The History of Small Size U.S. Currency
From 1861 until 1928, the United States Bureau of Engraving and Printing (BEP) printed large size currency measuring 3 1/8” tall by 7 7/8” wide. These large size notes were called “horse blankets” because of their size. Many other countries, most notably Canada, used large format size notes for their currency as well.
U.S. Treasury Secretary Franklin MacVeagh, who served from 1909 to 1913, appointed a committee to investigate the possible advantages of issuing a smaller size currency, including saving on paper costs and increased production rates. With the outbreak of World War I, MacVeagh’s term ended and so did the impetus for issuing smaller size currency. On August 20, 1925, Treasury Secretary Andrew Mellon appointed a similar committee and in May 1927, accepted their recommendations to issue small size currency.
On July 10, 1929, the new small size currency was distributed to the Federal Reserve System. The notes were printed on the same rag paper but now measured 2 5/8” tall by 6 1/8” wide. They were immediately accepted by the public, for whom currency was extremely scarce in 1929. But as the stock market crashed and banks offered more of the new smaller paper currency, many people preferred to ask for Gold coins instead. Despite this sentiment, the BEP moved ahead with printing this new smaller currency.
The BEP issued small size Legal Tender currency based on the same legislation that authorized the large size Legal tender notes. These Legal Tender notes, or United States notes, were first printed in 1928 as the popular “Funny Back” notes. They were known as such due to the word “ONE” having a similar look to Monopoly or game money. These notes also feature a red Treasury seal and red serial numbers. Legal Tender (United States) Notes were issued in $1, $2, $5 and $100 denominations. The latest printing of these Legal Tender notes came about in 1966, with the printing of the Red Seal $100’s.
Another very popular small size currency issue was the small size Silver Certificates. Until 1967, these notes were redeemable at Federal Reserve Banks and certain other banking locations for either one U.S. Silver Dollar or $1 worth of Silver grain. Being redeemable for Silver made Silver Certificates popular with the public. Silver Certificates were issued in $1, $5 and $10 denominations. The 1928 $1 Silver Certificates were also issued using the “Funny Back” backs of the notes. The last issue date was 1957 for the $1 Silver Certificates.
Small size National Bank Notes were secured by United States Treasury Bonds and were issued from 1929 through 1935 by many banks in most states. The Treasury obligated these local banks to redeem these notes. All worked as planned until 1935 when the Treasury had to redeem these bonds and they were no longer available as collateral for the National Currency that was being issued. Small size National Bank Notes bear a brown Treasury seal and brown serial numbers along with the charter number of the issuing bank. Type I National Bank Notes have the charter number printed twice in black ink, while Type II National Bank Notes have the charter number printed four times, twice in black ink and twice in brown ink. These notes were printed in $5, $10, $20, $50 and $100 denominations.
Federal Reserve Bank Notes, unlike National Bank Notes, only bear the names of the bank in the Federal Reserve System. They do not bear the names of individual banks. They were printed in $5, $10, $20, $50 and $100 denominations and all dated 1929.
Some of the most popular small size certificates were the Gold Certificates. As President Franklin D. Roosevelt took the United States off the Gold Standard, these notes were only issued during 1928. Executive Order 6102 of 1933 required the confiscation of not only United States Gold coins, but of Gold Certificates as well. In 1964, Treasury Secretary Douglas Dillon removed all restrictions on holding or collecting Gold Certificates, much to the delight of currency collectors and investors. Gold Certificates were issued in $10, $20, $50, $100, $500 and $1,000 denominations. $5,000 and $10,000 Gold Certificates were also issued but are extremely rare.
Finally, our current small size notes are Federal Reserve Notes. They have been issued since 1928 and are still issued today. The Treasury Department seals and serial numbers are printed in the familiar green ink. New issues are generally printed when there are changes in either Treasury Secretaries or Treasurer of the United States. They have been printed in $1, $2, $5, $10, $20, $50, $100, $500, $1,000, $5,000 and $10,000 denominations. The $100 denomination is the largest currently printed denomination. $500 and $1,000 notes were issued and dated in 1928 and 1934.
The $5,000 and $10,000 denomination Federal Reserve Notes are the highest denominations available today, but they are available at many multiples over face value. Both of these notes routinely sell for more than 10 times face value and are rarely available. They were also dated in 1928 and 1934 only.
Many collectors try to assemble one of each type and year of Federal Reserve Notes but what you collect or invest in is entirely up to you!