Don't Break the Bank: A Student's Guide to Managing Money (4 page)

1785:
Congress recognizes the dollar as the official paper currency of the United States.

1792:
The Coinage Act of 1792 involves several monetary milestones: it creates the U.S. Mint, establishes a federal money system, and sets the denominations for U.S. coins.

1861:
The federal government first circulates paper money to help finance the Civil War. The bills are known as “greenbacks” because of their color.

1865:
The Secret Service is created. Now famous for protecting the president, the Secret Service also investigates counterfeiting crimes.

1913:
The Federal Reserve Act establishes a national banking system.

1929:
The first major changes to paper money occur in an effort to lower printing costs. Bills are reduced in size by approximately 30 percent.

1957:
The inscription “In God We Trust” appears on paper currency. This inscription will appear on all Series 1963 currency and beyond.

1990:
To deter counterfeiting by the latest copiers and printers, a security thread and microprinting are introduced. The features first appear on the $100, $50, and the $20 bills of the Series 1990 notes. By the Series 1993 notes, the security thread and microprinting appear in all denominations except the $1 bill.

1996:
The first major design changes to U.S. currency in nearly seventy years are made in an effort to make bills even harder to counterfeit. The new $100 is introduced in 1996, the $50 appears in 1997, and the newly designed $20 is introduced in 1998. The new $50 provides an additional unique feature to help those with low vision—a large dark numeral on a light background on the lower right corner of the back of the bill.

1998:
50 State Quarters Program Act begins a program that runs from 1999 until 2008, with five new quarters released every year during the ten years. The 50 new quarters feature a design that honors each state’s unique history and tradition. The quarters are released in the order in which the states joined the union.

2000:
The U.S. Treasury introduced redesigned $5 and $10 bills in an anti-counterfeiting effort. The new $5 and $10 bills featured oversized and a bit off-centered pictures of Abraham Lincoln and Alexander Hamilton. Other measures to counter counterfeiting included watermarks that can be seen under a light, security threads that glow when exposed to ultraviolet light and tiny printing that’s visible with the help of a magnifying glass. The $100, $50 and the $20 bill underwent similar makeovers in 1996, 1997 and 1998, respectively.

2003:
As the U.S. Secret Service is integrated into the new U.S. Department of Homeland Security, protecting the security of the dollar against counterfeiting joins other homeland security efforts. For the first time since the Series 1905 $20 Gold Certificate, the new currency features subtle background colors, beginning with the redesigned $20 bill in October 2003. Different colors will be used for different denominations, which will help everyone—especially those who are visually impaired—to tell denominations apart. The redesigned $20 bill features images of the American eagle, as well as subtle background colors of green, blue, and peach.

2004:
The $50 bill is redesigned and is issued on September 28, 2004. Similar to the redesigned $20 bill, the redesigned $50 bill features historical symbols of Americana (a waving American flag and a small metallic silver-blue star) and subtle background colors of blue and red.

2006:
A redesigned Series 2004A $10 bill is issued on March 2, 2006. The
A
in the series designation indicates a change in some feature of the bill, in this case, a change in the Treasurer’s signature. Just like the new $20 and $50 bills, the redesigned $10 bill features symbols of freedom (the Statue of Liberty’s torch and the words
We the People
from the United States Constitution) and subtle shades of orange, yellow, and red.

2006:
The U.S. government announces that the $5 bill will be redesigned as part of ongoing efforts to enhance the security of U.S. currency.

2007:
The U.S. government reveals the new $5 bill design through an all-digital presentation on September 20, 2007.

2008:
The redesigned $5 bill is issued on March 13. It retains two of the most important security features that were first introduced in the 1990s and are easy to check.

2010:
The new design of the $100 bill is presented by officials from the U.S. Department of the Treasury, the Federal Reserve Board, and the U.S. Secret Service on April 21. Complete with advanced technology to combat counterfeiting, the new design for the $100 note retains the traditional look of U.S. currency. For more information, see
“The $100 Bill”
later in this chapter.

How Does Money Get Printed?

Money is printed by the
Bureau of Engraving and Printing,
which is a division of the
U.S. Department of the Treasury
. There are two printing facilities: one in Fort Worth, Texas, and the other is in Washington, D.C.

Production facts from the Bureau of Engraving and Printing:

• Approximately 23.5 million notes per day, with a face value of approximately $453 million, were produced by the Bureau of Engraving and Printing during Fiscal Year 2011.

• The Bureau of Engraving and Printing delivered approximately 5.8 billion notes at an average cost of 9.1 cents per note in Fiscal Year 2011.

• 95 percent of the notes printed each year are used to replace notes already in, or taken out of circulation.

• Approximately 8.5 tons of ink were used each day at the Bureau of Engraving and Printing’s Fort Worth and Washington, D.C., facilities during Fiscal Year 2011.

Mutilated Money

The Department of the Treasury has a special process to handle mutilated money. Mutilated money is money that has been damaged in a major way, from things like fire, flooding, or even being buried. You can send your damaged money to the Treasury, and they will try to salvage enough of it to indentify how much was there and then redeem it for the face value.

http://www.moneyfactory.gov/uscurrency/damagedcurrency.html

(If you have currency that has just been slightly torn or otherwise damaged in a minor way, you can take it to a bank to be redeemed.)

The Lifespan of a Bill

New money is constantly being printed, partly because older bills need to be replaced. The average lifespan of a bill ranges from 4.7 years for a one dollar bill to 21.6 years for a $100 bill, according to the U.S. Department of the Treasury. Larger bills tend to last longer because people tend to hold onto them longer and only use them for larger purchases or special occasions. Since they aren’t handled as often, they don’t wear out as quickly as smaller bills.

A Look at Each Bill

[Images courtesy of the Bureau of Engraving and Printing.]

The $100 Bill

The first $100 U.S. notes were issued by the federal government in 1862 and featured an image of an eagle.

Today, the front of the $100 bill features Benjamin Franklin. The back of the $100 bill shows Independence Hall in Philadelphia. This is an important part of U.S. history because it was where the Declaration of Independence was signed and the Constitution of the United States was drafted. It is often called the birthplace of our nation.

The $100 bill has had three different looks in recent years. The pre-Series 1996 bill looked the same as it had for years, with good ol’ Ben Franklin on the front. But starting with the 1996 Series, new security features began to appear. The 1996–2003A series featured a larger portrait of Ben Franklin, a watermark of Franklin to the right of his portrait, and a security thread, among other things. In April 2010, the newest version of the $100 bill was introduced, and it was placed in circulation in February 2011. It’s loaded with new security features, important since it’s one of the most frequently counterfeited notes, according to government officials.

The largest bill being printed by the Department of the Treasury today is the $100 bill. The government previously printed bills in denominations of $500; $1,000; $5,000 and $10,000 but stopped printing these in 1945. These bills are still considered legal tender, though, so you could spend them—if you were lucky enough to get your hands on one.

The $50 Bill

The front of the $50 bill shows Ulysses Grant, the 18th president of the United States. The back shows the U.S. Capitol. Like several of the other bills, the $50 Bill has been updated a few times recently for security purposes.