Treasury Notes

 A Brief History of U.S. Government, Currency, 1861 – Present: Part 2

By: Dr. Franklin Noll
8/26/2014

At the close of the 19th century there were five forms of currency making up the circulation of money in the U.S. economy: The United States Notes, National Bank Notes, Gold Certificates, Silver Certificates and the Treasury Coin Notes. Yet, despite the existence of all these currencies, the U.S. continued to experience money-related economic and banking crises, as the supply of these currencies could not expand or contract to meet economic conditions. 

1-10FedNote.jpgThe Early 20th Century

The Federal Reserve was established as a possible solution. Created by the Federal Reserve Act of December 23, 1913, the Federal Reserve had the ability to change the money supply to meet changes in the economy and financial markets. In terms of currency, it did this primarily through the issuance of Federal Reserve Notes that were backed by gold held in Federal Reserve Bank vaults. Issuance of notes ranging in value from $1 to $10,000 began in 1914, and they co-circulated with the existing types of currency. 

The next significant changes to the money supply occurred in the 1930’s. The Great Depression and the banking crisis of 1933 forced the U.S. off of the gold standard. The Gold Reserve Act of 1934 made it illegal for private citizens to hold Gold Certificates. Consequently, Gold Certificates were taken out of circulation but were allowed to be used by the Federal Reserve and the Treasury. This included the newly printed $100,000 denomination note. In 1935, the issuance of Bank Notes ended.

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500FedNote.jpg 
The Late 20th Century

By the second half of the 20th century, the amount of silver and silver dollar in the Treasury had declined, threatening the metallic backing of Silver Certificates. In 1963, Congress decided to end the issuance of the certificates. To compensate for the loss, issuance of the $1 denomination Federal Reserve Note was authorized. On July 14, 1969, the Treasury also stopped issuing Federal Reserve Notes with values over $100.  In 1976, the $2 denomination was added.

6-Old100FedNote.jpg4-100FedNote.jpg

By this time, U.S. Notes were of little importance in the nation’s money supply, though Congress still supported their continued circulation. In 1966, Congress recognized the reality of the situation and began to remove the notes from circulation. These last delivered notes were in 1971. Then, in 1994, Congress ended the issuance of U.S. Notes. This move made Federal Reserve notes the only form of currency available to the general public.

In 1996, the look of Federal Reserve Notes began to undergo major alterations as designers changed and enlarged the portraits on some denominations. These new currency designs also included various anti-counterfeiting devices such as security threads and micro-printing. In 2003, the next generation currency was introduced beginning with the $20 note. The Treasury added subtle background colors and other features to the redesigned bills to make them more secure and difficult to counterfeit. Next generation design reached its apex with the introduction of the new $100 in 2010.

Currency in circulation has become much simpler, consisting of one type for each denomination up to $100; however the actual notes themselves have become more sophisticated. With its various security features, this seemingly simple form of money has become a global currency and has become a measure of value around the world.


Dr. Franklin Noll is the Historian at the United States Department of the Treasury’s Bureau of Engraving and Printing, and President of the Treasury Historical Association.
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Posted in:  Bureau of Engraving nad Printing.
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