It came as a surprise to me, when researching our American bills, that the USA has not always had paper money. During the Revolutionary War, there was paper money, called Continentals. The Continental Congress printed them to help finance the American Revolution, but they were virtually worthless by the end of the war. After that, coins were the primary way to exchange money. For 70 years, until the Civil War, private entities, not the federal government, issued paper money. The notes were printed by state-chartered banks. The notes could easily be counterfeited.
When the Civil War began, people were hesitant to use gold,silver or other metal coins. They began hoarding the coins. As a result of the hoarding, some businesses started printing their own currency to fill the need for small change. The Ten Cent note pictured here, was printed up for the Smith General Store in Fish House, NY. Note the date, October 24th, 1862. This form of “scrip” was called Fractional Money.
Then on February 25, 1863, President Lincoln signed the National Banking Act which established the federal dollar as the sole currency of the United States. The government then started printing up Legal Tender Notes. This type of paper money was issued up until 1971. They were originally issued into circulation by the U.S.Treasury to pay expenses incurred by the Union during the Civil War.