{"id":1980,"date":"2025-02-06T00:11:18","date_gmt":"2025-02-05T22:11:18","guid":{"rendered":"https:\/\/money-wiki.com\/?p=1980"},"modified":"2025-02-06T07:01:52","modified_gmt":"2025-02-06T05:01:52","slug":"dollar-history","status":"publish","type":"post","link":"https:\/\/money-wiki.com\/en\/dollar-when-and-how\/","title":{"rendered":"The evolution of the US dollar - how and when did dollars appear?"},"content":{"rendered":"

It\u2019s been a long time since business was conducted solely through the exchange of goods, and money was still completely unknown. But over the centuries, not only humanity has evolved, but also the way we trade. Today, it\u2019s hard to imagine that spices were paid for in textiles, and textiles in fruits and vegetables. Instead, almost every country has its own currency or, as in much of Europe, a common currency. The euro has been able to establish itself around the world since its introduction, but now we\u2019re going to talk about another currency that has been around much longer than the euro or the hryvnia. Want to know what the US dollar is?<\/p>\n\n\n\n

<\/a>Background and history of the emergence of the US dollar<\/h2>\n\n\n\n

The United States dollar (USD) is the official currency of the United States of America, and is also one of the most influential and widely used currencies in the world. It is probably the most widely used not only in the United States, but also in many other countries as a reserve currency and the main means of international payments.<\/p>\n\n\n\n

The history of the US dollar is still quite \u201cgreen\u201d, like itself. Moreover, it already existed before the United States. The dollar originated not in the USA, as many believe, but in Spain. And this was at the beginning of the 16th century. Then there was a currency called \u201cdollar\u201d. From there, the currency got to the Netherlands and became a \u201cthaler\u201d. The name \u201cthaler\u201d itself came from Joachimsthal (a city in Bohemia, where Joachimsthaler silver coins were minted), and gradually this name became attached to large silver coins in Europe. So the roots of the dollar really go deeper than just the USA! Only later, due to pirate raids, the currency got across the ocean to the colonies of that time, and over time turned into a dollar.<\/p>\n\n\n

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\"history<\/figure>\n<\/div>\n\n\n

During the American Revolutionary War, the colonists tried to create their own currency, but failed with the so-called \u201ccontinental currency.\u201d The call for a stronger financial system grew louder. \u201cThe United States is destined to become the most powerful industrial and commercial power in the world,\u201d confidently declared the first US Treasury Secretary Alexander Hamilton. However, just a few years after declaring independence in 1776, the young nation was at economic rock bottom: without industry, without its own currency, but with a pile of debts to Europe, from which it, in fact, wanted to renounce.<\/p>\n\n\n\n

To get out of this predicament, an economic recovery was needed. In Hamilton's opinion, a single currency and, accordingly, a measurable success factor would be useful. Although the Spanish "dollars" widely used silver and gold, they had different precious metal contents in each federal state.<\/p>\n\n\n\n

<\/a>From an agricultural country to an industrial state<\/h3>\n\n\n\n

Members of Congress put an end to this coin confusion on July 6, 1785, and decreed: "The currency of the United States of America is one dollar. The silver content thereof is 375.64 grains. The decimal system of numerals shall be used. The smallest unit shall be half a cent." That's all, they said - how they cut it off! This date can be considered the day the dollar appeared.<\/p>\n\n\n\n

Hamilton, therefore, still had the desired financial basis for the fantastic upsurge that was to come from the country's gigantic and historic transition from an agricultural to an industrial nation. The Secretary of the Treasury had sworn to the farmers to open up the opportunity for them to sell their goods to the hungry industrial workers living in the hungry, growing cities. Naturally, this gave hope that they would become the most stable buyers of milk, grain, and meat.<\/p>\n\n\n

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\"Features<\/figure>\n<\/div>\n\n\n

Hamilton made it clear to businessmen and workers that they would only prosper with modern factories. The idea caught on, and factories were built and exported all over the world.<\/p>\n\n\n\n

What was missing was a central authority to coordinate monetary policy. In its absence, financial anarchy reigned, with numerous institutions continuing to print their own banknotes. Despite the Civil War of 1861, both sides needed huge amounts of money, and so they set up printing presses that churned out tons of new bills around the clock.<\/p>\n\n\n\n

But while inflation was rampant in the South, President Abraham Lincoln managed to introduce his banknotes as the only valid means of payment in the midst of the war. The creation of the dollar was completed, and its obverse featured a portrait of the current Secretary of the Treasury, Salman Chase. But there was not enough imagination for the reverse, and therefore, deciding not to bother, they left it simply green, which is why it was quickly nicknamed the \u201cgreenback\u201d by the people. But the symbolic essence was achieved: one nation \u2014 one banknote. Thus, all the others (approximately 7,000 different banknotes from hundreds of banks) \u201crested in peace\u201d \u2013 were replaced.<\/p>\n\n\n\n

Today, it is not only the main currency in the United States, many other countries have also recognized it as an official main means of payment or accept it as a foreign currency or second currency. Here are just a few of these countries:<\/p>\n\n\n\n