In the 1800’s, new photography technology was being used to make illegal copies of the dollar. As a result, the treasury department sought to invent a system for keeping the dollar from being copied. At that time, the illegal copies were being made using black and white photography. By applying colored ink to the bills, copies would appear gray in color. Of all the colors tested, green was the most successful, and became the new standard color of the American dollar!
For more on the history of money, check out the U.S. Department of the Treasury’s money history page.
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