A Gold Certificate is a paper note or bill issued by the United States government that represents a specified claim for a particular dollar value of gold or gold bullion deposited in the United States Treasury. Unlike other notes issued by the United States government, these notes were issued as a convenience rather than a political or economic strategy. Therefore, a majority of the notes issued were of higher denominations.
History of the Gold Certificate
The first Gold Certificates were issued under the Banking Act of March 3, 1863. Generally, Gold Certificates are divided into two groups: large size and small size. Large size currency measured 3.125 x 7.4218 inches, and small size currency measured 2.61 x 6.14 inches. The following series were issued until production was suspended in 1934:
Large Size Denominations
- Series 1865: $20, $100, $500, $1,000, $5,000, $10,000
- Series 1870-75: $100, $500, $1,000, $5,000, $10,000
- Series 1882: $20, $50, $100, $500, $1,000, $5,000, $10,000
- Series 1888: $5,000, $10,000
- Series 1900: $10,000
- Series 1905 & 1906: $20
- Series 1907: $10, $1,000
- Series 1913: $50
- Series 1922: $10, $20, $50, $100, $500, $1,000
Small Size Denominations
- Series 1928: $10, $20, $50, $100, $500, $1,000, $5,000, $10,000
- Series 1934: $100, $1,000, $10,000, $100,000
Largest Note Ever
The $100,000 Gold Certificate is the largest paper currency note ever issued by the United States government. It was only used for monetary transfers between financial institutions and/or The Federal Reserve Bank. None were ever released to the general public. Therefore, it is illegal to own one.
Originally, paper money issued in the United States was printed and distributed by individual banks. If the bank failed, the notes became worthless. Eventually, people did not trust paper currency and demanded gold or gold coins to complete financial transactions.
For large transactions, gold and gold coins proved to be bulky and difficult to transport. Additionally, transporting large amounts of gold was very risky because it was hard to conceal. Gold Certificates were created to restore trust in paper currency and facilitate larger financial transactions. Gold Certificates circulated widely alongside other paper currency throughout the United States for years. Because a majority of them were used to complete commercial transactions, many of them are still in good condition.
The Treasury Department maintained a large number of gold coins and gold bullion in their inventory to back these notes that were issued. When the United States was removed from the gold standard by President Roosevelt in 1934, he required that all citizens turn in their Gold Certificate for silver coins or replacement paper currency.
Are Gold Certificates Legal Tender Today?
Gold Certificates are no longer redeemable for gold coins or gold bullion. However, all gold certificates are considered legal tender and can be redeemed at any financial institution for their face value in equivalent current coin or paper money. However, if the Gold Certificate was redeemed, it was canceled by punching a series of holes in the note that spelled the word CANCELED. These notes are not redeemable at face value.
On December 13, 1935, a fire in the United States Post Office in Washington, D.C. triggered a series of events where postal workers were trying to save documents from the fire. A box of canceled Series 1900 $10,000 Gold Certificates were thrown out the window. The box burst open, and people scrambled to collect them. Much to their dismay, the canceled bills were worthless. Although they are still considered stolen property because they are worthless, the United States government does not prosecute anybody possessing them.
How Much Is a Gold Certificate Worth?
Many factors determine the value of a Gold Certificate. There were hundreds of different series and denomination combinations issued over the years. The following general rules and observations will help you determine the value of your Gold Certificate.
The first step in determining the value of your Gold Certificate is to determine the note's denomination. This is also known as the face value. It is indicated by large numerals and words such as "One Hundred Dollars." Since Gold Certificates are still legal tender today, the value of any note will not be less than its face value or denomination if it is not canceled.
Most people refer to this as the year or date. It is a type or class of currency that is associated with a particular year. Typically, series signifies a change in authorization or design on large size notes. For small size notes, it indicated a change in the signature combinations on the note's face. The same series date can be used for years if there is not a change in design or signature combinations. It is a common misconception that the year on the note is the year that it was printed.
When paper currency was first printed in the United States, each note was signed by hand by an authorized individual or individuals. This was true for the Gold Certificates produced in the 1800s. As time progressed and thousands of notes were printed, it became a very burdensome task for high-ranking officials to sign thousands of dollar bills.
When the United States federal government issued the first Gold Certificates in 1865, the authorized signatures included the Assistant Treasurer of the United States and Treasurer of the United States. These notes were signed by hand. However, later notes used imprinted signatures as part of the automated printing process. In 1928, the authorized signatures changed to the Treasurer of the United States and the Secretary of the Treasury.
Most importantly, the condition of the note should be taken into consideration. The better the condition of the note, the more valuable it will be. If the note has seen circulation and has been folded, torn, crumpled, washed, rolled, soaked, etc., it will be ranked at the bottom of the value scale. However, if a note has been carefully stored and preserved since the first day it rolled off the printing press, it will be prized by collectors and at the very top of the value scale.
A grading scale very similar to that used for grading coins is also used for grading paper money. This scale is on a continuum from 1 through 70, where 70 is considered a perfect note and 1 is considered poor and barely identifiable. Other small change, such as paper money, are printed and not minted, and therefore notes that have not seen circulation are referred to as "Uncirculated" instead of "Mint State."
Serial Number and Star Notes
Finally, if the note has a fancy serial number or a star in it, these will also carry a premium numismatic value. For example, the following serial numbers are highly sought after by collectors of paper money:
- All the same digits (222222222 or 555555555)
- A repeating series of digits (123123123 or 585858585)
- Same digits forwards and backward, also known as a radar note (123454321 or 785696587)
- Very low numbers or very high numbers (000000001 or 999999999)
Are Gold Certificates in Circulation Today?
It is extremely rare to find Gold Certificates in circulation today. If they are found, they are usually well circulated and are worth only the face value of the note. However, if you do find a crisp uncirculated note, it may be worth a considerable premium. The best guidebook to determine the value of your notes is A Guide Book of United States Paper Money by Arthur L. and Ira S. Friedberg, published by Whitman Publishing.