- June 1, 2021
- Posted by General Electric Credit Union
- 2 read
Discover the History of U.S. Currency
Have you ever wondered how the money in your wallet ended up there? To learn the history of U.S. dollars and change, you have to go all the way back to our country’s infancy. From colonial notes to Continentals, our currency has gone through many changes to become what it is today.
Paper currency – called “colonial notes” – was first introduced by the Massachusetts Bay Colony in 1690 and was used to fund military expeditions (you’ll notice this is a reoccurring theme). During this time, the colonies were still under British rule. Because of this they relied on foreign coins prior to creating their own currency. Other colonies soon followed suit and made their own unique colonial notes.
A new type of currency called “Continentals” was introduced to finance the Revolutionary War. They were not backed by gold and silver. Instead, their value was determined based on the estimated tax revenue the Continental Congress expected to receive from the colonies.
The currency was prone to inflation and rampant counterfeit attempts (especially by the British government); and it was eventually phased out.
- Fun fact: The phrase “not worth a Continental” refers to the low value of the Continental currency.
In 1791, Alexander Hamilton helped establish the Bank of the United States for the U.S. government. Some argued its fiscal caution was slowing down economic progress and it ceased operations when its charter ended. It was replaced by the Second Bank five years later in response to the War of 1812 and subsequent debt.
The Second Bank also dissolved once its charter ended, and a free banking era followed thanks to new legislation. This free banking system would serve as inspiration for another national banking system introduced around the time of the Civil War. Eventually, the new system would birth the first uniform federal currency.
Paper money gained company when the Mint Act of 1792 established a coinage system in the U.S. This was introduced in part to address a growing national debt, since previous forms of currency – like Continentals – were not backed by gold or silver. A coin’s value was determined both by the material it was made of and how much of the material was used.
- Fun fact: There’s always talk about getting rid of the penny, but did you know the U.S. used to produce half pennies?
If you have old U.S. dollars or coinage, it’s still valid as long as it was issued in 1861 or later!1 Come in and deposit your money into a GECU checking or savings accounts by visiting us at a local branch.
Have a whole change jar to deposit? No problem! GECU’s Reading Road, Mason, Montgomery, Oakley, Loveland, Fairfield, Eastgate, Highland Heights, and Florence, KY, locations have coin counting machines members can use free of charge. Just put your change into the receptacle and the machine will deposit the funds electronically into your account.