Banknotes of the United States dollar

In 1812, the US began issuing Treasury Notes, although the motivation behind their issuance was funding federal expenditures rather than the provision of a circulating medium.

Since 1971, Federal Reserves Notes have been the only banknotes of the United States dollar that have been issued.

They switched to small size in 1929 and are the only type of currency in circulation today in the United States.

A $1 note was added in 1963 to replace the $1 Silver Certificate after that type of currency had been discontinued.

Before the American Revolution, every one of the Thirteen Colonies had issued its own paper money, most often denominated in British pounds, shillings and pence.

In 1776, the newly created United States issued currency which was bought by people who wanted to support the war (it was promised that the currency could be redeemed for Spanish milled dollars once the war would end).

At first, the banknotes circulated at par with the stated value, however after a few months they started depreciating until they became almost worthless.

The United States agreed to redeem the notes for treasury bonds at 1% of the face value.

Demand Notes are considered the first paper money issued by the United States whose main purpose was to circulate.

After the war ended paper money continued to circulate until present day.

They were not redeemable but were receivable for all taxes and debts, which is what persuaded people to circulate them.

United States Notes switched to small size in 1928 and were introduced in denominations of only $1, $2 and $5.

In 1934, when Federal Reserve Notes stopped being redeemable in gold, the only difference between them and Legal Tender Notes was that the first were liabilities of the Federal Reserve while the latter were direct liabilities of the United States Treasury Department.

The U.S. government decided to substitute paper currency of denominations under a dollar for coins in order to solve the problem.

They paid out 6% annual interest compounded semi-annually 3 years after their issue.

They were of uniform appearance except for the name of the bank and were issued as three series or charter periods: 1869–1882, 1882–1902, and 1902–1922.

Refunding Certificates, issued only in 1879 and only in the $10 denomination, were special in that their interest (4% per annum) did accrue indefinitely, which was meant as a way to persuade people into buying them.