The birth of Americas currency system – 1793 Once the Constitution was ratified, the coinage system of the United States was established. Americas first coins were struck in 1793 at the Philadelphia Mint, and from then until 1861 (68 years later), the U.S. government saw no need for a national paper currency. But during this period, several important events took place. The War of 1812, the Mexican War of 1846, the Panic of 1857, and the uneasy period immediately before the outbreak of the Civil War all caused a severe drain on the U.S. Treasury. To overcome these deficits, the federal government issued so-called Treasury Notes from time to time. They were simply signed promissory notes which earned interest, and did not circulate as money except for a brief time in 1815. To pay for the war, the Confederate government issued a vast array of paper currencies — at least seventy different types of currency, totaling more than 1.5 billion dollars, an incredible sum at that time. Making things even more confusing, state governments issued their own currencies — as did banks, insurance companies, and businesses. None of this paper money could be redeemed, or traded for, gold or silver — as was common in the early nineteenth century. The Confederate government had no gold or silver to make coins. Instead, Confederate paper money was like a loan — a promissory note or promise to pay at a later time. At the start of the war, when southerners expected to win the war, they were willing to trust that their paper dollars would continue to hold value. But as the South started to slide towards defeat, they lost faith in not only their chances of victory but their money as well. littletoncoin/webapp/wcs/stores/servlet/Display%7C10001%7C10001%7C-1%7C%7CLearnNav%7CUS-Paper-Money-1793-Present.html
Posted on: Tue, 18 Nov 2014 17:10:44 +0000
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