The two banknotes below may look identical, but there is a small and very important difference.
The banknote on top is a Silver Certificate from 1935. It promises "One dollar in silver payable to the bearer on demand." The bottom one promises just "One dollar", which can be printed at will.
Many don't know that Silver Certificates were the primary form of currency for much of the late 19th and early 20th centuries in the U.S.
Around the mid-20th century, the amount of silver and silver dollars in the Treasury declined, threatening the actual backing of these certificates. In 1963, Congress decided to end their issuance. To compensate for the loss, Federal Reserve Note production and issuance were expanded, resulting in the bottom banknote we still use today.
Such silver backing gave comfort to the public that their currency would not be devalued, as it was backed by hard money. Otherwise, a government can easily print money and devalue its currency to fund say foreign wars, pre-election welfare programs, or simply close a large deficit gap.
It is a great reminder that the current fiat period we live in is an anomaly for most of modern human history.
This Silver Certificate is part of my personal collection. I have been collecting old banknotes, share certificates, and bonds for many years because I believe they are critical to understanding the history of money, which in turn allows us to better imagine the future of money and finance.
I will try to share more pieces from my collection and similar history of money soundbites over the coming months!
Make sure to subscribe to my YouTube page not to miss them:
#
Finance# #
Bitcoin# #
Crypto# #
Money#