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Prior to 1964, the USA was "on the silver standard." The government controlled the price of silver, and silver certificates were bills that could be exchanged for a specific amount of the metal. The government was allowed to print only as many silver certificates as there was silver in the Treasury to redeem them, which helped to control the money supply. Silver certificates in fact were little more than a receipt or deed for a certain number of ounces of silver. In fact it was possible to exchange a silver certificate for its denominated value in silver metal.

During the 19th century silver certificates were at one point or another issued in every denomination from $1 to $1000. In the 20th century that range was limited to $1, $5, and $10.

In the 1960s the demand for silver increased sharply and the government was forced to let the price be determined by market forces. The value shot up from the controlled price of $1.29/oz to over $40 before settling back down. That volatility meant it was impossible for the Treasury to maintain a fixed connection between the value of silver certificates in circulation and the amount of metal held by the Treasury. Speculators were "gaming" those price fluctuations by repeatedly exchanging bills for silver or silver for bills, then skimming off the difference. The Treasury found itself in the position of in effect subsidizing that speculation; in 1968 they halted redemption and declared the bills to be Fiat currency, the same as Federal Reserve Notes.

Many late-date silver certificates were saved by collectors, and are still so common in collections that they are not worth much more than face value despite being 50+ years old.

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