Welcome to the fascinating history of making money in the United States! This blog will be an introduction to U.S. coin production by the U.S. Mint and paper money production by the U.S. Bureau of Engraving and Printing, two agencies within the U.S. Treasury Department.
Coins. In the American colonies, people traded using foreign coins, tobacco, wampum, nails, and barter. The Spanish silver dollar was considered the most trustworthy of the coins and served as kind of an unofficial national currency. There were lots of Spanish dollars around; Spain had plenty of silver from its mines in Bolivia, Peru, and Mexico. Its dollars were "milled" - edges embossed with a pattern to prevent cheating by shaving - and was often cut into "bits" - halves, quarters, eighths ("pieces of eight"), and sixteenths - to make smaller denominations. During the Confederation period, opens a new window (1783-1792), the Articles of Confederation allowed the people of the different American colonies to produce their own coins. Confusingly, the same-named coin could be worth different amounts depending upon the colony of origin. So, a Georgia copper penny could have a value different from a Massachusetts copper penny. Bankers and traders kept scales handy, to determine the worth of any coin, or fraction of a coin.
At the new nation's beginning, money was needed right away by the Congress. The Revolutionary War had been financed by Continental notes that were basically just IOUs, signed by hand, not backed by anything. The country needed a real national currency. But when South Carolina-born merchant John Hinckley Mitchell offered his services in supplying U.S. copper coins using a mint in Europe "in a state of higher perfection than has ever yet been issued by any nation", Secretary of State Thomas Jefferson argued before Congress that production should not be in Europe, saying "Coinage is peculiarly an attribute of sovereignty. To transfer its exercise into another country, is to submit it to another sovereign."
He further warned of the dangers of piracy in transportation, of counterfeiting, and what if the United States were to go to war with the country in which its money is made? In the end, one of the earliest pieces of legislation was the Coinage Act, opens a new window (1792), which established the first national Mint in the United States. And it was placed within Jefferson's State Department, instead of Alexander Hamilton's Treasury Department.
Congress chose Philadelphia, the nation’s capital at the time, as the site for the new Mint. President George Washington charged David Rittenhouse with building it. Rittenhouse was a self-taught engineer during the Revolution, a talented inventor and astronomer, as well as an early abolitionist who once wrote of "sons and daughters [who] have been degraded from their native dignity, and doomed to endless slavery in America, merely because their bodies may be disposed to reflect, or absorb the rays of light different from ours". He built a three-story facility, the tallest building in Philadelphia at the time and the first brick building erected by Act of Congress for public use.
The selection of coins and the choice of "dollar" as a unit drew mostly from ideas of Hamilton and Jefferson, and the back-and-forth between those two were detailed in early writings of Congress such as the American State Papers, opens a new window (see Book III, Finance). The official adoption of a decimal coinage system was revolutionary - the first in history for any country. The new government avoided using President George Washington's portrait on the early coins; it was too much like putting the image of a monarch on currency, which was what European countries did. The whole point of the United States was to not have a monarch. So the Coinage Act stipulated that the new coins bear the image of an imaginary "Lady Liberty". So worried were the founders about kings that a real person would not be featured on coinage until 1909, when Abraham Lincoln would replace Liberty on the penny. The Great Emancipator achieved this honor however, only after he was 44 years in the grave, in accordance with a provision added to an 1866 appropriations bill by Pennsylvania Congressman Russell Thayer that read “hereafter no portrait or likeness of any living person shall be engraved or placed upon any of the bonds, securities, notes, or postal currency of the United States”.
The Coinage Act ordered the following coinage denominations: copper half cents and cents, silver half dimes, dimes, quarters, half dollars, and dollars, plus gold quarter eagles ($2.50), half eagles ($5), and eagles ($10). At first the United States was unable to strike gold and silver coins. For one thing the Chief Coiner and the Assayer could not come up with the required bond (certain government officials had to be bonded - in this case, for $10,000). For another, the new country just did not possess enough bullion. Therefore, only the cheaper copper coins were produced until a solution could be found, and in March 1793, the Mint delivered its first circulating coins: 11,178 copper cents.
A 1793 act allowed specific foreign coins of specific weights to be used as legal tender for three years, to give the new Mint time to generate enough US coins for circulation. Bullion and foreign coins brought into the country were restruck as US coins. Now centers of commerce wanted their own branches of the Mint. New York, for example, lobbied for the establishment of a branch Mint, opens a new window, noting that "a large proportion of the gold and silver bullion and foreign coins imported into the United States" arrived at its port. It would be expensive and risky to send such cargo all the way to Philadelphia to be minted, only to have the coins make the long and risky trip back to New York banks to be used in commerce.
Gold Rush days expanded the work of the Mint. Branch Mints became places for local miners to go to have their nuggets melted, refined, and struck into coins, without having to travel to Philadelphia. One early American gold rush was on Cherokee land here in Georgia, opens a new window, and the rush accelerated the eviction of Native people on the deadly Trail of Tears. Congress established a branch Mint in the seat of Lumpkin County, called Licklog at the time, but renamed Dahlonega, for the Cherokee word talonega, meaning "precious yellow" (1835). Even when Georgia prospectors went west following other gold rushes, many chose to bring their gold home to the local mint. In 1861 at the beginning of the Civil War, the Confederacy gained control of the Dahlonega mint, sporadically making Confederate coinage before converting it to a simple assay office. The U.S. regained possession of facilities in the Confederate states in 1862, but the gold was mined out by then and Dahlonega never reopened as a mint. The land and building were ultimately given to the Georgia Agricultural College (later the North Georgia College and State University) in 1871. Fortuneseekers followed successive Gold Rushes, and branch Mints were opened in San Francisco (1854), Denver (1858) and Carson City (1870). Some were opened in places that weren't even states yet - these were called "territorial Mints".
In 1795, the Mint became the first federal agency to employ women - at first, as "adjusters". The adjuster weighed the blanks and "adjusted" those that weighed too much by filing them down. The Adjusting Room was a stifling place that had to keep all doors and windows tightly shut, since any air current affected the accuracy of the scales. Still, it was considered better work than that other big employer of women working outside the household at the time: cotton mills, opens a new window. By the mid-1800s, all adjusters were women. As technology improved, women were physically able to work the machinery and progressed into better paying jobs in the Mint.
Paper Money. In colonial times, the colonies issued paper money for some transactions, facsimiles of which you can often find in National Park Service gift shops. But eventually, without sufficient coin backing, this paper money was worth less than you would have paid for it in that gift shop. Paper notes of the time were essentially IOUs for coin or bullion (gold or silver bricks). Coins could be weighed and had value; paper could be counterfeited and its use was controversial. It's a testament to the security of our banking system that today we think of coins as worth less than paper - in fact, in 2025, Treasury is phasing out production of pennies completely.
Until the 1830s, money in circulation in the United States consisted mainly of bank notes (secured by a bank), foreign gold and silver coins (backed by foreign government treasuries), and some domestic coins. The United States did not issue its own paper currency until 1861, when Civil War costs necessitated a dive into IOUs. Learning from the mistakes of the original colonies, though, the National Banking Acts of 1863 and 1864 provided reliable backing for these new United States Notes. The Notes stopped being printed in 1971 but continued to be legal tender as late as 1994, though by then, nearly everyone was using notes issued by the Federal Reserve banks.
The earliest U.S. Government notes had to be printed by a private firm under contract. The company printed the notes in sheets, then sent them to the Department of the Treasury where a room of dozens of clerks engraved signatures on the notes and scores of female workers cut the sheets and trimmed the notes by hand. Someone finally noticed how inefficient this was, opens a new window, and how insecure it was to have a private firm control the dies used for engraving rather than the government. So gradually, the Treasury's currency processing group took on more and more of the production steps until it finally had the equipment and supplies to print and engrave on its own. By 1877 the Bureau of Engraving and Printing, or BEP, was tasked with producing all paper currency for the U.S. Government.
Counterfeiting. Counterfeiting is ever a concern for paper money. Innovator Benjamin Franklin's printing firm added mica to the paper it used to print notes for the Colony of Pennsylvania, and also had the bright idea of creating unique raised impressions of patterns cast from actual leaves, opens a new window. These methods were used by Franklin and his partner David Hall and later by the firm of Hall and William Sellers.
Salmon P. Chase (1808-1873) served as the 25th United States Secretary of the Treasury throughout the Civil War. He therefore played an outsized role in the development of U.S. Notes, which were created to pay for the war. He was a bureaucrat, politician, antislavery activist, and ultimately the 6th Chief Justice of the United States, who lent his name to the Chase Manhattan Bank and whose portrait appeared on the $10,000 bill. This bill, which you can see in the Monetary Museum, opens a new window at the Federal Reserve Bank of Atlanta at 1000 Peachtree Street, was produced from 1878 until it was retired in 1945, the highest denomination of US currency to be used by the public.
Chase was very concerned with the threat of counterfeiting and gave a lot of thought to designing a seal that would be difficult to copy. This he did, and a private company die cut the seal that would be printed. But then when production was to be moved to Treasury instead of being contracted out, the company refused to give up the dies. Chase ended up having to purchase duplicates. He also procured special paper and inks that were difficult to reproduce, and introduced the green tint that would give these notes their nickname of "greenbacks". The effort against counterfeiting is one of the reasons for the United States Secret Service, founded in 1865, to be placed under the Treasury Department (the Secret Service, its duties broadened, is part of the Department of Homeland Security today.)
Though new technologies have created new opportunities for counterfeiters in the modern world, constant updating by the BEP has resulted in one of the lowest counterfeiting rates of any major paper currency in the world, opens a new window.
Shredded and mutilated paper currency. BEP will replace mutilated paper currency free of charge, if you don't mind waiting the turnaround time. But there are definitions for "mutilated", opens a new window - for example, a bill torn in half and taped together is not considered mutilated. Nor are bills with political messages stamped on them, lipstick marks, or cigarette burn holes. If a bill is too gross for you to stand touching, take it to your bank to be exchanged.
You can buy small amounts of shredded currency in some BEP visitor centers, or five pound bags through the mail. Larger amounts have to be approved, and there are rules, opens a new window (note that Rule #5 should make you think about washing your hands after handling bills, or using them as compost in an edible garden).
Federal Reserve banks dispose of thousands of tons of shredded currency every year. So the Federal Reserve banks have looked for ways to reuse their shredded bills. For example, the Federal Reserve of San Francisco uses its shredded currency to power homes in Los Angeles and San Francisco, to cure concrete and make recycled paper in Salt Lake City and Seattle, and compost in Phoenix. The Atlanta Federal Reserve branch in New Orleans recycles its shreds into fertilizer, and the Monetary Museum, opens a new window at 1000 Peachtree Street gives away little bags of shreds to visitors. The Museum is open weekdays 9 to 4 and is an excellent bargain - free admission.
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