The Surprising History of American Currency
Paper and coins - worthless on their own, yet we've given them immense value. It’s a bizarre and fascinating system, just like the facts we’ve gathered for you about American money. Get ready, because these are worth your time.
The Oldest Circulation Coin
The Fugio Cent, also known as the "Franklin Cent," was the first coin to officially circulate in America. Minted in 1787 and designed by Benjamin Franklin, its copper design is similar to the 1776 Continental Currency coin that was never released.
The front features a sundial with the word “Fugio,” and Franklin’s phrase, “Mind Your Business,” at the bottom, a saying believed to reflect his business background. The back shows "We Are One" surrounded by 13 chain links, symbolizing the original US colonies.
How Are the Original Colonies Represented on the $1 Bill?
The $1 bill is a tribute to the original 13 colonies. Many people notice the all-seeing eye, but the number 13 is also prominent.
For instance, there are 13 steps on the pyramid, 13 bars and stripes on the shield and 13 stars above the eagle. The eagle holds an olive branch with 13 leaves and berries, as well as 13 arrows. Finally, the Treasury seal also has 13 stars.
Andrew Jackson was Against Paper Money
It's an irony of history: Andrew Jackson, whose face is on the $20 bill, was a fierce critic of paper money. He believed only gold and silver coins should be considered legal currency.
Jackson's opposition was rooted in the era's financial system, where individual banks printed their own paper money, leading to unstable and fluctuating values. He felt this system was unfair and harmful to the public.
The Ingenious Use of Green Ink
The US government started printing money with green ink to stop counterfeiting. Early cameras could only take black and white photos, which made it nearly impossible to create a convincing fake of a green bill.
The government kept using green ink after bills were standardized in 1929 simply because they had so much of it. It also had a positive association with stability. Over time, bills were also made smaller to reduce manufacturing costs and add another layer of protection against counterfeiting.
When Was Paper Money Introduced?
The first nationally circulated coins appeared around 1793, but the US didn't issue official paper money until 1862.
Before the mid-20th century, the main forms of currency were coins, gold and silver certificates, and commercial banknotes from private banks. To help fund the Civil War in 1862, Congress created the "Greenback," a new type of fiat currency.
This marked the first time the government had issued its own paper money since the Continental Congress funded the Revolutionary War.
Pennies Were Made… with Steel?
In 1943, with copper needed for ammunition, the US Mint began producing pennies from steel and zinc. This was a unique change - it's the only regular-issue coin to contain no copper at all.
However, the steel penny came with problems: its silver color made it easy to confuse with a dime, it rusted quickly and because it was magnetic, it wouldn't work in vending machines. The majority of these flawed coins were recalled and destroyed in 1943, though they remained in circulation until the ‘60s.
Backed By Gold
For a long time, US money was on the Gold Standard, a system where its value was directly tied to gold. This lasted from 1900-33.
President Woodrow Wilson created the Federal Reserve in 1913, to help manage the banking system. Over time, it became clear the country didn't have enough gold to back all its paper money. The government also linked the Gold Standard to economic problems like high unemployment.
So, in 1933, President Franklin D. Roosevelt used an Emergency Banking Act to move the country off the standard. Although a new version of the system was tried after World War II, President Richard Nixon made the final break in 1971, which led to the current system of fiat currency.