What Is a Silver Certificate?

Silver Certificate of 1957

Heritage Auctions, HA.com

The United States first issued silver certificate dollar bills in 1878. They are one of the most widely collected series of all U.S. paper currency. Occasionally, people will still find a silver certificate in circulation today. Although it looks very similar to the one dollar, two dollar, and five dollar bills, they are slightly different, and this catches the eyes of the public.

History of the Silver Certificate

The first silver certificates were issued under the Bland Allison act of February 28, 1878. This is the same legislation that created the Morgan silver dollar. There were five different issues which were payable to the bearer on demand in silver dollars or silver coin. The five issues are:

  1. Series 1878 and 1880. These notes were issued in denominations of $10 to $1,000. Officially they were labeled as "Certificates of Deposit," indicating that the required silver dollars as indicated by the denomination have been deposited by the government with the Treasury Department of the United States.
  2. Series 1886, 1891, and 1908. The available denominations in this series were expanded to include $1 notes through $1,000 notes.
  3. "Educational Series" of 1896. This famous series is considered one of the most artistically beautiful series of paper money ever issued by the United States. It only consisted of denominations of $1, $2, and $5 notes.
  4. Series of 1899. This series consisted of only lower denominations of the $1, $2 and $5. Another beautiful example of American artistry is featured on the $5 "Indian Chief Note," featuring the chief known as "Running Antelope."
  5. Series of 1923 through 1957. Multiple issues of silver certificates began in 1923 and consisted of only the $1 and $5 notes. The series of 1923 was the last silver certificate printed in large size. Silver certificates beginning with the series of 1928 were printed on the smaller size notes that we currently use on U.S. paper money.

Early paper currency issued in the United States was not tightly controlled by the government. Many banks issued their own currencies, and fraud was rampant. Eventually, people did not trust paper currency and demanded silver or gold coins to complete financial transactions.

For large transactions, gold and silver coins proved to be bulky and difficult to transport. Silver certificates, and later gold certificates, were created to restore trust in paper currency and facilitate larger financial transactions. Silver certificates circulated widely alongside other paper currency throughout the United States for years. These paper currencies included United States Notes, National Banknotes, Treasury Notes, and Federal Reserve Bank Notes.

The Treasury Department maintained a vast quantity of silver dollars in inventory. Some of the silver dollars were minted as early as 1878. These were the physical silver backing for all silver certificates. The Pittman Act of 1918 provided for the melting of more than 350 million of the silver dollars. This was only a fraction of what was in storage. By the 1950s, it was realized that these silver dollars were worth more numismatically than for their face value of one dollar.

In the mid-1960s, the value of silver was increasing. Silver certificates could be redeemed at any rate Federal Reserve branch for an equivalent number of silver dollars. On March 25, 1964, the Secretary of the Treasury announced that silver certificates would no longer be redeemable for silver dollars. The act also provided that silver certificates could be exchanged for an equivalent dollar amount of silver bullion until June 24, 1968. After that time, silver certificates would only be considered legal tender for their face value.

Are Silver Certificates Legal Tender Today?

Silver certificates are no longer redeemable for silver coins or silver bullion. However, all silver 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, the silvercCertificate, such as the 1899 Indian Chief is far more valuable than its face value of five dollars.

1899 Indian Chief $5 Silver Certificate
1899 Indian Chief $5 Silver Certificate. Heritage Auctions, HA.com

How Much Is a Silver Certificate Worth?

Many factors determine the value of a silver 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 silver certificate.

Denomination

The first step in determining the value of your silver 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 "Ten Dollars." Since silver certificates are still legal tender today, the value of any note will not be less than its face value or denomination.

Series

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 face of the note. 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.

Signatures

When paper currency was first printed in the United States, each note was signed by hand by an authorized individual or individuals. 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 first silver certificates were issued by the United States federal government in 1878, the authorized signatures included the Register of the Treasury 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.

Condition

Most importantly, the condition of the note is taken into consideration. The better the condition that the note is in, the more valuable it will be worth. If the note has seen circulation and has been folded, torn, crumpled, washed, rolled, soaked with water, 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. There are other small changes such as paper money is 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 (111111111 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)

Silver Certificates Found in Circulation Today

Most silver certificates found in circulation today 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 guide book to determine the value of your notes is the A Guide Book of United States Paper Money by Arthur L. and Ira S. Friedberg, published by Whitman Publishing.