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What were the first US Dollars called?


The US dollar is the official currency of the United States of America. It is also used in other countries like Ecuador, El Salvador, the Federated States of Micronesia, Palau, the Caribbean Netherlands, and Timor-Leste. The US dollar is one of the most traded currencies in the world and serves as a global reserve currency. But the dollar we know today has gone through many evolutions since the founding of the United States. So what were the first US dollars called?

Colonial Currency

Before the United States was formed, each of the 13 colonies issued their own paper money. There was no unified currency, and each colony’s money had different values and names. Some of the early colonial currencies included:

Massachusetts Pound

The Massachusetts Pound was issued by the Massachusetts Bay Colony from 1690 to 1775. It was valued at 1 British Pound Sterling or 4 Spanish Milled Dollars. The paper bills carried denominations like 1, 2, 3, 5, and 10 pounds.

New Hampshire Pound

First issued in 1735, the New Hampshire Pound was valued at 6 shillings and 8 pence or 1/3 of a British Pound. The colony printed £10, £20, £30, and £50 banknotes.

New York Pound

The Province of New York issued the New York Pound from 1709 to 1775. It was set at a value of 1 British Pound or $2.50 in US Dollars. The paper money came in denominations of £1/6, £1 and £3.

New Jersey Pound

The New Jersey Pound debuted in 1724 and held par value with the British Pound. The colony printed £1/6, £1, £2, and £3 notes.

Delaware Pound

First printed in 1770, the Delaware Pound was pegged to the Spanish Dollar at a rate of 6 Shillings. The paper money came in £3, £5, £10, and £20 denominations.

Virginia Pound

Virginia began issuing paper money in 1755 denominated in Pounds, Shillings, and Pence. It was valued at 1 British Pound or $2.67 US. The colony printed £1/3, £1, £2, £3 notes.

North Carolina Pound

The North Carolina Pound was first issued in 1712. It was valued at 8 Spanish Milled Dollars or 2 British Pounds. The colony printed £1/8, £1/4, £1/2, and £1 notes.

South Carolina Pound

South Carolina began issuing the South Carolina Pound in 1703. It was pegged to the British Pound at a rate of £1 SC = £1.3 British. The paper money came in denominations of £1, £2, £5, £10, and £20.

Pennsylvania Pound

The Province of Pennsylvania issued its own currency called the Pennsylvania Pound from 1723 to 1775. It was valued at 1 British Shilling and 6 Pence or 1/3 of £1 Sterling. The colony printed denominations of 1 Shilling, 1 Shilling and 6 pence, and £1 notes.

So as you can see, before the Revolutionary War and the founding of the United States, each colony issued its own distinct paper currency with unique names, values, and denominations. There was no unified money system.

Continental Currency

In 1775, the Continental Congress began issuing paper money known as Continental Currency to help finance the American Revolutionary War. This was the first national currency for the American colonies under the Continental Congress.

The Continental Currency was denominated in Spanish milled dollars, which were the most commonly used coin in the colonies at the time. It carried denominations of $1/6, $1/3, $2/3, $1, $2, $3, $4, $5, $6, $7, $8, $20, $30, and $80.

Over time, the value of Continental Currency was damaged by counterfeiting and British propaganda. By 1780, the bills were practically worthless and the phrase “Not worth a continental” emerged to describe something of little value.

But the Continental Currency was an important early attempt to establish a national money system for the future United States. And the dollar denominations helped set the stage for the US dollar as we know it today.

Spanish Milled Dollar

After the Revolutionary War in the 1780s and 1790s, foreign coins circulated widely in the newly formed United States. The most popular was the Spanish Milled Dollar, also known as the Spanish dollar or Piece of Eight.

The Spanish dollar originated in 1497 and was widely used in world trade. It contained 0.77 ounces of silver. In the early US, the Spanish dollar was valued at 8 Reales or 8 “bits”. This is where the term “two bits” to describe 25 cents comes from.

The Constitution gave Congress the power to mint coins in 1792. And the first US Mint Act of 1792 chose the Spanish dollar as the monetary unit for the United States. US Gold and Silver coins were minted to relate to the Spanish dollar:

  • 1 US Dollar = 1 Spanish Milled Dollar
  • 1/10 US Dollar = 1 Spanish Real (Bit)
  • 1/100 US Dollar = 1 Spanish Centavo

So in the 1780s to 1790s time period, the first widely used US currency was in fact the Spanish Milled Dollar and coins derived from it. The dollar sign “$” is even based on the Spanish dollar.

The US Dollar is Born

In 1792, the Coinage Act established the United States Dollar as the standard unit of US money. It set the value of the US dollar equal to the Spanish Milled Dollar.

The term “dollar” comes from the German word “thaler”, which is short for “Joachimsthaler”. This was the name of a popular silver coin from the 1500s minted in Joachimsthal, Austria. The word dollar was in common use in the British North American colonies by the late 1700s.

Under the Coinage Act of 1792, the US Mint issued gold, silver, and copper coins denominated in dollars and cents. Some of the first US coins included:

  • Gold Eagle ($10)
  • Silver Dollar (100 cents)
  • Half Dollar (50 cents)
  • Quarter Dollar (25 cents)
  • Dime (10 cents)
  • Half Dime (5 cents)
  • Copper Cent (1 cent)

So the United States dollar was formally defined in 1792 based on the widely used Spanish Milled Dollar. The dollar has endured as the core monetary unit of the US for over 200 years since then.

Early Paper Money

In addition to coins, paper banknotes denominated in dollars also started emerging around the late 1700s and early 1800s. But initially, paper money was printed by individual banks – not the Federal government.

The first paper dollar bills were issued by the Continental Congress in 1775 to help fund the Revolutionary War. But these Continental Currency notes lost value and stopped circulating after the war.

In 1782, the Bank of North America printed $5 and $10 notes referencing US Dollars on the bills. Other private banks followed suit by printing paper notes denominated in dollars and cents.

But there was no standardized national US paper currency until 1862 during the Civil War, when the Federal government began issuing United States Notes, also known as Legal Tender Notes.

So in summary, while US coins were denominated in dollars starting in 1792, standardized Federal paper currency denominated in dollars didn’t emerge until 1862.

The Evolution of US Dollar Bill Designs

US dollar banknotes have gone through many redesigns over the years since the first Federal paper money appeared in 1862. Here is a quick overview:

Large-sized US Paper Money (1862 to 1928)

The first nationally issued US paper currency included denominations of $1, $2, $5, $10, $20, $50, $100, $500 and $1000. These original dollar bills were quite large – ranging from 2.61 inches x 6.14 inches (for $1) up to 7.42 inches x 3.125 inches (for $1000).

This large paper money format persisted from 1862 until 1928. The obverses featured black and white depictions of historical figures, while the reverses had intricate designs printed in a range of colors.

Some of the notable large-sized dollar bill designs included:

  • The Educational Series Silver Certificates from 1896 with portraits and allegorical images depicting different classical studies like science, history, and the arts.
  • The 1899 Black Eagle Silver Certificates bearing an engraved black eagle.
  • The 1917 $1 Gold Certificate depicting George Washington in the center.
  • The 1922 $20 Federal Reserve Note with a bust of Andrew Jackson on the face.

Small-sized US Paper Money (1929 Onward)

To save printing costs and prevent counterfeiting, United States Currency was redesigned into the small-sized format we know today starting in 1929. All denominations shrank to 6.14 inches x 2.61 inches or less.

Some iconic small-sized dollar bills over the years have included:

  • The Educational Series Silver Certificates like the 1928 $1 bill with Martha Washington and the 1928 $2 note with an allegorical science vignette.
  • The 1928 and 1934 Series A, B, C, D, and E Federal Reserve Notes.
  • The 1953 Red Seal Federal Reserve Notes like the $2 bill with Thomas Jefferson.
  • The 1963 $5 Silver Certificate with Abraham Lincoln on the right and the American Bald Eagle on the left.
  • The 1969 $10 Federal Reserve Note featuring Alexander Hamilton.
  • The current 1999 series $1, $5, and $20 bills depicting George Washington, Abraham Lincoln, and Andrew Jackson respectively.

While the size and designs have evolved, the fundamental US dollar has retained the same value and identity since 1792, anchored by coins and then paper money tied to that unit.

Conclusion

In summary, the US dollar has origins dating back to the Spanish Milled Dollar used widely in the American colonies. The dollar was formally established as the currency unit for the United States in the Coinage Act of 1792. Early US coins and private paper banknotes were denominated in dollars and cents.

Standardized Federal paper money denominated in dollars first appeared in the 1860s. US bills went through a transition from large-sized formats in the 1800s to small-sized designs in the 1900s. But the dollar has persisted as America’s trusted currency for over 200 years and counting. So next time you handle a $1 or $20 bill, you can appreciate the long history behind those dollars in your wallet!