In 1862, the beginning year of the Civil War, the U.S. government issued its first paper money. The bills were called greenbacks because the backs were printed in green ink—to distinguish them from gold certificates. As a side note, gold certificates portrayed an eagle across the dollar amount with the back being printed with an abstract design. Gold certificates were used from 1863-1933.
After a full year of hard fighting on both sides it became apparent to the folks in Washington, D.C., that the currency issued by state banks need to be replaced. However, the federal laws had restricted money on the national level to hard currency (gold and silver coins). On Feb. 25, 1862, for the very first time in U.S. history, the congress passed the issuance of paper money. This paper money was backed only by the “full faith and credit” of the U.S. government.
In his book “The Ascent of Money,” Neil Ferguson states, “Bread, cash, dosh, dough, loot, lucre, moolah, readies, the werewithal: call it what you like, money matters.”
While the greenback originally referred to the money printed during the Civil War, it also refers to modern day U.S. currency. Each modern day greenback banknote is identified by a letter symbol in the center of the seal that names the Federal Reserve Bank that issued the bill. A note with a “B” indicates it came from the Federal Reserve of New York. The number two also indicates this. The number of the Federal Reserve Bank appears twice, once in each lower quadrant of the bill. Each of the 12 Federal Reserve banks has an identifying letter and number. Minneapolis has the letter I and number 9. San Francisco’s are L and 12. Each Federal Reserve branch issues their own bills, which are printed by the Bureau of Engraving and Printing (BEP).
Affixed to the front is The Great Seal of the United States which sports the American eagle and the number 13 which represents the original 13 states. There are also 13 stripes affixed to the shield of an eagle and the 13-star constellation above the eagle’s head along with 13 arrows held in one of the eagle’s claws. Finally there is an olive branch depicted with 13 olive leaves and olives, held in the eagle’s other claw.
The serial number is printed on the top right and lower left of the front of the bill. Each number starts with identifying letters which are issued by the Federal Reserve Bank that prints the note.
Today, greenbacks are just over two and half inches wide and a little over six inches long. They weigh one gram. There are six steps in printing currency which starts by making the original die that is carved by engravers out of steel. Next is creating the master printing plate through a many stepped process until finalized. The “substrate” is then created which is the paper that will be printed on. Obviously this is a very special paper which is 75 percent cotton and 25 percent linen. This is followed by what is known as the “intaglio printing process.” The currency is then numbered and finally cut.
As to the printing process, a black colored front is printed from the engraved plates and then on the second day the greenback is printed on the back. The last printing step is printing the serial numbers and affixing the Treasury seal. In the end, the ink feels as if it is raised, a very difficult process to complete.
Today, greenbacks have changed immensely from the days of the Civil War, especially as anti-counterfeiting goes. According to the BEP, “Beginning in 1996, the government has been adding advanced security features to our paper money – the first major design change since 1928. Advanced copying technologies have helped raise the incidence of counterfeiting. Ink jet printers, color copiers, and scanners are just a few tools criminals use to create bogus notes.
In keeping with the strategy of maintaining the security of our currency by enhancing the designs every seven to 10 years, a new series of U.S. currency is being issued, beginning with the $20 note which entered circulation on Oct. 9, 2003, followed by the $50 note which was issued on Sept. 28, 2004. The redesigned $10 note entered circulation on March 2, 2006. The redesigned $5 note entered circulation on March 13, 2008. The $100 note is also slated to be redesigned, but a timetable for its introduction is not yet set. The government has no plans to redesign the $1 and $2 notes.”
Finally, if you go to New York, a great museum to take in is the Museum of American Finance, located at 48 Wall St. They have a terrific money exhibit that “traces our country’s currency from the earliest years through the latest designs and features barter currencies, gold, coins, paper money and scrip.” It is a must to see and is one of the most modern museums in the country, tracing the history of finance and of course the greenback.
Quote of the Week: “I honestly believe it iz [is] better tew [to] know nothing than tew know what aint so.”—Josh Billings
Bart Ward is the chief executive officer of Ward & Co. Ltd. an Anoka based registered investment advisor – specializing in the management of stock ands bond portfolios in companies which are listed on the NYSE.