Quick Study: Dollar Doldrums (page 5 of 5)

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Illustrated By Arthur Mount

The dollar's long slide began in 2002; since then, it has lost nearly half its value versus the euro.

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The Timeline

1792

Congress passes the Coinage Act, establishing the dollar as the monetary unit of the United States.

1861

Congress authorizes printing of paper money to fund the Civil War; one-dollar note bears likeness of Treasury Secretary Salmon P. Chase.

1862

Bureau of Engraving and Printing founded in Treasury basement.

1869

George Washington first appears on a one-dollar bill.

1913

Congress passes Federal Reserve Act, establishing central bank to reduce likelihood of financial panics.

1929

U.S. currency reduced in size by one-third; portraits and designs still in use today are adopted.

1933

In midst of Great Depression, Congress passes Emergency Banking Act, intended to restore confidence in paper money.

1944

Bretton Woods Agreement establishes dollar as world reserve currency (money used for international transactions); paper notes can be traded for gold bullion at a rate of $35 to one ounce of gold.

1955

As Cold War statement, Congress orders "In God We Trust" to appear on all paper currency.

1969

Circulation of $500, $1,000, $5,000, and $10,000 bills stopped; $100 bill now largest in circulation.

1971

President Nixon takes dollar off gold standard because foreigners hold more U.S. paper currency than U.S. has gold bullion.

1974-1979

Oil embargo by OPEC states and runaway inflation weaken dollar; dollar loses 10 percent of its value relative to other world currencies.

1997

Dollar begins surge in value during period of economic growth and international stability.

1999

European Union introduces euro for use in business transactions; EU begins issuing euros for consumer use in 2002.

2001

Dollar remains temporarily strong despite 9/11 attacks.

2002

Bear market begins; dollar eventually loses 40 percent of value.

2003

Dollar continues slide as foreign economies rebound and concern grows over U.S. trade deficit, war spending, and oil supplies.

2008

Dollar hits all-time low (€1=$1.60) on April 22; Treasury Secretary Henry M. Paulson (left) reiterates commitment to dollar as world reserve currency. Fun fact: What $1 bought in 1792 now costs $22.37.

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