Monthly Archives: February 2015

The Complete Historical Guide to Silver Certificates

Gold certificates, Federal Reserve Notes, US notes, all these notes always get so much attention. But, what about silver certificates? One of the most prolific certificates in US history, and one of the longest lasting legal tender notes next to Federal Reserve notes (US currency today). This guide will help bring to light some of the history behind these pieces of US history, and highlight this often overlooked collectible currency.

The “Crime of ’73″ – Silver Certificates are created

As the heading so dramatically puts it, the “crime of ’73″ was the passage of the fourth coinage act of 1873, which, at the time, made it so that silver was no longer part of the standard of currency, effectively ending the bimetallic standard of the US and ended production of silver dollars. However, due to public outcry and denouncement from the shift away from silver, an act was passed by Congress that required the government to purchase silver to be minted into coins.

Series 1878 – The First Silver Certificates

$1 Silver Certificate 1899 Series

 

 

 

 

 

In 1878 the first silver certificates were printed. These notes ranged in denominations from $10 all the way up to $1,000! However, banks were leery of the new bill. While they were much more convenient and less bulky to carry than silver coins, the new paper money was no accepted yet for all transactions. While they could be used in bank reserves and for taxes and public debts, they were not considered legal tender for private transactions. Due to this lack of ability, people still preferred the silver coins also due to the fact that paper currency was not trusted at all. Congress passed legislation to clarify this so that the silver certificates could actually be used in day to day activities, as well as authorized the printing of smaller denominations which helped increase circulation of silver certificates.

Small Size Large Amount of Power

In the early 1900s, then Secretary of the Treasury, Franklin MacVeagh, started up a committee to investigate the possible advantages of issuing smaller sized US banknotes. Unfortunately, due to the outbreak of World War I and the end of his tenure, any recommendations found by the committee were stalled. The question wouldn’t rise again until 1925 when Secretary Mellon would create a similar committee and probably found the same advantages that his predecessor’s committee had found. In July of 1929, the treasury would start issuing the smaller currency.

$10 Silver Certificate 1934 Series

 

 

 

 

An interesting little side note, the date on the bill did not necessarily mean that was the date when the bill was printed. The date on the bill signified the last time there was a major design change on the currency. Changes such as signature changes led to a letter being added below the date.

The Sun Sets on Silver Certificates

By 1963, the demand for silver bullion had risen to a cool 110 million ounces per year. Worried about a silver shortage, the government issued laws that repealed earlier acts that allowed people to purchase silver bullion and established base prices that it could not go below. This provided specific instructions to hold the silver that they currently had in reserve against the issued certificates still in circulation. Additionally, this also amended the Federal Reserve Act to allow them to begin gradually retiring small denominations of silver certificates and releasing silver bullion from reserves. While they still retain their legal tender status, the bill has been effectively retired and then, as of 1968 all redemption in silver had ceased.

Well, we hope you enjoyed this trip down memory lane for the Silver Certificate. Curious about adding one of these banknotes to your collection? Great American Coin Company is proud to carry several denominations and series of these great numismatic collectibles.

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The Banknote MVP: Gold Certificates

Gold Certificates are considered by many collectors to be the MVP (Most Valuable Paper) of banknote collecting. Especially since the gold recall of 1933, most notes were taken out of circulation and destroyed, making the notes highly valuable, especially if found in uncirculated condition. But, we’ll get to that in a minute, first we need to introduce the notes and when they first began.

A Hazy Beginning

The early history of US gold certificates is particularly unclear. They were first authorized for production and circulation with the Currency Act of 1863, but unlike the United States Notes (which were representations of the national debt, which we talked about in an earlier blog post), gold certificates weren’t printed until 1865. The first notes had a very small amount of information on them. They weren’t issued with series dates, and were hand-dated upon issue. At that time, issue meant that the government had the equivalent value in gold that they were issuing the note on. Additionally, they were basically promissory notes to pay the amount in gold only to the depositor, who was identified in great detail on the actual certificate itself. The only art featured on these first notes was an eagle vignette which was used across all denominations.

$500 USD Gold Certificate 1865

Gold Certificates Become Legal Tender

From 1862 to 1879, US notes were considered legal tender but were not convertible to their value in gold due to being direct representations of the national debt at the time. However, some transactions, such as dealing with interest on the national debt had to be made in gold, which meant that the early gold certificates were usable in transactions that US notes were not. However, they still were not used in general circulation due to the extremely high value of the notes at the time. In 1879, the government became willing to redeem US notes at face value in gold, making gold certificates able to be used in general circulation. However, it wasn’t until the 1882 series of notes that made them payable to bearer and not just depositor.

$1000 Gold Certificate 1882

Gold Certificates Large and Small

Gold certificates, like all US banknotes were made in two different sizes. From 1865 to 1928, the notes were a larger size and a smaller size from 1928 to their end in 1934. These notes eventually became known as “goldbacks” like their “greenback” cousins due to the reverse of the gold certificates being orange. Also, it was during this time that gold certificates began having identical denominations to the other banknotes in circulation.

$20 Gold Certificat 1922 Series

The Gold Recall of 1933 and Gold Certificates Today

In 1933, to keep the public from hoarding precious metals, FDR and Congress instituted the Gold Recall of 1933, making it illegal for the public to own or trade in gold coins or certificates. Most of the currency from this period was returned to US banks and was redeemed and destroyed. However, in 1934, the US issued a new series of gold certificates to be used in intrabank transactions. Today, the US Treasury has issued gold certificates to the Federal Reserve Banks. However, these are merely to denote the collateral for any issue of Federal Reserve notes (our currency today).

Curious about adding a piece of our currency’s history to your collection? Great American Coin is proud to offer $20 gold certificates from the 1922 series.

Gary Dyner is the owner of Great American Coin Company. Connect with him on Google+.

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