page_title: History of the United States dollar
section_title: Background
hierarchical_section_title: History of the United States dollar / Background
caption_attribution_description: $50 Continental Currency note from 1778. The note was designed by Francis Hopkinson, and the unfinished pyramid design was a precursor to the reverse side of the Great Seal of the United States.
context_page_description: The history of the United States Dollar refers to more than 240 years since the Continental Congress of the United States authorized the issuance of Continental Currency in 1775. On April 2, 1792, the United States Congress created the United States dollar as the country's standard unit of money. The term dollar had already been in common usage since the colonial period when it referred to eight-real coin used by the Spanish throughout New Spain.
context_section_description: After the American Revolutionary War began in 1775, the Continental Congress began issuing paper money known as Continental currency, or Continentals. Continental currency was denominated in dollars from $​¹⁄₆ to $80, including many odd denominations in between. During the Revolution, Congress issued $241,552,780 in Continental currency. By the end of 1778,  this Continental currency retained only between ​¹⁄₅ to ​¹⁄₇ of its original face value. By 1780, Continental bills – or Continentals – were worth just ​¹⁄₄₀ of their face value. Congress tried to reform the currency by removing the old bills from circulation and issuing new ones, but this met with little to no success. By May 1781, Continentals had become so worthless they ceased to circulate as money. Benjamin Franklin noted that the depreciation of the currency had, in effect, acted as a tax to pay for the war. In the 1790s, after the ratification of the United States Constitution, Continentals could be exchanged for treasury bonds at 1% of face value.
  Congress appointed Robert Morris to be Superintendent of Finance of the United States following the collapse of Continental currency. In 1782, Morris advocated the creation of the first financial institution chartered by the United States. The Bank of North America was funded in part by bullion coin, loaned to the United States by France. Morris helped finance the final stages of the war by issuing promissory notes in his name, backed by his own money. The Bank of North America also issued notes convertible into gold or silver. On July 6, 1785, the Continental Congress of the United States authorized the issuance of a new currency, the US dollar.
  However, runaway inflation and the collapse of the Continental currency prompted delegates at the Constitutional Convention in Philadelphia in 1787 to include the gold and silver clause in the United States Constitution, preventing individual States from issuing their own bills of credit. Article One states they were prohibited to "make any Thing but gold and silver Coin a Tender in Payment of Debts." Some people use this clause to argue that federal paper money is unconstitutional, though very few constitutional scholars hold that position.
  The United States Mint was created by Congress following the passing of the Coinage Act of 1792. It was primarily tasked with producing and circulating coinage. The first Mint building was in Philadelphia, then the capital of the United States. The Mint was originally placed within the Department of State, until the Coinage Act of 1873 when it became part of the Department of the Treasury (in 1981 it was placed under the auspices of the Treasurer of the United States). The Mint had the authority to convert any precious metals into standard coinage for anyone's account with no seigniorage charge beyond refining costs.
caption: This $50 Continental Currency note (from 1778) was designed by Francis Hopkinson. The unfinished pyramid design was a precursor to the reverse side of the Great Seal of the United States.
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