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When the $1 note was silver-backed

Many coin collectors still remember when silver coins disappeared from circulation following the implementation of the Coinage Act of 1965, but fewer remember the parallel disappearance of $1 Silver Certificates.

While there were also $5 and $10 Silver Certificates, until the $1 Federal Reserve Note was introduced for the first time with the Series 1963 issue, the $1 Silver Certificate basically was the only current $1 note issued by the United States for 35 years.

So not only was the government replacing silver coins as fast as it could with copper-nickel clad issues, it was also replacing the circulating $1 Silver Certificates with $1 Federal Reserve Notes.

As you might expect, a Silver Certificate was something you could present to the Treasury and ask for silver dollars (later silver bullion), but this right was terminated June 24, 1968.

At that point, the Silver Certificate was still legal tender, but it was no longer convertible into precious metal. It is an historical relic today that you can still spend if you are of a mind to and the clerk doesn’t think you are trying to pass a counterfeit.

The story of the $1 Silver Certificate, which dominated circulation for decades, is truly an interesting story and by assembling a collection of large-size (pre-1929) and small-size $1 Silver Certificates you can have a great collection while learning the story of one of the most interesting of all notes ever issued by the United States.

It would be safe to suggest that the Silver Certificate was every bit as much a result of the vast wealth of silver found in the Comstock Lode as the Morgan dollar and in fact, the two are very closely related. To understand the story, we have to go back to the Wild West and the Comstock Lode. The silver discovered in Nevada was a great boon to the local economy but it was also a fragile one as the silver was one of the largest discoveries in history. High production levels threatened the price of silver and that in turn threatened the profits of those who owned the mines.

The burning question of the day was what to do with all that silver and there was an assortment of ideas that seemed to involve using the government to purchase the silver to prop up the price, the very opposite of today’s problem.
There was first an attempt at a Trade dollar issued in 1873 and that coin worked to soak up silver supplies for a couple of years to a limited degree, but the Trade dollar was never accepted in the way some had hoped in China. China preferred Mexican pesos. Once its legal-tender status was revoked, the Trade dollar became a real problem in domestic circulation as they were trading at less than their face value, which was causing some who accepted them as a dollar to lose money.

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There were other ideas to use silver like a 20-cent piece and that worked for about six months in 1875 before people started confusing them with quarters. In addition, the 20-cent piece was never going to use enough silver to help with the problem. At about the time the 20-cent piece failed, there was the Bland-Allison Act of 1878, which called for the purchase of millions of ounces of silver each month that would be used to make silver dollars. It was a case of “if at first you don’t succeed, try something even bigger.”

The United States had no particular use for millions and millions of silver dollars. People were almost as averse to using the coin as they are today but that really did not matter to those supporting the Bland-Allison Act as the purpose was not really to have people using silver dollars. The purpose was simply to have the government buying excess silver and striking dollars out of it anyway.

The way the great silver buying experiment worked is that the government bought the silver and then made the silver dollars, which in turn were used as backing for Silver Certificates, which were first authorized in legislation passed on Feb. 28, 1876, and then in later legislation passed on Aug. 4, 1886.

Since there was an enormous amount of silver, it should not be too surprising that the first Series 1878 and 1880 Silver Certificates were in higher denominations from $10-$1,000. With time, however, it was apparent that more use of Silver Certificates was needed and that meant lower denominations.

The first $1 Silver Certificate appeared as part of the Series 1886. It was a very interesting note that featured Martha Washington as part of its face design from a Jalabert painting engraved by Charles Burt. The use of Martha Washington was significant as it marked the first time an American woman was used on a note as the only prior use of women had been on private bank notes (called obsolete notes by collectors) and issues of the Confederate States of America.

Realistically, the Series 1886 $1 as well as the Series 1891, which still used Martha Washington but which has a different back design, are available with the most available example of the Series 1886 in Fine being roughly $250 while a Series 1891 in the same grade is $275. In Choice Crisp Uncirculated 63 a Series 1886 would currently cost roughly $2,000 while a Series 1891 is $1,425.

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In every case, the price listings can hide the true scarcity of the notes. The Series 1886 has a number of signature and seal combinations and many are tough especially in upper grades. The Choice CU 63 population of brown seal Rosecrans-Nebeker Series 1886 $1 notes is scarce but it can be found and for the Series 1891 there are only two signature combinations with the Rosecrans-Nebeker signature combination the scarcer of the two.

There are supplies of the Series 1896 $1 Silver Certificate but they are never enough to meet the demand as the $1 Series 1896 ranks as one of the most popular of all notes of the United States.

The $1 Series 1896 Silver Certificate is part of the famous “Educational Series” and features a face design of “History Instructing Youth,” which was designed by Will H. Low and was engraved by Charles Schlecht.

The design includes an allegorical scene along with the Washington Monument and Capitol in the background while names of great Americans are found in wreaths around the border. The back is also worth noting as it features portraits of Martha and George Washington with the Martha Washington being basically the same as used on the earlier series while the George Washington was engraved by Alfred Sealey.

The Series 1896 $1 Silver Certificate is currently priced at about $325 in fine and $2,400 in Choice CU 63. There are two signature combinations although in this case the big goal of most collectors is to simply acquire a type example. Naturally because the design is so popular because of its artistic qualities there is enormous pressure on the supply of top grade examples.

The Series 1896 was followed by the Series 1899, which while popular is not in the same class as the 1896. The face design of the Series 1899 features a large eagle over the small portraits of Abraham Lincoln and U.S. Grant in an engraving effort by G.F.C. Smillie. With a significant number of signature combinations, the Series 1899 could well be a collection by itself. The most available of the examples are currently priced at $150 in fine and $400 in Choice CU 63, but there are a number like those with a Napier-Thompson signature combination which command premiums.

The final type of large-size $1 Silver Certificate is the Series 1923. The Series 1923 has an interesting design for a different reason as you can see clearly in the Washington face design the sign of things to come as the same design is basically still in use for the $1 Federal Reserve Note. While the notes would change in wording and other aspects, the Series 1923 $1 Silver Certificate is clearly a transitional note.

At the time the era of large-size notes was coming to an end, the $1 Silver Certificate was certainly important, but it was not the only $1 note in circulation. There were $1 United States Notes with red seals and serial numbers as opposed to the blue that became standard on the Silver Certificate.

During World War I $1 Federal Reserve Bank Notes circulated in some numbers. These were essentially emergency issues because of the disruption to the economy causes by the war and the melting of 270 million silver dollars backing Silver Certificates because of the 1918 Pittman Act.

The situation would change with the introduction of small-size notes in 1929 with Series 1928 date. By that time the legislation requiring silver purchases had long since expired and the United States had been officially on the gold standard since 1900.

It is hard today to imagine the system of paper money that used many different kinds of money in the late 1920s. The Silver Certificate was joined by United States Notes, National Bank Notes, Gold Certificates and Federal Reserve Notes on a regular basis.

However, the $1 denomination for 35 years was the Silver Certificate with a minor exception during the Depression.
The role of the Silver Certificate, which would primarily be the $1 denomination, was perhaps a decision reflecting the fact that the historic relationship between Silver Certificates and the supply of silver dollars was still in place.

The whole idea of reducing the size of notes had been a long time in the works as the first study of the matter had been made in the Taft Administration but for a variety of reasons action on changing sizes was delayed.

In 1925 secretary of the Treasury Andrew Mellon picked up the ball that had been dropped a dozen years earlier. He appointed a committee to study how to implement the change. Design standardization also was to occur. Mellon accepted the report of his committee and ordered the change to begin in May of 1927, with the first of the new small-size notes being released in July 1929.

Although there would later be $5 and $10 small-size Silver Certificates, they were basically emergency issues brought on by the Great Depression. At least initially the only small-size Silver Certificate would be the $1, but of course as the lowest denomination bank note, the $1 Silver Certificate would be the note most often encountered by most Americans.

The initial printing of the Series 1928 $1 Silver Certificate was more than 638 million pieces. The only other small-size $1 note was dated 1928 but was not printed until some years later and it was the $1 United States Note, which had a total printing of less than 2 million pieces and even with that low total initially only 5,000 of the total would be released, meaning there is no doubt that the small-size $1 note of the United States was expected to be the Silver Certificate.

With such a large printing, the Series 1928 $1 Silver Certificate is an historical note. The good news for collectors is that it is relatively available. The Series 1928 is currently priced at $100 in Choice CU 63, but if you will settle for a fine, the price is just $25.

The 1928 star replacement note is $500 in Choice CU 63. An actual star appears at the end of the serial number on these notes.

The $1 Silver Certificates break down into a couple of groups. The first is comprised of earlier series prior to the back design change, which took place with the Series 1935 and it is this first group where the majority of the better notes are found.

Unlike coins, dates do not a change annual on paper money. Letters are added as signatures change or designs are modified. Series 1928 was followed by A series 1928A through Series 1928E.

One of the better notes is the Series 1928C, where a regular note is roughly $650 in Choice CU 63. Even the fine is $125. The reason is simple in that the printing was just 5,364,348. While a regular Series 1928C is tough, a star replacement note from the Series 1928C is extremely tough with a current listing of $8 in XF and $25,000 in Choice CU 63.

The Series 1928D with a Julian-Woodin signature combination followed with a printing of nearly 14.5 million, which makes it tough as well. A Choice CU 63 currently is priced at $425 while a star replacement note is $10,000 in XF and $27,500 in Choice CU 63.

The lowest printing of the early notes came next in the form of the Series 1928E, which had a printing of 3,519,324. The Series 1928E starts at $1,100 in XF and reaches $1,700 for a Choice CU 63. In the case of star replacement notes the Series 1928E is extremely tough as is seen by a $75,000 Choice CU 63 price.

A new date arrived with Series 1934. It promised to pay in silver while the prior design promised a silver dollar.
At $100 in Choice CU 63, the price reflects a much larger printing than the others and a greater number available in top grades. It along with the Series 1935 with the new back design make for an excellent pair at modest prices, with the Series 1935 being just $35 in Choice CU 63 while a star replacement note is $575 in that grade.

Prices become more affordable as notes moved through the succeeding series, 1935A through 1935H. The 1935H notes were actually issued and signed by officials in the Kennedy administration. If you ignore the star notes that are avidly sought by specialists, Silver Certificates in this group are affordable for just about anyone at roughly $20 each. You can even buy a common later star note in Choice CU 63 for $25.

The low cost of some $1 Silver Certificates can mask the fact that some are very interesting notes, such as the Series 1957. The Series 1957 and a star of the series are not very expensive, but they are historic as the Series 1957 carries IN GOD WE TRUST on the back thanks to Public Law 140, which was signed by Dwight D. Eisenhower on July 11, 1955.

It was an interesting time as while the Series 1957 was being printed with the motto, the Series 1935F was being printed without the motto and the Series 1935G would come both with and without the motto as it was being printed about the same time as the Series 1957A.

Eventually IN GOD WE TRUST was to become a permanent part of the design, but this transition period is interesting especially in the case of the Series 1957.

The $1 Silver Certificate has had a certain cloud hanging over prices based on the fact that in the 1960s the Silver Certificate was saved in large numbers by the general public. The reason was simply that it was being replaced with the Series 1963 and later $1 Federal Reserve Notes and as the distinctive green seal and serial number Federal Reserve Notes appeared to make up a great and greater percentage of the notes in circulation, people began to hoard Silver Certificates.

That was compounded by the fact that the government had taken steps to eliminate or reduce silver in coins, making it clear to many who were not serious collectors that someday silver coins and Silver Certificate might be worth premium prices. That caused a great deal of uncertainty in the market as it was clear that there were a large number of small holdings and hoards of Silver Certificates and especially the $1 as it had been the lowest denomination at the time.

In recent times the prices of previously very inexpensive later $1 Silver Certificates have begun to move higher as now some 40 years after the hoarding the bulk of the hoards have been broken up and been absorbed by the market. They no longer present a potential threat of large numbers of notes hitting the market.

We have seen the final series, the Series 1957B, for example, rise in price in CU from a 1998 listing of $5.50 to its current $15 in Choice CU 63. The adoption of numerical grades has spurred even further gains in certain notes.
Rising prices are a simple recognition that the fear of the release of unknown hoards that kept prices artificially low for many years no longer has the power to intimidate buyers. Collectors more and more are also deciding that they had better collect small-size notes while they still have the chance.

Since it was printed, one Silver Certificate has remained very popular and that is the Hawaii Emergency $1 Silver Certificate. It is a good note with a great story. It was a case where in the early days of World War II there was legitimate concern that the Japanese might attack and capture Hawaii and with it large amounts of notes might fall into enemy hands.

The concern might seem odd considering the outcome of the war, but back in early 1942 the fear was very real as most of the U.S. Pacific Fleet was either at the bottom of the ocean or in need of repairs. The idea was to prevent captured notes from being used by the Japanese against us, so special Series 1935A $1 Silver Certificates were created with large black HAWAII overprints on the back so they could be easily recognized.

The notes saw use in Hawaii throughout the war and later in islands as they were liberated from the Japanese. Their clear use in World War II helps to make the Hawaii $1 Emergency Silver Certificate a popular type note today with prices of at least $150 for a Choice CU 63 example while a star replacement note begins at $900 in XF.

There was a similar problem in the case of North Africa where large numbers of invading troops could potential be captured and with them their money. That produced another Series 1935A special $1 Silver Certificate, but this time with a yellow seal instead of blue, which made the notes easy to identify. The North African invasion $1 Silver Certificates are also very popular with a Choice CU 63 listing for $175 while a star replacement note starts at $800 in XF.

There were other special Series 1935A $1 Silver Certificates in the form of “R” and “S” experimentals. These too were related to the war effort as it was decided that a replacement security paper might be needed for notes. To test the paper, it was decided to run an experiment which saw a total of 1,184,000 notes of the test paper being made along with an identical number of notes of the normal paper. The notes were identified by large red overprinted “R” for regular or “S” for special paper and released into circulation.

The tests were apparently not conclusive, but there is no question that the “R” and “S” experimentals are popular and tough thanks to those modest printings. In XF you can expect to pay roughly $130 for either, but a star replacement note in the same grade is likely to start at $2,000.

Although the last $1 Silver Certificate vanished from circulation decades ago, the fact is that there are still many Americans who remember the final days of this colorful form of American paper money. As a collection, they make for an interesting set spanning the period from the days of the Comstock Lode and the Old West right up to the first Americans in space. This is an enormous amount of history and the $1 Silver Certificate was in the hands of most Americans for the entire time. That makes a collection interesting and fortunately for many still affordable.

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