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USCURRENCYCOLLECTOR - History

Fractional Currency

U.S. Notes

Silver Certificates

Gold Certificates

Federal Reserve Bank Notes


 

Fractional / Postage Currency

At the outset of the Civil War there were a number of changes in the money supply of the United States. These changes eventually led to the introduction of Postage, then Fractional, Currency. With the advent of the war and the Government's suspension of payment in gold or silver for the face value of a coin or bill, the value of the metallic content in circulating coinage soon became greater than the face value of the coins themselves. This being the case, it was actually more profitable to melt coins for bullion value. Circulating coinage rapidly disappeared completely. Hence, the resulting advent of 5 separate Issues of Fractional currency:

First Issue: From August 21, 1862 thru May 27, 1863 in denominations of 5, 10, 25 & 50 Cents.

Second Issue: From October 10, 1863 thru February 23, 1867 in denominations of 5, 10, 25 & 50 Cents.

Third Issue: December 5, 1864 thru August 16, 1869 in denominations of 3, 5, 10, 15, 25 & 50 Cents.

Fourth Issue: July 14, 1869 thru February 16, 1875 in denominations of 10, 15, 25 & 50 Cents.

Fifth Issue: February 26, 1874 thru February 15, 1876 in denominations of 10, 25 & 50 Cents.



 

United States Notes / Legal Tender Notes

United States Notes are also known as Legal Tender Notes pursuant to the wording of their obligation. These notes are next to the earliest type and longest issued U.S. paper currency to date. The issuance of these notes stirred a great deal of Constitutional debate over the legality of notes backed only by the credit of the U.S. government.

Large Size

Large U.S. Notes consisted of 5 issues from 1862 to 1923. All series were titled "United States Note" except for the series of 1869, which were entitled "Treasury Note" and the series of 1862-1863, which had no title on the note. The wording of the obligation carried on the reverse of the notes was changed several times during the entire issue.

The first issue, dated March 10, 1862 consisted of all denominations from $5 to $1,000. The earlier notes in this series carry the following obligation:
"This note is legal tender for all debts, public and private, except duties on imports and interest on the public debt, and is exchangeable for U.S. six per cent twenty year bonds, redeemable at the pleasure of the United States after 5 years."

Later notes in this series, as well as notes from the second and third issue carry the following obligation:
"This note is legal tender for all debts, public and private, except duties on imports and interest on the public debt, and is receivable in payment of all loans made to the United States."

The second issue was dated August 1, 1862 and only issued in denominations of 1 and 2 Dollars.

The third issue was dated March 10, 1863 and was issued in all denominations from $5 to $1,000 Dollars.

The fourth issue, authorized by an Act of Congress on March 3, 1863 was issued in denominations from $1 to $10,000. Series dates consisted of 1869, 1874, 1875, 1878, 1880, 1907, 1917, and 1923. All of these notes carried the following obligation:
"The United States will pay to bearer __ Dollars. This note is legal tender at its face value for all debts public and private, except duties on imports and interest on the public debt."

The fifth issue, authorized by the Legal Tender Act of 1862 and 1863, consisted only of the series 1901 $10 note. The obligation on these notes was worded as follows:
"The United States of America will pay to the bearer Ten Dollars. This note is a Legal Tender for Ten Dollars subject to the provisions of Section 3588 R.S. This note is a Legal Tender at its face value for all debts public and private except duties on imports and interest on the public debt."

Small Size

Small size United States Notes were issued in series 1928, 1953, 1963, and 1966 in denominations of $1, $2, $5 and $100, but not all denominations were issued for all series. The obligation carried on series starting in 1928 read as follows: "This note is legal tender at its face value for all debts public and private except duties on imports and interest on the public debt."

The wording was changed again by an act of Congress on May 12, 1933 to read:
"This note is legal tender at its face value for all debts public and private"

The wording was changed still again with the series of 1963 to read:
"This note is legal tender for all debts, public and private"

The Act of May 3, 1878 required that circulation be maintained at $346,681,016. This was accomplished by the Treasury, in recent years, by moving the necessary amounts of the small size $100 notes, which were last printed in 1969, from one vault to another. This remained in effect until 1993 when the Legal Tender regulations were repealed. In 1996, disregarding talk of selling the obsolete small size $100 U.S. Notes to collectors, the remaining notes were destroyed.


 

Silver Certificates

Congressional Acts of Feb. 28, 1878 and Aug 4, 1886 authorized Silver Certificates. In 1878, the U.S. economy was doing quite well and the need for silver coinage outstripped the available supply. The idea was not to replace coins, but to create an easier method of exchange. The government would hold the equivalent amount of silver coins and bullion and promise to redeem the certificates on demand.

Due to the Silver Purchase Act of 1934, the redemption clause was changed to allow redemption in Silver Dollars or Silver bullion and in March 1964, the Secretary of the Treasury halted redemption in Silver Dollars. Silver Certificate legislation was abolished by Congressional Act June 4, 1963 and all redemption in silver was halted in June 24, 1968.

Large Size

Large size silver certificates consisted of 5 issues.

The first issue consisted of series 1878 and 1880 in denominations from $10 to $1,000. The obligation on these notes read,
"This certifies that there have been deposited with the Treasurer of the U.S. at Washington D.C. payable at his office to the bearer on demand ___ Silver Dollars. This certificate is receivable for customs, taxes and all public dues and when so received may be reissued."

The second issue consisted of series 1886, 1891, and 1908 in denominations of $1 to $1,000.

The third issue consisted of the "Educational" series 1896 in denominations of $1, $2, and $5.

The fourth issue was series 1899 in denominations of $1, $2, and $5.

The fifth issue of 1923 was printed in denominations of $1 and $5. The obligation on the last four series of large size silver certificates read,
"This certifies that there have been deposited in the Treasury of the United States ___ Silver Dollars payable to the bearer on demand. This certificate is receivable for customs, taxes and all public dues and when so received may be reissued."

Small Size

Small size silver certificates were issued in denominations of $1, $5 and $10 in series 1928, 1933, 1934, 1935, 1953, and 1957. The obligation on the 1928 series silver certificates stated that they were redeemable for "One Silver Dollar", which was changed in 1934 to read "One Dollar in Silver."

It should be mentioned that within this category are the WW II Emergency $1.00 Issues of Hawaii and North Africa designations, along with an "R" and "S" Experimental series. Higher denomination Emergency Issues were all FRNs for the Hawaii Issue and Sliver Certificates for the North Africa Issues.


 

Gold Certificates

Gold Certificates were authorized by the Currency Act of March 3, 1863 and were issued in series from 1865 to 1934. The earlier Gold Certificates, due to their higher face values, were not intended for general circulation, but were used almost exclusively in interbank channels to settle gold accounts.

70 years after being authorized, Gold Certificates met their demise by the Gold Reserve Act of 1933. On December 28, 1933 the Secretary of the Treasury, Henry Morgenthau, Jr., issued an order forbidding the holding of Gold Certificates and required their surrender. Banks were ordered to turn in all stocks of gold certificates as well as the general public. A provision had been made for collectors allowing them to retain their collection of gold coins, but this provision did not include Gold Certificates. Finally, 31 years later on April 24, 1964, the Secretary of the Treasury, C. Douglas Dillon, issued regulations removing all restrictions on the acquisition or holding of Gold Certificates that were issued by the US Government prior to January 30, 1934. This covered notes up to Series 1928 only.

Large Size

Large Size Gold Certificates consisted of 9 issues and were authorized by the Currency Act of March 3, 1863. The first, second, third and sixth issues were mainly used between banks and clearinghouses and not intended for general circulation.

The first issue was printed in denominations of $20, $100, $500, $1,000, $5,000 and $10,000 and is extremely rare. The obligation on the first and second issues read;
"It is hereby certified that ___ Dollars have been deposited with the Assistant Treasurer of the United States in New York payable in gold at his office to the bearer."

The second issue was printed in denominations of $100, $500, $1,000, $5,000 and $10,000 with only one example of the $500 note known.

The third issue consisted of series 1875 and was printed in denominations of $100, $500 and $1000 and was a blank back one-face design. The obligation on the third issue read;
"It is hereby certified that ___ Dollars have been deposited with the Assistant Treasurer of the United States payable in gold at his office to the order of ....". These notes were countersigned and dated by hand.

Gold Certificates entered general circulation with the fourth issue and the obligation was changed to read: "This certifies that there have been deposited in the Treasury of the United States of America ___ Dollars in gold coin repayable to the bearer on demand." The word "repayable" was replaced with "payable" after series 1882. Series 1922 also bore the following: "This certificate is a legal tender in the amount thereof in payment of all debts and dues public and private. Acts of March 14, 1900, as amended and December 24, 1919."

The fourth issue consisted of series 1882 and was printed in denominations of $20, $50, $100, $500, $1,000, $5,000 and $10,000.

The fifth issue consisted of series 1888 and was printed in denominations of $5000 and $10000.

The sixth issue consisted of series 1900 and was printed in a $10,000 denomination only. This issue was used primarily between banks and clearing houses.

The seventh issue consisted of the following series and denominations:
Series 1905 $20 (Considered the most beautiful Gold Certificate because of a red seal and serial numbers and on the back, gold tinted center and gold border.)
Series 1906 $20
Series 1907 $10

The eighth issue consisted of series 1907 in a $1,000 denomination only.

The ninth issue consisted of the following series and denominations:
Series 1913 $50
Series 1922 $10, $20, $50, $100, $1,000

Small Size

 

Small Size Gold Certificates consisted of three series. The seals and serial numbers continued to be printed in gold ink, but the back lost the distinctive gold color and used the standardized green rear design of the other small size notes.

The obligation was changed to read: "This certifies that there have been deposited in the Treasury of the United States of America _____ Dollars in gold coin payable to the bearer on demand." "This certificate is a legal tender in the amount thereof in payment of all debts and dues public and private."

Series 1928 was printed in denominations of $10, $20, $50, $100, $1,000, $5,000 and $10,000.

Series 1928A was printed in denominations of $10, $20 and $100, but were never released to the public. BEP records indicate that notes were delivered, but none appear to have been released to the public. There is some discrepancy as to whether these notes were destroyed or whether they are in a storage vault at the United States Treasury building in Washington, DC.

Series 1934 was printed in a $100,000 denomination only which was intended for use only in fiscal channels and was never released into general circulation. This would make them illegal to be held, even by collectors.



 

Federal Reserve Bank Notes

Large Size

Often confused with the Federal Reserve Notes, which are currency issues of the Federal Reserve System itself, Federal Reserve Bank Notes were issued by the 12 individual Federal Reserve Banks, much like the National Bank Notes.

Indeed, Federal Reserve Bank Notes, large and small size, carry the "National Currency" inscription.
In the large size note-issuing period, the similarity of Federal Reserve Bank Notes to Federal Reserve notes extended to nearly identical back designs in the $5-$50 denominations. FRBNs were also issued in $1 and $2 denominations, while the FRNs were issued in value from $5 through $10,000.

Two separate issues of Federal Reserve Bank Notes comprise the large size issue, while there was a single issue in small size.

The Series 1915 FRBNs were authorized under the terms of the Federal Reserve Act of Dec. 23, 1913. Issued only in denominations of $5-$20, only the banks in Atlanta, Chicago, Kansas City, Dallas and San Francisco participated, with the Frisco bank issuing only $5s.

Like the National Bank Notes, the obligation to pay the bearer on the FRBNs is made by the issuing bank, rather than the Fed system or U.S. Government. The security notice on the 1915 issue reads: "Secured by United States bonds deposited with the Treasurer of the United States."

That obligation was changed for the Series 1918 FRBNS, issued under authority of a Congressional Act of April 23, 1918. The modification reads: "Secured by United States certificates of indebtedness or United States one-year gold notes, deposited with the Treasurer of the United States."

The Series 1918 FRBNs consist of all denominations from $1 through $50, though again, not all 12 banks issued all denominations. For instance, only the Atlanta and St. Louis banks issued $20 Series 1918 FRBNS, while only St. Louis issued $50s.

Spurred initially by demand for the attractive "Battleship" back design of the $2, and the defiant eagle on the $1 (symbols of America's defense posture in World War 1), all large size FRBNs are actively collected today, especially in new condition. A wealth of combinations of U.S. Government signatures combined with signatures of the various Governors and Cashiers of the individual issuing banks, creates myriad varieties to keep the series challenging.

Also contributing to the challenge is the sheer scarcity of surviving specimens. Treasury sources indicate just over $2 million worth of FRBNs outstanding, from a total issue of more than $760 million.

Small Size

 

The small size Federal Reserve Bank Notes were an emergency currency issue authorized March 9, 1933, to inject cash into the economy to combat heavy withdrawals from the Federal Reserve System in the first months of that year.

FRBNs in the small size were printed on currency stock prepared for the regular Series 1929 National Currency. Changes consisted of overprinting several elements. The President (and sometimes Cashier) title at the bottom of the notes was obliterated, and replaced with Governor, and the appropriate signatures of those Federal Reserve Bank officers engraved. There are, however, three exceptions to the Cashier-Governor combination on the small size FRBNS. On the notes of the Chicago bank, the signatures are those of the Assistant Deputy Governor and Governor; for New York, the signature of the Deputy Governor replaces that of the Cashier, and in the St. Louis district, the Controller signed instead of the Cashier.

In the places where the National Bank's charter number would have been imprinted, the proper district letter of the issuing bank appears in heavy black block type. At top of the note, near the obligation, a line was added to read: "or by like deposit of other securities."

Like the regular National Bank Notes of the small size era, the Treasury seal and serial number on the Federal Reserve Bank Notes are in brown ink.

Collector demand for this type has been almost nonexistent until recent years. Now, however, the true rarity of some banks and denominations ($5-$100), especially in star notes, is being appreciated.




 

Federal Reserve Notes

Large Size

Authorized by the Federal Reserve Act of Dec. 23, 1913 and first issued in 1914, the Federal Reserve Note is the only type of U.S. paper money that continues in production today.

The large size issues of FRNs are in two series, 1914, in denominations from $5-$100, and 1918, in denominations from $500-$10,000. Additionally, two distinctive varieties of 1914 notes exist, those with red Treasury seal and serial number, and those with the elements in blue. The Red Seal 1914 FRNs are considerably scarcer than the blue.

While they are issued to circulation through the 12 Federal Reserve Banks, the FRNs are an obligation of the United States Government, rather than bank named thereon (unlike the Federal Reserve Bank Notes). Neither are Federal Reserve Notes secured by government bonds, precious metals or other reserves. The obligation on FRNs simply states that: "The United States of America will pay to the bearer on demand ___ dollars."

On back, the redemption qualities of the large size FRNs was spelled out thusly: "This note is receivable by all National and member banks and Federal Reserve Banks and for all taxes, customs and other public dues. It is redeemable in gold on demand at the Treasury Department of the United States in the city of Washington, District of Columbia or in gold or lawful money at any Federal Reserve Bank."

This redeemable-in-gold clause continued in use on the Series 1928 small size FRNS, but was revoked with the passage of the Gold Reserve Act of 1933. The obligation, beginning with the Series 1934 notes, was modified to read: "This note is legal tender for all debts, public and private, and is redeemable in lawful money at the United States Treasury, or at any Federal Reserve Bank."

Beginning with Series 1963, the obligation was changed to its present form: "This note is legal tender for all debts, public and private."

Wide variances in the number of notes printed for each bank in any particular series of a denomination have created many challenging issues within the Federal Reserve Note series, both large and small size.

NOTE: Three interesting, if not altogether popular among collectors, varieties exist within the large size FRNs bearing the White-MelIon Federal signature combination, and two within the Burke-McAdoo combination notes. The variations deal with the size and placement of the numeral-letter combination designating the bank through which the notes were issued, and appearing in the lower left corner of the face. The earliest variety has a large size combination, matching that in the upper right corner of the note. The second variety has the combination greatly reduced (compared to that in the upper right). The third reverts to the larger size, but the combination has been moved higher and more to the left, while the Treasury and Fed Bank seals on each end of this variety have been moved closer to center. Not all three varieties exist on every bank in every combination.

Small Size

 

Virtually the only type of U.S. paper money encountered in circulation today is the Federal Reserve Note, in denominations of $1-100. Beginning with the series 1990, $100 and $50 notes new security features have been added, including a metallic strip and micro printing. A second printing plant was opened at Fort Worth, Texas in 1990, with the notes identified by a "FW" prefix on the face plate check number.

Authorization continued in the small size period for FRNs to be issued in denominations from $5-$10,000. With the demise of the Silver Certificate $1 bill in 1963, that denomination was moved into the FRN realm. The Bicentennial in 1976 led to the re-introduction of the $2 note, which had last been issued as a United States Note in 1966, in the guise of a green-seal Federal Reserve Note.

No Federal Reserve Note of denomination higher than $100 has been printed since 1945, and since 1969, all notes of $500 and higher face value have been actively retired as they are turned into the Federal Reserve System.



 

Treasury or Coin Notes

 

Pushed through Congress by the silver mining industry, the authorizing legislation of July 14, 1890, which created the Treasury Notes carefully did not specify that they be redeemable in silver; only that they be issued to pay for silver bullion purchased by the Treasury and that they be payable "in Coin" (hence the more commonly encountered name Coin Notes). With the co-operation of Treasury officials, silver sellers were able to turn their bullion in at artificially high official prices, receive the Coin Notes in payment, and redeem them immediately for gold coin and a tidy profit.

In denominations of $1, $2, $5, $10, $20, $100 and $1,000, the Coin Notes were issued in Series 1890 and 1891 form, the 1890 issue bearing ornately engraved green back designs that filled the print area. The $50 was issued only in Series of 1891, and the $500 note, which had been designed and a plate prepared with the portrait of Gen. William T. Sherman, was not issued at all. It was felt that even as late as 25 years after the Civil War, the use of Sherman's portrait on a currency note would inflame passions in the South. The 1890 notes are much scarcer and in greater demand than the Series 1891 issue, especially in new condition.

Face and back obligations of the Coin Notes are interesting and unique. They read: "This United States of America will pay to bearer ___ dollars in coin." And, "This note is a legal tender at its face value in payment of all debts public and private except when otherwise expressly stipulated in the contract."




 

National Bank Notes

 

After the US Civil War (1863-1935), the US government created charters for private banks to print paper money that was backed by the US Government. There were a very large number of national banks chartered from all over the USA (e.g. Nashville, Tennessee; Key West, Florida; Bismarck, North Dakota; L.A., California). The Charter Numbers which identified the various individual Banks ran from 1 thru 14,320, with notes being issued in denominations that varied over the years anywhere between $1.00 & $1000.00, which then were also mandated by numerous Congressional Acts and are further more involved having a multitude of design changes. "Nationals", as they are called, are very complex by nature of not only the many different banks issuing them, but even further by the Charter & Series variations. National Bank Notes are a very specialized field and are normally collected by a distinct few who can devote a great deal of time and effort to this interesting venue.


 

Others

 

There are only several other types of notes ever produced not mentioned above that are extreemly rare. They are:

"Demand Notes"

"Compound Interest Treasury Notes"

"Interest Bearing Notes"

"Refunding Certificates"

"National Gold Bank Notes"

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Links

 

Great Seal of the United States of America

The Department of the Treasury

FAQs About U. S. Currency

The Bureau of Engraving and Printing

Other Internet Auctions

More Auctions

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