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
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.
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.