A vital and central role has been played by monetary system of the United States, whether it is an age of debit and credit cards, or the tobacco and gold were used as some of the forms of money in the barter trade. Thus, the American experience of money has been very rich as it developed significantly in different era of human life. In the past, the thirteen colonies and the Continental Congress were responsible for the issuance of paper currencies, as well as, a variety of foreign coins that played a crucial role in the development of monetary system of the United States.



Controversies have been a major part of the U.S. monetary system, as it developed and expanded from its beginning of a decentralized system, and today, as a more centralized system can be observed in the monetary system of the United States. Moreover, general doubts related to the banking power have been another reason for the gradual development of this system. In addition, extensive legal debate was involved and responsible for the every change that occurred in this system. In specific, the liberties of state, as well as, federal governments have always been the center of attraction of these debates. Moreover, the freedom of an individual or citizen of the United States has been given due importance during the different processes of decision-making. (Wood, pp. 19-23)

On the other hand, the gold has played a vital and prominent role in the economic development, and in other words, the monetary system of the United States. However, now less importance is given to the role of gold, which was once a foundation stone of the monetary system. In specific, the importance has reduced due to its non-utilization as a medium of exchange, as well as, regulator of supply of money, which was the responsibility of gold in the monetary system of the country in the previous decades. In this regard, the modern and complex economy is one of the reasons that changed the perception of gold in the monetary system of the country. (Chown, pp. 90-92)

The considerations related to the establishment of a financial system were quite unclear and confusing in the beginning years that involved the framing of the Constitution. At that time, it was preferred by various economists and experts that the federal system should be given the highest power and authority to run and monitor the monetary system of the country, and therefore, a centralized monetary system should be established in the country. In this regard, the concept of a national currency, as well as, the significance of a single chartered bank was considered by the framers that bestowed most of the power to the Federal government. (D’Arista, pp. 63-67)

On the other hand, other framers of the Constitution preferred of a decentralized monetary system that should provide powers to the states to run their systems individually. In this way, every state would be having different notes due to their individual chartered banks. In this regard, the concept of a single national currency and a single chartered bank was argued and rejected by these framers of the Constitution. After the long debate, the right of coining money, as well as, its regulation was given to the Federal Government by the framers. States were not allowed to introduce their own money or make any arrangements for the issuance of paper currency. At this stage, the financial system was less involved with the federal government, as specified by the Constitution. On the other hand, Congress was given the major rights for different processes of financial system of the country, and the regulation, minting, as well as, the responsibility of circulation of money in different states was given to the Congress.