Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
A silver certificate is a form of U.S. paper currency issued between 1878 and 1964. In addition to being recognized as legal tender, silver certificates were redeemable for silver dollar coins and, for a short period, raw bullion equal to their face value. Silver certificates were an attempt to appease silver-rich states that suffered economic losses from the country’s move away from a bimetallic system to the gold standard. Today, holders can only redeem this currency for Federal Reserve Notes of equivalent value. Although silver certificates are no longer exchangeable for silver bullion, they’re still sought-after for their historical significance, considerable scarcity, and numismatic appeal.
The History of Silver Certificates
Silver certificates harken back to a crucial inflection point in America’s economic framework when the government adopted the gold standard. These peculiar notes bear many of the hallmarks of standard dollars yet differ significantly in their sizes, designs, and history.
The United States operated under a de facto bimetallic system even before the signing of the Declaration of Independence. This gold and silver backing was officially enshrined under the Coinage Act of 1792 which also established the U.S. Mint. However, a series of massive gold mining discoveries encouraged the prioritizing of gold over silver.
The Coinage Act of 1873 effectively demonetized silver by axing the production of silver dollar coins which were highly popular and widely circulated then. The controversial legislation also ended the free coinage of silver – a common practice at the time that allowed people to have their metal minted into legal tender.
Silver coin production was relegated to sub-dollar denominations which inevitably meant the metal was only used in small day-to-day transactions. On the other hand, gold quickly became the preferred basis of the monetary system. Gold coins were relied upon for larger transactions and dealings.
Critics quickly dubbed the legislation the “Crime of 73” for its negative effect on silver-mining regions. A steep drop in the silver prices led representatives from Colorado and Nevada, which were handling 40% of global silver volume, to lobby for change. At the same time, many consumers became concerned about insufficient currency in circulation.
The government responded with the passage of the Bland–Allison Act of 1878. The US Treasury would purchase millions of dollars worth of silver from Western mining giants each month. Silver certificates were printed as a legal IOU which could be redeemed for silver coins (and, for a limited amount of time, physical silver bullion) equal to their face value.
Initially, banks and private individuals met silver certificates with heavy skepticism. There was widespread uncertainty regarding their legal function which was initially limited to taxes owed to the federal government. It took the government a few years to clarify the status of silver certificates as full legal tender.
Halfway through the 20th century, a surge in silver demand prompted the government to open its silver reserves which had piled up to back silver certificates. A series of sweeping legislation repealed previous acts regarding silver purchasing and reserve requirements.
In 1964, the Secretary of the Treasury officially revoked the redemption of silver certificates for silver dollar coins and implemented a temporary exchange for silver granules. By 1968, silver certificates were relegated to standard currency at their denominational values with no opportunity for exchanges.
The Evolution of Silver Certificates
Silver certificates underwent several size, denominational, and design changes throughout their 84 years of production.
Large Silver Certificates (1878–1923)
For the first few decades, the US Treasury produced large silver certificates which were much bigger than modern US banknotes. Interestingly, larger-sized bills weren’t uncommon at the time and even earned the nickname “horse blankets” for their substantial dimensions. Measuring 7.38 x 3.13 inches, large silver certificates were strategically chosen to accommodate more intricate designs. This was an aesthetic choice as well as a protection against counterfeiting.
| Year | Denominations Issued | Notable Features |
|---|---|---|
| 1878-1880 | $10, $20, $50, $100, $500, $1,000 | A third signature of a US Assistant Treasurer was added to the standard duo signatures of the Treasurer and Register of the Treasury |
| 1886 | $1, $2, $5, $10, $20 | Lower denomination notes were introduced to encourage the use of silver certificates in daily transactions |
| 1891 | $1, $2, $5, $10, $20, $50, $100, $1,000 | The paper used in the production of silver certificates was made more durable. |
| 1896 | $1, $2, $5 | Known as the “Educational Series”, this release is famed for its artistic design. |
| 1899 | $1, $2, $5 | The blue Treasury seal and serial numbers were added. |
| 1908 | $10 | |
| 1923 | $1, $5 |
Small Silver Certificates (1928–1957)
In the early 1900s, the Treasury began looking into the benefits of reducing the size of larger US banknotes. The economic burden of World War I redoubled the government’s efforts considering the increased productivity and decreased cost that would be achieved with smaller notes. In 1929, small silver certificates officially replaced their larger counterparts. In addition to dimensional adjustments, small silver certificates saw several design changes throughout their issuance.
| Year | Denominations Issued | Notable Features |
|---|---|---|
| 1928 | $1, $5, $10 | The first batch of small silver certificates were issued. |
| 1934 | $1, $5, $10 | The verbiage on the silver certificates regarding their redemption for silver was adjusted. |
| 1935 | $1, $5 | The motto “In God We Trust” was added to the designs. |
| 1935A | $1, $5 | |
| 1935B | $1, $5 | |
| 1935C | $1, $5 | |
| 1935D | $1, $5 | |
| 1935E | $1, $5 | |
| 1935F | $1, $5 | |
| 1935G | $1 | The Fed introduced variations with and without the motto “In God We Trust”. |
| 1957 | $1, $5 | |
| 1957A | $1, $5 | |
| 1957B | $1, $5 | |
| 1957C | $1, $5 | |
| 1957D | $1, $5 |
Specialty Silver Certificates (1942–1943/1944)
During WWII, the US issued a variety of specialty silver certificates in Hawaii and Northern Africa. The Hawaiian notes were issued following the Japanese attack on Pearl Harbor to allow for quick devaluation in the event of a full-scale invasion. These notes are easily discernible with the word “HAWAII” printed on both sides. The North African iteration was designed to fund the American war efforts on the continent with similarly distinctive markings. Known as “Yellow Seals”, this currency was also used as a security measure in the case of a takeover by the Axis powers.
Are silver certificates a good investment?
Generally, silver certificates aren’t considered a good investment due to their lack of inherent value. The overwhelming majority of silver certificates aren’t worth more than their face value, making them as worthwhile an investment as standard paper currency. Once the convertibility of silver certificates to physical silver was severed, silver certificates lost their inherent worth. Plus, high production levels, widespread circulation, and a high rate of survivability have kept these notes currency from becoming scarce, further limiting their value. These factors greatly diminish the potential investment merit of silver certificates, rendering most examples mere collectibles. In some instances, the value of a silver certificate can exceed its face value due to factors like exceptional rarity, impressive condition, unique series, printing errors, or historical significance.
Can you still get silver certificates?
The government ceased issuing silver certificates in 1964; however, it’s still relatively easy for collectors to get their hands on this historical currency. There are plenty of collectors, dealers, and auctions offering these notes. There are even stories of consumers coming across silver certificates in the circulating money supply.