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U.S. Dollar Debasement – A Unique Historical Timeline

U.S. Dollar Debasement - A Unique Historical Timeline

Before Dollar Debasement: The Classical Gold Standard

Before the Great Depression, the United States operated under a gold standard.  This meant that most U.S. currency could be freely exchanged at banks or the U.S. Treasury for gold coins.  This was done at the rate of $20.67 for one troy ounce of gold.  In other words, a $20 gold certificate could be redeemed for a double-eagle gold coin which contained almost a full troy ounce of pure gold.

This conversion mechanism constrained growth in the money supply, meaning that there was effectively no inflation for as long as the system remained in place.  In addition, silver certificates that were directly redeemable for silver dollars also circulated in the economy, providing additional protection against U.S. dollar debasement.

The classical gold standard provided unprecedented financial stability and economic growth - not only in the United States, but also in other countries that had adopted it, including Great Britain, France, Germany and Japan.  It was only with the arrival of World War I that the international gold standard began to weaken.

 

  • Early 1900s - The U.S. economy is dominated by a variety of high quality currency instruments. Gold certificates, silver certificates, United States Notes and Federal Reserve Notes (after 1914) all circulate side-by-side, along with gold and silver coins.
  • 1913 - The Federal Reserve is founded as a "banker's bank" with the stated purpose of preventing financial panics. The new institution's policies will profoundly impact the trajectory of dollar debasement in the decades to come.
  • 1914 to 1918 - World War I forces most belligerent nations to abandon the gold standard. The United States is a notable exception to this trend, which cements the country's position as an international economic power.
  • 1920s - A decade of economic expansion is driven by strong fundamentals and the newly formed Federal Reserve's outrageous "coup de whiskey" monetary policy. This has grave consequences because it foments a massive Wall Street stock market bubble that surreptitiously undermines the economy.
  • 1929 - The Great Wall Street Crash in October signals the start of the Great Depression.
  • 1931 - The collapse of Credit-Anstalt, a major Austrian bank, ushers in the most virulent phase of the Great Depression.
  • 1931 - Great Britain is forced off the gold standard in September of this year, greatly increasing monetary pressure on all countries that still maintain gold convertibility, including the United States.
  • 1933 - Franklin Delano Roosevelt assumes the Presidency and immediately calls a banking holiday. He simultaneously suspends the gold convertibility of the U.S. dollar.  A short time later, on April 5, FDR effectively nationalizes the country's gold, declaring that all privately-held gold coins and gold certificates must be exchanged for non-gold currency.
  • 1934 - FDR increases the price of gold from $20.67 to $35 per troy ounce. This effectively devalues the U.S. dollar by 41%.  The classical gold standard in the United States is officially dead and the modern era of dollar debasement begins.
  • 1934 - The U.S. Treasury commissions a final series of gold certificates. These are not intended for public circulation, but are instead used for bank reserves and inter-bank transfers.
  • 1935 - FDR passes a law allowing the U.S. Treasury to issue small-denomination, government-backed bonds, otherwise known as savings bonds, directly to the public. Savings bonds allow U.S. citizens to invest in a safe Treasury instrument with a competitive interest rate.

 

Old U.S. Gold Certificates (Gold Seal Notes) For Sale

 

Dollar Debasement Begins: The Bretton Woods System

In the wake of the widespread devastation wrought by the Great Depression and World War II, a new international monetary framework was desperately needed.  As a result, in July 1944, 44 representatives of the allied nations, including Great Britain, the United States, France and the Soviet Union, gathered at Bretton Woods, New Hampshire to hammer out a new monetary system.

It was finally decided that the U.S. dollar would be convertible into gold at the rate of $35 for each troy ounce.  But only foreign governments and central banks would be allowed to exercise this conversion feature, not individuals.  In addition, all other countries would tie the value of their currencies to the dollar.

Although silver certificates and silver coins freely circulated in America during this period, gold bullion was illegal for U.S. citizens to own.  Each $1 silver certificate was exchangeable into a silver dollar containing 0.77344 troy ounces of pure silver.  United States Notes and Federal Reserve Notes also circulated and could be exchanged for fiduciary silver coinage (90% silver dimes, quarters and half dollars) which contained 0.7234 troy ounces of silver per $1 face value.

 

  • 1944 - The Bretton Woods system is formalized. This monetary structure is quickly adopted by most nations that are not part of the Soviet Communist Bloc.
  • 1950s - A period of international prosperity exists, with the United States acting as both the world's monetary hub and primary export destination. However, the United State's huge silver and gold reserves are gradually drawn down to pay for this flood of foreign imports.
  • Early 1960s - The rising price of silver in the international market makes it clear that the U.S. government will soon have difficulty redeeming silver certificates at their traditional rate.
  • 1964 - The U.S. government suspends the Treasury's obligation to redeem silver certificates for silver dollars, but still allows redemption for raw silver granules or bullion bars for a limited time.
  • 1964 - U.S. citizens are allowed to legally own gold certificates again. While they regain their legal tender status, they are no longer redeemable for gold.
  • 1966 - The U.S. Mint strikes its last 90% silver coins meant for circulation (which are dated 1964 due to a date freeze). The only circulating U.S. coins with any precious metal remaining are 40% silver Kennedy half dollars.  Most U.S. coinage is now copper-nickel slugs.
  • 1968 - The U.S. Treasury discontinues redeeming silver certificates in their entirety, although the notes still remain legal tender.
  • 1969 - The U.S. Treasury withdraws high denomination currency from circulation due to fears that it facilitates organized crime. But honest citizens who crave financial discretion and safety are most impacted.  This policy applies to the $500, $1,000, $5,000 and $10,000 bills.  These large denomination notes are not, however, demonetized.
  • 1970 - The 40% silver Kennedy half dollar is discontinued and replaced with a copper-nickel base metal version. There are now no coins produced by the U.S. Mint for general circulation that contain any silver.
  • 1971 - In August, President Richard Nixon stops redeeming U.S. dollars presented by foreign governments and central banks for gold. This ends the last formal link that the U.S. dollar has to precious metals, marking a new era in dollar debasement.  All currencies in the world are now fiat currencies with floating exchange rates.
  • Early 1970s - By this time, nearly all 90% U.S. silver coinage (especially dimes and quarters) have been pulled from circulation due to Gresham's Law.
  • 1973 - An international oil crisis is precipitated when Arab nations refuse to exchange their oil for now depreciated U.S. dollars at the traditional rate.
  • 1975 - After more than 40 years of being illegal, gold ownership for U.S. citizens is re-legalized.

 

Pre-1965 90% Silver U.S. Coins For Sale

 

Dollar Debasement Accelerates: The Bretton Woods II System

After the monetary chaos of the 1970s, which was characterized by persistently high inflation and frequent recessions, a monetary reform was necessary.  The U.S. Federal Reserve raised short-term interest rates to a dizzying 20% in 1980 in order to break the economy's deleterious inflationary cycle.  Once confidence in the dollar had been reestablished, a reconstituted global monetary system emerged.

Unlike the original Bretton Woods System, the Bretton Woods II System was entirely informal.  While the U.S. dollar remained at the center of the global monetary system as the world's reserve currency, it was no longer exchangeable for gold or silver at a fixed rate.  Instead, all currencies floated freely against each other.

The United States also remained the world's primary destination for exported goods, gradually leading to a slow deindustrialization of the country.

 

  • 1980 - A bubble in precious metals - gold, silver and platinum - finally bursts after the Federal Reserve raises short-term interest rates to unbelievably high levels.
  • 1982 - The U.S. Government bans the issuance of new bearer bonds. This is a blow to financial anonymity because these corporate promissory notes are similar to cash; whoever holds them receives their interest and principal payments.  However, existing bearer bonds are allowed to mature naturally.  Because the maximum term of a bond is typically no more than 30 years, the last of these bearer bonds mature by 2012.
  • 1980s - A period of relative economic prosperity develops as the Federal Reserve's relatively cautious interest rate policies discourage widespread speculation.
  • 1986 - The U.S. Mint begins striking American Gold and Silver Eagle bullion coins, giving small investors a good way to accumulate precious metals with confidence.
  • Late 1990s - The advent of the original technology bubble ushers in an era of destabilizing, serial boom-bust financial markets. This development is encouraged by a profligate Federal Reserve that reliably "bails-out" bubble speculators.
  • Mid 2000s - The Federal Reserve holds short-term interest rates too low for too long, giving rise to the Housing Bubble.
  • Mid 2000s - Due to the rising price of precious metals, the last remnants of pre-1970 silver coinage finally disappear from circulation. Looking through rolls of coins from your local bank in hopes finding the odd silver Kennedy half dollar or silver war nickel is now a lost cause.
  • 2008 - The Great Financial Crisis strikes when the Housing Bubble bursts. The Federal Reserve lowers interest rates to almost zero, causing significant dollar debasement.  The Fed, in effect, subjects the American people to intense financial repression in order to recapitalize the irresponsible banking system.
  • Late 2000s - The U.S. Treasury systematically lowers the interest rates it pays on savings bonds, making them far less attractive investments to small savers than they used to be.
  • 2009 - New York City's centralized clearinghouse for stock settlements adds a $500 fee to the cost of issuing new paper stock certificates, effectively ending their creation. However, existing paper stocks certificates are allowed to remain outstanding.
  • 2012 - The U.S. Government states that it will no longer issue physical savings bonds certificates. From now on all U.S. savings bonds are digital only, with only one minor exception.  This is the death knell of the U.S. savings bond program.
  • 2013 - The Depository Trust & Clearing Corporation (DTCC) proposes the elimination of all physical stock certificates. This would make it impossible to hold stocks anywhere except for a brokerage account or DRIP plan.
  • 2010s - The Federal Reserve again suppresses short-term interest rates, inflating a grotesque, hybrid Real Estate/Stock Market/Bond Market/Crypto-Currency Bubble. When it finally bursts, the economic fallout will be catastrophic.
  • 2016 - Several stories run in the media in favor of discontinuing the $100 bill - ostensibly because of their alleged use in criminal transactions. This is in spite of the fact that a $100 bill in 2016 only has the same purchasing power as a $10 bill in 1950.

 

1/10 Troy Ounce Gold Bullion Coins For Sale

 

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Celebrity Provenance – Why Antiques and Fame Don’t Mix

Celebrity Provenance - Why Antiques and Fame Don't Mix
Photo Credit (CC 2.0 license): Insomnia Cured Here

I was recently thinking about the importance of celebrity provenance when valuing or collecting antiques.  This was prompted, in part, by the research I did for my recent article titled "Your Hopalong Cassidy Collectibles Are a Bad Investment".

Although Hopalong Cassidy was the genesis of this idea, I wanted to more broadly examine how fame impacts a vintage item's desirability.  In this case, I define a celebrity as any politician (kings, queens and dictators count too), entertainer (including movie stars and musical artists), writer or sports star.  While celebrity provenance can take many different forms when applied to antiques, there are two primary categories.

The first is autographed photos, items or other ephemera.  The second is objects that can be definitely attributed to the ownership of a famous individual, usually via an inscription on the item or photos of the famous person in question using the item.

In any case, a fundamental question about celebrity provenance occurred to me.  How famous does a person have to be in order to render a personal effect or autograph desirable?

In my opinion, the answer to this query is fairly simple.  A person is famous enough when his or her name is familiar to the average person on the street.  But there is a catch.  It only counts once a century has passed from the peak of that celebrity's fame.

Unfortunately, as we will soon discover, lasting fame is brutally difficult to achieve.  There are precious few 19th or early 20th century celebrities who remain household names today.  However, by examining those who make the cut (and those who don't), we can make an educated guess at which antiques with celebrity provenance to purchase and which to avoid.

Let's take a look at a few examples, starting with politicians, kings and other rulers.

How many 19th century rulers are still well-known by the average person today?  I would argue that the answer is not many.  Perhaps the French Emperor Napoleon, U.S. President Abraham Lincoln and British Queen Victoria pass this grueling test.

I also think the Russian Czar Nicholas II slips onto this list, but only because he and his doomed royal family were murdered by the Bolsheviks during the Russian Revolution.  After all, nobody today remembers Nicholas' father, the Czar Alexander III.  Only the last of the Romanovs passed into legend as martyrs.

And then there are the 19th century political also rans.  These were rulers who were undoubtedly household names in their time, but whose fame inevitably faded over the decades.

I would include the French Emperor Napoleon III in this category.  Now this is where most people say, "What!  There was another Napoleon?" The answer is yes.  The original Napoleon had a nephew who resurrected the glorious French Empire 50 years after his death, but few people beyond history buffs (or Frenchmen) know it.

I also think that the Chancellor of the German Empire, Otto Von Bismarck, is another politician who doesn't quite make the grade.  Although he was an incredibly influential man during the late 19th century, my guess is that only 1 in 10 people (or fewer) would have any inkling who he was today.

Celebrity provenance is just as vitally important when considering antiques and autographs from movie stars, musicians and other entertainers.  However, we tend to run into the same durability issues as with rulers and politicians; few entertainers remain famous a century after their time in the sun.

For instance, I feel that early 20th century celebrities Charlie Chaplin and Harry Houdini are fairly safe bets.  Even today most people know who these superstars were.

Silent film star Rudolph Valentino is a distinct maybe.  Although he was wildly popular in the 1920s, Valentino's continued name recognition today is most likely due to his untimely and tragic death in 1926.  Nothing preserves a star's memory better than dying young and at the height of his (or her) fame.

But many of the silent film era's biggest stars remain on the cusp in the modern age.  Clara Bow (the original "It Girl"), Buster Keaton, Greta Garbo and Douglas Fairbanks might be familiar to early film aficionados, but few Millennials will recognize the names.  It is a fair bet that in another 50 years, the Millennials' grandkids will have absolutely no clue who these people were.

So here is our grand question.  If you are interested in collecting antiques with celebrity provenance, which famous people from the last 70 or 80 years are a good investment?

I think the list is pretty short - probably shorter than a lot of collectors would like to acknowledge.

World War II leaders like, Winston Churchill, Joseph Stalin, FDR and Adolph Hitler, are unlikely to be forgotten anytime soon.  U.S. President John F. Kennedy is also well-placed for eternal popularity.

But second tier 20th century rulers such as Ronald Reagan, Mikhail Gorbachev and Margaret Thatcher are riding the bubble.  They may or may not ultimately be household names in another 100 years.

Lasting fame for movies stars is a tough sell in today's "flavor-of-the-month" entertainment world.  But I think that Humphrey Bogart, James Dean, Elizabeth Taylor and Arnold Schwarzenegger could be good enough.

As an aside, I'm under no illusions that Arnold Schwarzenegger was a great actor, but he did become both a pre-internet meme (I'll be back!) and a successful politician (elected governor of California).  Sometimes it isn't the truly great ones who are remembered.  As they say in Hollywood, fame is a bitch.

When it comes to musicians and desirable celebrity provenance, I believe the 20th century will bequeath the future with only 3 giants: Elvis, the Beatles and Michael Jackson.  Every other musical artist of the 20th century, regardless of talent, will be an afterthought compared to these colossi.

The trend in the world of sports will probably be very similar to those in music.  Maybe a handful of great 20th century players from every major sport will be remembered.  I nominate Babe Ruth (most people know the name even if they've never watched a baseball game in their life), Pelé (I hate soccer and I still know about Pelé), Mario Andretti (I don't know a thing about racing, but the name Mario Andretti is synonymous with speed) and Arnold Palmer (a great golfer and all-round likable guy who has a drink named after him).

But the flip side of these predictions is that most vintage items with celebrity provenance from lesser known or second tier famous people will either stagnate or drop in value over the decades.

This is because people naturally have a recency bias when evaluating celebrities.  In other words, if a person was famous during your lifetime - and especially within the past 5 or 10 years - there is the tendency to believe that people in the distant future will also fondly remember this star.

But that isn't the way the world works.  As every new generation is born, they begin life with a celebrity blank slate, so to speak.  Yes, some parents may pass their love for a certain famous singer or actor down to their children, but this is very much the exception and not the rule.

The rules of celebrity provenance are clear.  If you are interested in collecting autographs or celebrity-linked antiques, stick to those figures you firmly believe will continue to be household names 50 or 100 years from today.  Just be aware that the list will probably be a lot shorter than you hope.

 

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Invest Like a Czar with Imperial Russian Antiques

Invest Like a Czar with Imperial Russian Antiques

As an antique investor, I'm constantly on the lookout for the next big thing.  Well, I think I've found it.  I've already written an article about investing like the Russian Gokhran.  But if that doesn't interest you, maybe you should invest like a Russian Czar instead!

Imperial Russian antiques are tangible reminders of a glorious, but doomed empire that had a population of 170 million subjects and covered almost 1/6 of the world's landmass.  Fine antiques from the Russian Empire have always been popular among collectors, but the recent 100th anniversary of the collapse of Czarist Russia has sparked renewed interest.

Pre-revolutionary Russia is a fascinating place and time in human history.  The Russian Empire was headed by the glamorous Romanov Dynasty during this period - a family that has entered into popular mythology over the past century.  The personal triumphs and tragedies of the Russian royal family have been recounted countless times in books, movies and television since the overthrow of the monarchy in 1917.

The history of the Romanovs reads like a fiction novel.  The dynasty first came to power in 1613, after the tumultuous Time of Troubles - a period in Russian history punctuated by famine, political infighting and foreign invasion.  However, the establishment of the Romanov bloodline put an end to this chaos, ushering in their 300 year reign as the nation's autocratic rulers.

The Romanov Dynasty ruled over a Russia that was still largely medieval in its administration and outlook, even into the 19th century. For instance, the Russian Empire only emancipated its serfs (peasants tied to land owned by the aristocracy) in 1861.  Unlike Great Britain and other Western European nations, Russia's aristocracy lacked the counterbalance of a rich and powerful industrial or mercantile elite.  As a result, the aristocracy's power was only effectively checked by the authority of the Czar and his administrators.

The end of the Russian Empire is all too familiar to students of history.  Imperial institutions, while originally dynamic and vital, gradually became ossified and ineffective over the centuries.  The Romanov monarchs systematically resisted any attempt to meaningfully curb their power or reform the government.  The Russian State Duma, a rudimentary parliament of sorts, was belatedly established in 1905.  But the Russian old guard could not abide sharing power, rendering it a token institution.

World War I was the final nail in the coffin for the vast, but teetering empire.  Widespread food shortages and a series of military setbacks strained the Russian people to their breaking point.  The Romanovs sat secluded and unaware in their lavish palaces while political and social chaos swirled around them.  Finally, the last Czar, Nicholas II, was forced to abdicate on March 15, 1917.

For anyone interested in investing in Imperial Russian antiques, I have good news.  There is a multitude of aesthetically pleasing objets d'art for the savvy connoisseur to choose from, many of them rendered in gold, silver and precious gemstones.  And while prices are usually somewhat higher than for comparable antiques from Western Europe, given the Russian Empire's romance and history, they are well worth the cost.

The first Imperial Russian antiques I want to showcase are Czarist era silver and gold coins.  The Russian Empire's main currency unit was the rouble, with kopeks acting as the equivalent of cents.  Denominations from the tiny 5 kopek coin to the substantial 1 rouble coin were all struck in silver.  Gold coins were struck in 3 rouble, 5 rouble, 7.5 rouble, 10 rouble and 15 rouble denominations.

 

Certified Czarist Imperial Russian 1/2 & 1 Rouble Silver Coins For Sale

 

These attractive coins feature the head of the reigning Czar on the obverse and the iconic double-headed Romanov eagle on the reverse.  Alternatively, some coins have the denomination surrounded by a legend or wreath in place of the Czar's bust.

If you are interested in collecting these compelling Imperial Russian antiques, I suggest that you stick to the higher denomination silver coins or the gold coins.  The larger silver coins like the half-rouble and rouble are impressive mementos of Czarist Russia and are the most likely (among the silver coins) to appreciate in value.  Any Imperial Russian gold coins are highly desirable and there is always strong demand in the market for these covetable pieces.

Imperial Russia even struck platinum coins for a brief period from the late 1820s to the mid 1840s.  These unusual pieces were the only platinum coins ever intended for general circulation in history.  Unfortunately, they were not popular with the Russian people, who were not familiar with platinum as a precious metal.  As a result, few of these platinum coins were minted and they are very scarce and expensive today.

One caveat when buying high value Imperial Russian coins is to watch out for fakes.  Because they are in perpetual demand, a significant number of counterfeit specimens have been produced over the decades.  In order to avoid this pitfall, I strongly recommend that any Czarist Russian coin you consider purchasing with a value of more than $100 be certified by a third-party grading service, either NGC or PCGS.  This advice applies doubly for gold and platinum pieces, which are the most often counterfeited.

 

Certified Czarist Imperial Russian Gold Coins For Sale

 

Jewelry is another category of Imperial Russian antiques that is well loved by collectors and investors alike.  Even though it was heavily influenced by contemporary Victorian and Edwardian stylistic trends, Czarist jewelry has a uniquely Russian look.

For example, Imperial Russian jewelry often incorporates native Russian gemstones from the Urals or Siberia.  This includes fabled gems such as green demantoid garnet, reddish-purple Siberian amethyst, glowing Baltic amber and vibrant nephrite jade.

Imperial Russian jewelry also often employs fantastic enamel-work, especially guilloche enamel.  This is the translucent, luminous enamel that the renowned Faberge workshops were famous for.  Cloisonné enamel - opaque enamel where different colors are partitioned by thin metal strips - was also a specialty of 19th and early 20th century Russian jewelers.

Like most Imperial Russian antiques, Czarist jewelry is in very high demand.  This has driven prices up considerably over the last few decades.  At this point, it is difficult to find anything worthwhile for less than about $1,000.  And the sky's the limit on the high-end of pre-revolution Russian jewelry.

 

Czarist Imperial Russian Jewelry For Sale

 

Any overview of Imperial Russian antiques would be incomplete without mentioning Czarist silverware.  It is some of the most beautiful antique silver produced in pre-World War I Europe.  A fine silver flatware or tea set was de rigueur for any respectable pre-revolutionary Russian noble family.

Antique Russian silver is normally found in two different finenesses: 84 zolotniks and 88 zolotniks.  The zolotnik fineness standard originated in medieval Russia and was gradually phased out after the Russian revolution.  96 zolotniks is pure silver, meaning 84 zolotniks is equivalent to .875 fine silver while 88 zolotniks is .917 fine silver.  Occasionally high end antique Russian silver was made from 91 zolotnik silver, which is 94.8% fine - purer than sterling silver.

Imperial Russian silver often relies on a handful of characteristic silversmithing techniques.  The first of these is bright-cut engraving, where a design or scene is shallowly cut into the otherwise plain surface of a silver object.  The second technique commonly encountered is cloisonné enamel, something Imperial Russian silver has in common with Czarist jewelry.  Finally, niello, a blackened alloy of sulfur, silver, copper and lead, was often inlaid into antique Russian silver as a contrasting decorative element.

Czarist era Russian silver is highly desirable and almost always sells for a premium versus other antique Continental European silver.  Very little good material can be found for less than around $200.  Nonetheless, pre-revolution Russian silver represents a superlative way to invest in Imperial Russian antiques.

 

Czarist Imperial Russian Silver For Sale

 

Czarist Russia represents a lost, almost legendary, way of life in which nobility and royalty lived carefree lives of sumptuous excess while factory workers, peasants and soldiers wrestled with the drudgery of everyday life.  We might not have wanted to live there ourselves, but it sure is amazing to be able to peek inside their world.  Luckily, Imperial Russian antiques give you that rare (and lucrative) opportunity.

 

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The Secret History of 20th Century U.S. Currency

The Secret History of 20th Century U.S. Currency
Photo Credit (CC 2.0 license): J W

The United States dollar is currently the world's reserve currency.  One factor that has undoubtedly helped secure this coveted position is that almost all U.S. currency issued by the Treasury or Federal Reserve from 1863 to the present is still legal tender, acceptable for debts, commerce and taxes.  This is exceptional, as most countries regularly demonetize old notes and withdraw them from circulation.

But demonetization simply does not happen in the United States (although obsolete notes are sometimes withdrawn from circulation).  In fact, when I worked as a bank teller in the mid 1990s, I found a Series 1934 $20 Federal Reserve Note in my till.  That particular $20 bill had probably been in circulation for a good 50 years, if not longer.

Many people do not realize that U.S. currency has a secret history.  There have actually been 4 (or 5, depending on how you count) different types of U.S. paper money in circulation during the 20th century.  Below I will reveal the untold history of U.S. paper money, concentrating on Series 1928 and later bills.

I consciously chose 1928 as a starting point because in that year all U.S. currency was radically redesigned.  For the sake of convenience, these new notes were shrunk in size compared to previously issued bills.  They also began to feature the presidential portraits (Lincoln on the $5, Hamilton on the $10, Jackson on the $20, etc.) that we are familiar with today.

On the whole, the average American would recognize a Series 1928 note as being essentially modern, although anti-counterfeiting design updates since 1996 have endowed newer notes with larger, off-center portraits, more color and less scrollwork.

As an FYI, a U.S. currency's series refers to the year a design was first initiated, not necessarily the date the note was printed.  So if a Series 1928 note was later followed up by a redesigned Series 1953 note, the Series 1928 note could generally have been printed anytime between 1928 and 1953.

And now let's examine the different types of U.S. currency that were issued during the 20th century:

 

U.S. Gold Certificates (Gold Seal Notes)

The United States Treasury issued gold certificates from the end of the Civil War in 1865 until the Great Depression in 1934.  As the name implies, these iconic U.S. notes with their characteristic gold seals were exchangeable into gold coin upon request.  In fact, each one has a gold clause that unequivocally states:

"This certifies that there have been deposited in the Treasury of the United States of America XX dollars in gold coin payable to the bearer on demand".

These beautifully engraved notes were issued in denominations ranging from $10 to $10,000.  Starting in 1928, U.S. gold certificates were, like all other U.S. currency, redesigned with the presidential portraits and smaller-size familiar to us today.

Unfortunately, the advent of the Great Depression in the 1930s soon put an end to the international gold standard.  The catastrophic failure of Austria's Credit-Anstalt bank in May 1931 increased pressure on over-extended banks and governments around the world, eventually forcing the Bank of England to break the British pound's peg to gold in September 1931.  After this, the United State's abandonment of the gold standard was inevitable.

 

Old U.S. Gold Certificates (Gold Seal Notes) For Sale

 

The honor of reneging on U.S. gold certificates ultimately fell to President Franklin Delano Roosevelt, who declared a nationwide banking holiday on March 5, 1933, shortly after taking office.  One month later, on April 5, 1933, FDR decreed that all U.S. gold coins and gold certificates had to be exchanged for non-gold coins and notes on pain of imprisonment.  After a short grace period, it became illegal for any American to own or possess gold certificates.

But history wasn't over for that most revered of U.S. paper currencies.  In 1934, the U.S. Treasury actually printed a new series of U.S. gold certificates in denominations of $100, $1,000, $10,000 and $100,000.  These non-circulating notes were distinguished from older, previously circulating series by their orange-toned reverse and amended gold clause, which reads "payable to the bearer on demand as authorized by law".

Series 1934 gold certificates were used exclusively for bank reserves and inter-bank transfers.  They are exceedingly rare and valuable today.

In 1964, the restriction on American citizens owning U.S. gold certificates was removed.  Although no longer redeemable for gold coin or bullion, gold certificates are still legal tender today at their stated face value.

 

U.S. Silver Certificates (Blue Seal Notes)

Silver certificates were another kind of note issued by the U.S. Treasury between 1878 and 1963.  They were redeemable at the rate of 0.77344 troy ounces of pure silver for each dollar.  Much like gold certificates, each silver certificate had the following silver clause printed on it:

"This certifies that there is on deposit in the Treasury of the United States of America X dollars in silver payable to the bearer on demand".

After 1928, U.S. silver certificates were issued in $1, $5 and $10 denominations, although denominations as high as $1,000 were printed in the late 19th century.  Post-1928, small-size notes are easily identifiable by their blue treasury seal.

 

Old U.S. Silver Certificates (Blue Seal Notes) For Sale

 

The only exceptions to this rule were a couple of World War II emergency issues.  The first of these was a $1 silver certificate with a brown seal and the word "Hawaii" over-printed in several areas.  The other was a set of $1, $5 and $10 yellow seal silver certificates intended for circulation among U.S. troops in allied-occupied North Africa.  Both types of these distinctive notes were issued so that they could be easily demonetized if those territories were overrun by Axis forces.

By the early 1960s, it had become increasingly apparent that the rising price of silver would soon render it impossible for the U.S. Treasury to continue redeeming silver certificates.  As a result, the legal obligation to exchange these notes for silver dollars was suspended on March 25, 1964, with a provision that they could still be redeemed for the appropriate weight of raw silver granules or bullion bars until June 24, 1968.  It has been speculated that the U.S. treasury modified the redemption of these notes from coins to bullion in an attempt to dissuade people from cashing them in.

Much like U.S. gold certificates after 1933, U.S. silver certificates ceased to be exchangeable for any precious metal after 1968.  However, they still remain legal tender.

 

United States Notes (Red Seal Notes)

United States Notes were another variety of paper money issued by the U.S. Treasury during the 20th century.  These notes, which are also known as Legal Tender Notes, are characterized by their red seals.  They were first issued during the Civil War in 1863 and last released into circulation in 1971.

Since 1928, red seal United States notes have been issued in $1, $2 and $5 denominations, along with the singular and uncommon Series 1966 $100 bill.

 

Old United States Notes (Red Seal Notes) For Sale

 

United States Notes have not been redeemable for specie since the U.S. abandoned the gold standard in 1933.  Consequently, they were eventually determined to be redundant, and were gradually withdrawn from circulation in favor of Federal Reserve Notes in the 1970s.  However, like all of the other currencies detailed here, United States Notes continue to be legal tender.

 

U.S. Federal Reserve Notes (Green Seal Notes)

Federal Reserve Notes are the most recognizable of 20th century U.S. currency types because they are the paper money we still use today.  First printed in 1914 (in a large-size format), Federal Reserve Notes have been issued in denominations ranging from the lowly $1 bill to the mammoth $10,000 note.

The chief distinction between red seal United States Notes and green seal U.S. Federal Reserve Notes is that the latter have been issued by the Federal Reserve instead of the United States Treasury.

 

Old U.S. Federal Reserve Notes (Green Seal Notes) For Sale

 

In addition, Congress has decreed that Federal Reserve Banks must retain collateral that is equal in value to all outstanding Federal Reserve Notes.  This collateral primarily consists of gold certificates (including the intriguing Series 1934 gold certificates mentioned above) and U.S. Treasury securities.  Theoretically, Federal Reserve Notes held by the public have a first lien on these assets, but are not redeemable for them.

Federal Reserve Notes eventually displaced gold certificates, silver certificates and United States Notes to be the only form of paper money issued in the U.S. by the late 20th century.  All Federal Reserve Notes ever issued are still legal tender.

 

High Denomination U.S. Paper Currency

High denomination U.S. currency refers to anything larger than a $100 bill.  These include the $500 note featuring President William McKinley, the $1,000 note with President Grover Cleveland, the $5,000 note with President James Madison and the $10,000 note with Treasury Secretary Salmon P. Chase.  The U.S. Treasury even issued an elusive $100,000 gold certificate with the portrait of President Woodrow Wilson on it.  However, only a handful of these ultra-rare $100,000 bills survive - all of which are in the possession of the Federal Government.

Although I've placed high denomination U.S. currency in its own category, all of these notes technically belong to one of the previously discussed types: gold certificates, silver certificates, United States Notes or Federal Reserve Notes.

High denomination U.S. paper money was regularly printed in the late 19th through the mid 20th century.  In most instances, these monster notes were used primarily by banks and other financial institutions.  Few individuals ever saw a circulating, high denomination bill due to their immense purchasing power.

For example, a $1,000 bill issued 90 years ago in 1928 would be equivalent to almost $15,000 in 2018 dollars, due to inflation.

 

Old U.S. High Denomination Certified $500 & $1,000 Bills For Sale

 

High denomination U.S. currency was last printed in 1946, although they remained in circulation until they were actively withdrawn in 1969.  The decision to withdraw large denomination bills was largely driven by political anxiety over their potential use in organized crime, although there was never any explicit evidence that this happened systematically.

As a result, high denomination U.S. currency is very scarce today, especially denominations above $1,000.  Because there are a fair number of counterfeit notes targeting collectors, buyers of high denomination notes are advised to only purchase bills that have been third-party certified by Paper Money Guaranty (PMG) or PCGS Currency.

One of the most interesting high denomination notes is the Series 1900 $10,000 bill.  It is the only U.S. high denomination note found in the wild that is not currently legal tender.  Consequently, when these notes occasionally come up for sale, they sell for significantly less than face value - something that collectors love.

 

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