Explore the interactive timeline.
Every image has a story to tell.
Journey through World Wars I and II and discover the emotional stories and powerful pictures that called on Americans to "Fight or Buy Bonds" to support the war effort. And learn about the Fed’s role as America’s bank.
War Spares No Expense
That’s what the founders of our country discovered when they began fighting the Revolutionary War. In fact, financing the war was the start of our country’s debt.The Continental Congress didn’t have the authority to levy and collect taxes, so in 1775, its delegates issued paper money, called Continentals. These were bills of credit to be redeemed in coin “on the faith in the revolutionary cause.”
To manage the nation’s money, the Department of Finance, led by Robert Morris, was created in 1781. The Treasury Department, created in 1789, named Alexander Hamilton as its first Secretary.
By 1790, US debt was $77.1 million, $75.5 million of it incurred by the Revolutionary War. To raise money, the government issued loan certificates, much like federal bonds, through which it borrowed money from France and the Netherlands.
After the Revolutionary War, the value of paper Continentals decreased so rapidly that the money became worthless, and angry citizens coined the phrase “not worth a Continental.”
The First Bank of the United States, the nation’s first central bank, was formed in 1791. It loaned the government money to pay the deficit that had been accrued by the military, issued bank notes, and controlled the nation’s money supply. But in 1811, when the Bank’s 20-year charter ran out, it was not renewed.
To finance that war, the Legal Tender Act of 1862 authorized the sale of $500 million in bonds.
When the government had problems marketing the bonds, it hired a banking house to do so. However, the arrangement was discontinued because of public opinion that the banking house was making too much profit. In 1863, Congress passed the National Bank Act to handle the Treasury’s transactions.
Learning Center and Money Museum
Discover the tales money can tell — Borrow our traveling exhibits—for free! The Learning Center and Money Museum has exhibits for your organization to borrow. The exhibits are easily transported on sturdy collapsible stands. Loan periods can range from two weeks to 3 months depending on availability. All exhibits come with complimentary educational materials. There is never a fee to borrow our exhibits, however borrowing organizations may be asked to pay for shipping costs. Contact us at 216-579-3188 or firstname.lastname@example.org.