The Origins of the American Currency

Early History of the Dollar Bill

One of the most intriguing and recognizable aspects of the United States of America is its currency. The dollar bill especially holds keys to the country’s story. With its unique look and esoteric symbolism, the dollar bill could even be considered a legitimate work of art.

The path toward adopting the dollar bill was one that was littered with obstacles. While the government was keen to incorporate paper money into its currency system, the public was skeptical and didn’t initially trust that paper could be just as valuable as traditional silver and gold.

Contrary to general assumptions, the dollar existed before the United States was an independent and unified nation. Prior to the Declaration of Independence, the Continental Congress had authorized the government to issue dollars and coins for use as widely accepted tender amongst the thirteen British colonies. The term “dollar” itself actually owes to Spanish currency of the time, specifically the eight-real coin (also known as the Spanish dollar), and U.S. dollars were used side by side with their Spanish counterparts – which were accepted as legal tender until 1857 – during colonial times.

The dollars we all use today operate independently of gold prices or any precious metals of intrinsic value. This is known as “fiat currency” – that is, the dollar’s value is only that which we collectively ascribe to it. Insofar as we value, accept and seek dollars as compensation, they have and will continue to have value.

Designs and Symbols on the Dollar Bill

The $ symbol first occurs in the 1770s, in manuscript documents of English-Americans who had business dealings with Spanish-Americans, and it starts to appear in print after 1800.

The word ‘dollar’ itself derives from the Flemish or Low German word daler (in German taler or thaler), short for Joachimstaler, referring to a coin from the silver mines of Joachimstal, in Bohemia (now Jáchymov in the Czech Republic). The term was later applied to a coin used in the Spanish-American colonies and also in the British North American colonies at the time of the American War of Independence. It was adopted as the name of the US currency unit in the late 18th century.

Interestingly, the practice of putting presidents on the front of U.S. dollars is a rather modern tradition, beginning only in the early 1900’s. George Washington, the president most readily identified with the dollar, scoffed at the idea of using his face on money. To Washington, the very notion smacked of European monarchical tradition.

In recent years, the Treasury Department has been thoroughly redesigning American paper money, incorporating advanced anti-counterfeiting measures while at the same time retaining traditional features such as the portraits, motifs, and colors of past United States paper money issues.