The history of money: A brief look at American currency

Many people today don’t often use coins or paper money anymore, preferring instead the convenience of a credit card, debit card, or even a smartphone. But the history of currency in the United States is actually (surprisingly) very fascinating.

For example, did you know that there were redbacks before there were greenbacks? And that after the Revolutionary War our currency was so worthless that the phrase “not worth a Continental” was a regular part of everyday language?

But beyond these interesting tidbits, the evolution of American currency helps to frame the history of finance in the United States, as our rapidly expanding nation struggled, failed, and ultimately succeeded in creating a reliable monetary and banking system. Creating trust in paper notes has been an enduring theme in the history of American finance, banking, and currency.

So, read on below for a brief glimpse of America’s – and your wallet’s – financial history.

1. Continental Currency (1775-1790)

To finance the Revolutionary War, the Continental Congress issued paper money, backed by the “anticipation” of tax revenues. It was the first federally issued paper money. Without solid backing and easily counterfeited, the Continental currency notes quickly became devalued, giving rise to the phrase “not worth a Continental.” Continental currency depreciated rapidly, becoming practically worthless by the end of the war.

2. Silver Coins (1792-1863)

Congress passed the first Coinage Act in 1792 giving the United States Mint responsibility for creating coins for public use. Silver coin is usually 90% silver with the remaining 10% of copper for strength. The law directed money to be made from copper, silver, and gold. Today, these coins (quarters and dimes) are comprised of 75% copper and 25% nickel alloy.

3. Gold Coins (1795-Present)

In 1795, the first official gold coins were minted in the United States. When gold was discovered in California in 1948, two new denominations were struck, the gold dollar and the double eagle. Popular among collectors, modern gold coins are used primarily for investment purposes.