Following the signing of the Declaration of Independence in 1777, the fledgling nation underwent rapid change to produce a sustainable financial structure. The next few decades would be a whirlwind as the nation's leaders worked to determine what would and would not be a functional framework to assist in creating prosperity.
In 1781, Congress chartered the Bank of North America in Philadelphia as the first national bank. Not long after in 1785, the United States adopted the dollar as the official monetary unit of the country.
From 1832 and until the Civil War in 1861, there was no acting national central bank or currency due to the population's distrust and the nation's rate of growth as civilization expanded out into the west. However, in 1861, the need to finance the Civil War led Congress to authorize Demand Notes. Demand Notes were the first federally issued paper money since the Continentals. These bills became known as greenbacks because of their color and were authorized by the U.S. Treasury to be non-interest bearing currency.
Demand Notes and all forms of currency issues since 1861 are still valid and redeemable in current cash at their assigned value. By 1862, Congress discontinued Demand Notes and began to issue Legal Tender Noted or United States Notes. These new forms of currency incorporated fine-line engraving, intricate geometric lathe work patterns, a U.S. Treasury seal and engraved signatures, distinctive cotton and linen papers with embedded red and blue fiber to aid counterfeiting deterrence. United States Notes were issued in denominations from $1 to $10,000.
Upon the passing of the National Banking Act in 1863, Congress established a national banking system and uniform national currency. The country switched from the United States Notes to National Bank Notes. The federal government enforced this change during this tumultuous time by taxing all state bank notes. The Department of the Treasury's Bureau of Engraving and Printing began printing all U.S. currency in 1877 - officially taking control of all currency product from private companies or state governments.
In 1913, the Federal Reserve Act created the Federal Reserve System as the nation's central bank to regulate the flow of money and credit for economic stability. Today's currency is formally known as a Federal Reserve Note and has undergone numerous appearance changes to fit the needs of the consumer and deter counterfeiters. The evolving form of currency in the United States may only continue to adapt as technology and needs advance.