Creation of a National Currency

 All media of exchange circulating in a country  Includes:  Coins  Paper money  Credit instruments (bonds, checks, loan papers)

 Metallic currency (coins)  Paper currency  Government currency - money printed by gov.  Bank currency - notes issued by banks  Deposit currency - checks, because that’s how they are redeemed

 Before WWI many countries did not issue paper money  In the U.S. paper currency was printed by the government

 Settlers traded shells & nails  Colonial America  British coins  people didn’t trust them  Spanish dollar “real”  Most popular because it had higher silver content  Paper money  Only English & foreign bank notes  Could be redeemed for coins

 During Revolutionary War, the Continental Congress issued paper money to buy desperately needed supplies  People had no confidence in this currency  Phrase “not worth a continental” meant an item was worthless

 After the Revolutionary War, the new U.S. decided to replace colonial coins  The Act authorized:  Gold coins  $10, $5 & $2.50  Silver coins  $1, $.50, $.25, $.10, $.05  Copper coins  $.01,.005

 Before 1861 there were only bank notes from 2 chartered Banks of the United States & from many different state banks.  Foreign coins stayed around until the 1830s

 Too many types of currency floating around caused confusion  During the Civil War, people became so concerned about the value of money that some stores even issued their own currency!

 Originally called the National Currency Act 1863  Established standards for currency  Taxed state bank notes, making them unprofitable  So state banks stopped issuing currency  A system of national currency came into being

 Examples:  Quarters commemorating each of 50 states  Susan B. Anthony silver dollar  U.S. paper money has kept same people on each bill since  People must be dead to be on bill

 “Checkpoints”  Pg. 39  Pg. 41  “Assessment 2.1” pg. 42  #1-5