The silver certificate was representative money issued by the United States from 1878 to 1964. It was one of the country’s first forms of paper money.
When the U.S. government issued the first silver certificates in the 19th century, they were redeemable for their face value equivalent in silver dollar coins. Morgan Dollar coins were typically used early on, followed by Peace Dollars. However, exchanging the certificates for any combination of silver coins, including dimes, quarters, and half dollars, was possible.
The Treasury stopped providing an exchange for silver coins in the 1960s, as silver coins were removed from circulation. Instead, they began exchanging silver certificates for raw silver bullion.
In 1968, the U.S. government entirely halted redemption of silver certificates for silver bullion. While silver certificates are technically still fiat legal tender, they are most often kept as collector’s items or keepsakes, with some having significant numismatic value in certain conditions.
Silver Certificate Facts
- Silver certificates are a former legal tender paper currency issued by the U.S. government starting in 1878.
- Each certificate represented the face value amount in silver bullion, enabling individuals to carry and use paper currency for any transactions in the same way as silver and gold coins.
- The Treasury Secretary declared that silver certificates would no longer be redeemable for silver dollars in 1964.
- Silver certificates can still be redeemed for their face value in fiat currency today; however, many have historical and numismatic values beyond face value.
Understanding Silver Certificates
The following phrase appears on the front of each silver certificate: “This certifies that there is on deposit in the Treasury of the United States of America X dollars in silver payable to the bearer on demand.” The ‘X’ represents the certificate’s denomination, which ranges from $1 to $1,000.
When silver certificates were first introduced, silver and gold coins were considered real money. The value of each coin was based on the amount of silver it was minted with. Each $1 USD silver coin has a gross weight of 26.73 g and a silver content of 0.7734 oz.
For every ten Morgan Dollar coins someone carried, the weight of those coins was 8.6 troy ounces, a little more than half a pound. With the introduction of paper money, an individual could carry the same value with only a few folded pieces of paper.
The key characteristic that helped ensure that people adopted the use of silver certificates is that they were backed and guaranteed by the U.S. Treasury and were redeemable at any time for the equivalent amount of silver coins.
Value of Silver Certificates
With precious metals deleted from the economy in the early 1970s, modern U.S. currency, including paper bills and coins, is now fiat money with no underlying commodity providing backing.
Without being backed by gold or silver, the Federal Reserve Notes and the no longer-issued silver certificates are fiat currency since neither is redeemable for a set amount of silver or gold.
The value of individual silver certificates as collectibles can vary widely based on their age, condition, rarity, and specific print run, among other factors. Some are particularly valuable, especially specimens in good condition or with certain serial numbers, with many examples of PCGS or PMG-graded large denomination silver certificates fetching hundreds of dollars.
Silver certificates continue to appeal strongly to silver stackers, notaphilists, currency collectors, and those who appreciate the history and nostalgia they represent. They are a historical artifact that reminds us of an era when silver was integrally woven into the fabric of the economy and how changes occurred regularly in the currency system.