What is the difference between a regular bill and a silver certificate?

Answer 1

Silver certificates were once "regular" bills. It's only been since the early 1970s that all US currency has been printed as green-seal Federal Reserve Notes.

Silver certificates were issued from the 1860s until the 1957-B series of $1 bills (which were actually printed in 1965). They originally came in denominations from $1 all the way up to $1000, but $1 and $5 were by far the most common.

The bills were backed dollar-for-dollar with silver metal on deposit in the US Treasury, which meant that the government was only allowed to print as many dollars worth of certificates as there was metal in the vaults. The government also controlled the price of silver at the now-ridiculously low value of $1.29 an ounce, so the relationship between bills and metal was constant.

Silver certificates could be exchanged for silver coins or metal bullion and carried wording to that effect. The problem was that by the early 1960s industrial demand for silver started to outstrip supplies. That put a tremendous amount of economic pressure on the Treasury to "do something" about all of that metal just sitting in its vaults at a fixed price. The government was finally forced to stop controlling the price of silver, let it reach its market value, and sell off its stocks.

Starting in 1963 the Treasury decided to issue all bills as either Federal Reserve Notes or United States Notes. These bills couldn't be exchanged for metal but instead were backed by the stability of the government. Redemption of existing silver certificates for metal or coins was discontinued to prevent speculation; otherwise people could "game" the system by trading bills for metal, waiting for the price to go up, selling the metal for more bills, and so on.

United States Notes had for decades only made up a small fraction of the bills in circulation, so by 1971 production of those was suspended as well. Since then all bills have been the familiar green-seal Federal Reserve Notes.