What does a silver certificate really mean?

Answer 1

When silver certificates were originally issued the government controlled the price of silver and had a large hoard in various locations as backing for currency. Only as many silver certificates could be printed as there was silver to back them up, so it was a way of controlling the amount of money in circulation and holding down inflation. Citizens were allowed to take silver certificates to banks and some government offices where they could be exchanged for an equivalent amount of metal.

As the economy changed they only became exchangeable for silver coins, which made them effectively the same as other kinds of paper currency except that they still had to be backed by silver.

By the 1960s market pressure on silver (much from the electronic and Photography industries) forced the government to deregulate its price and start selling its hoard. They stopped printing silver certificates and abandoned the policy of exchanging them for metal. By 1963 all U.S. currency printed was either Federal Reserve or U.S. Notes, which were not backed by any metal in the Treasury. U.S. Notes were discontinued shortly after that, around 1966 because they were entirely equivalent to FRN's.