The existence of money as a means of buying or selling goods and services dates back to at least 3000 B.C., when the Sumerians began using metal coins in place of bartering with barley. The use of paper money began in China during the seventh century, but its uncertain value, as opposed to the more universally accepted value of gold or silver coins, led to widespread inflation and state bankruptcy. It was not until 1658, when Swedish financier Johann Palmstruck introduced a paper bank note for the Swedish State Bank, that paper money again entered circulation.
The first paper money in what is now the United States was issued by the Massachusetts Bay Colony in 1690. It was valued in British pounds. The first dollar bills were issued in Maryland in the 1760s. During the American Revolution, the fledgling Continental Congress issued Continental Currency to finance the war, but widespread counterfeiting by the British and general uncertainty as to the outcome of the revolution led to massive devaluation of the new paper money.
Stung by this failure, the United States government did not issue paper money again until the mid-1800s. In the interim, numerous banks, utilities, merchants, and even individuals issued their own bank notes and paper currency. By the outbreak of the Civil War there were as many as 1,600 different kinds of paper money in circulation in the United States--as much as a third of it counterfeit or otherwise worthless.
Realizing the need for a universal and stable currency, the United States Congress authorized issuing paper money in 1861. In 1865, President Lincoln established the Secret Service, whose principal task was to track down and arrest counterfeiters. This early paper currency came in several different types, designs, and denominations, but had the common characteristic of being somewhat larger in size than today's money. It was not until 1929 that the current-sized bills went into circulation. In 1945, the government stopped printing bills in denominations greater than $100, and in 1963, they stopped printing silver certificate bills with the assurance that the dollar amount was available "...in silver payable to the bearer on demand."
Starting in 1996, the Department of the Treasury began issuing $100 bills with a new front and back design and several new security features designed to make counterfeiting more difficult. Other new bills in descending denominations will be printed at the rate of one new denomination per year.
The new bills use the same paper and are the same size and color as today's bills. Multicolor images, such as are commonly found on European currency, were not used because they were too easy to duplicate with color photocopies and printers. The image of Benjamin Franklin still appears on the front of the new $100 bill, although his portrait is larger and is shifted to the left. A watermark, formed by reducing the thickness of the paper during manufacture, has been placed to the right of the portrait and shows a second image of Franklin when the bill is held up to the light. The imbedded security thread is also still there, although now it has been treated to glow red under ultraviolet light. The position of the thread varies depending on the denomination of the bill to prevent the counterfeiting practice of bleaching the ink off lower denomination bills and reprinting them as higher denominations.
Other new features include concentric fine lines behind Franklin's head on the front and behind the image of Independence Hall on the back. These lines are so fine that they are extremely difficult for copiers or printers to duplicate without blurring them into a solid background. Microprinting, which was introduced in 1990, is used in two places on the new $100 bill: the words "USA 100" appear within the lower lefthand numeral 100, and the words "United States of America" run down the lapel of Franklin's coat.
Perhaps the most high-tech feature is a special color-shifting ink which is used to print the numeral in the lower right-hand corner. When viewed from head on, this ink appears green, but changes to black when viewed from the side.
Lower denomination bills will have many, but not all, of the security features present in the new $100 bills. The highest level of protection was given to the $100 bill because it is the largest denomination being printed. It is also the most common bill in circulation outside the United States, and hence, is frequently counterfeited in other countries.
Some of the security features originally proposed for the new money—such as holograms, plastic films, and coded fiber optics--were not used for this latest change because they represented too great a departure from the current money or because of potential technical problems. Looking further into the future, paper money may eventually be replaced by electronic money that is downloaded onto plastic "stored value" cards from an ATM or computer. Each card would have a computer chip memory, and the money would be electronically transferred through a card reader to make purchases.
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