Coin to Paper: History of the Dollar
4669_diff_coins_160Name six things people used as money.

Do you ever wonder how people came up with the dollar? It turns out that the dollar has an interesting, and long, history.

Actually, the paper dollar we use and see every day started not as a dollar bill, but as a metal coin.

It all started about 1,200 years ago, in China.

After making copper coins for nearly 150 years, the Chinese people began to run out of the reddish metal. When that happened, the Chinese did something that changed the way the whole world saw money. They created the first paper bills.

If it wasn’t for their clever thinking, today’s dollar could be very different.

From the mountains

4669_Thaler_160Dollar coins come in all shapes, colors, and sizes.

The next key moment in dollar history happened almost 500 years ago in the town of Joachimstal. Joachimstal is in the Ore Mountains of Bohemia, at the foot of Mount Klinovec.

The townspeople made coins out of silver from a nearby mine. They named these coins joachimstaler after their town. Since joachimstaler is hard to say, they called the coins thaler for short.

Years later, the Dutch and Germans softened the word and changed it from thaler to daler. The English picked up the word as well. They changed it to its modern spelling, dollar.

And that’s how a joachimstaler became a dollar.

Introducing the dollar

4669_4_coins_160The U.S. was the first country with an official currency.

The U.S. adopted the dollar, worth 100 cents, in 1785. It was the first nation to adopt an official currency.

At first dollars weren’t paper. They were coins made of silver and gold. When silver and gold supplies decreased, the U.S. started making paper money. The first paper dollar bills were made in 1861. The original bills, called “Greenbacks,” helped finance the Civil War.

The transition wasn't easy. These new paper bills posed some problems...

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