A Best Exchange Rates UK Guide To The History of The US Dollar

January 11th, 2012

Best Exchange Rates UK presents a guide to the history of the US Dollar.

The history of the United States currency can be traced back to the 1690’s before the birth of the country. Back then, the region was made up by a patchwork of colonies. The Massachusetts Bay Colony used paper notes to finance military expeditions, which the other colonies quickly joined.

The British colony imposed certain restrictions on the colonial paper currency until, finally, it was outlawed. When the colonists were preparing to go to war with the British in 1775, the Continental Congress introduced the continental currency. This was short-lived, as the paper currency was easy to counterfeit and there was insufficient financial backing to the currency. The foreign currency of the United States was not yet formed.

In 1781, the Congress chartered the first national bank in Philadelphia, named the Bank of North America. This was to help with the government’s finances in whatever way possible. In 1785, the dollar was born. The US Dollar was chosen to be the foreign currency unique to the USA. Further progress was made in 1792 with the passage of The Coinage Act. This put together an organised monetary system that introduced coinage in gold, silver and copper.  Tt wasn’t until nearly 70 years later that the dollar note was introduced. In 1861, the dollar note, or the greenback, was introduced into the USA in order to finance the Civil War.

There were several techniques introduced to help deal with the counterfeiting problem they had dealt with previously when the USA was split into colonies. These included having a treasury seal and engraved signatures. The National Banking Acts of 1863 and 1864 established a national banking system, giving the Treasury the ability to overlook the issuance of National Bank notes. This offered the USA the regulation it needed, especially if foreign exchange would be carried out in the future.

In 1913, The Federal Reserve Act was passed which created one central bank that would regulate the national banking system and provide effective organisation of a banking system that was growing rapidly. The Federal Reserve Note was created and was first issued in a 10 dollar bill in 1914.

The design of the notes did not change dramatically until 1996 when they improved the note to prevent further counterfeiting problems.

The US dollar has been adopted, and in some cases used as the official currency, in many different territories and countries. The US Dollar is possibly the most used foreign currency in the world and people visiting the USA or making transactions in the US continually watch the markets to find the best exchange rate for US dollars.

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