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Dollars and Cents

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Dollars and Cents Federal Reserve Bank of Atlanta Introduction With more than $1 trillion in circulation worldwide, U.S. currency and coin play an important role in facilitating the exchange of goods and services here and around the globe. This publication gives some basic information about U.S. currency and coin, including how they are made, how they were designed, what some of their features are, and how they circulate. It also explains how to spot counterfeit currency. 1 History of paper money Federal Reserve notes Federal Reserve notes make up the majority of U.S. paper money in circulation today. The rest consists of U.S. notes and other currency still in circulation but no longer issued. The Bureau of Engraving and Printing (BEP), a division of the U.S. Treasury, prints Federal Reserve notes in denominations of $1, $2, $5, $10, $20, $50, and $100. Until 1946, it also printed $500, $1,000, $5,000, and $10,000 notes. These larger denominations circulated until 1969, when Congress discontinued them due to lack of use. As the nation’s central bank, the Federal Reserve issues, distrib- utes, processes, and accounts for Federal Reserve notes in the United States and abroad. Congress passed the Federal Reserve Act in 1913, which mandated an elastic currency that would expand and contract based on public demand. The 12 regional Federal Reserve Banks, through their network of branches through- out the country, distribute Federal Reserve notes to the public through depository institutions. Federal Reserve assets are used as collateral for Federal Reserve notes in circulation. The Federal Reserve holds these assets chiefly in the form of U.S. Treasury, federal agency, and government-sponsored enterprise securities. Former currencies The U.S. Treasury issued demand notes in 1861 to finance the Civil War. Nicknamed “greenbacks” because of their color, they were the first paper currency to circulate in the United States after the Continentals (issued during the Revolutionary War). The following year, Congress authorized a new class of currency. Called United States notes—sometimes “legal tenders”—they ranged in denomi- nation from $1 to $10,000. These notes, considered the first legal national currency, circulated alongside Federal Reserve notes until their issuance ended in 1971. Other paper currency no longer in circulation includes national bank notes, which national banks issued from 1863 to 1935, and gold certificates, which the Treasury issued in exchange for gold coin and bullion. These notes circulated from 1865 to 1933. Silver certificates, authorized in 1878 and issued in exchange for silver dollars, accounted for nearly all of the $1 notes in circulation until November 1963, when the first $1 Federal Reserve notes were issued. z 2 HOW CURRENCY IS PRINTED The Bureau of Engraving and Printing (BEP) prints Fed- eral Reserve notes using a combination of traditional printing techniques and advanced technology. The process begins with large, blank sheets of currency paper crafted from cotton and linen especially for the BEP. The Treasury began redesigning currency in the 1990s. For the redesigned currency, the first step of the printing process adds the subtle background colors to the blank sheets using offset printing. The printed sheets dry for 72 hours before moving to the next step—intaglio printing. Intaglio, which comes from the Italian word meaning “to cut or engrave,” is what makes the intricate artwork on the note possible and gives U.S. currency its distinctive texture. Images are engraved onto soft steel plates. When the ink is applied, it pools into the recessed areas of the plate. Paper is laid over the plate and the two are pressed together under 20 tons of pressure. Each printing plate makes 32 copies of the bill being printed. Computers examine the large printed sheets for mistakes. After the sheets are cut into smaller sheets of 16, they move to letterpress, the third and final printing process. A letterpress overprints the Federal Reserve seal and its corresponding number designation, as well as the Treasury seal and serial numbers. Last, the guillotine cutters separate the sheets into two sheets, then into individual notes, which are organized in “bricks” containing 40 packages of 100 notes each. Initially, the BEP produced all U.S. currency in Washing- ton, D.C., but in 1991 a second printing facility opened in Fort Worth, Texas. z 3 U.S. currency Security features The U.S. Treasury Department established the U.S. Secret Service in 1865 to curtail counterfeiting. However, protecting and maintaining confidence in U.S. currency requires a combination of effective law enforcement, public education, and security features. Starting in the 1990s, the U.S. government began redesigning Federal Reserve notes to stay ahead of counterfeiting threats. New features include watermarks, color-shifting inks, and security threads in the $5, $10, $20, $50, and $100 notes. These features make the notes easier to authenticate and more difficult to counterfeit. GEORGE WASHINGTON $1 note THOMAS JEFFERSON $2 note ABRAHAM LINCOLN $5 note 4 ALEXANDER HAMILTON $10 note ANDREW JACKSON $20 note ULYSSES S. GRANT $50 note BENJAMIN FRANKLIN $100 note Please check out the website of the Bureau of Engraving and Printing for up-to-date information. 5 MAKING SENSE OF THE REDESIGNED $100 NOTE A new $100 note, the latest denomination of U.S. currency to have been redesigned, began circulating on October 8, 2013. The redesigned note features two new security features: the 3-D security ribbon and the “Bell in the Inkwell”. • 3-D Security Ribbon A blue ribbon is woven into the paper near the center of the note. The ribbon contains images of bells that change to “100”s when you tilt the note. The bells and numbers move side to side when you tilt the note back and forth, and move up and down when you tilt the note side to side. • The Bell in the Inkwell A copper inkwell con- taining a color-shifting bell is located to the right of the portrait. When you tilt the note, the bell changes from copper to green, making it seem to appear and disappear within the inkwell. Like the other redesigned denominations, the $100 note features American symbols of freedom. Phrases from the Declaration of Independence and the quill the Founding Fathers used to sign the document are located to the right of the portrait on the front of the note. Like the pre- vious $100 note, the redesigned note features a vignette of Independence Hall on the back, but it shows the rear of the building instead of the front. Another difference: the vignette is larger and the oval that used to surround it has been removed. The new $100 note retains several effective security and design features from the previous redesign in 1996: the portrait watermark of Benjamin Franklin, the security thread, and the color-shifting 100. You can learn more about the redesigned $100 by visiting www.newmoney.gov. z 6 The most recent series of redesigned notes began in 2003 with the new $20 bill. It was followed by the $50 note in 2004, the $10 note in 2006, and the $5 note in 2008. A redesigned $100 note, the last in the series, began circulating in October 2013. No redesign is planned for the $2 and $1 notes. You should know that you do not need to trade in your original notes for the new ones. All U.S. currency remains legal tender, regardless of when it was issued. Other design features Many physical characteristics of Federal Reserve notes have changed over time since the Federal Reserve first issued the notes in 1914, though the notes retain the traditional look and feel of U.S. currency. Many of the changes, including a smaller size and more standardized designs, first appeared in 1928 as part of the first set of sweeping changes to the currency. Federal Reserve indicators On redesigned notes, a seal representing the Federal Reserve System appears to the left of the portrait. A letter and number below the left serial number identify the issuing Federal Reserve Bank. (See the map.) The $1 and $2 notes, which have not been redesigned, feature the individual seal of the issuing Reserve Bank. 7 Symbols of freedom The 2003 series of redesigned notes features different American symbols for each denomination. For example, two American eagles appear on the front of the $20 note. The large blue eagle in the background to the left of President Andrew Jackson’s por- trait represents the eagles drawn and sculpted during President Jackson’s time. The smaller green metallic eagle to the lower right of the portrait is a relatively modern illustration, made with the same raised-ink intaglio process as the portrait, numerals, and engravings. Series A new series year designation is necessary when the note’s appearance undergoes a major change, when the signatures of the secretary of the Treasury or the Treasurer change, or when there is a significant gap in production times. Serial number A unique combination of 11 numbers and letters appears twice on the front of each redesigned note. The first letter of the serial number corresponds to the series year (see the table). The second prefix letter identifies the Federal Reserve Bank that issued the note. The $1 and $2 notes have only one prefix 8 Series Year and Serial Number Relationship Series year First prefix letter Denomination 1996 A $20, $50, $100 1999 B $5, $10, $20, $100 2001 C $5, $10, $20, $50, $100 2003 D $5, $10, $100 2003A F $5, $100 2004 E $20, $50 2004A G $10, $20, $50 2006 H $5, $100 2006A K $100 2006 I $5, $10, $20, $50 2009 J $5, $10, $20, $50, $100 2009A L $100 2013 M $5, $10, $20 Sources: moneyfactory.gov/images/Series_Year_and_Serial_Number_Relationship_Table.pdf; newmoney.gov/uscurrency/seriesyear.htm 9 THE GREAT SEAL OF THE UNITED STATES Although the Great Seal of the United States was created early in the history of the United States, the first currency note to include it in the design was the $1 silver certificate, series 1935.
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