What was the original purpose for circulating the two-dollar bill?

Answer 1

The $2 note was intended to "fill in the blanks" between $1 and $5 notes. $1 bills make up over half of the bills printed, so anything that reduces that demand is clearly an advantage. However, about 120 years ago the common betting amount at race tracks was $2 and the bill became very commonly used there. In the puritanical Victorian era other people felt that the denomination was somehow symbolic of the corruption associated with gambling, so they shied away from spending it. To this day some superstitious people think that $2 bills are somehow "unlucky" and refuse to touch them!!

By now the $2 bill would be a major help in commerce but traditionally we Americans are very slow to change our habits. For instance, the government also introduced a 2¢ piece to help reduce the demand for pennies but people refused to spend it because it was "different", so it was dropped after only a decade.

For what it's worth, many other countries (Canada, Australia, England, EU) have successfully circulated 2-cent coins and/or 2-dollar bills (or their local equivalents) with no public opposition, which I guess says something about national cultures.