Who was allowed to issue paper money during the 1800?

The USA started printing "bills" in the 1860's, however: because of the poor circulation across a vast underpopulated area of the U.S., banks in towns in virtually every town and Territory was able to print their own paper currency, backed by gold on deposit at the various institutions, usually within a very finite area around the bank that had it printed. Each "bill" would be signed by the owner or president of a bank. The currency was not any good unless it bore the proper signitures.

But what was often the case, a bank would go defunct thereby only making the notes redeemable as long as the gold and silver lasted, voiding the rest of the currency as worthless. In the case of fresh notes coming from the printer, there would not be a signature to put on the notes, making them worthless. Thus; the expression," You can use the notes to wallpaper your bathroom.

Also throughout the 1800's Fractional Currency was also locally printed. Mostly in the 25 and 50 cent increments.

Hope this helps. BTW, the first coin to bear "In God We Trust" was the 1864 2 cent piece.

Stgcret