The history of the U.S. dollar goes back before the war of independence when the Massachusetts Bay Colony introduced paper notes to finance expeditions in 1690. After the introduction of paper currency in Massachusetts, the issuance of colonial script that was equal to goods and services quickly followed in the other colonies. In 1775, when the colonists were preparing to go to war with the British, the Continental Congress authorized dollar denominated coins and currency because the term dollar was already commonly used to refer to the Spanish colonial eight-real coin, also known as the Spanish dollar. A few years later, the Coinage Act of 1792 established the dollar as the basic monetary unit for the whole United States and ushered in an organized monetary system that utilized coins in gold, silver, and copper.
The paper one dollar bill or “greenbacks” were introduced into the United States monetary system in 1861 to help finance the Civil War. These paper notes were backed by the Spanish dollars at the time and employed primitive techniques to help reduce counterfeiting at the time. Because photographic technology in 1861 could not reproduce color, the federal government decided the back of the bills should be printed in an ink color contrasting to the black on the front of the bills. The color green was chosen because it was thought to imply stability, and the U.S. dollar with a green back was born.
Although some older U.S. bills have had red or blue highlights on the front, Federal Reserve notes have been printed in the same colors for most of the 20th century, with black ink with green highlights on the front, and predominantly green ink on the back. Congress granted the U.S. Treasury permission to oversee the issuance of National Bank notes in 1863, and currency as well as gold and silver coins were used in commerce successfully. A gold standard was formally adopted in 1900 and the Federal Reserve Act of 1913 created one central U.S. bank and a new currency called the Federal Reserve Note.
Silver certificates were issued in $1, $5, and $10 notes and the first federal notes were issued in $5 and $10 denominations that were backed by and redeemable in gold. United States silver certificates were only printed until 1964. Later, the Federal Reserve board decided to reduce the dollar’s manufacturing costs by reducing the size of the notes by a third and printing the same designs on all denominations instead of printing individual designs.
The dollar has seen many improvements carried out to prevent counterfeiting and micro-print and security threads were introduced in 1991. In 2003, the Treasury introduced the first new colors other than green or black seen on U.S. currency since 1905. Today, the main colors on all U.S. currency denominations remain primarily green and black; and any other colors present can only be seen as subtle shades within the secondary design elements on the notes. In addition to being the currency of the United States, the dollar has also been used as the official currency in many different territories and countries around the world. Despite the ups and down of the various different international currencies around the world, the U.S. dollar remains the single strongest and most widely used currency on the planet.
