Silver certificate - Definition and Overview

A picture of a silver certificate (top image is the obverse of the certificate, bottom image is the reverse of the certificate).

The Silver Certificate was used for a period of time in United States history as a form of paper currency. They were produced in response to silver agitation by citizens angered by the Crime of '73, which placed the United States on the gold standard. The certificate was matched to the same amount of value in silver coinage; for example: fifty silver dollars = one fifty dollar silver certificate.

Distinguishing Features

There are a few features that will always denote a silver certificate.

Seal and Serial Number Color

The seal and serial number on many of the first silver certificates issued was of red or brown color. It was not until Series 1899 for the $1, $2, and $5 denominations that the seal and number colors were officially, and permanently, changed to blue. (This occurred at different points for denominations above $5.)

Obligation

The obligation of a note denotes how much of a specific commodity the government of a country will "pay to the bearer." On most large-size silver certificates, the obligation reads: "This certifies that there have/has been deposited in the Treasury of the United States of America (blank) silver dollar(s) payable to the bearer on demand." On small-sized silver certificates beginning with Series 1934, in order to denote current location of deposit, it was changed to read: "This certifies that there is on deposit in the Treasury of the United States of America (blank) dollar(s) in silver payable to the bearer on demand."

History

The Beginning of an Age

The Crime of 1873 placed the United States on the gold standard, as opposed to a bimetallic standard that had been created by Alexander Hamilton. Many of the poorer citizens saw this as a "crime," and silver agitation began. The Bland-Allison Act, as it came to be known, was passed on February 28, 1878 by Congress. It did not provide for the "free and unlimited coinage of silver" as demanded by Western miners, but it did require the United States Treasury to purchase between $2 million and $4 million of silver bullion from mining companies in the West. The silver coins that were to be minted would be legal tender for all debts, like gold. These coins, however, were quite heavy in weight, so the government applied their gold certificate strategy to the silver. Say there were five silver dollars in the treasury. The government would print a $5 silver certificate against the dollars, providing a somewhat easier medium of exchange. The idea was kept, and Series 1878 was printed in denominations of $10 to $1000.

New Series and Changes Along the Way

Coming soon.

The First Small-size Silver Certificates

In 1928, the United States Treasury decided to reduce the size of its currency in order to speedup transactions, and also to cut costs. By this time, the Federal Reserve had taken over much of the currency market, and the prices of gold and silver had risen greatly. For Series 1928, only $1 silver certificates were produced. Fives and tens of this time were mainly Federal Reserve Notes, which were backed by and redeemable in gold. All this would change, however, with the beginning of the Great Depression in October 1929. The United States was plunged into an economic disaster of profound proportions. Many citizens blamed the fluctuating price of gold, which directly affected the U.S. dollar because it was pegged to the value of gold.

President-elect Franklin Roosevelt felt the same way. He persuaded Congress to recall all gold coins, gold bullion, and gold certificates, which circulated alongside silver certificates. This prompted Congress to quietly place the U.S. on the silver standard. On May 12, 1933, the Agricultural Adjustment Act was passed, which included a clause allowing for the pumping of silver into the market to replace the gold. A new Series 1933 $10 silver certificate was printed and released, but not many were released into circulation.

In 1934, a law was passed in Congress that changed the obligation on silver certificates so as to denote the current location of the silver. This law also allowed the government to exchange silver bullion for the certificates, not just silver dollars. The 1933, along with its sister, the 1933A, $10 silvers, as well as the 1928 $1 silvers were phased out and replaced with certificates of Series 1934. The small-size $5 silver certificate was introduced with this series, as well.

The End of the Silver Certificates

Silver certificates circulated, mainly in the $1 denomination, widely throughout the United States in the years following 1934. When the '34s wore out, they were replaced with a new, more modern-looking Series 1953 (1935 for the $1 silvers; see below), with the same face changes as the Series 1950 Federal Reserve Notes had experienced. However, the silver certificates began to disappear from circulation during the 1940s and 1950s. The amount of silver certificates in circulation depended directly upon the amount of silver bullion in the Treasury vaults. As people redeemed the certificates for bullion or silver dollars, the notes were shredded, because the notes had lost their backing and could not be recirculated unless there were more silver being produced. The price of silver was also rising. In 1960, it was nearing $1.29, which meant that silver dollars were worth more than $1. This meant that people would receive their silver dollars, and melt them down for the bullion, thereby reducing the amount of silver in circulation, which was already falling.

In March 1964, the Secretary of the Treasury halted redemption of silver certificates for Silver Dollars. In the 1970s, large numbers of the remaining silver dollars in the mint vaults were sold to the collecting public for collector value. Silver Certificates were abolished by Congress on June 4, 1963 and all redemption in silver ceased on June 24, 1968. With that, America's currency had become completely fiat; that is, a $5 bill is worth five dollars because the government says so.

Complete Series Catalogue

This is a catalogue of all the series of Silver Certificates prinhted. Each entry will include: series year, general description, and printing figures if available.

Large-Size Silver Certificates

Coming Soon.

Small-Size Silver Certificates

The silver certificate replaced the gold certificate when the United States government balanced its currency against the silver standard instead of the gold standard. The decision between gold and silver backing of US currency was one of the most hotly debated topics of the 1890s and figured prominently in at least one presidential election.