinley’s portrait. These circulate for roughly two decades and remains legal tender.

Congress prohibits the redemption of currency for gold.

Automated teller machines (ATM) first appear in New York City. They allow bank customers to retrieve cash from their accounts without needing to visit the bank.

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.

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.

On the 233rd anniversary of Thomas Jefferson's birth, and to commemorate the bicentennial, the $2 Federal Reserve note is re-introduced featuring a new vignette: Trumbull's painting "The Signing of the Declaration of Independence."

Azie Taylor Morton is the first African-American woman to have her signature on a Federal Reserve note. Morton is the 36th Treasurer of the United States.

A security thread and microprinting are introduced in Federal Reserve notes to deter counterfeiting by copiers and printers. The features first appear in Series 1990 $100 notes. By Series 1993, the features appeared on all denominations except $1 and $2 notes.

The BEP’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 new-design $20 note features subtle background colors of green and peach. The $20 note includes an embedded security thread that glows green when illuminated by UV light. When held to light, a portrait watermark of President Jackson is visible from both sides of the note. In addition, the note includes a color-shifting numeral 20 in the lower right corner of the 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 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 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.

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.

The Federal Reserve Board launches uscurrency.gov to inform the public about the security and design features of Federal Reserve notes. This website offers multi-lingual educational materials free for public use.

The 12 Federal Reserve Banks repurpose banknotes not fit for circulation. The banks shred and reuse money that is too worn or dirty for a number of purposes, such as insulation or compost.