Paper Money

On this day in 1862, the United States government issued its first paper money as we know it. There had been paper money much earlier. The Chinese had the first paper currency in the Tang dynasty in the 7th century, although what we would readily recognize as paper money, appeared in the 11th century during the Song Dynasty.

Prior to 1862, paper money had been issued in the United States, by the Continental Congress, states, banks, or private entities. This was the first time it was issued by the United States. This legal tender would continue to be issued until 1971, when the government no longer guaranteed to exchange them for a precious metal, like gold.

Paper money brought its own special problems, however. It wore out much quicker and was easier to destroy. How many people have had money literally laundered? It also could be counterfeited. With our world going more to credit cards and other ways to pay without using money, will it ever be obsolete? 

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