Money Matters: The American Experience With Money

Money Matters: The American Experience With Money
Federal Reserve Bank of Chicago | 2001 | English | ISBN 1930748035 | 18 pages | PDF | 1.4 MB

The Beginnings... and Beyond

From the earliest times when commodities such as tobacco and beaver pelts were used as money, to the present

when credit and debit cards are commonplace, money has always played a central role in the American experience.

Early in our history, our monetary system consisted of numerous foreign coins and paper currencies issued by

the thirteen colonies and the Continental Congress. More than two hundred years later, we now have a single

national currency and privately owned banks chartered by state and federal governments. Furthermore, a central

bank, the Federal Reserve, has replaced gold as the regulator of the value of our money.

The evolution from a decentralized system to a more centralized system has been marked by controversy and

slowed by a general suspicion of banking power. Each change has involved extensive legal debate focusing on the

rights of state and federal governments and the freedom of the individual.

Another important dimension of our nation's economic development is the role of gold. Once a cornerstone of the

financial system, gold has gradually but perceptibly become less important, both as a medium of exchange and as

a regulator of the money supply. This process was driven by the nature of gold itself as well as by the

changing needs of our modern and complex economy.

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