Why were 2 dollar bills made?

Answer 1

$2 bills were regularly printed in the early days of government-issued paper money starting during the Civil War. Their purpose is because US has a quasi-decimal currency system - i.e. it's mostly based on factors and multiples of 10.

Ideally, to optimize the number of coins or bills needed to make change versus the number of different denominations, coins and bills should all be multiples of 1, 2, 5, or 10, so a $2 bill fits nicely in between the $1 and $5 bills in the same way that a $20 bill fits between a $10 and $50. In fact, most countries that use decimal currency systems have a 2-unit denomination because it limits the number of ones needed to make change. Making change for a $5 bill then requires at most 2 other bills - two $2 bills or one $1 and one $2.

The reason the US is different dates back to the late 19th century. At that time $2 was a common price in numerous quasi-criminal activities such as gambling and prostitution. As a result the bills became associated with criminals and were shunned by "decent folks" in that era, so they pretty much stopped circulating in regular channels. Lack of use led to a reduction in printing, which led to even lower use, and so on.

Despite those effects, there's always been a small but steady demand for $2 bills so they've never been discontinued and new ones have been printed as recently as 2013.