Even in the digital age, paper money is a consistent part of life. There is around $1.79 trillion worth of bills in circulation in the U.S. Considering how many notes pass through the average person's hands in a lifetime, it's surprising how little most people know about the currency's history. Here's a closer look at the production of money in the U.S.

How Is Paper Money Made in the U.S.?

The Origins

The history of paper money in the United States dates back to 1690 when the Massachusetts Bay Colony released their own notes. During the Revolutionary War in 1775, the Continental Congress issued bills, but they depreciated in value rapidly and failed to last. 

For nearly a century, coins were the primary method of currency in the states, until 1861 when Congress issued Demand Notes, or "greenbacks," to help finance the Civil War. However, the rising cost of war and a downturn in economic conditions forced the government to quit exchanging them for coins. While they still circulated afterward, they weren't considered as valuable.

To help combat the deterioration of Demand Notes, Congress passed the First Legal Tender Act the following year. This move gave the government the right to produce a flat currency guaranteed with a legal tender status, which was recognized by creditors but not redeemable for precious metals.

Accompanying the act was the release of the United States notes, featuring a red seal and serial number. While the new paper money was designed to replace Demand Notes, both styles stayed in circulation until 1971.

After the passage of the Federal Reserve Act in 1913, Federal Reserve notes were issued, and they’re still used today.  The currency differs from other versions because it's backed by assets instead of a simple guarantee.

Present Day

Advancements in technology have changed the way U.S. currency is produced. The development of state-of-the-art tools, materials, and security methods make it much more challenging to produce counterfeit bills. The bills are also more durable than years past. 

Today's paper money is printed on a cotton and linen mixture that features small red and blue fibers. The paper itself is manufactured with a security thread and watermark incorporated into each note of $5 or higher value, and $100 bills are woven with a 3-D security ribbon.

Green ink is utilized for the backs of all denominations, while the fronts feature black ink, along with color-shifting ink on bills $10 and up. After a layered process of offset and intaglio printing, the notes are inspected, and two serial numbers are added in overprinting. 

Dealing with everything from gold coins to stamps, Hawaiian Islands Stamp & Coin in Honolulu has been a leader in buying, selling, and authenticating collectibles since 1973. The experienced appraisers also specialize in unique and rare paper money, including confederate notes. Learn more about their current selection of bills online, or request an appraisal today at (808) 531-6251.