Before the euro, it used to be argued how many frontiers you had to cross in Europe before your money was wholly used up by bank charges. It was often assumed that the Americans had always been sensible enough to have a single money. Not so. With a wealth of anecdote, Jason Goodwin's hugely entertaining book spells out just how long it took them to create a national currency.

He quotes a traveller who headed west from Virginia 50 years after the Revolution: "Received a $100 Tennessee note – went back to Kentucky – forced there to exchange the Tennessee note for $88 of Kentucky money." He paid five dollars for breakfast and received in change two dollars on a bank in Pennsylvania, one dollar issued by the Baltimore & Ohio railroad, and worthless small notes. All but the railroad money was refused a hundred yards further on.

Well into the history of the Republic, much money in use in America was Spanish. The dollar took its name from the thaler, the Habsburg coin known in Spanish America as "pieces of eight". It has been called a buck since colonial times because one dollar bought one deerskin.

The war of independence was fought with paper money, the Continentals, a byword for depreciation. Jacob Perkins improved the durability of paper by steel engraving, but for decades after coins were in such short supply that people split them. Out-of-state banknotes were discounted by professional "shavers". As late as the 1850s, one Iowa banker preferred "Sucker, Puke or Hoosier", from Illinois, Missouri and Indiana, but he would accept "Buckeye or Corncracker" from Ohio or Kentucky.

Goodwin realises that the history of American money is a history of American society. Thomas Jefferson, in his admiration for all things French, insisted on a decimal currency. His rival Alexander Hamilton, "bastard brat of a Scots peddler" from the West Indies, understood how money could unify the 13 colonies, and made the federal government assume state debts. The South was called Dixie because New Orleans bills were marked "dix" as well as "ten". When hundreds of young women worked at producing paper dollars during the Civil War, an official turned the Treasury building into a bordello.

Money was at the core of regional rivalry. Southern and Western farmers called the decision to stop printing paper money after the Civil War "the Crime of '73". They followed William Jennings Bryan, who begged eastern bankers not to "crucify mankind upon a cross of gold" and believed that the country would be saved by "the free and unlimited coinage of silver". Millions read "Coin" Harvey's book, blaming the City of London for the hard life of western farmers. The Wizard of Oz is interpreted by some as a satire on the populist delusion about silver.

In 1900, so far from listening to the prophets of silver, American went on to the gold standard. Since then, the dollar has conquered the world. For 100 years it has been all it was not in the 19th century: not local, discounted, shaved, but national, solid and – so far – relatively safe.