The History of Silver Certificates

Silver certificates were replaced by federal reserve notes in 1963.

The rapid growth, by way of westward expansion, of the U.S. in the late 19th century led to economic chaos. The federal government wanted to boost its holdings of gold and silver to help stabilize the currency, and began issuing silver certificates in exchange for silver dollars.

First Issue

The U.S. Treasury Department started printing paper money in 1877, prior to which private banks printed paper money for the government prior. The first silver certificates were issued in 1878.

Popularity

Silver and gold certificates became the most popular forms of paper money, due to the fact that they were redeemable for gold or silver coins.

The Great Depression

The Great Depression of the 1930s caused a run on gold and silver. The U.S. government outlawed individual ownership of gold and silver. Silver certificates became the major form of paper currency.

Last Issue

In 1963 the price of silver rose to $1.29 an ounce. To prevent a run on silver, silver certificates were outlawed by Congress, and the Federal Reserve System began issuing Federal Reserve Notes in $1 and $2 denominations.

Historical Note

The Treasury Department issued silver certificates with an image of Martha Washington in 1886. This became the only US paper currency to have a woman's picture on it.

References

• Federal Reserve Board of San Francisco: 1995 Annual Report
• friesian.com: Six Kinds of United States Paper Currency