the Useful Notes article on American Money
, which evolved independently of this article.)
The spread of American media and American influence has made American currency at least somewhat well-known in many places. The following coins are in circulation (ignoring special coins made only for collectors):
- Cents. A hundred of these make up a dollar. The coins themselves are often called pennies (never "pence"), but prices are still in "cents". These used to be made of solid copper (with steel cent coins being manufactured for about a year during WWII) but increasing copper prices (and pressure from the zinc industry) resulted in a change to zinc with copper plating in 1982. They also cost the mint about 1½ cents to manufacture one, i.e., for every 2 cents the mint manufactures, it costs them 3 cents. Most vending machines won't accept them and they are nearly worthless but they are handy in making change (note that sales tax in the United States is added to the sale price, resulting in uneven totals) and there's no real sign of them going away. Features the head of Abraham Lincoln.
- Nickels (5 cents), showing Thomas Jefferson. The nickel is only about 25 percent nickel.
- Dimes (10 cents), with Franklin D. Roosevelt. Smaller than both the nickel and the penny. Contained silver up to 1964. Also, it is the lowest denomination to have a scalloped edge; the edge of the dime, quarter and half dollar have grooves; all the other coins (except the Susan B. Anthony dollar) are flat edged. It has Roosevelt because as President he created the March of Dimes, a charity organization where people would donate dimes to help support polio research and give money to families whose children had polio. Roosevelt famously lost the use of his legs to the disease when he was 39.
- Quarters (25 cents), with George Washington. Contained silver up to 1964, minted out of a copper/nickel "sandwich" composition since.. Featured commemorative bicentennial design in 1975-'76 that replaced the year of minting with the dual-date "1776-1976" and a special tails-side design for both years. Has not had a single tails-side design since the 1998 series (see below).
- Half dollar (50 cents). Featured the head of Benjamin Franklin through 1963. Has featured the head of John F. Kennedy since 1964. Minted in 90% silver through 1964, and then minted in 40% silver until 1970, minted out of the above-mentioned copper/nickel "sandwich" since then. Generally not accepted by vending machines and rarely seen in circulation. Some small businesses will give you them in change as a gimmick. Featured commemorative bicentennial design in 1975-'76 that replaced the year of minting with the dual-date "1776-1976" and a special tails-side design for both years.
- Dollar coins. In general circulation up to the 1930s (silver), then not until the Eisenhower dollar starting in 1971 (like the above-mentioned quarter and half-dollar coins, the Eisenhower dollar coin was composed of a copper/nickel "sandwich"). Featured commemorative bicentennial design in 1975-'76 that replaced the year of minting with the dual-date "1776-1976" and a special tails-side design for both years. The modern size of dollar coin was introduced with the Susan B. Anthony coin minted from 1979 through 1981, with a few more minted in 1999 (again, a copper/nickel "sandwich"), which was reviled for looking almost exactly like a quarter in both size and color. The other mistake with the Susan B. was that the edge was scalloped, exactly the way a quarter is, making it virtually impossible to tell the difference between this dollar coin and the quarter unless you looked at it. The current Sacagaweanote dollar coins are gold-colored and easier to distinguish because the edge is flat instead of scalloped, but remain unpopular, appearing mostly in post office and subway vending machines, though a helpful tip: Their weight, diameter, thickness and even electromagnetic properties are identical to the Susan B. Anthony; therefore any machine that accepts the SBA is guaranteed to also accept the newer golden (color) dollar coins as well. There also was a brief series of collectible dollar coins with portraits of U.S. presidents. It started in 2007, but ended abruptly in 2011 because people were saving the coins and not spending them (Instead of issuing to general circulation, starting with Chester A. Arthur, the remainder of the coins in the series are to be minted for collectable purposes only). Interesting bit of trivia: the design on the tails-side of the (non-bicentennial) Eisenhower dollar coin and the Susan B. Anthony dollar coin was derived from the Apollo 11 mission patch's design, a reference to the fact that the lunar module of that mission was christened "Eagle". Another cool tidbit: The presidential $1 coin series are the first ever American coinage to feature lettering/numbering engraved on the coin's edge that is neither on the heads-side nor the tails-side of the coin.
As pointed out with the page quote, there have been some even odder coins, such as 2- and 3-cent pieces, as well as mill (1/1000 of a dollar) tokens representing fractions of a cent. Of course, none have been made or used for years. Certain goods and taxes are still priced or levied in fractions of a cent per unit, but in practice the quantities involved are usually very large.
Until 1999, all U.S. quarters had an eagle on the back, except for the 1976 quarter (which like the bicentennial half-dollar and one-dollar coins was actually minted during the years 1975 and
1976, which is the reason why catalogs that offer "one coin of each denomination from a year of your choice" often state they can't offer a set from 1975
), whose reverse features a Revolutionary War drummer. From 1999 to 2008, commemorative quarters were issued for the 50 states, followed by the District of Columbia and five U.S. territories. After this came a series of quarters commemorating U.S. national parks. These were put into circulation by the U.S. mint, partly to encourage a new generation of coin collectors, and so far have been exceedingly popular. When the U. S. Mint tried to promote a one-dollar coin to replace the 1-dollar bill by making a series of dollar-coins with a "heads" side design featuring each President (in sequence) excluding those still alive, collectors were so
enthusiastic that no one wanted to use the coins as money
By law, all U.S. coins must bear the inscriptions "Liberty," "E Pluribus Unum," and "In God We Trust." While the phrase "In God We Trust" has appeared on coins since the 1860s, only in 1957 was it introduced for paper banknotes.
Banknotes: The technical term for U.S. paper currency is Federal Reserve Notes. We could get into great detail about how banknotes have changed in design. Most of this will be useless information to you. The dominant color on them is green, as it long has been, but shades of color were added when they were redesigned circa 2005 (except for the $1 and $2 bill). Green was selected because in the nineteenth century green was a hard color to reproduce. Banknotes contain anti-counterfeiting strips which, of course, led to a conspiracy theory on The X-Files
. Due to a law banning anyone from having their face rendered on American money during their lifetime, most of them today feature the heads of dead presidents and the phrase "Dead Presidents" is sometimes used to refer to money, but the idea of putting images of former American Presidents and/or other government figures, living or
dead, on our money was largely not
made a routine practice until well into the 20th century.
- 1 dollar (George Washington again); The most common bank note. Often referred to as a "single", a "one", or simply a "buck".
- 2 dollars (Thomas Jefferson again): The $2 bill is a common butt of jokes and is seldom seen in the wild, but is still printed in small amounts and can be requested at banks. Stories of merchants believing they are fake turn up every so often, with varying degrees of dubiousness. Nicknames include "deuce", "Tom", "Tom-Tom", and "T.J."
- 5 dollars (Abraham Lincoln again). Currently a grayish-green bill becoming a purple color in the center. Nicknames include "fin", "fiver" (yes, the same nickname used for a British five-pound note), and "five-spot".
- 10 dollars (Alexander Hamilton; not a president, but a secretary of the Treasury). Current issue is a lovely shade of orange fading to yellow in the center. Referred to as a "sawbuck", "ten-spot", or "Hamilton".
- 20 dollars (Andrew Jackson). Currently the only denomination dispensed by the vast majority of cash machines. This leads to it getting the nickname of "Yuppie food stamps" since splitting a bill at a restaurant invariably leads to the diners paying with a pile of 20s. Current bills have a faint green edge becoming orange-yellow in the center. Other nicknames are "double sawbuck", "dub", and "Jackson". Ironically, President Jackson was a firm believer in hard currency and tried to outlaw paper money.
- 50 dollars (Ulysses S. Grant). Current issue has a stylized image of the U.S. flag on it, in appropriate colors (though the white looks more buff). Nicknamed a Grant, of course.
- 100 dollars (Benjamin Franklin; not a president). The highest denomination in circulation. Remained green the longest out of all the denominations higher than 2 dollars, but the current issue has a teal-blue edge that becomes white in the center. It's all about the Benjamins, baby. Or the Benjis. Or the Franklins. Or the C-notes.
- Larger bills existed but have not been produced since the 1930s. They were essentially used for interbank transactions and settlement of debts owed by banks, but with the use of the Federal Reserve, wire transfers and computer transaction matching they're generally not needed any more. They're graced by such luminaries as Grover Cleveland and Obscurity Hall-of-Famer Salmon P. Chase.
It's worth noting that in the past, certain types of notes were certificates representing a specific amount of specie held by the government, and in theory could be converted into the amount of precious metal denoted on the bill. The United States long practiced bimetallism
, with smaller denominations being backed in silver and larger ones backed in gold. (This practice was bitterly fought over - William Jennings Bryan's famous "Cross of Gold" speech was a passionate defense of bimetallism against pushes for a gold-only currency.) At a certain point, the value of silver was left to float relative to the value of gold, making gold the sole standard of value for the currency (the gold standard). Of course, the United States has since left the gold standard, and today all U.S. currency is fiat currency
- backed not by specie, but the credit of the U.S. government. Coins and banknotes of the U.S. dollar are legal tender in the United States, which, contrary to popular belief, does not simply mean that you can use them to pay for things—rather, it means that if someone under the jurisdiction of the United States refuses to take them in payment, you can actually sue him for doing that.note
The law is funny that way, but to be fair, it's that way in every country in respect to the national currency.
The central bank of the United States is known as the Federal Reserve, or "Fed" for short. The Fed's role is to monitor the national economy and to supply, via loans to private banks, money across the United States. Basically when a Fed branch determines that the cash supply is too low it will place an order with the US Mint or US Bureau of Engraving and Printing then loan the money at an interest rate to private banks who then loan it to businesses and people. The Fed has 12 branches in various regions across the country. The most notable of the 12 is the New York branch, which serves in a "first among equals" role within the Fed - when the Fed decides to shift monetary policy, it does so through the New York branch.
Since World War II
, the U.S. dollar has been the world's reserve currency. This means that the currencies of other nations tend to fix their value in relation to the dollar. This developed out of the Bretton Woods System—after World War II, all the European economies were shot to hell, and Western Europe collectively decided that for the sake of economic stability, they would all peg their currencies to the dollar, and the dollar would be on the gold standard (i.e., pegged to gold). Eastern Europe didn't participate, having non-convertible currencies anyway (for various reasons). The dollar went off the gold standard in 1971 after changes in the world economy made this system untenable, and European currencies gradually decided to float afterward.
One more fun fact: American currency has never been devalued, meaning that every coin minted and bill printed are still legal tender worth their face value. If you have a dollar bill from 1862 (the first year they were printed), you can still buy a candy bar with it. You are, of course, a damn fool for doing so — the bill has immense value as a collectible — but you can
. Incidentally, at least one wealthy coin collector goes out once a year and makes common purchases with some rare coins, returning them to circulation, in the hopes that the lucky finders will be inspired to take up the hobby.