The history of paper money is far more involved and less linear than any of us might expect. We use it without really thinking about all the thought, and all the changes that have gone into the bills we use now.

Because coins are heavy and difficult to transport, the search for an easier form of currency began early, especially in far-flung trading networks where carrying large amounts of cash was impractical.

Leather, parchment and other durable substances were used. They were not paper money, as we think of it. These bills acted as bills of credit or promissory notes for the transaction of business. Paper money is thought to have begun in China using the inner bark of mulberry trees. (I guess in this case money really did grow on trees.)

Letters of credit and promissory notes were widely used in Europe during the Middle Ages. They were backed up usually by specie. The shift toward using these banknotes in Europe occurred in the mid-17th century. But the issuing of such notes was not centralized. Banks and other groups (such as the Knights Templar) issued their own.

. In the United States, notes were issued by different banks, even the different states. There were more than 7000 different varieties.. In 1861, the Treasury Department began printing ‘Treasury notes’, partially to help fund the Civil War. But the other banks and institutions continued printing there own notes; US government decreed these notes were subject to government authorization. The law was not suspended until 1932.

Although paper money is lighter to carry, it is also less durable. Counterfeiting has been and continues to be an ongoing problem. To combat the problem, various changes were instituted. The Secret Service was established in the 1860s. In 1929, the design for the bills was standardized. Paper and ink have been changed a few times to make them harder to copy and, most recently, the pictures have been moved off center.

The history of paper money is far more involved and interesting than we realize.money