eBusiness Weekly
With the questions over “externalisation,” we take a look at the physical features of the most commonly used currency in Zimbabwe from 2009-2016.
When did the US get its own currency?
It was only in 1690 that the Massachusetts Bay Colony, one of the Thirteen Original Colonies, issued the first paper money to cover costs of military expeditions.
The practice of issuing paper bills spread to the other colonies.
A variety of currencies were in use for some time after Independence in 1776.
Though several monetary systems were proposed for the early republic, the dollar was approved by Congress on August 8, 1786.
After passage of the Constitution was secured, the government turned its attention to monetary issues again in the early 1790s under the leadership of Alexander Hamilton, the secretary of the treasury at the time (he’s the guy on the $10 bill; the Treasury Department building is on the reverse).
Congress acted on Hamilton’s recommendations in the Coinage Act of 1792, which established the Dollar as the basic unit of account for the United States.
Did they use the gold standard at first?
The Coinage Act specified a “dollar” to be between 371 and 416 grains (27.0 g) of silver (depending on purity) and an ‘eagle” to be between 247 and 270 grains (17 g) of gold (also depending on purity); the eagle was valued at $10.
The choice of the value, 371 grains, arose from Alexander Hamilton’s decision to base the new American unit on the average weight of a selection of used Spanish dollars.
Hamilton got the treasury to weigh a sample of Spanish dollars and the average weight came out to be 371 grains.
A new Spanish dollar was usually about 377 grains in weight, and so the new US dollar was at a slight discount in relation to the Spanish dollar.
The gold equivalent of the Spanish dollar in sterling was ₤1 = $4.80, whereas the gold equivalent of the US dollar was ₤1 = 4.86⅔.
This exchange rate with sterling remained right up until Britain abandoned the gold standard in 1931.
Why are the notes called greenbacks?
The federal government began issuing currency that was backed by Spanish dollars during the American Civil War in the 1860s.
As photographic technology of the day could not reproduce colour, it was decided the back of the bills would be printed in a colour other than black.
The choice fell to the colour green which was seen as a symbol of stability.
Thus the bills were known as “greenbacks” for their colour.
In contrast to the currency notes of many other countries, Federal Reserve notes of varying denominations are the same colours: predominantly black ink with green highlights on the front, and predominantly green ink on the back.
The newer notes do have some different colours – each has a vertical laminate strip imprinted with denominational information, which under ultraviolet light fluoresces a different colour for each denomination – $5 note: blue; $10 note: orange; $20 note: green; $50 note: yellow; $100 note: red.
The new $100 note is mainly blue in colour,
How are the notes made?
Intaglio printing is what gives the U.S. currency its distinctive look.
The process begins with an engraving, both of the portrait and of the fine line detail surrounding the bill.
This beautiful art is painstakingly produced by a master engraver on steel plates.
These master plates form the actual production plates used during the printing process.
A high-viscosity ink is then applied to the plates, and the printing process begins.
The plates are first wiped clean, leaving only ink in the grooves, then pressed with enormous pressure (7,500 to 15,000 psi) which transfers the ink to the paper.
The enormous pressure causes the paper to be embossed with the ink, thus giving the ink a distinctive raised feel that other printing techniques cannot duplicate.
The very fine engravings appear muddy when reproduced in counterfeit notes.
While most of the front and back part of the bill is produced in this way, the Treasury seal, Federal Reserve seal and serial numbers are not printed with the Intaglio process.
How does the Fed fit in?
The Federal Reserve System (also known as the Federal Reserve, and informally as the Fed) is the central banking system of the US.
Its duties today, according to official Federal Reserve documentation, fall into four general areas:
1. Conducting the nation’s monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates.
2. Supervising and regulating banking institutions to ensure the safety and soundness of the nation’s banking and financial system and to protect the credit rights of consumers.
3. Maintaining the stability of the financial system and containing systemic risk that may arise in financial markets.
4. Providing financial services to depository institutions, the US government, and foreign official institutions, including playing a major role in operating the nation’s payments system. There are 12 Federal Reserves in the US.
The serial number of the bill shows one of the following prefixes according to the Federal Reserve it is attached to:
The Federal Reserve Branches
Prefix City of Origin
A1 Boston
B2 New York City
C3 Philadelphia
D4 Cleveland
E5 Richmond
F6 Atlanta
G7 Chicago
H8 St.Louis
I9 Minneapolis
J10 Kansas City
K11 Dallas
L12 San Francisco
What’s the story with “Federal Reserve Note”?
Basically, a Federal Reserve Note is a type of banknote issued by the Federal Reserve System and is the only type of US banknote that is still produced today.
They are issued by the Federal Reserve Banks and have replaced United States Notes, which were once issued by the Treasury Department.
Federal Reserve Notes are printed by the Bureau of Engraving and Printing (BEP), a bureau of the Department of the Treasury.
The Federal Reserve Banks pay the BEP not only the cost of printing the notes (today, generally about 4¢ a note), but to circulate the note as new currency rather than merely replacing worn notes, they must pledge collateral for the face value, primarily in Federal securities.
The Federal Reserve shreds 7,000 tons of worn out currency each year.
Who are the guys on the notes?
The portrait may not seem to be a security feature, but the US Treasury maintains that the face is the most recognisable part of money.
People will tend to remember faces, and if the bill is counterfeit, they will see that the face is not exactly right.
The early currency of the US did not exhibit faces of presidents.
In fact, George Washington, the first US President, was against having his face on the currency, a practice he compared to the policies of European monarchs.
This is ironic since “his” $1 note is now the most common one produced by the Fed – about 45% of all US currency currently printed.
The currency as we know it today did not get the faces they currently have until the early 1900s; before that the US used a variety of symbols.
The $2 features the 3rd President Thomas Jefferson, who was a chief drafter of the Declaration of Independence. He also made the Louisiana Purchase in 1803 and sent out the Lewis and Clark Expedition to explore it.
An engraved modified reproduction of the painting The Declaration of Independence by John Trumbull is featured on the reverse.
Featuring John Adams and Thomas Jefferson, it is one of only two US Currency notes that feature two Presidents.
Why a $2 note?
The denomination of $2 was first used by the US federal government in July 1862.
The denomination was continuously used until 1966.
In 1976 use of the two-dollar denomination was resumed as part of the US bicentennial and the $2 bill was finally assigned as a Federal Reserve Note, with a new design on the back.
Two-dollar bills were spent by libertarians to draw attention to the Federal Reserve’s role in creating the financial crisis of 2007–2009 and perceived inflationary policies.
The $2 note was chosen because it features: Thomas Jefferson, who was an opponent of central banking; the Declaration of Independence, which started a movement for independence from a distant, tyrannical government; and the number two, representing the loss of value that inflation entails.
What about the rest?
The $5 bill features 16th President, Abraham Lincoln’s portrait on the front and the Lincoln Memorial on the back.
Lincoln saved the Union during the American Civil War and emancipated the slaves; he was assassinated by John Wilkes Booth in 1865.
The $10 we’ve mentioned already.
The $20 has the 7th President Andrew Jackson while the White House is featured on the reverse side.
Jackson, arrestingly known as Old Hickory, successfully defended New Orleans from the British in 1815 and expanded the power of the presidency (which is why he gets the White House).
Ulysses S. Grant, winning commander of the Union armies in the American Civil War graces the $50 while the US Capitol is featured on the reverse.
Tell us about the C-note.
US statesman, inventor, and diplomat Benjamin Franklin has the honour to appear on the $100 bill.
On the reverse is an image of Independence Hall, the building in Philadelphia where the Declaration of Independence was signed.
The time on the clock shows approximately 4:10 on the older green notes.
The numeral four on the clock face is incorrectly written as “IV” whereas the real Independence Hall clock face has “IIII”.
There is no published reason why this time was chosen.
The time was changed to 10:30 on the series blue 2009A notes released in 2013 and currently cost about 14c each to print.
What is the highest value note?
Believe it or not but they do have a $100,000 note, issued in 1929; it is an odd bill however, in that it was not generally issued, and printed only as a gold certificate.
$500, $1,000, and $5,000 interest bearing notes were issued in the same year.
For the most part, these bills were used by banks and the Federal Government for large financial transactions.
Although they are still technically legal tender in the US, high-denomination bills were last printed in 1945 and officially discontinued on July 14, 1969, by the Federal Reserve System.
Circulation of high-denomination bills was halted in 1969 by executive order of President Nixon, in an effort to combat organised crime.
Despite the degradation in the value of the U.S. $100 banknote (which was worth more in 1969 than a U.S. $500 note would be worth today), and despite competition from some more valuable foreign notes (most notably, the €500 banknote, now also being phased out), there are no plans to re-issue banknotes above $100.
The widespread use of electronic means to conduct high-value transactions today has made large-scale physical cash transactions obsolete and therefore, unnecessary for the conduct of legitimate business.
Oh and by the way, the $5,000 features George Washington and James Madison, in case you were wondering which was the other note showing two US presidents.
Any conspiracies about the currency design?
Conspiracy theorists are of the opinion that much of the symbolism on the reverse of the $1 bill involves occultism.
The number 13 (actually corresponding to the original 13 colonies) figures prominently.
The number of letters/digits in 1776 (4) and its Roman Numeral equivalent MDCCLXXVI (9) adds up to 13; there are 13 stars above the eagle, 13 steps on the Pyramid and 13 letters in ANNUIT COEPTIS (“God has favoured our undertaking”) and E PLURIBUS UNUM (“a new order for the ages”).
There are 13 vertical bars and 13 horizontal stripes on the shield, 13 leaves and 13 berries on the olive branch and lastly, the dollar bill also features 13 arrows and 13 hats.
The eye surrounded by rays of light is thought to represent the “eye of God”, but a conspiracy theory is that the eye is the “all-seeing eye” of the Freemasons, and the fact that it’s on the dollar bill is proof the majority of the founding fathers belonged to the Freemasons.
The Eye of Providence was a common Christian emblem symbolising the Trinity throughout the Middle Ages and Renaissance
And the 9/ 11 story?
Folding common paper images such as currency and familiar product packaging to produce amusing (and often risqué) new images is a pastime with a long history.
So, in that fine tradition, someone discovered that folding a US $20 bill a couple of different ways produces images that, with a little power of suggestion behind them, are reminiscent of pictures of the burning World Trade Center and Pentagon buildings after the September 11 terrorist attacks.
To those (few, we hope) who might be tempted to take something like this seriously, remember that: The current $20 bill was the product of a redesign introduced by the US Treasury back in September 1998, a full three years before the terrorist attacks.
Since all denominations of US currency higher than the $2 bill feature an engraving of a building surrounded by trees and/or shrubbery on their reverse sides, it isn’t difficult to find a bill that can be folded to create an image similar to that of a burning building, with the leaves or shrubbery functioning as the “smoke.
