Dunlap High School
This is a hypothetical scenario in which I attempt to design a new system of currency for the United States. We start with a brief history first before moving on to the hypothetical stuff.
US Money History
The history of money of the United States dates back even before the birth of the nation, when Massachusetts bay colony first issued paper money to the colonies. During the Revolution War, The Continental Congress at that time created the Bank of North America in Philadelphia and set the currency unit to “dollar” to fund the war. The colonies gave the US “Continental Currency”, which was backed by monetary return from the government. However, because the government could not tax directly to the citizens and because the notes were easily counterfeited, the currency lost its value, hence the phrase “not worth a continental”.
After the adaption of the US constitution, congress created the first national bank that served as the nation’s first central bank. In 1793, the government issued the first coins. The federal government hoped that the central monetary system would eliminate confusion and simplify trade. The second bank of the United States was granted a 20-year charter in 1816. However, states began issuing their own currency through private institutions. Hundreds of different, easily counterfeited notes created confusion and circulation problems. The second bank of US could not resolve these issues, as it was never renewed after 20 years.
During the civil war, congress passed what people called “green backs” to fund the civil war. The notes had a green tint to them to make them hard to counterfeit. These notes were engraved and printed by private banks, through the order of congress. In 1863, the notes received the US Department of Treasury Seal to make it more difficult to counterfeit.
In 1865, the US Department of Treasury issued the gold certificates, which were certificates that could be redeemed by gold coins and bullion deposits. These certificates were discontinued in 1933; however, the last ones to circulate the market were in the 70s. Silver certificates, which launched in 1878, also circulated. The last of those were issued in the 1957 series.
In 1913, the Federal Reserve System was established. Now only the US made the currency, with consistent design.
Currency in other countries
In the United States, fiat money is used. This type of money retains value because the government gives approves it as a legal means of exchange. There are other types of money, and many countries use them. Commodity money is one of such money. This type of money has value besides exchange. Exchange commodity money is like barter. My own country—in the country side of course—exchanges grains for goods. Many African countries also use commodity money. Some European countries, like Switzerland, use representative money, or money that re backed up by something of value, such as gold.
A new form of currency?
Coins shall replace the current currency in circulation in the economy of the United States; nonetheless, it shall retain the essential characteristics of any currency: It shall be portable, durable, divisibility, and reliable. This new currency system is to consist of coins of different value, which are as follows: there is to be a penny (1 cent), a nickel (5 cents), a dime (10 cents), a quarter (25 cents); in addition, there shall be larger values of coins: a loony (1 dollar), a toony (2 dollars, a 10 dollars coin, a 20 dollar coins, a 50 dollars coin, a 100 dollars coin, and a 500 dollars coin.
The coins that represent cents shall be half the size of coins that represents the dollar value. Unlike coins in current circulation, the new coins representing different amounts in cents are not to differ from each other in size. Same ruling goes for coins representing dollar values. This shall ensure that there is a distinct and clear way to differentiate dollar and cents coins.
The 500 value coins shall be of color Gold while the 100 colored coins are to be silver in color. Any other values are to have variety of colors to differentiate between them. The coins shall have a large print numeric value that states the value of the coin, with an equivalent braille version.
The Federal Reserve Board shall be responsible for making the currency uniform in the economic system of the USA. The Board also holds the power to decide and/or amend the colors of the coins and the materials with which the coins are made. This authority is given with the aim that their decision is in accordance with the goal to make currency production and circulation as efficient as possible
The power to create the best means of carrying and transporting the currency shall be left to the free market, to encourage innovation and flexibility as time and situation changes. For example, businesses may compete to develop and create the best wallet to satisfy the consumers’ needs.
Congress shall pass this bill before the articles above are enacted upon by any means.