United States dollar


The United States dollar is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it into 100 cents, and authorized the minting of coins denominated in dollars and cents. U.S. banknotes are issued in the form of Federal Reserve Notes, popularly called greenbacks due to their predominantly green color.
The U.S. dollar was originally defined under a bimetallic standard of fine silver or, from 1834, fine gold, or $20.67 per troy ounce. The Gold Standard Act of 1900 linked the dollar solely to gold. From 1934, its equivalence to gold was revised to $35 per troy ounce. In 1971 all links to gold were repealed. The U.S. dollar became an important international reserve currency after the First World War, and displaced the pound sterling as the world's primary reserve currency by the Bretton Woods Agreement towards the end of the Second World War. The dollar is the most widely used currency in international transactions, and a free-floating currency. It is also the official currency in several countries and the de facto currency in many others, with Federal Reserve Notes used in circulation.
The monetary policy of the United States is conducted by the Federal Reserve System, which acts as the nation's central bank. As of February 10, 2021, currency in circulation amounted to, of which is in Federal Reserve Notes. As of January 1, 2025, the Federal Reserve estimated that the total amount of currency in circulation was approximately.

Overview

In the Constitution

, Section 8 of the U.S. Constitution provides that Congress has the power "to coin money". Laws implementing this power are currently codified in Title 31 of the U.S. Code, under Section 5112, which prescribes the forms in which the United States dollars should be issued. These coins are both designated in the section as legal tender in payment of debts. The Sacagawea dollar is one example of the copper alloy dollar, in contrast to the American Silver Eagle which is pure silver. Section 5112 also provides for the minting and issuance of other coins, which have values ranging from one cent to 100 dollars. These other coins are more fully described in Coins of the United States dollar.
Article I, Section 9 of the Constitution provides that "a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time", which is further specified by Section 331 of Title 31 of the U.S. Code. The sums of money reported in the "Statements" are currently expressed in U.S. dollars, thus the U.S. dollar may be described as the unit of account of the United States. "Dollar" is one of the first words of Section 9, in which the term refers to the Spanish milled dollar, or the coin worth eight Spanish reales.

Coinage Act

In 1792, the U.S. Congress passed the Coinage Act, of which Section 9 authorized the production of various coins, including:Section 20 of the Act designates the United States dollar as the unit of currency of the United States:

Decimal units

Unlike the Spanish milled dollar, the Continental Congress and the Coinage Act prescribed a decimal system of units to go with the unit dollar, as follows: the mill, or one-thousandth of a dollar; the cent, or one-hundredth of a dollar; the dime, or one-tenth of a dollar; and the eagle, or ten dollars. The current relevance of these units:
  • Only the cent is used as an everyday division of the dollar, with the ubiquitous exception of vehicle fuel pricing.
  • Dime is used solely as the name of the coin with the value of ten cents.
  • The mill is relatively unknown but before the middle of the 20th century was familiar in matters of sales taxes. It is ubiquitous in prices of gasoline and diesel fuels, which are usually in the form of $xx.xx9 per gallon.
  • The eagle is also largely unknown to the general public. This term was used in the Coinage Act of 1792 for the denomination of ten dollars and subsequently in naming gold coins.
The Spanish peso, or dollar, was historically divided into eight reales – hence pieces of eight. Americans also learned counting in non-decimal bits of cents before 1857 when Mexican bits were more frequently encountered than American cents; in fact this practice survived in New York Stock Exchange quotations until 2001.
In 1854, Secretary of the Treasury James Guthrie proposed creating $100, $50, and $25 gold coins, to be referred to as a union, half union, and quarter union, respectively, thus implying a denomination of 1 Union = $100. However, no such coins were ever struck, and only patterns for the $50 half union exist.
When currently issued in circulating form, denominations less than or equal to a dollar are emitted as U.S. coins, while denominations greater than or equal to a dollar are emitted as Federal Reserve Notes, disregarding the following special cases:
  • Gold coins issued for circulation until the 1930s, up to the value of $20
  • Bullion or commemorative gold, silver, platinum, and palladium coins valued up to $100 as legal tender.
  • Civil War paper currency issue in denominations below $1, i.e. fractional currency, sometimes pejoratively referred to as shinplasters.

    Etymology

In the 16th century, Count Hieronymus Schlick of Bohemia began minting coins known as joachimstalers, named for Joachimstal, the valley in which the silver was mined. In turn, the valley's name is titled after Saint Joachim, whereby thal or tal, a cognate of the English word, is German for 'valley.' The joachimstaler was later shortened to the German taler, a word that eventually found its way into many languages, including:
tolar ; daler ; talar ;
dalar and daler ; daler or daalder ;
talari ;
tallér ;
tallero ;
دولار ; and dollar.
Though the Dutch pioneered in modern-day New York in the 17th century the use and the counting of money in silver dollars in the form of German-Dutch reichsthalers and native Dutch leeuwendaalders, it was the ubiquitous Spanish American eight-real coin which became exclusively known as the dollar since the 18th century.

Nicknames

The colloquialism buck is often used to refer to dollars of various nations, including the U.S. dollar. This term, dating to the 18th century, may have originated with the colonial leather trade, or it may also have originated from a poker term.
Greenback is another nickname, originally applied specifically to the 19th-century Demand Note dollars, which were printed black and green on the backside, created by Abraham Lincoln to finance the North for the Civil War. It is still used to refer to the U.S. dollar. The term greenback is also used by the financial press in other countries, such as
Australia, New Zealand, South Africa, and India.
Other well-known names of the dollar as a whole in denominations include greenmail, green, and dead presidents, the latter of which referring to the deceased presidents pictured on most bills. Dollars in general have also been known as bones. The newer designs, with portraits displayed in the main body of the obverse, upon paper color-coded by denomination, are sometimes referred to as bigface notes or Monopoly money.
Piastre was the original French word for the U.S. dollar, used for example in the French text of the Louisiana Purchase. Though the U.S. dollar is called dollar in Modern French, the term piastre is still used among the speakers of Cajun French and New England French, as well as speakers in Haiti and other French Caribbean islands.
Nicknames specific to denomination:
  • The quarter dollar coin is known as two bits, alluding the dollar's origins as the "piece of eight".
  • The $1 bill is nicknamed buck or single.
  • The infrequently used $2 bill is sometimes called deuce, Tom, or Jefferson.
  • The $5 bill is sometimes called Lincoln, fin, fiver, or five-spot.
  • The $10 bill is sometimes called sawbuck, ten-spot, or Hamilton.
  • The $20 bill is sometimes called double sawbuck, Jackson, or double eagle.
  • The $50 bill is sometimes called a yardstick, or a grant, after President Ulysses S. Grant.
  • The $100 bill is called Benjamin, Benji, Ben, or Franklin, referring to its portrait of Benjamin Franklin. Other nicknames include C-note, century note, or bill.
  • Amounts or multiples of $1,000 are sometimes called grand in colloquial speech, abbreviated in written form to G, K, or k. Likewise, a large or stack can also refer to a multiple of $1,000.

    Dollar sign

The symbol, usually written before the numerical amount, is used for the U.S. dollar. The sign was perhaps the result of a late 18th-century evolution of the scribal abbreviation ps for the peso, the common name for the Spanish dollars that were in wide circulation in the New World from the 16th to the 19th centuries. The p and the s eventually came to be written over each other giving rise to $.
Another popular explanation is that it is derived from the Pillars of Hercules on the Spanish coat of arms of the Spanish dollar. These Pillars of Hercules on the silver Spanish dollar coins take the form of two vertical bars and a swinging cloth band in the shape of an S.
Yet another explanation suggests that the dollar sign was formed from the capital letters U and S written or printed one on top of the other. This theory, popularized by novelist Ayn Rand in Atlas Shrugged, does not consider the fact that the symbol was already in use before the formation of the United States.