Types of U.S. Currency

The United States has issued a number of different types of currency over the years; the main difference between them is the way in which each type was backed or guaranteed. Beginning with the first small-size notes in Series 1928, the different types of currency were distinguished by different-colored Treasury seals and serial numbers. (On the large-size currency prior to 1928, colors had no particular significance.) Five distinct types have been issued as small-size notes:

• Federal Reserve Notes are the only note type still printed today. They are also the type most recently introduced; they were first issued in 1914. These notes are backed by the U.S. government but issued by the twelve Federal Reserve Banks, which are required by law to maintain assets sufficient to balance all the notes issued. Small-size Federal Reserve Notes have green seals and serial numbers.
• United States Notes were among the oldest types of circulating U.S. currency, introduced during the Civil War. Also known as Legal Tender Notes, these notes were direct obligations of the U.S. government; in essence, they were pieces of the national debt. An act of Congress in 1878 required the dollar value of these notes outstanding at any one time to be maintained at $322,539,016. By the 1960s, this amount had become a negligible percentage of all circulating currency, so the Treasury decided that these notes no longer served any useful purpose, and stopped actively circulating them. Still, the law requiring them to exist was not repealed until 1994, and for the intervening twenty-five years, roughly a million $100 U.S. Notes sat in a Federal Reserve vault to fulfill this technicality. Small-size U.S. Notes have red seals and serial numbers.
• Silver Certificates were first issued in 1878. As the name suggests, these notes were backed by the U.S. government's stockpile of silver, and they could be redeemed for silver at the Treasury. Because of the rising price of silver (and in order to free up the government's silver reserves for other uses), production of Silver Certifcates was halted in 1963, and a deadline of June 24, 1968 was imposed for their redemption. Since that time, any Silver Certificates still in circulation have not been redeemable in silver, but they do remain legal tender. Small-size Silver Certificates have blue seals and serial numbers.
• Gold Certificates date back to 1863; these notes were redeemable in gold coin at the U.S. Treasury. They were discontinued in 1933 when the U.S. prohibited private ownership of gold, and unlike all other types of obsolete currency, they were actually recalled and made illegal to own. (The Gold Certificates of Series 1934 were issued for use only between Federal Reserve Banks, and could not be held by the public. Notes of this noncirculating series are distinguished from all other small-size currency by the fact that their backs are printed in orange rather than green.) The ban on possession of pre-1934 Gold Certificates was finally lifted in 1964, in order that surviving examples could be collected and traded openly; but, as with the Silver Certificates, the pre-1934 Gold Certificates are no longer redeemable in the metal. Small-size Gold Certificates have yellow seals and serial numbers.
• National Currency was introduced during the Civil War as well. The purpose of these notes was to replace the often-worthless private currency that had been issued by many banks and corporations until it was suppressed in 1865. Like the earlier unregulated notes, National Bank Notes were issued and guaranteed by private banks, but they were printed and regulated by the U.S. government, which ensured that each issuing bank actually had the funds (and the intention) to redeem the notes that it issued. A subtype of the Nationals, Federal Reserve Bank Notes were an odd hybrid: they were National Currency issued by Federal Reserve Banks, so that unlike ordinary Federal Reserve Notes, they were direct obligations of the issuing bank, not the U.S. government. The production of National Currency was halted in 1935. Small-size National Bank Notes have brown seals and serial numbers.

A number of additional types were issued prior to 1928:

• Demand Notes were the first type of U.S. currency to be printed for circulation; a one-time issue totalling $60,000,000 was authorised by Congress in 1861 in order to provide emergency funding for the Civil War. Initially these notes were to have been redeemable in gold on demand (hence their name), but it soon became apparent that the government would not have sufficient gold to redeem all the notes that were being presented, so they were made legal tender instead. Alone among all U.S. currency, these notes carry the handwritten signatures of various Treasury Department clerks, rather than the engraved signatures of high Treasury officials.
• Fractional Currency, in denominations of less than $1, was issued from 1862 to 1876 in response to a shortage of silver coin (due partially to public hoarding in the face of the Civil War, and partially to higher silver prices abroad which encouraged its export for melting at a profit). The initial issue was designated as Postage Currency; the notes resembled postage stamps in design, and some even had perforated edges. Later issues of Fractional Currency were similar in appearance to other contemporary currency, though smaller in size.
• National Gold Bank Notes were another subtype of the National Currency. Like the regular National Bank Notes, they were primarily obligations of private banks; but they were also redeemable in gold, which the issuing banks were required to keep on reserve. These notes were first authorised in 1870, mainly for the purpose of overcoming public resistance to paper currency in California, where the economy was still largely based on gold only. No bank outside California ever issued these notes; but in fact few banks in California did so either. Eventually the banks issuing these notes were given permission to revert to ordinary National Currency, and all did so by 1884.
• Currency Certificates were issued in small numbers beginning in 1872. These notes, in denominations of $5000 and $10000, were intended to facilitate large cash transactions between banks; they were redeemable only in U.S. Notes. At the time, the only other notes of such large value were Gold Certificates, and these were in short supply as the Treasury's gold reserves were still depleted after the Civil War. As Gold Certificates became more available, the need for the Currency Certificates disappeared, and they were discontinued in 1900.
• Treasury Notes, also known as Coin Notes, were introduced in 1890. Congress required the Treasury to pay out these notes when purchasing silver bullion, and to redeem them "in coin"--but, significantly, not necessarily in silver coin. The creation of these notes was a massive favor to the politically powerful silver mining industry: In the late 19th century, so much silver was being mined in the U.S. that its value was declining sharply. By selling silver to the Treasury for Coin Notes and immediately redeeming these in gold coin, the silver mines obtained much larger profits than they could otherwise. The silver industry took such advantage of this situation that the U.S. Treasury was perilously close to bankruptcy by 1893, at which time President Cleveland ordered that the Coin Notes be redeemed in silver only. Deprived of their political purpose, these notes were no longer in much demand, and they were discontinued a few years later.
• Additionally, several types of early interest-bearing notes functioned as something intermediate between circulating currency and government securities. Interest-Bearing Treasury Notes were issued intermittently from 1812 until the Civil War era; but each time these were issued, they were intended more as an emergency measure to resolve a temporary shortage of funds than as what we would consider regular currency. Continuing in this tradition, Compound Interest Treasury Notes were Civil War emergency issues. Each note of these types stated not only its initial face value but also its interest rate--and it appears that these notes actually did manage to circulate, though it must have been awkward to have to compute their current value when spending or receiving them! A later interest-bearing issue, the Refunding Certificates of 1879, were something like our modern Savings Bonds; they were created as a convenient investment for the average citizen. They were, however, payable to bearer, and they saw at least some limited circulation.

Denominations of U.S. currency

U.S. currency has been issued in denominations ranging from three cents to $100,000. The chronologies of small-size and large-size notes show which types were issued in which denominations at various times. In general, most types were issued in a wider range of denominations during the large-size era than during the small-size era. For example, silver certificates of up to $1000 were issued in several series before 1900, but small-size silver certificates were printed only in the $1, $5, and $10 denominations. Aside from the Fractional Currency, however, the denominations printed as small-size notes are all those that the U.S. has ever issued: $1, $2, $5, $10, $20, $50, $100, $500, $1000, $5000, $10,000, and $100,000. (An 1865 law did allow for a $3 National Bank Note, and designs were engraved for a potential $3 Legal Tender Note around the same time, but in each case no $3 notes were ever actually printed for circulation.) Fractionals were issued in denominations of 3�, 5�, 10�, 15�, 25�, and 50�.

Denominations larger than $100 were withdrawn from circulation in 1969 due to lack of demand--indeed, none of these notes had been printed since the 1940s. Surviving high-denomination notes are still removed from circulation and destroyed whenever they reach the Federal Reserve or the Treasury, but most of those still in the hands of the public are held by collectors. The $100,000 note has never reached the public at all: It was issued only as a Series 1934 gold certificate, and that series was not authorised for release outside the Federal Reserve System, so none of these notes have ever entered general circulation.

Contrary to popular belief, the $2 note is still a circulating denomination. From 1928 to 1966, the $2 denomination was printed only as a United States Note, and in fact the $2 was discontinued in 1966 when small-denomination U.S. Notes went out of production. But a $2 Federal Reserve Note, with a different back design commemorating the Declaration of Independence, was introduced in 1976 for the Bicentennial, and $2 FRNs are still printed and issued as demand requires.

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