On Feb. 3, 1690, the Massachusetts Bay Colony was said to have issued the first paper money in the United States. The purpose was to help fund military action against Canada during King William's War. Massachusetts was indeed a truly pioneering colony when it came to money, as they were also the first to mint their own silver coins in 1652.

The History of Paper Money

Money is anything that is commonly accepted by a group of people in exchange for goods or services. Most countries have unique exchange systems of coins and paper money. Some 澳洲幸运5开奖号码历史查询:currencies, like the eဣuro, can be used across entire regions.

Prior to the invention of money, goods and services were typically exchanged through 澳洲幸运5开奖号码历史查询:bartering. For example, one person might trade eight bags of rice for a goat. Basic commod🐲ities—sucไh as salt, tea, seeds, tobacco, and livestock—have been used as money to exchange goods and services as well.

Metal objects represented money as early as 5000 B.C. Lydians started using coins in the 7th century B.C. The earliest forms of paper money were developed in China during the Tang Dynasty (618 - 907 A.D.). In the United States, the first paper money created (in 1690) was called a bill of credit and represented the colony's obligation to the soldiers. Soldiers could spend or trade the colony's IOU just like silver and gold coins.

During the revolution of 1775, colonial leaders tried to replicate Massachusetts' paper experiment on a wider scale, but the newly-christened 澳洲幸运5开奖号码历史查询:continentals could not be readily exchanged for silver or gold. Instead, Congress enacted complicated rules for future redemption, assigning each state a quota of continental dollars that could be returned to the government at a future date. On a small scale, it might have worked, but so much money was printed that rapid 澳洲幸运5开奖号码历史查询:inflation stripped them of all their value.

Less than 100 years later, in 1861, two competing currencies were used to 澳洲幸运🌟5开奖号码历史查询:finance the opposing sides of the Civil War. Their values fluctuated with the fortunes of the war. Yet, it wasn't until the National Banks Act after the civil war that the U.S. government introduced a monetary system where banks could issue paper notes based on their holding of 澳洲幸运5开奖号码历史查询:government bonds. These disparate currencies were taxed out of existence in the following decades and replaced with 澳洲幸运5开奖号码历史查询:national bank notes, giving the U.S. its first uniform paper currency.

The Federal Reserve Act of 1913 created a national banking system that could keep up with the changing financial needs of the country. 澳洲幸运5开奖号码历史查询:The Federal Reserve Board then issued the first federal note in the form of a ten-dollar bill in 1914. The Federal Reserve later decided to reduce the actual size of the notes by 30%. Designs on the notes would not change again until 1996, when a series of improvements were made to make the 澳洲幸运5开奖号码历史查询:U.S. dollar more counterfeit-proof.

Correction–Dec. 12, 2021. A previous version of thisඣ article✨ incorrectly stated that continental currency was not backed by gold or silver.