The dollar was unanimously chosen as the monetary unit for the United States on July 6, 1785. The word "dollar" is derived from the name of a European silver coin with the German name of "thaler" meaning "valley-er" after the mines' locations in what is now the Czech Republic.

Until 1974 the value of the United States dollar was tied to and backed by silver, gold, or a combination of the two. From 1792 to 1873 the U.S. dollar was freely backed by both gold and silver at a ratio of 15:1 under a system known as bimetallism. In this system, the dollar could be exchanged for 371.25 grains (24.06 g) of silver or 24.75 grains (1.60 g) of gold.

In 1834, due to a drop in the value of silver, the 15:1 ratio was changed to a 16:1 ratio. This created a new U.S. dollar that was backed by 1.50 g (23.2 grains) of gold. However, the previous dollar had been represented by 1.60 g (24.75 grains) of gold. The result of this revaluation, which was the first-ever devaluation of the U.S. dollar, was that the value in gold of the dollar was reduced by 6%.

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