Gold certificate

A $10,000 1934 gold certificate depicting Salmon P. Chase. Image courtesy of the Smithsonian Institution.

A gold certificate in general is a certificate of ownership that gold owners hold instead of storing the actual gold. It has both a historic meaning as a U.S. paper currency (1863–1933) and a current meaning as a way to invest in gold.

Banks may issue gold certificates for gold that is allocated (non-fungible) or unallocated (fungible or pooled). Unallocated gold certificates are a form of fractional-reserve banking and do not guarantee an equal exchange for metal in the event of a run on the issuing bank's gold on deposit.^[1] Allocated gold certificates should be correlated with specific numbered bars, although it is difficult to determine whether a bank is improperly allocating a single bar to more than one party.^[2]

Historic U.S. gold certificates (1863–1933)

The gold certificate was used from 1863 to 1933 in the United States as a form of paper currency. Each certificate gave its holder title to a corresponding amount of gold coin at the statutory rate of $20.67 per troy ounce established by the Coinage Act of 1834. Therefore, this type of paper currency was intended to represent actual gold coinage. In 1933 the practice of redeeming these notes for gold coins was ended by the U.S. government and until 1964 it was actually illegal to possess these notes. (In 1964 these restrictions were lifted, primarily to allow collectors to own examples legally; however the issue technically converted to standard legal tender with no connection to gold.)

After the gold recall in 1933, gold certificates were withdrawn from circulation. As noted above, it was illegal to own them. That fact, and public fear that the notes would be devalued and made obsolete, resulted in the majority of circulating notes being retired. In general, the notes are scarce and valuable, especially examples in "new" condition.

The early history of United States gold certificates is somewhat hazy. They were authorized under the Act of 3 March 1863, but unlike the United States Notes also authorized, they apparently were not printed until 1865. They did not have a series date, and were hand-dated upon issue. "Issue" meant that the government took in the equivalent value in gold, and the first several series of gold certificates promised to pay the amount only to the depositor, who was explicitly identified on the certificate itself. The first issue featured a vignette of an eagle uniformly across all denominations. Several later issues (series 1870, 1871, and 1875) featured various portraits of historical figures. The reverse sides were either blank or featured abstract designs. The only exception was the $20 of 1865, which had a picture of a $20 gold coin.

From 1862 to 1879, United States Notes were legal tender and the dominant paper currency but were not convertible at face value into gold and traded at a discount. However some transactions, such as customs duties and interest on the federal debt, were required to be made in gold. Thus the early gold certificates were acceptable in some transactions where United States Notes were not, but were not used in general circulation due to their premium value. After 1879, the government was willing to redeem United States Notes at face value in gold, bringing the United States Notes into parity with gold certificates, making the latter also a candidate for general circulation.

The Series of 1882 was the first series that was payable to the bearer; it was transferable and anyone could redeem it for the equivalent in gold. This was the case with all gold certificate series from that point on, with the exception of 1888, 1900, and 1934. The series of 1888 and 1900 were issued to specific depositors, as before. The series of 1882 had the same portraits as the series of 1875, but a different back design, featuring a series of eagles, as well as complex border work.

Gold certificates, along with all other U.S. currency, were made in two sizes—a larger size from 1865 to 1928, and a smaller size from 1928 to 1934. The backs of all large-sized notes and also the small-sized notes of the Series of 1934 were orange, resulting in the nickname "goldbacks". The backs of the Series of 1928 bills were green, and identical to the corresponding denomination of the more familiar Federal Reserve Notes, including the usual buildings on the $10 through $100 designs and the less-known abstract designs of denominations $500 and up. With the 1934 issue, the promise to pay was amended with the phrase "as authorized by law", as redemption was now restricted to only certain entities. The phrase "in gold coin" was changed to "in gold" as the physical amount of gold represented would vary with changes in the government price. Both large and small size gold certificates feature a gold treasury seal on the obverse, just as U.S. Notes feature a red seal, silver certificates (except World War II Hawaii and North Africa notes) a blue seal, and Federal Reserve Notes a green seal.

Another interesting note is the Series of 1900. Along with the $5,000 and $10,000 of the Series of 1888, all 1900 bills ($10,000 denomination only) have been redeemed, and no longer have legal tender status. Most were destroyed, with the exception of a number of 1900 $10,000 bills that were in a box in a post office near the U.S. Treasury in Washington, D.C. There was a fire on 13 December 1935, and employees threw burning boxes out into the street. The box of canceled high-denomination currency burst open. Much to everyone's dismay, they were worthless. There are several hundred outstanding, and their ownership is technically illegal, as they are stolen property. However, due to their lack of intrinsic value, the government has not prosecuted any owners, citing more important concerns. They carry a collector value in the numismatic market and, as noted in Bowers and Sundermans' The 100 Greatest American Currency Notes, the only United States notes that can be purchased for less than their face value. This is the only example of "circulating" U.S. currency that is not an obligation of the government, and thus not redeemable by a Federal Reserve Bank. The note bears the portrait of Andrew Jackson and has no printed design on its reverse side.

Issue

Series and varieties

Complete United States Gold Certificate type set

Large

Large-size United States Gold Certificates

Value	Issue	Series	Fr.	Image	Portrait	Signature & seal varieties
20$20	1st	1865	Fr.1166b	Image pending	Vignettes of eagle with shield	1166b – Colby and Spinner – small red
100$100	1st	1865	Fr.1166c		Vignette of eagle with shield	1166c – Colby and Spinner – small red
500$500	1st	1865	Fr.1166d proof		Vignette of eagle with shield	1166d – Colby and Spinner – small red
1000$1,000	1st	1865	Fr.1166e proof		Vignettes of eagle with shield, and justice with scales.	1166e – Colby and Spinner – small red
5000$5,000	1st	1865	Fr.1166f proof		Vignettes of eagle with shield and female	1166f – Colby and Spinner – small red
10000$10,000	1st	1865	Fr.1166g proof		Vignettes of eagle with shield	1166g – Colby and Spinner – small red
100$100	2nd & 3rd	1870–75	Fr.1166h		Thomas Hart Benton	1166h – xxx and xxx – large red (1870) 1166m – Allison and New – large red (1875)
500$500	2nd & 3rd	1870–75	Fr.1166i		Abraham Lincoln	1166i – Allison and Tuttle – large red (1870) 1166n – Allison and New – large red (1875)
1000$1,000	2nd & 3rd	1870–75	Fr.1166j proof		Alexander Hamilton	1166j – xxx and xxx – large red (1870) 1166o – Allison and New – large red (1875)
5000$5,000	2nd & 3rd	1870–75	Fr.1166k proof		James Madison	1166k – Allison and Gilfillan – large red
10000$10,000	2nd & 3rd	1870–75	Fr.1166l proof		Andrew Jackson	1166l – xxx and xxx – large red (1870) 1166q – Allison and Wyman – large red (1875)
10$10	7th	1907	Fr.1172		Michael Hillegas	1167 – 1172  1167 – Vernon and Treat – Gold 1168 – Vernon and McClung – Gold 1169 – Napier and McClung – Gold, Act of 1882 1169a – Napier and McClung – Gold, Act of 1907 1170 – Napier and Thompson – Gold, Act of 1882 1170a – Napier and Thompson – Gold, Act of 1907 1171 – Parker and Burke – Gold 1172 – Teehee and Burke – Gold
10$10	9th	1922	Fr.1173		Michael Hillegas	1173 – Speelman and White – Gold 1173a – Speelman and White – Gold, small serial numbers
20$20	4th	1882	Fr.1175a		James Garfield	1174 – 1178  1174 – Bruce and Gilfillan – brown 1175* – Bruce and Gilfillan – brown, CS by Thomas C. Acton 1175a – Bruce and Gilfillan – brown, CS by Thomas C. Acton 1176 – Bruce and Wyman – brown 1177 – Rosecrans and Huston – large brown 1178 – Lyons and Roberts – small red
20$20	4th	1882	Fr.1177		James Garfield
20$20	7th	1905	Fr.1180		George Washington	1179 – Lyons and Roberts – small red 1180 – Lyons and Treat – small red
20$20	7th	1906	Fr.1185		George Washington	1181 – 1186  1181 – Vernon and Treat – Gold 1182 – Vernon and McClung – Gold 1183 – Napier and McClung – Gold 1184 – Napier and Thompson – Gold 1185 – Parker and Burke – Gold 1186 – Teehee and Burke – Gold
20$20	9th	1922	Fr.1187		George Washington	1187 – Speelman and White – Gold
50$50	4th	1882	Fr.1189a		Silas Wright	1188 – 1197  1188 – Bruce and Gilfillan – brown 1189* – Bruce and Gilfillan – brown, CS by Thomas C. Acton 1189a – Bruce and Gilfillan – brown, CS by Thomas C. Acton 1190 – Bruce and Wyman – brown 1191 – Rosecrans and Hyatt – large red 1192 – Rosecrans and Huston – large brown 1192a – Rosecrans and Huston – small red 1193 – Lyons and Roberts – small red 1194 – Lyons and Treat – small red 1195 – Vernon and Treat – small red 1196 – Vernon and McClung – small red 1197 – Napier and McClung – small red
50$50	4th	1882	Fr.1195		Silas Wright
50$50	9th	1913	Fr.1199		Ulysses S. Grant	1198 – Parker and Burke – Gold 1199 – Teehee and Burke – Gold
50$50	9th	1922	Fr.1200a		Ulysses S. Grant	1200 – Speelman and White – Gold 1200a – Speelman and White – Gold, small serial numbers
100$100	4th	1882	Fr.1202		Thomas Hart Benton	1201 – 1214  1201 – Bruce and Gilfillan – brown 1202* – Bruce and Gilfillan – brown, CS by Thomas C. Acton 1202a – Bruce and Gilfillan – brown, CS by Thomas C. Acton 1203 – Bruce and Wyman – brown 1204 – Rosecrans and Hyatt – large red 1205 – Rosecrans and Huston – large brown 1206 – Lyons and Roberts – small red 1207 – Lyons and Treat – small red 1208 – Vernon and Treat – small red 1209 – Vernon and McClung – small red 1210 – Napier and McClung – small red 1211 – Napier and Thompson – small red 1212 – Napier and Burke – small red 1213 – Parker and Burke – small red 1214 – Teehee and Burke – small red
100$100	4th	1882	Fr.1207		Thomas Hart Benton
100$100	9th	1922	Fr.1215		Thomas Hart Benton	1215 – Speelman and White – small red
500$500	4th	1882	Fr.1216a		Abraham Lincoln	1215a – 1216b  1215a – Bruce and Gilfillan – brown 1215b – Bruce and Gilfillan – brown, CS by Thomas C. Acton 1215c – Bruce and Wyman – brown 1215d – Rosecrans and Hyatt – large red 1216 – Lyons and Roberts – small red 1216a – Parker and Burke – small red 1216b – Teehee and Burke – small red
500$500	9th	1922	Fr.1217		Abraham Lincoln	1217 – Speelman and White – small red
1000$1,000	4th	1882	Fr.1218a		Alexander Hamilton	1218 – 1218g  1218 – Bruce and Gilfillan –brown 1218a* – Bruce and Gilfillan –brown, CS by Thomas C. Acton 1218b – Bruce and Wyman – brown 1218c – Rosecrans and Hyatt –large red 1218d – Rosecrans and Huston – large brown 1218e – Rosecrans and Nebecker – small red 1218f – Lyons and Roberts – small red 1218g – Lyons and Treat – small red
1000$1,000	4th	1882	Fr.1218g		Alexander Hamilton
1000$1,000	8th	1907	Fr.1219		Alexander Hamilton	1219 – 1219e  1219 – Vernon and Treat – Gold 1219a – Vernon and McClung – Gold 1219b – Napier and McClung – Gold 1219c – Napier and Burke – Gold 1219d – Parker and Burke – Gold 1219e – Teehee and Burke – Gold
1000$1,000	9th	1922	Fr.1220		Alexander Hamilton	1220 – Speelman and White – Gold
5000$5,000	4th	1882	Fr.1221a proof		James Madison	1221 – 1221j  1221 – Bruce and Gilfillan – brown 1221a* – Bruce and Gilfillan – brown, CS by Thomas C. Acton 1221b – Bruce and Wyman – brown 1221c – Rosecrans and Hyatt – large red 1221d – Rosecrans and Nebecker – small red 1221e – Lyons and Roberts – small red 1221f – Vernon and Treat – small red 1221g – Vernon and McClung – small red 1221h – Napier and McClung – small red 1221i – Parker and Burke – small red 1221j – Teehee and Burke – small red
5000$5,000	5th	1888	Fr.1222a proof		James Madison	1222 – Rosecrans and Hyatt – large red 1222a – Rosecrans and Nebecker – small red
10000$10,000	4th	1882	Fr.1223a proof		Andrew Jackson	1223 – 1223g  1223 – Bruce and Gilfillan – brown 1223a – Bruce and Gilfillan – brown, CS by Thomas C. Acton 1223b – Bruce and Wyman – brown 1223c – Rosecrans and Hyatt – large red 1223d – Rosecrans and Nebecker – small red 1223e – Lyons and Roberts – small red 1223f – Vernon and Treat – small red 1223g – Teehee and Burke – small red
10000$10,000	5th	1888	Fr.1224a proof		Andrew Jackson	1224 – Rosecrans and Hyatt – large red 1224a – Rosecrans and Nebecker – small red
10000$10,000	6th	1900[nb 2]	Fr.1225		Andrew Jackson	1225a – 1225h  1225a – Lyons and Roberts – small red 1225b – Lyons and Treat – small red 1225c – Vernon and Treat – small red 1225d – Vernon and McClung – small red 1225e – Napier and McClung – small red 1225f – Napier and Burke – small red 1225g – Parker and Burke – small red 1225h – Teehee and Burke – small red

Small

Small-size United States Gold Certificates

Value	Series	Fr.	Image	Portrait	Signature & seal varieties
10$10	19281928	Fr.2400		Alexander Hamilton	2400 – Woods and Mellon – gold 2401 – Woods and Mellon (1928A) – gold.
20$20	19281928	Fr.2402		Andrew Jackson	2402 – Woods and Mellon – gold 2403 – Woods and Mills (1928A) – gold.
50$50	19281928	Fr.2404		Ulysses Grant	2404 – Woods and Mellon – gold
100$100	19281928	Fr.2405		Benjamin Franklin	2405 – Woods and Mellon – gold.
500$500	19281928	Fr.2407		William McKinley	2407 – Woods and Mellon – gold.
1000$1,000	19281928	Fr.2408		Grover Cleveland	2408 – Woods and Mellon – gold.
5000$5,000	19281928	Fr.2410		James Madison	2410 – Woods and Mellon – gold.
10000$10,000	19281928	Fr.2411		Salmon P. Chase	2411 – Woods and Mellon – gold.
100$100	19341934	Fr.2406		Benjamin Franklin	2406 – Julian and Morgenthau – gold.
1000$1,000	19341934	Fr.2409		Grover Cleveland	2409 – Julian and Morgenthau – gold.
10000$10,000	19341934	Fr.2412		Salmon P. Chase	2412 – Julian and Morgenthau – gold.
100000$100,000	19341934	Fr.2413		Woodrow Wilson	2413 – Julian and Morgenthau – gold.

Modern usage by the Federal Reserve System

Since the time of the gold recall legislation the United States Treasury has issued gold certificates to the Federal Reserve Banks. The Secretary of the Treasury is authorized to "prescribe the form and denominations of the certificates".^[11] Originally, this was the purpose of the Series of 1934 Certificates which were issued only to the banks and never to the public. However, since the 1960s most of the paper certificates have been destroyed,^[12] and the currently prescribed form of the "certificates" issued to the Federal Reserve is an electronic book entry account between the Federal Reserve and the Treasury.^[13] The electronic book entry system also allows for the various regional Federal Reserve Banks to exchange certificate balances among themselves.^[14]

As of December 2013 the Federal Reserve reported^[15] holding $11.037 billion face value of these certificates. The Treasury backs these certificates by holding an equivalent amount of gold at the statutory exchange rate of $42 2/9 per troy ounce of gold, though the Federal Reserve does not have the right to exchange the certificates for gold. As the certificates are denominated in dollars rather than in a set weight of gold, any change in the statutory exchange rate towards the (much higher) market rate would result in a windfall accounting gain for the Treasury.

Series catalogue

This is a chart of some of the series of gold certificates printed. Each entry includes: series year, general description, and printing figures if available.

Small-size gold certificates

• Notes: All Series 1928A gold certificates were consigned to destruction and never released; none^[16] are known to exist. All Series 1934 gold certificates were issued only to banks and were not available to the public. The Series 1934 gold certificates are also distinguished from the previous gold certificates in their gold clause, which adds the phrase "as authorized by law" to denote that these notes cannot be legally held by private individuals, and by their distinctive orange reverses. Only a few museum specimens of these Series 1934 gold certificates survive today. The $100,000 note is the largest denomination currency ever issued by the United States.

See also

• Silver certificate (United States)
• National gold bank note
• Digital gold currency

Footnotes

Notes

References

• Friedberg, Arthur L.; Friedberg, Ira S. (2013). Paper Money of the United States: A Complete Illustrated Guide With Valuations (20th ed.). Coin & Currency Institute. ISBN 978-0-87184-520-7. Retrieved 14 February 2014.