Currency is used everyday all around the world. Currency, money, is what keeps the machine known as big business running. The currency used in the United States is called a dollar. It is divided into 100 cents. Every American knows this by second grade at the latest. The American dollar has been referred to, in slang, as a buck since the 1700s; it is thought that the term may have come into use because of the lucrative fur trade in colonial times (“United States dollar”). “The name for the United States dollar comes from the Spanish dollar. The Spanish dollar was the silver coin widely circulated in the United States during the time of the American Revolutionary War,” states the encyclopedia article “United States dollar.” As the above piece of information is meant to demonstrate, despite the fact that everyone in the United States uses American dollars everyday the American public seems to know little about how money is made or the history behind it.
Banking is a very common thing in the United States, and always has been. According to the article “Banking,” banks were chartered in the 1780s by many states mainly to issue banknotes, paper money. Even though banking was already common the first major bank in the United States was the Bank of North America. The Bank of North America was created by the Second Continental Congress in 1781 (“Banking”).
The next major bank established in the U.S. was the Bank of the United States (“Banking”). The Bank was originally proposed by Alexander Hamilton, state Charles Van Doren and Robert McHenry, editors of Webster’s Guide to American History, and on December 12, 1791, it opened its main branch in Philadelphia (68). “Banking” explains that the Bank of the United States’ charter was allowed to expire in 1811, due to opposition from state banks. The state banks opposed the Federal bank because the banks were losing customers. The American public preferred banknotes that were issued by the federal bank over notes issued by state banks (“Banking”).
A second Bank of the United States was created in 1816, says the article “Banking.” Due to opposition from President Andrew Jackson, as well as local bankers, the federal government withdrew all of its funds from the bank. Three years later, in 1836, its charter expired (“Banking”).
Coins are made at the United States Mint (“United States dollar”). According to Richard and Jeffrey Morris, editors of Encyclopedia of American History, The Mint Act was passed on April 2, 1792. The Act established a mint in Philadelphia and allowed for the coinage system that exists in the United States today (720). The current coinage system, says “History of the United States Mint,” was originally proposed by Thomas Jefferson. Jefferson was also a leading proponent of the U.S. having its own mint. His efforts were fulfilled in the Mint Act of 1972 (“History of the United States Mint”). The Act also valued the United States dollar at 24.75 grains of gold (Morris and Morris 720).
The primary purpose of the United States Mint is to produce enough coins for the country to conduct business, says the article “About the Unites States Mint.” The Mint is also in charge of protecting the nation’s assets in gold and silver (“About the United States Mint”). A large portion of the United States’ gold is kept in Fort Knox, which is located in Kentucky (“History of the United States Mint”). The Mint is also responsible for distributing coins to the Federal Reserve banks and branches. It also must receive, redeem, and process mutilated coins (“About the United States Mint”).
In 1799, the United States mint was made officially independent of the government, says “History of the United States Mint.” President Andrew Jackson authorized the opening of mint facilities in Dahlonega,GA , Charlotte, NC, and New Orleans, LA in 1835. All of these facilities closed after the Civil War. In 1873 the Mint was made part of the Treasury Department and moved its main headquarters to Washington D.C, where it remains today. Presently there are six mint facilities in total. They are located in Washington D.C., Denver, San Francisco, Philadelphia, West Point, and Fort Knox (“History of the United States Mint”).
There are a few other little known facts about the United States Mint. “About the United States Mint” says that because the Mint is a self-funded agency all of the profits are turned over to the General Fund of the Treasury. Also, most people probably do not know this, but the Act of January 29, 1874 declared that the U.S. Mint was allowed to make coins for other countries as long as it did not interfere with coins for the United States being produced, says “History of the United States Mint”. The first time foreign coins were made in the Philadelphia facility it was for the Venezuelan government. Between 1874 and the early 1980s coins were made for over forty foreign governments, including Hawaii before it became a member of the U.S. (“History of the United States Mint”).
In 1792, the United States Mint used horses to drive the machines that made the coins, according to “History of the United States Mint.” The process required the heating of metals in a furnace, similar to what a blacksmith would have used. The metal was then made into sheets by sending it through rollers. Coin shapes were then cut out of the sheets, and the shapes were then handfed into a machine that stamped them. In the beginning it was common to find imperfect coins. Today the Mint uses an automated system that consists of the same basic steps that were used in 1792 (“History of the United States Mint”).
According to the article “Coin Specification” which is on the United States Mint’s website, the life span of the average coin is about thirty years. Mutilated coins have been chipped, fused together, or are not machine countable. These coins are redeemable at the Philadelphia United States Mint facility. “Uncurrent” coins are worn, but are still able to be recognized, and they will be redeemed by any of the Federal Reserve banks. The Federal Reserve banks then send them to the Mint. All redeemed coins are recycled by the Mint to make new coins (“Coin Specification”).
“History of the United States Mint’ mentions that the Act of 1972 declared that it was mandatory to have an emblem of liberty, along with the word and year the coin was made, on one side of a coin, and on the other side an eagle with “United States of America” inscribed. Changes have been made to the original design since then, but the design is still fairly similar (“History of the United States Mint”). The Encyclopedia of American History mentions that the Coinage Act was passed on February 21, 1853. The act lowered the amount of silver in all coins valued at denominations of less than one dollar. It also authorized the making of a three-dollar gold piece (Morris and Morris 721).
Common coins that are in circulation are the penny, nickel, dime, quarter, half-dollar, and dollar. The article “United States dollar” says that the half-dollar and dollar coins are more uncommon than the other coins mentioned in regular circulation. Since 1793, the United States Mint has also made coins in the denominations of “half-cent, two-cent, three-cent, twenty-cent, $2.50, $3.00, $4.00, $5.00, $10.00, and $20.00.” These are all still legal tender, but are worth much more than their face value to any coin collector (“United States dollar”)
The article “History of the United States Mint” says, in 1909, the Lincoln Penny was made to commemorate the centennial of Abraham Lincoln’s birth. George Washington’s image was first put on the quarter in 1932. Thomas Jefferson’s first appearance on the nickel was in 1938. The Mint created the Franklin D. Roosevelt dime in 1946, because Roosevelt was a major supporter of the March of Dimes. The John F. Kennedy half-dollar was created in 1964 (“History of the United States Mint”).
“Dollar coins have never been popular in the United States,” says “United States dollar.” On October 10, 1978, Public Law 95-447 allowed for the creation of the Susan B. Anthony dollar coin, says the article “History of the United States Mint”. This was the first time that a non-mythical woman had appeared on a U.S. coin (“History of the United States Mint”). The Susan B. Anthony dollar was unpopular because it was easily mistaken for a quarter, says “United States dollar.” They had the same milled edge and were similar in size and color.
The Dollar Coin Act of 1997 allowed for the making of the Sacagawea dollar coin, documents “History of the United States Mint.” Sacagawea was a young Indian woman who assisted Lewis and Clark on their expedition. The coin was to be made when supplies of the Susan B. Anthony dollar began running low. The coin was first issued in 2000 (“History of the United States Mint”). The Sacagawea coin is gold in color and has a smooth edge, says “United States dollar.” The article goes on to say that it still is not as popular as the dollar bill. “The failure to simultaneously withdraw the dollar bill and weak publicity efforts have been cited by coin proponents as primary reasons for the failure of the dollar coin to gain popular support” (“United States dollar”).
The article “United States dollar” mentions some problems that critics have with United States coins. Critics mention that the worth of United States coins are written on the coin in English words instead of in numerals. This, critics argue, make it difficult for foreigners to use our coins. Also, the value of coins is not labeled on them in a consistent fashion. For example, a quarter does not say twenty-five cents on it; it reads quarter-dollar; to understand that a quarter is worth twenty-five cents a tourist must be aware that the American dollar is equal to 100 cents. This makes it necessary for tourists to know the names for coins to understand their value, critics argue. Another fact that is mentioned is that United States coins do not get larger as their value is higher. A dime is worth ten cents and a nickel is worth five cents, but the nickel is larger. Critics do not feel that the coinage system of the United States is to learn for all of the reasons mentioned above (“United States dollar”).
The Federal Reserve Act was signed on December 23, 1913, by President Woodrow Wilson (Van Doren and McHenry 375). The Federal Reserve System is completely independent from the federal government states the article “Currency”. The Federal Reserve is in charge of issuing currency (“United States dollar”). It is also responsible for the formation “of monetary policy,” says the article “The Board of Governors of the Federal Reserve.” The article goes on to explain that the Federal Reserve System has 12 Reserve banks (The Board of Governors of the Federal Reserve”). The twelve banks, as can be seen on Table 2 of “Series Year and Federal Reserve Indicators,” are located in Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas, and San Francisco.
The Bureau of Engraving and Printing started printing banknotes for the Federal Reserve in 1914, states “United States dollar.” American banknotes were originally a larger size than they are today; the size used currently was adopted in 1928 (“United States dollar”). The types of banknotes that are currently in circulation are the $1.00, $2.00, $5.00, $10.00, $20.00, $50.00, and $100.00. Banknotes larger than $100.00 ceased to be printed in 1946 and were officially pulled from circulation by President Richard Nixon in 1969 because of their use in organized crime (“United States dollar”).
There are serial numbers that are printed on all banknotes. The letters on these bills correspond to the Reserve bank that they were issued from and the series year, as well as who the secretary and treasurer were at the time the banknote was printed (“Series Year and Federal Reserve Indicators”).
The article “Bureau History” states that the beginnings of the Bureau of Engraving and Printing were in the treasury building’s one-room basement on August 29, 1862. There four women and two men separated and sealed banknotes that had been printed by private companies. The Bureau did not use electric lighting until 1888. In 1894, the Bureau started printing postage stamps (“Bureau History”). Another interesting fact mentioned in “Bureau History” is that the Bureau must spend a lot of time researching when they are designing money and postage stamps. The bureau has a history of receiving mail from the public concerning design mistakes (“Bureau History”).
The article “Anti-Counterfeiting” mentions that beginning in 1996 the government has been adding more advanced features for security on banknotes. The design of banknotes is being changed every seven to ten years to attempt to keep it secure from counterfeiting (“Anti-Counterfeiting”). Another security measure is that the exact components of the ink and paper are confidential (“United States dollar”).
Critics of the U.S. dollar feel the Federal Reserve should add holographic features on banknotes. Having holographic features would make it more difficult, and more expensive to counterfeit. Critics also argue that American Banknotes are difficult to tell apart because they are all the same size, color, and have similar designs. All of the banknotes being the same size make it difficult for the blind to tell them apart. Other major currencies, like the Euro, use different sizes, as well as colors, for banknotes. There are proposals to make the one and five dollar bills a half an inch shorter in height, and an inch shorter in length, but that still would not make the American monetary system any more accessible for the blind. There would be many advantages to having different sizes for banknotes. One would be the fact that if bills were printed in different sizes one form of counterfeiting would be completely eliminated. Some counterfeiters simply bleach the value numbers off of the banknote and print a higher value in its place (“United States dollar”).
There is a wealth of information about almost everything out there. People seem to know more about things that are happening half-way around the world than the little things that are right in front of them. The American dollar is a very common thing that even American citizens seem to know little about. People work all day long trying to chase that dollar, but they may not even know where it came from or the history behind it.
“About the United States Mint.” The United States Mint. 2006. 3 Apr. 2006.
“Anti-Counterfeiting.” Bureau of Engraving and Printing. 2006. 3 Apr. 2006.
“Banking.” Microsoft ® Encarta ® Online Encyclopedia 2005. 2005. 2 Apr. 2006.
“Bureau History.” Bureau of Engraving and Printing. 2006. 3 Apr. 2006.
“Coin Specification.” The United States Mint. 2006. 3 Apr. 2006.
“Currency.” Wikipedia, the free encyclopedia. 2006. 29 Mar. 2006.
“History of the United States Mint.” The United States Mint. 2006. 3 Apr. 2006.
Morris, Richard B., and Jeffrey B. Morris, Eds. Encyclopedia of American History. New
York: Harper Collins Publishers, Inc., 1996. 720-21.
“Series Year and Federal Reserve Bank Indicators.” Bureau of Engraving and Printing.
2006. 3 Apr. 2006. .
“The Board of Governors of the Federal Reserve System.” The Federal Reserve Board.
8 Jul. 2003. 3 Apr. 2006. .
“United States dollar.” Wikipedia, the free encyclopedia. 2006. 29 Mar. 2006.
Van Doren, Charles, and Robert McHenry, Eds. Webster’s Guide to American History.
Springfield, MA: G&C Merriam Co., 1971. 68, 375-6.