Filthy Greenbacks

Until the 1860's, Americans used gold and silver coins as currency. But after the Civil War broke out, the government was hard pressed to stretch its money as far as it could go. In 1861, Congress authorized the US Treasury to issue paper money. Well, actually, dollar bills weren't and still aren't made from typical paper. Dollar bills are made out of cotton, which lasts longer than wood pulp. Unfortunately the Union usually got its cotton from the southern states, and they were at war with each other. As you can imagine, it didn't help the conflict when the Union blockaded the Confederate States and took some of their cotton.

By the end of the Civil War, the whole country was nearly bankrupt. A dollar bill was only really worth 39 cents. Furthermore, an estimated 33% to 50% of bills were counterfeit. This prompted Congress in 1865 to create a new government organization to curb the counterfeiting--the United States Secret Service.