US Dollar History refers to more than 240 years since the Continental Congress of the United States authorized the issuance of the Continental Currency in 1775. On April 2, 1792, the United States Congress created the United States. Declare the dollar as the standard unit of state money. The term dollars has been commonly used since the colonial period when referring to the eight-real coins (Spanish dollars) used by Spain throughout the New Spain.
Video History of the United States dollar
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At the end of 1778, the Continental Currency only maintained between 1 / 5 to 1 / 7 of its original face value. In 1780, the Continental bill - or Continentals - was worth only 1 / 40 of its face value. Congress tries to reform the currency by removing old bills from circulation and publishing new ones, but these meet little or no success. In May 1781, the Continentals became so worthless that they ceased to circulate as money. Benjamin Franklin notes that currency depreciation has, in effect, acted as a tax to pay for war. In the 1790s, after the ratification of the US Constitution, the Continentals were redeemable with treasury bonds of 1% of their nominal value.
Congress appointed Robert Morris to become the US Treasury Superintendent after the collapse of the Continental currency. In 1782, Morris advocated the creation of the first financial institution hired by the United States. The Bank of North America is funded in part by speculators lent to the United States by France. Morris helped finance the final stages of the war by issuing notes on his behalf, backed by his own money. The Bank of North America also issued a record that could be converted into a specie. On July 6, 1785, the United States Continental Congress approved the issuance of a new currency, the US dollar.
However, the ongoing inflation and the collapse of the Continental currency prompted delegates to the Constitution Convention in Philadelphia in 1787 to include gold and silver clauses in the United States Constitution, preventing individual States from issuing their own credit bills. Article One states that they are prohibited to "make Anything but Gold and silver Coins as Tender of Debt Payment." Some people use this clause to certify that federal banknotes are unconstitutional.
The United States Mint was created by Congress after the passage of the 1792 Coinage Act. It was primarily in charge of producing and distributing coins. The first Mint building was in Philadelphia, then the capital city of the United States. The Mint was originally placed within the State Department, until the 1873 Laundering Law when it became part of the Treasury Department (in 1981 was placed under the auspices of the US Treasurer). Mint has the authority to convert precious metals into standard currency for any account at no cost to seigniorage beyond refining fees.
Maps History of the United States dollar
Initial history
After the creation of the US dollar, the new US administration of President George Washington turned his attention to monetary matters again in the early 1790s under the leadership of Alexander Hamilton, the then Minister of Finance. Congress acts on the recommendation of Hamilton in the Coinage Act of 1792, which sets the dollar as the basic unit of accounts for the United States. The word dollar comes from Low Saxon cognate of the High German Thaler . The most commonly circulated and available currency, used by ordinary Americans, at present, is the Spanish Peso, also known as the "Spanish milled dollar", which is valued for its high silver content.
At the beginning of the 19th century, gold rose in relation to silver, resulting in the abolition of the trading of almost all gold coins, and subsequent liquefaction. Therefore, in the Coinage Act of 1834, the 15: 1 ratio from silver to gold changed to a 16: 1 ratio by reducing the weight of the nation's gold currency. It created a new US dollar backed by 1.50 g (23.22 grains) of gold. However, the previous dollar has been represented by 1.60 g (24.75 grains) of gold. The result of this revaluation, which is the first devaluation of the US dollar, is that the value of dollar gold is reduced by 6%. In addition, for a while, gold and silver coins are useful in trading.
In 1853, the weight of US silver coins (except the dollar itself, which was rarely used) was reduced. It has the effect of putting the nation effectively (though not officially) on the gold standard. The fixed weight in dollar coins is a nod of bimetallism, though it has the effect of further moving the silver dollar coins from trading. Foreign coins, including the Spanish dollar, were also, widely used, as a valid payment instrument, until 1857.
With the enactment of the National Banking Act of 1863, during the American Civil War and later versions that weighed on state and currency bonds, the dollar became the single currency of the United States and remains so to this day.
During the 19th century dollars were less accepted worldwide than British pounds. Nellie Bly carries the Bank of England record in 1889-1890 travels worldwide in 72 days; he also brought in a few dollars, Bly wrote, "to be used at ports as a test to see if American money is known outside America". Traveling east from New York, he did not see American money until he found a $ 20 gold piece used as a jewelry in Colombo; there Bly found that when the dollar was received at a discount of 60%.
In 1878, the Bland-Allison Act was enacted to provide more free silver coins. This action requires the government to buy between $ 2 million and $ 4 million silver bullion each month at market prices and put it in a silver dollar. This is, in essence, a subsidy for politically influential silver producers.
The discovery of a large silver deposit in the Western United States at the end of the 19th century created a political controversy. Due to the large influx of silver, the value of silver in the country's currency dropped dramatically. On the one hand are agrarian interests such as the United States Greenback Party that wants to maintain a bimetallic standard for inflating dollars, which will allow farmers to more easily repay their debts. On the other hand are the Eastern banking and commercial interests, which advocate healthy money and switch to the gold standard. This problem split the Democratic Party in 1896. This led to the famous "golden cross" speech given by William Jennings Bryan, and may have inspired many themes in The Wizard of Oz. Despite the controversy, silver status was slowly reduced through a series of legislative changes from 1873 to 1900, when the gold standard was officially adopted. The gold standard survived, with some modifications, until 1971.
Gold Standard
Bimetalism lasted until March 14, 1900, with the passage of the Gold Standard Law, which stipulates that:
... a dollar of twenty-five and eight-tenths (1.67 g) of nine gold deposits, a fine, as determined by thirty-five hundred and eleven sections of the United States Revised Statute, shall be a standard unit of value, and all the form of money spent or created by the United States must be maintained at a parity of value with this standard...
Thus the United States moved to the gold standard, making gold and silver a legal-tender currency of the United States, and guaranteeing the dollar as a convertible of up to 1.5 g (23.22 grains) of gold.
The gold standard was postponed twice during World War I, after full and then for foreign exchange. At the beginning of the war, US companies had large debts paid to European entities, which began liquidating their debts with gold. With debt looming to Europe, the dollar against the British pound exchange rate reached as high as $ 6.75, well above (gold) parity of $ 4.8665. This caused a large outflow of gold until July 31, 1914, when the New York Stock Exchange closed and the gold standard was temporarily suspended. To maintain the dollar exchange rate, the US Treasury endorses countries and national banks hired to issue emergency currencies under the Aldrich-Vreeland Act, and the newly formed Federal Reserve regulates funds to secure debts to foreign creditors. These efforts were largely successful, and the Aldrich-Vreeland record was suspended in November and the gold standard was restored when the New York Stock Exchange reopened in December 1914.
Because the United States remained neutral in the war, it remained the only country that maintained its gold standard, doing so without restrictions on imports or exports of gold from 1915 to 1917. During the participation of the United States as an enemy, President Wilson banned the export of gold, thus suspending the gold standard for currency foreign. After the war, the European countries slowly returned to their gold standard, albeit in a somewhat changed form.
During the Great Depression, every major currency left the gold standard. Among the earliest, the Bank of England abandoned the gold standard in 1931 as speculators demanded gold in exchange of currencies, threatening the solvency of the British monetary system. This pattern is repeated throughout Europe and North America. In the United States, the Federal Reserve was forced to raise interest rates to protect the gold standard for the US dollar, worsening the already severe domestic economic pressures. After the bank became clearer in early 1933, people began stockpiling gold coins as distrust for banks caused distrust of paper money, worsening deflation and depletion of gold reserves.
Golden Reserve Act
In early 1933, in order to combat the Congress of severe deflation and President Roosevelt implemented a series of Acts of Congress and Executive Orders that suspended the gold standard except for foreign exchange, deprived gold as a universal means of payment for debt, and prohibited significant private ownership. gold coins. These measures include Executive Order 6073, Emergency Banking Act, 6102 Executive Command, 6111 Executive Command, Agricultural Adjustment Act, Banking Act 1933, House Combined Resolution 192, and then Golden Reserve Act. This action was upheld by the US Supreme Court in the "Golden Clause Case" in 1935.
For foreign exchange purposes, the $ 20.67 per ounce dollar set was lifted, allowing the dollar to float freely in the foreign exchange market with no gold value. It ends after one year. Roosevelt sought first to stabilize prices falling with the Agricultural Adjustment Act; However, this does not prove popular, so the next popular political option is to devalue the dollar in the foreign exchange market. Under the Golden Reserve Act, the value of gold is set at $ 35 an ounce, making the dollar more attractive to foreign buyers (and making foreign currency more expensive for those holding dollars). This change leads to more gold conversion into dollars, allowing the US to effectively corner the world gold market.
The suspension of the gold standard was considered temporary by many people in the market and in government at the time, but restoring the standard was considered a low priority to deal with other problems.
Under the Bretton Woods system post World War II, all other currencies are valued in US dollars and thus indirectly related to the gold standard. The need for the US government to maintain a market price of $ 35 per troy ounce (112.53 Â ¢/g) of gold and also conversion to foreign currency causes economic and trade pressures. In the early 1960s, compensation for this pressure began to become too complicated to manage.
In March 1968, efforts to control the price of gold in the private market were abandoned. Two-tier system begins. In this system all central bank transactions in gold are insulated from free market prices. Central banks will trade gold among themselves at $ 35 per troy ounce (112.53 Â ¢/g) but will not trade with the private market. Private markets can trade at equilibrium market prices and there will be no official intervention. The price immediately jumped to $ 43 per troy ounce (138.25 ¢/g). The price of gold briefly touched back at $ 35 (112.53 Â ¢/g) near the end of 1969 before starting a steady rise in prices. The rise in gold prices soared sharply to 1972 and reached its highest point of the year above $ 70 (2.25 $/g). At that time, a floating exchange rate also began to emerge, indicating the de facto dissolution of the Bretton Woods system. The two-tier system was abandoned in November 1973. At that time the gold price had reached $ 100 per troy ounce ($ 3.22/g).
In the early 1970s, inflation was caused by rising prices for imported commodities, especially oil, and spending on the Vietnam War, which was not neutralized by other government spending cuts, combined with a trade deficit to create a situation where the dollar is worth less than the gold used to support it.
In 1971, President Richard Nixon unilaterally ordered the cancellation of the US dollar's direct convertibility into gold. This action is known as Nixon Shock.
AS. dollar value vs. gold value
The sudden surge in gold prices after the collapse of the Bretton Woods agreement was a result of the earlier significant drop from the US dollar due to excessive inflation from monetary supplies through the central bank (Federal Reserve) coordinated fractional banking reserves under Bretton Woods' partial gold standard. In the absence of an international mechanism that binds the dollar with gold through a fixed exchange rate, the dollar becomes a pure fiat currency and thus falls into the exchange price of its free market versus gold. As a result, the price of gold rose from $ 35 per troy ounce (1,125 $/g) in 1969 to nearly $ 500 (29 $/g) in 1980.
Shortly after the price of gold began to rise in the early 1970s, other commodity prices such as oil also began to rise. While commodity prices became more volatile, the average exchange rate between oil and gold remained the same in the 1990s as in the 1960s, 1970s and 1980s.
Concerned about the emergence of separate speculum-based gold economies from the central bank, and with the threat associated with the collapse of the US dollar, the US government approved several changes to trading at COMEX. This change resulted in a sharp decline in the value of precious metals trading from the early 1980s onwards.
In September 1987 under the Reagan administration, US Treasury Secretary James Baker made a proposal through the International Monetary Fund to use a commodity basket (which included gold).
Silver Standard
The US silver certificate is a type of representative money printed from 1878 to 1964 in the United States as part of its paper currency circulation. They were produced in response to silver agitation by citizens who were angered by the Fourth Coinage Act, and used in addition to the record of the gold-based dollar. Silver certificates can initially be exchanged for the same amount of silver dollar coins, and then in raw silver bullion.
Since the early 1920s, silver certificates were issued in denominations of $ 1, $ 5, and $ 10. In the 1928 series, only $ 1 silver certificates were produced. Ives and these dozens of times are mostly Federal Reserve banknotes, backed by and redeemable with gold. In 1933, Congress passed the Agricultural Adjustment Act which included a clause that allowed the pumping of silver into the market to replace gold. The newly printed and released 1933 series silver series, but not much is released into the circulation.
In 1934, a law was passed on in Congress that changed its obligations to the Silver Certificate thus showing the current silver location.
The last government regulation on the silver standard was in 1963, when President John F. Kennedy issued Executive Order 11110, delegated to the Minister of Finance his authority to authorize the US Treasury to issue silver certificates for each silver held by the US Government in excess not supporting certificates which are issued. This is necessary because the signing of Kennedy Public Law 88-36 on the same day, one of the effects of the repeal of the Silver Acquisition Act of 1934-this act has authorized the Minister of Finance to buy gold bullion and issue a silver certificate against it. Silver certificates continued to be issued for a short time in the $ 1 denomination, but were discontinued at the end of 1963.
Use as international reserve currency
History
World War II destroyed the European and Asian economies while leaving the US economy relatively unharmed. When European governments spend their gold reserves and borrow to pay the United States for war material, the United States accumulates large gold reserves. This combination gave the United States significant political and economic power after the war.
The Bretton Woods deal codified the economic dominance of this dollar after the war. In 1944, the Allied nations sought to create an international monetary order that sustained the global economy and prevented the economic downturn that followed the First World War. The Bretton Woods deal laid the foundation for an international monetary order that creates rules and expectations for the international economic system. This creates the International Monetary Fund (IMF), the predecessor of the World Bank, and the international monetary system based on a fixed exchange rate. This valued the dollar at $ 35 per ounce of gold and the remaining signers peg their respective currencies relative to the dollar, leading some economists to argue that Bretton Woods "took off" gold as a default asset.
While Bretton Woods instituted the importance of the dollar after the war, Europe and Asia faced a shortage of dollars. The international community needs dollars to finance imports from the United States to rebuild what is lost in the war. In 1948 Congress passed the European Recovery Program - commonly known as the Marshall Plan - giving dollars to European countries to buy the necessary imports to rebuild their economies. The plan helps European countries by giving them dollars to buy the necessary imports to generate exports, eventually allowing countries to export enough of their own goods to get the dollars needed to defend their economies without relying on a plan like Marshall. At the same time, Joseph Dodge worked with officials and the Japanese Congress to pass the Dodge Plan in 1949, in collaboration with the Marshall Plan, but to Japan rather than Europe.
The success of Marshall and Dodge plans has brought new challenges for the US dollar. In 1959, the dollar circulating around the world exceeded the US gold reserves, which became vulnerable to equivalent bank activities. In 1960, Yale economist Robert Triffin described the problem to Congress: whether the dollar is not freely available and other countries are not able to import American goods, or freely available dollars but the belief that the dollar can be converted into gold will be reduced.
Finally, the United States chose to devalue the dollar. During the early 1960s, American officials largely prevented the conversion of the dollar into gold by a series of "gentleman" agreements and other policies - including the London Gold Pool - but the action was unsustainable; the danger of running in the US gold reserves is too high. With the election of Nixon in 1968, American officials became increasingly alarmed until Nixon finally issued Executive Order 11615 in August 1971, ending the dollar's direct convertibility into gold. He said, "We must protect the position of the American dollar as a pillar of monetary stability worldwide... I decided that the American dollar should no longer be hostage in the hands of international speculators." This is known as Nixon Shock and marks the transition of the dollar from the gold standard to the fiat currency.
Impact
The United States enjoys some benefits because the dollar serves as the international reserve currency. The United States tends not to face the balance of payments crisis.
The position of the dollar as an international reserve currency also has a cost: the US government is more likely to ignore expansionary fiscal policy to maintain confidence in dollars.
United States Notes
Note The United States, also known as the Official Auction Notes, is a type of banknote issued from 1862 to 1971 in the US. After more than 100 years, they are issued longer than any other form of US banknotes.. They are popularly known as "greenbacks" in their day, a name inherited from the Demand Notes they replaced in 1862.
While the US publication of Notes ended in January 1971, the United States Notes are still valid currencies in the United States today, though rarely seen to be outstanding.
Both the United States Notes and the Federal Reserve Notes are part of the national currency of the United States, and both have become legitimate means of payment since the 1933 gold recall. Both have been used in circulation as money in the same way. However, the authority issuing it comes from different laws. United States Records were created as fiat currencies, because the government never guaranteed a certainty to exchange them with precious metals - albeit occasionally, as after the resumption of the return of 1879, federal officials were authorized to do so if requested.
The difference between US Records and Federal Reserve Records is that the United States Note represents a "credit bill" and is inserted by the Treasury directly into an interest-free circulation. The Federal Reserve Notes are backed by debts purchased by the Federal Reserve, and thus produce seigniorage for the Federal Reserve System, which serves as an intermediary loan between Treasury and the public.
Fiat Standard
Today, like most countries' currencies, dollars are fiat money, not returned by any physical assets. A holder of a federal reserve record is not entitled to ask for assets such as gold or silver from the government in exchange for a note. Consequently, some proponents of intrinsic value theory believe that the near-zero marginal cost of today's fiat dollar production reduces its appeal as a medium of exchange and holds value because fiat currencies with no marginal cost of production are easier. to undermine through overproduction and subsequent inflation of the money supply.
In 1963, the words "RESPONSIBLE FOR BEARER ON DEMAND" were removed from all newly published Federal Reserve records. Then, in 1968, the pre-1963 redemption of Federal Reserve records for gold or silver was officially over. The Coinage Act of 1965 got rid of all the silver from the quarters and dime, which is 90% silver before acting. However, there are provisions in the law that allow some coins to contain a 40% silver consistency, such as the Kennedy Half Dollar. Then, even this provision was removed, with the last remaining silver-content section printed in 1969. All of the previously printed silver coins for general circulation are now bandaged. During 1982, the penis composition was changed from copper to zinc with a thin copper layer. The content of nickel has not changed since 1946. Silver and gold coins are produced by the US government, but only as non-circular warning pieces or sets for collectors.
All outstanding records, issued from 1861 to the present, will be honored by the government at face value as a legal means of payment. This means that the federal government will accept the old record as payment for debt to the federal government (taxes and fees), or redeem old notes for new ones, but will not redeem the record for gold or silver, even if the records state that it can be redeemed. Some bills may have a premium for collectors.
The only exception to this rule is a $ 10,000 gold certificate from the 1900 Series, a number that were accidentally released to the public by a fire in 1935. A box of them was literally thrown out the window. This set is not considered "in circulation" and, in fact, is a stolen property. However, the government canceled the paper money and issued it from official records. Their value, only relevant to collectors, is about a thousand US dollars.
According to the Federal Reserve Bank of New York, there is $ 1.2 trillion in total US currency in circulation worldwide in July 2013.
Color and design
The federal government began issuing currencies like the Spanish dollar during the American Civil War. Since photographic technology at the time could not produce color, it was decided that the back of the banknote would be printed in a color other than black. Since the green color is seen as a symbol of stability, it is selected. This is known as the "greenback" for their color and embarked on a tradition of the United States printing the back of his money in green. The author of the discovery was the chemist Christopher Der-Seropian. In contrast to currency records from many other countries, Federal Reserve records of various denominations are of the same color: black-dominated ink with green highlights on the front, and green-dominated ink on the back. Federal Reserve records are printed in the same color for most of the 20th century, though older bills called "silver certificates" have blue highlights on the front, and "United States notes" have a red highlight on the front.
In 1928, the stipulation of standardized bills (involving a 25% reduction in their current size, compared to older and larger records dubbed "horse blankets"). The modern US currency, regardless of denomination, is 2.61 inches (66.3 mm) wide, 6.14 inches (156 mm), and 0.0043 inches (0.109 mm) thick. One bill weighs about fifteen and a half grains (one gram) and costs about 4.2 cents for the Engraving and Printing Bureau to produce.
Microprinting and security threads were introduced in the 1991 currency series.
Another series began in 1996 with a record $ 100, adding the following changes:
- Larger portrait, moved out of center to create more space to combine watermarks.
- The watermark to the right of the portrait depicting the same historical figure as the portrait. Watermarks can be seen only when held to light (and have long been the standard feature of all other major currencies).
- Security threads that will glow pink when exposed to ultraviolet light in dark environments. Yarn is in a unique position in every denomination.
- Color removal inks that change from green to black when viewed from different angles. This feature appears in numbers in the bottom right corner of the front of the bill.
- Micro print on the numbers in the lower left-hand corner of the note and above Benjamin Franklin's coat.
- Printing of fine lines is concentric in the background of the portrait and behind the note. This type of printing is difficult to copy well.
- The currency value written in the Arial 14pt font on the back for those with visual impairments.
- Other features for machine authentication and currency processing.
The annual release of the 1996 series followed. The $ 50 paper, June 12, 1997, introduced a large dark number with a bright background on the back of the record to make it easier for people to identify denominations. The $ 20 note in 1998 introduced new machine-readable capabilities to aid scanning devices. The safety threads glow green under ultraviolet light, and "USA TWENTY" and flags are printed on the thread, while the number "20" is printed in the field of the flag star. Microprinting is in the lower left ornamentation of the portrait and in the lower left corner of the front of the note. In 1998, the $ 20 bill was the most frequently forged bill in the United States. The new design of the $ 5 and $ 10 money was released in 2000.
May 13, 2003, the Treasury announced that it would introduce a new color into the $ 20 bill, the first US currency since 1905 (excluding the 1934 gold certificate) to have a color other than green or black. The move is intended primarily to reduce counterfeiting, rather than increasing the visual differentiation between denominations. The main colors of all denominations, including new ones $ 20 and $ 50, remain green and black; Other colors are only present in subtle shades in the secondary design elements. This contrasts with the record of the euro, the Australian dollar, and most other currencies, where strong colors are used to distinguish each denomination from another.
The new $ 20 currency goes into circulation October 9, 2003, new $ 50 bill, September 28, 2004. A new $ 10 bill was introduced in 2006 and a new $ 5 bill started on March 13, 2008. Each will have subtle elements with different colors, though it will continue to be green and black. The Treasury said it would update Federal Reserve records every 7 to 10 years to follow counterfeit technology. In addition, there are rumors that future banknotes will use embedded RFID microchips as another anti-counterfeiting tool.
The $ 5 2008 bill contains a significant new security update. The front side of the bill includes patterned yellow printing that will signal to digital image processing software to prevent digital copying, watermarks, digital security threads, and extensive microprocessor printing. The reverse side includes a large purple number 5 to provide easy differentiation from other denominations.
On April 21, 2010, the US Government announced a highly redesigned $ 100 bill featuring bolder colors, color changing inks, microlenses, and other features. It was scheduled to begin circulating on February 10, 2011, but was postponed due to sporadic discoveries wrinkled on record and "pounding" (when there was too much ink on paper, the artwork on the notes was not clearly visible). The redesigned $ 100 bill was released October 8, 2013. It costs 11.8 cents to generate each bill.
"The health of a country's currency is very important to its economic health and to uphold the health of our currency, it must be recognized and respected as tender and legal fraud should be effectively thwarted," Federal Reserve Chairman Alan Greenspan said at the opening ceremony of a new $ 20 bill. Prior to the current design, the latest redesign of the US dollar bill in 1996.
As a result of the 2008 decision in the accessibility suit filed by the American Council of the Blind, the Bureau of Engraving and Printing plans to implement enhanced tactile features in the next redesign of each note, except for $ 1 and up-to-date versions of $ 100. planning bigger numbers, higher contrasts, more color differences, and the distribution of currency readers to help the blind during the transition period. In 2016, the Treasury announced a number of design changes on the $ 5, $ 10, and $ 20 bills; to be introduced in the next redesign. Redesign includes:
- The back of the $ 5 bill will be changed to show off a historic event at the Lincoln Memorial depicted by adding a portrait of Marian Anderson (due to his famous appearance there after being banned from Constitution Hall because of his race), Martin Luther King Jr. (because of his famous speech, I Have A Dream), and Eleanor Roosevelt (who arranged Anderson's performance).
- The back of the $ 10 bill will be changed to show the 1913 parade for women's suffrage in the United States, plus portraits of Sojourner Truth, Lucretia Mott, Susan B. Anthony, Alice Paul and Elizabeth Cady Stanton.
- At the $ 20 bill, Andrew Jackson will move back (minus size, next to the White House) and Harriet Tubman will appear on the front.
See also
- Continental currency
- Coinage Act of 1792
- Coinage Act of 1849
- National Banking Act (1863)
- Coinage Act of 1864
- Coinage Act of 1873
- The history of central banking in the United States
- Nixon shock (1971)
- International usage of US dollars
References
External links
- Joint Economic Committee Study, November 1998
Source of the article : Wikipedia
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