Silver Certificates: What Are They and What Are They Worth?

By Bullion Shark LLC ……
United States silver certificates are probably the most popular and widely collected type of U.S. paper currency. This is because many of the older issues have amazingly beautiful designs, while others, like the Hawaii overprint notes from World War II, have an interesting history behind them. Moreover, the notes were first issued during one of the most fascinating periods in American monetary history.

Silver certificates were issued between 1878 and 1964 and were redeemable at face value in silver dollars or, at certain times, silver bullion. In 1964, Treasury Secretary C. Douglas Dillon announced the notes would no longer be redeemable for silver dollars and from that time until 1968, they could be redeemed for silver granules.

These actions were taken because of the rising price of silver in the 1860s and because the Treasury vaults at the time had 2.9 million silver dollars, including many which already had numismatic value, and there was no fair way to distribute them if people could continue redeeming their silver certificates for silver dollars.

Since 1968, silver certificates have been redeemable only for Federal Reserve Notes but they are still legal tender. Examples of more common silver certificates, especially if they are worn, are in many cases only worth not much over face value and are sometimes used in transactions, but earlier ones are in many cases valuable and have historic value.

Historic Origins

Silver certificates were rooted in reactions by many American citizens to the impact of the Coinage Act of 1873, which passed the United States Congress apparently with many of its members allegedly not really understanding what they had approved. The law stopped the production of silver dollars, ended bimetallism (a monetary policy began by Alexander Hamilton that established a ratio between the values of gold and silver), and effectively put the U.S. on a gold standard, which was also happening in Europe at the time.

The bill had lingered in Congress for three years before being passed and then signed into law by President Ulysses Grant. For adherents of the Free Silver Movement like William Jennings Bryan, the legislation became known as the “Crime of ’73” because it essentially demonetized silver.

By 1875, Western banks and mining companies had begun lobbying for a return to bimetallism even while a law enacted that year limited the number of greenbacks that could be redeemed for silver to a face value of $5. There was also a sharp decline in the value of silver by 1876 because of large silver discoveries such as the Comstock Lode.

House members from Nevada and Colorado, which states alone accounted for 40% of global silver production at the time, lobbied to restore free silver coinage. This laid the grounds for the Morgan dollar coin through the Bland-Allison Act of 1878 passed by Congress over a presidential veto on February 28. Though it did not provide for the unlimited free coining of silver as before, it did require the Treasury to purchase $2-4 million worth of silver per month from Western mining companies.

To back all the 1878 Morgan dollars and those that came afterward through 1904, the law also authorized the printing of silver certificate dollars redeemable in silver dollars. They were issued in response to agitation by citizens upset about the demonetization of silver. They were also issued to help restore trust in paper currency at a time when many banks issued their own currency and many citizens lacked faith in paper dollars, as well as to facilitate large transactions, which were difficult with lots of coins.

Silver Certificate Dollars

Silver certificates were all issued under either the 1878 law or the 1886 law. The first issue, Series 1878 and 1880, included denominations from $10 to $10,000 and were called Certificates of Deposit, which indicated that the appropriate amount of silver dollars had been deposited with the Treasury to cover them. But they were not accepted for all transactions and were only used for customs, taxes, and public dues (and under an 1882 law as bank reserves), but they were not legal tender for transactions between individuals.

The second issue of silver certificates, the Series of 1886, 1891, and 1908, included notes from $1 to $10,000.

The third issue was the Educational Series of 1896 of $1, $2, and $5 notes that are widely considered the most beautiful U.S. paper currency ever issued.

The fourth issue was the Series 1899, which included $1, $2, and $5 notes, and the fifth issue was Series 1923, which only included $1 and $5 notes. There are also 1928, 1934, 1935, 1953, and 1957 Series silver certificates.

Silver certificates through the Series 1923 were printed on very large paper, measuring 3.125 by 7.373 inches, and were known as “horse blankets”. Since the 1928 series, they have been printed on dollars the same size as those used today.

Silver Certificate Values

The value of a particular silver certificate varies widely depending on the series, the denomination, and the condition (graded on a 1 to 70 scale) – as well as other factors like serial number arrangement (such as very low or high numbers and repeating numbers) and Federal Reserve seal and number.

Keep in mind that the series year is not when the notes were printed but instead corresponds to when major design changes were made.

Many of the earlier notes are quite valuable, such as the 1886 series notes with Martha Washington on the obverse, which are worth from $225 for an average condition note to $3,000 for an uncirculated example of the scarcest one. The 1899 series with an eagle on the obverse can be worth from $100 for a more common one in average condition to over $6,000 for an MS63 example of the rarest issue.

Another interesting example is the 1942 North Africa Operation Torch emergency notes issued for use by U.S. military personnel in North Africa, which had a yellow seal to distinguish them from other currency.

1935 and 1957 Silver Certificates

The 1935 and 1957 series silver certificates are generally worth less than $5 if circulated and as much as a couple hundred in high grades. They can come with blue and brown seals (the emblem of the Treasury Department). Both look like regular paper currency used today except that they have notations such as under “ONE DOLLAR” at the bottom, to which is added “payable in silver to the bearer on demand.”

Some 1935 certificates have the motto IN GOD WE TRUST, while others do not. One type of 1935 series is more valuable and also of historic interest, and that is the emergency notes overprinted with “HAWAII” on their backs in large letters and written on the left side of the front as well.

After the December 7, 1941 attack on Pearl Harbor, the U.S. was worried that the Japanese would overrun Hawaii and that large amounts of currency would fall into enemy hands, so emergency notes were created to be used by residents and military personnel stationed there. Each of these 1935A Series notes issued from July 1942 to October 1944 had a brown seal and had “HAWAII” printed on both sides.

There are many ways to collect silver certificates, from building a set of one denomination or series to assembling a type set of each of the different major types of notes. Along the way, you will learn a lot about U.S. history and the dollar.

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