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US Banknotes

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

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March 10, 2015 1:11AM

The actual question is a bit different, because some dollar bills - but not all - have been issued as silver certificates and some silver certificates - but not all - have been issued as dollar bills.

Silver certificates were a form of paper currency backed dollar-for-dollar by silver on deposit with the US Treasury. Silver certificates were issued in all denominations up to $1000 although 1's and 5's were by far the most common. They were usually printed with blue seals.

The government could only issue as many dollars' worth of silver certificates as they had silver metal in the vaults. They were also exchangeable for a fixed amount of silver metal. At various times you could get a dollar's worth of silver coins or silver bullion in exchange. By the 1960s demand for silver skyrocketed and the government was forced to deregulate its price. To prevent people from "gaming" the system by exchanging metal back and forth for bills and skimming the difference due to price changes, the Treasury discontinued printing silver certificates and stopped redeeming existing ones for silver.

They're technically still legal tender and very occasionally show up in change, but in general they're worth more to collectors than face value. Many $1 silver certificates are only worth a bit more than face value, sometimes as little as a quarter extra, though. Other denominations from the late 19th and early 20th do carry a higher premium.