A History of Currency and Banking in the United States
The history of currency and banking in the United States is a long and often complicated story. The basic fact to remember is that the power to print money is the power to appropriate the real resources (or wealth) of an economy. The Constitution gives the federal government the exclusive power to "coin money." The authorization for a fiat currency was expressly forbidden. l However, the federal government, usually in times of fiscal difficulties, has been compelled to issue currency with a promise of redemption and then renege on that promise to a greater or lesser extent. As a result, the costs of fighting wars, from the time of the Revolution through the Civil War, were to a large extent paid for through the direct printing of currency-which promised redeemability at some point in the future upon the cessation of military conflict.