1. Ch. 11.2 Notes:Early Money & Banking

2. I. Different Money Standards during our History A. State created banks (by1780s) 1. Can print money at any time a. Bad because value will go down 2. Each state’s money looked different. a. hard to exchange with other states 3. Money not backed by anything

3. B. “Greenbacks” during the Civil War (1861) 1. The Union and Confederate government created their first national money to help pay for the war a. they overprinted and money was not backed by anything

4. C. National Currency after Civil War (late 1800s) 1. First U.S. money after the civil war. 2. Gov. regulated the money’s creation design, and distribution 3. Money looked the same 4. Gov. backed the money with IOUs/Bonds

5. D. The Gold Standard (1900) 1. Gov backed the money with gold. 2. People can change money into gold if they wish to do so 3. backing money with gold prevents overprinting and made people feel secure. = 400 troy ounce gold bar is worth $467,200 (4/10)

6. E. Inconvertible Fiat Standard (1934) 1. Our current system 2. money is no longer backed by gold. May drain the gold supply. 3. Money is now given value because it is backed by the U.S gov.

7. II. Distribution of Money………… >>>>> A. Bureau of Engraving & Printing, D.C >>>>> <<<<< B. Sent to 12 Fed Banks C. Ordered by My BankD. I Withdraw it

9. http://x-rates.com/ = Exchange Rateshttp://x-rates.com/ http://usrarecurrency.com/WebPgFl/K0304 0506H/Final1999$1SnK03040506H.jpghttp://usrarecurrency.com/WebPgFl/K0304 0506H/Final1999$1SnK03040506H.jpg = one dollar bill