Happy birthday dollar American. A historic date for the United States falls today: 239 years ago July 6th, 1785, the United States Congress, passing the “Dollar Act“, officially adopted the dollar as standard currency of the country. The adoption of the single currency not only laid the foundations for the modern American economy, but also represented a fundamental step in the formation of the young state's national identity. The new currency was essential for the economic unification and financial stability of the newly formed country.
The dollar (also informally called dollar, American dollar or simply buck at home) is the official currency of the United States of America since its birth. It is also used as an international reserve currency. Divided into 100 cents, the dollar was originally further subdivided into 1.000 mills, but this practice ceased after World War II due to the high costs of aluminum and inflation. Denominations less than one dollar are issued in coin, while those equal to or greater than one dollar are issued in banknotes. Modern banknotes have been printed by the Federal Reserve since 1929, and those with denominations greater than $100 have not been printed since 1946.
La importance of the dollar it grew significantly after the First World War, taking on an important role as a global reserve currency. The Bretton Woods agreements marked the definitive overtaking of the British pound by the dollar as the world's main reserve currency.
Before the dollar
Before the independence of the United States, the American colonies they used a variety of currencies. Despite the dominance of British Pound in trade, other colonial and foreign currencies also circulated, such as the Spanish dollar: particularly widespread were “Spanish dollars” coming from the Spanish Empire. This fragmented monetary system caused uncertainty and economic hardship.
During the Revolutionary War, the need for a unified currency became apparent. The Continental Congress issued i “Continentals”, paper money which however suffered a serious devaluation due to hyperinflation and lack of confidence. Even soon after independence from Great Britain and the colonies and states issued their own banknotes and coins, contributing to a fragmented monetary system subject to fluctuations in value. It was clear that a stable, unified monetary system was essential for the new nation.
July 6, 1785: the dollar is born
On July 6, 1785, the United States Congress met to discuss the need for a national currency. After intense debate, it was decided to adopt the dollar as the standard monetary unit. This decision was influenced by the success of the Spanish dollar, which was widely accepted and used in the colonies.
The Continental Congress, led by key figures such as Alexander Hamilton e Robert Morris, thus approved the “Dollar Act”, establishing the dollar as the official monetary unit of the United States and defining its value in terms of gold and silver. This move represented a critical step toward economic unification of the country, facilitating interstate commerce and stabilizing the financial system.
The big news of the dollar: decimalization
One of the most revolutionary aspects of the new currency was its decimalization. Thanks to the efforts of Thomas Jefferson and Alexander Hamilton, the dollar it was divided into 100 cents, simplifying calculations and making everyday use easier. This decimal system was innovative for its time and differentiated the dollar from European currencies, which often used more complex systems.
The evolution of the dollar
Until 1791, the value of the dollar was pegged to silver or gold, or a combination of the two. Subsequently, from 1792 to 1873, the dollar operated on a bimetallic system, with a fixed ratio of gold to silver of 15 to 1, known as bimetallism. In 1794, the first dollar coins were minted after the approval of the Coinage Act, which established the silver dollar as the base unit of U.S. currency and introduced a decimal system. These coins included the silver dollar along with several copper coins. The United States Mint, located in Philadelphia, was the first institution to produce these coins.
Between 1873 and 1900, several legislative changes gradually reduced the importance of silver untiladoption of the gold standard, which remained in force, albeit with modifications, until 1971.
During the American Civil War, Abraham Lincoln authorized the issuance of a new federal currency. These banknotes, called greenbacks due to their distinctive green color, they were the first to be printed in this way in the United States. This tradition of using green for U.S. banknotes continued through much of the 20th century.
Some curiosities about the dollar
Said that the first silver one dollar coin was minted in 1794 le first paper banknotes, were issued by the United States Treasury only in 1862, during the Civil War.
What, however, is the origin of the name dollar? The current name "dollar" has Anglophone and Central European roots, deriving from the ancient currency called thaler (tolar in Bohemia, thaler in Germany, daler in Sweden), in use in Europe since the 16th century. The term thaler has originates from German “tal – thal,” meaning “valley,” in reference to the silver mine located in the St. Joachim Valley (St. Joachims thal) in Bohemia, now Jáchymov, Czech Republic, where it was extracted silver to mint this coin.
The origin of the symbol of the dollar ($). Exist two versions: One theory suggests it comes from the overlapping letters “U” and “S” in “United States,” while another links it to the Spanish abbreviation “P” for peso.
Il design of American banknotes and coins has evolved over time, including symbols such as the bald eagle and the pyramid with the all-seeing eye. The motto "In God We Trust” first appeared on coins in 1864 during the Civil War, becoming the official motto of the United States in 1956. This motto reflected the prevailing religious sentiment in the country and helped further distinguish American currency from others.
The dollar today as a world reserve
Today, the dollar is there most important reserve currency in the world. Used for international trade and held by central banks around the world, it serves as a benchmark for many other currencies, cementing its crucial role in the global economy.
