Fun Facts About Currency: History of Paper Money

History of Paper Money

1690 - The Massachusetts Bay Colony issued the first paper money in the colonies which would later form the United States.

1775 - American colonists issued paper currency for the Continental Congress to finance the Revolutionary War. The notes were backed by the "anticipation" of tax revenues. Without solid backing and easily counterfeited, the notes quickly became devalued, giving rise to the phrase "not worth a continental."

1781 - To support the Revolutionary War, the Continental Congress chartered the Bank of North America in Philadelphia as the nation's first "real" bank.

1791 - After adoption of the Constitution in 1789, Congress chartered the first Bank of the United States until 1811 and authorized it to issue paper bank notes to eliminate confusion and simplify trade. The bank served as the U.S. Treasury's fiscal agent, thus performing the first central bank functions.

1861 - On the brink of bankruptcy and pressed to finance the Civil War, Congress authorized the United States Treasury to issue paper money for the first time in the form of non-interest bearing Treasury Notes call Demand Notes.

1865 - Gold Certificates were issued by the Department of the Treasury against gold coin and bullion deposits and were circulated until 1933.

1877 - The Department of the Treasury's Bureau of Engraving and Printing started printing all U.S. currency.

1913 - After the financial panics of 1893 and 1907, the Federal Reserve Act of 1913 was passed. It created the Federal Reserve System as the nation's central bank to regulate the flow of money and credit for economic stability and growth. The system was authorized to issue Federal Reserve Notes, now the only U.S. currency produced.

1929 - Currency was reduced in size by twenty-five percent and standardized with uniform portraits on the faces and emblems and monuments on the backs.

1990 - A security thread and microprinting were introduced in $50 and $100 notes to deter counterfeiting by technologically advanced copiers and printers.

1996 - Additional security features are added to a newly redesigned $100 Federal Reserve note. The note incorporates both familiar and new features, while remaining recognizably American. Redesigned lower denominations are being introduced at the rate of about one denomination per year.

1997 - The new $50 bill is introduced. The second note to be redesigned to include new security features, the reverse side also includes an enlarged number 50 in the lower right-hand corner to aid the low-vision community.