The Spanish-American War and US Banknotes

Believe it or not, the current size of US banknotes is a direct result of the Spanish-American War of 1898. Here's the story.

After the war, the US gained possession of the Philippine Islands. When it did so, the US took over managing the economic system of the country through the Bureau of Insular Affairs, part of the War Department. Part of this management included printing banknotes, silver Peso notes, starting in 1903. (See the 2 Peso note image.)

These notes were printed by the US in a smaller size than the US banknotes of the time to differentiate them better and to lower production costs. While the size of US notes in 1903 allowed only 8 subjects on a plate, the smaller Peso notes allowed for 12 on a plate, increasing productivity.

This idea of smaller notes and higher productivity caught on in the US Treasury for application to US dollars. It took until 1928, however, for US dollars to be reduced in size on par with the Pesos. And, since 1928, US banknotes have remained basically the same size as the original 1903 Pesos that were printed because of the outcome of the Spanish-American War.